Seattle Bubble has moved! Redirecting...

You should be automatically redirected. If not, visit http://seattlebubble.com/blog/and update your bookmarks.

Off-topic comment? Interesting link?
Head over to the forums, or click here for open threads.

Monday, June 05, 2006

For Lack Of More Exciting News

On the one hand, I do tire sometimes of Elizabeth Rhodes' constant real estate cheerleading. On the other hand, at least it gives us something new to talk about every Saturday, right? Without Ms. Rhodes, all we get are bland neighborhood profiles like this one about the "legacy of Mountlake Terrace."

The legacy of Mountlake Terrace and growing families goes back more than a half-century. Relentlessly optimistic and energetic, World War II veterans returned home, eager to build new lives and new families. They needed someplace cheap to do it.

Enterprising developers bought up land in The Terrace and plopped down cinder-block houses as fast as the concrete would cure. The vets paid $4,995 for two-bedroom, 640-square-foot homes.

"And for an extra $10 a month, the developers would throw in all the appliances," said Stan Krahn.

Things have changed. One of those houses, albeit with an extra bedroom tacked on, was on the market last year for $210,000.

Still, Mountlake Terrace, population 20,390, according to 2004 city figures, is attractive for new families.
Sure, it's crazy to think that people are paying $210,000 for tiny cinder-block houses, but what's new, right? Actually the amusing thing is that one of the friends I referred to earlier bought a cinder-block house... in Mountlake Terrace... for ~$230,000. Let's see, that's about 6.6% appreciation, every single year, for 60 years. It's magic!

(Don McManman, Seattle Times, 06.03.2006)

20 comments:

softwarengineer said...

HOUSING BUBBLE ALREADY BURST, IF YOU'RE PAYING THE OLD PRICE, YOU GOT SNUCKERRED

I know, you're saying not in Seattle, we're immune. Well, throw your local newspaper in the trash and I'll lead you with facts:

The banks tell us that when you bought your Seattle Hybrid Loan (I heard about 60% of the homes have them in Seattle) it came with a "whammy" of a surprise, like several hundreds of dollars now owed per month by families that were already hit in the stomache by $3 gasoline. Couple this ominous Seattle news with the fact that about 25% of the homes are soon to be dumped by older "baby boomers" cashing in for their retirements and we just heard a big bubble pop of unsold retirement inventory and resold inventory from homeowners that can't afford the mortgage payments as follows:

http://www.bankrate.com/ibd/news/mtg/20000601.asp

But Seattle home sales are still very strong, the realitors in this Blogger assure me so, wrong, even the local news gets it right sometimes, sales have plunged:

http://seattletimes.nwsource.com/html/businesstechnology/2002887963_newhomesales25.html?syndication=rss

But there's hope, mortgage rates are still a bargain. Not anymore, Greenbaum's not here anymore:

http://seattlepi.nwsource.com/business/218373_mortgage01.html

But, there's no Seattle Housing Bubble, that's all hogwash. Honey, the bubble is so inflated in Seattle its skin is a nano thick as follows:

http://www.housingbubblebust.com/OFHEO/OFHEO-NorthWest.html

But a home is always a good investment, renting is like buying a dead horse. Renting money to pay interest on a house today is worse than buying a dead horse as follows:

http://www.housingbubblebust.com/

Yes Tiny Tim, the Seattle Housing Bubble has popped. I've already seen it in my neighborhood, everytime a for sale sign is removed and a month later, the old owner is still mowing the lawn:

http://moneycentral.msn.com/content/P149596.asp

a fan said...

softwareengineer-

Please keep posting! SOS! We need you here - Desperately!

Facts. Thanks for the facts and sources.

biliruben said...

Dukes appears to have gotten the better of our flipper friend over at Tales...

However, on a visceral level, my fears were brought to the surface. Self-doubt and the fear of the unknown caused me to react emotionally to these negative comments. This one anonymous poster - with the handle of dukes - put on the guise of a devil's advocate, claiming to be an experienced investor across multiple channels. However, he just wanted to appear superior, and was by no means posting for my benefit.

What perplexes me is why these anonymous posters feel the need to chime in with such negative comments? Why read my blog at all? They claim that fear is driving my behavior; I would counter that fear of missing out on something they can't quite subscribe to is driving the behavior of these negative posters.


Now play nice, Dukes. ;)

emcityjill said...

Seattle inventory derived from the MLS made eeeeasy! Wow! I don't know why I've never seen this before!

And if you click on Seattle it takes you to another page which will provide you with "historical" (maybe they misspelled "hysterical" ...it only goes back to August 05)inventory and median asking price.

This should be fun to watch for a while.

seattle price drop said...

Actually, I read all the posts that Dukes wrote to Eric before Eric removed them from the blog.

Dukes posts were very civil, not condescending, almost fatherly.

I think it was a case of "kill the mesenger".

Also think that's why Eric had to remove Dukes posts. Anyone who read them would see that Dukes was not playing hard, dirty or anything Eric claims.

Our Seattle REI is screwed and scared, or at least suspects he will be in the future.

I think he's a bit too smart to not realize he's playing with fire. Ego and wishful thinking kills.

So Dukes, where the heck are our numbers? We're counting on you man. Don't leave us high and dry like this!

seattle price drop said...

emcityjill-

That is a fun site to watch. The only caution is that those prices are based on ASKING price, not selling.(scroll to bottom of page)

Since a lot's been being sold under asking, and going into price reduction since last Fall, you need to take them with a grain of salt.

Interesting that the middle median Asking has gone down a bit this week though.

The bubble tracker that Tim's got on the front page is fun too, tho that includes outside the city.

emcityjill said...

I was linked from the bubble tracker blog (which includes Snoho county in their numbers) to the House Tracker site, which seems to focus solely on Seattle. I think both datasets are useful, and I think that comparing the median asking price to NAR's median sales price would be interesting as well.

As for Dukes vs. Eric, I'm in agreement. I read the exchanges between Dukes and Eric before Eric finally removed them. Dukes was civil, although it's hard to dull completely a condescending edge when you're dealing with a stubborn young fool. I'm sad for Eric. He's going to lose his shirt up on Queen Anne. Then again, the little sadist in me kind of wants to say neener neener.

This whole real estate fiasco is something else. It's kind of like watching a train wreck in slow motion.

Anonymous said...

The Philadelphia Housing Index is getting a new low today
Most of major Home Builders are getting new lows today
The ETF for Home Builders are getting a new low today

Make your own conclusion (Of course, for some people, the law of “physics” doesn’t apply to Seattle, ha ha ha…)

Anonymous said...

Another very smart guy at PIMPCO just sold his home and goes on renting… This reminds me of Warren Buffet saying “ What smart investors do at the beginning, fools do at the end…”

Is Seattle becoming the remaining city of the fools in this world?

http://www.pimco.com/LeftNav/Regional+Market+Commentary/Global+Credit+Perspectives/2006/Kiesel_For_Sale_06+2005.htm

biliruben said...

Decided not to be greedy, and covered my DR Horton short today after a 24% drop (my gain). P/E of less than 5, regardless of projected future earnings is pretty tiny.

Anonymous said...

Wow. I didn't know Seattle was up 10.2% year-to-date. Definitly bucking the trend. This is getting crazy.....

seattle long term buyer said...

I'm just amazed how eric still believes that the drop in home sales is due to low inventory... has anyone checked the inventory lately? It's rising every month... and that's reason for low sales? give me a break...

As a long term buyer, I've been househunting now with the intention of finding a good bargain from a distressed buyer... or similar

I make a point of not buying from a flipper unless he's losing money on the sale so as to stop the crazy speculation going on...

It's interesting how people still expect 100K appreciation in one year and will drop 10K on a 500K house that's zillowed at 415K...

amazing

realistic realtor said...

Add one more to softwarengineer's list...the upcoming foreclosures in a year or two from all those who maxed out their purchase power through I/O loans. Some of those 3/1 I/O ARMS will come due next year and principal is going to be a b*tch. Heck my broker told me I should read up on foreclosures.

seattle price drop said...

For the first time, somebody in the biz- was it a homebuilder?- acknowledged today that this will be no "soft landing".

This a first. He predicted like a 35% drop in prices.

I am sorry that I'm not providing a link but the blip is at "the Housing Bubble Blog" for today, June 5.

Realistic Realtor- if you are really a realtor: Welcome! Well, even if you're not, Welcome!

But it is always refreshing to get insiders on board in the discussion.

I spoke with a lender today who told me that they are starting to see the beginnings of falling comps in WA.

There was a lender on Ben's blog yesterday who posted about the situation in Nevada regarding how hard it is to keep up with appraisals when the comps start sliding. It's something I'd never thought about before but obviously is important.

She told me about that aspect of the market without my even asking.

Once again, I just walked in off the street and we got into a housing market discussion. We talked for almost an hour on everything from new construction to flipping to loan types to appraisals.

There are some amazing people out there who really ARE experts and will tell you the truth.

IMO, if you are in the market for a house right now and are dealing with anyone, lender, realtor, anyone who tells you the "everything is fine!!!" line, *run* *don't* *walk* to the nearest exit.

Worst case:This person knows the truth but could care less about your welfare.

Best case: This person is a fool who should not be assisting you with major money transactions.

seattle long term buyer said...

actually was at an open house this weekend and when we came through the door and asked for a flyer the realtor grabbed one and corrected the price 20K lower... (he already did the same on the website the day before)

We got to talking and he had a sheet of comps within the price range I was looking for 400-500K in South King Co... 3 pages long...

He tells me about the market and how there is a glut of homes in this price range that are just not moving... he was the only honest realtor I met that weekend... tried to convince me to make any offer on the house and he would try to make the owners "see the light" as the home was on it's 32nd DOM and not going anywhere...

but then again, the house we really wanted to go for, sold for asking and we wanted 20K below asking and I wasn't interested in paying asking price...

It pays to ask the realtor why the owners are moving... if they're upgrading, moving, or anything other than speculating and have found a bigger house that's contingent on them selling the previous house, don't be afraid to make an offer below zillow estimate...

Seattlenobubblebob said...

For your viewing entertainment, please join the crowd at Seattle Real Estate Professionals who believe that Seattle will not see a market correction. Seattle is a Hybrid city, meaning that it is on par with Phoenix. Yes, that Phoenix. The one in which the inventory skyrocketed from roughly 4500 units for sale late last Summer to now around 40K?

http://blog.seattlepi.nwsource.com/realestate/

Anonymous said...

I know, isn't that a hoot? Between Phoenix, the city of miraculous inventory, and Minneapolis, where they've been burying St Joe's statues since last Fall near their "For Sale" signs cuz notthing else is moving those houses along- Seattle's got rally great company as a "hybrid". LOL!

biliruben said...

My timing sucks. DHI down another 8% in early trading today.

seattle price drop said...

Oh well Biliruben, can't time things **perfectly**! you did fine tho, right?

A blurb on CNBC said the HB stocks were one of the prime movers behind bringing the whole DOW down today.

Lot's of power there!

biliruben said...

Yeah, did fine.

When I short, all I look for is 20% and get out.

I'm still riding a couple more HBs, and some lenders who are finally showing some weakness.