Wednesday Open Thread
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38 comments:
I couldn't help but notice that today's Wall Street Journal article on the nationwide housing slump specifically called out Seattle as one of the only regions where there hasn't been a downturn.
We must really be "special".
We have such a shortage of housing that prices will clearly remain high in the Puget Sound even if the country hits a recession, and employers start sending out pink slips. We should thank those Puget Sound municipal planners for doing such a good job of restricting housing starts in our region, thereby ensuring prices will rise forever...
The full Wall Street journal article is here:
Housing slump proves painful for some owners and builders
In some other parts of the country, notably Texas and the Seattle area, local housing markets remain robust. Texas' low housing costs are attracting new residents and investors, while Seattle's strong job market and shortage of homes have kept prices rising.
Here's some news from Eleua's hood:
Home market smiles on buyers, sellers alike
Year-to-date, 25 percent fewer Bainbridge Island single-family homes have sold compared to 2005, according to the Northwest Multiple Listing Service, which tracks home sale statistics in several counties across the state.
Meanwhile, the median single-family home price – the point at which half of homes cost more and half less – hit $643,000 in July, nearly $100,000 more than at this time last year.
In the single-family home market, inventory in the more moderate $400,000-to-$500,000 range is scarce.
“The condominium market is now a fact of life on Bainbridge Island,” Laws said. “Not all people are buying to move in or rent.”
That includes investors who buy units early, sometimes before ground is broken, and then resell at a profit.
In some cases, units that have never been lived in may compete with brand-new units if inventory remains high.
Here's an opinion piece:
Put homeownership in reach of hardworking Washingtonians
The good news is the value of Puget Sound homes soared again this year. The bad news is the value of Puget Sound homes soared again this year.
The reason is simple. Population is increasing steadily; the supply of homes is not. Demand outstripping supply month after month creates the double-digit price increases that most wage earners can only dream of matching.
I don't totally understand his reasoning...last stats I saw, population was down in Seattle.
Here is how Robert Cote dealt with Meshugy at Ben's blog: Robert by the way is a seasoned, smart investor:
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Comment by Meshugy
2006-08-22 22:46:52
Seattle sold prices are up 15% YOY.
Check out this from the Wall Street Journal:
Housing slump proves painful for some owners and builders
In some other parts of the country, notably Texas and the Seattle area, local housing markets remain robust. Texas’ low housing costs are attracting new residents and investors, while Seattle’s strong job market and shortage of homes have kept prices rising.
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Reply to this comment
Comment by Robert Cote
2006-08-23 02:17:45
Puleeeze. Running out of houses? How many times have you heard that lie demolished on these pages? Then the false logic of “there’s never been a recession while jobs were plentiful.” Just because it hasn’t happened doesn’t mean it cannot happen.
The median price is rising because Seattle is in the late stages of a bubble topping process. It would be unusual for the median to not rise until inventory grows a bit and true DOM lengthens. It’s hard to find a comparable metro area for many aspects that make Seattle and Portland outliers on the national spectrum. The bursting bubble will play out there in slightly different ways but play out it will.
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Notice Meshugy using the exact same argument here? Interesting isn't it?
If someone keeps posting wrong and tired arguments, I agree that we need to attack the arguments, not attack people. If someone posts the same, incorrect reasoning, simply reply with reasoning that has been effective to counter them in the past. Someone who has lost a debate should not try the same reasoning again, but if you're going to reply to him anyway, may as well do so in the right manner. Otherwise ignore him as a troll and move on.
nice...people post some dissenting opinions and they promptly get deleted. Nice blog you have going here. Do you want a discussion or do you just want to have like-minded people post to justify your own opinions? Ridiculous.
Does anybody think it significant that Q2 King county building permits are UP 40-something% over the same quarter last year?
I've heard so many people say that "we've run out of land" so how is this possible?
Seriously though, there is ALOT of construction underway. Anyone know what the average build cycle length is from the permit date? I'm seeing alot of 3 level townhome projects started in Q2 that aren't on the market yet.
I don't totally understand his reasoning...last stats I saw, population was down in Seattle.
I actually agree with you on this one Meshugy... this is yet again another wag at attempting to justify rising home sales.
As I've pointed out many a time, Tokyo (not that Japan's seeing any pop. boom) is one of the most land limited densified cities on the planet, yet home sales and prices have fallen for 10-15 yrs...
This is the same kind of unresearched facts that lead developers to tout the "baby boomers and empty nesters moving into the city for the care-free lifestyle" propaganda we always here...
I've seen it all, Seattle is not a "special" place that is in a bubble and won't be unscathed in the housing bubble.
Hi Chix...I don't think Seattle is somehow magically immune to economic downfalls. I'm just following the current market to see what's happening. We might see a crash sometime in the future...anything could happen. However, it's undeniable that currently, Seattle has shown an uncanny resistance to the national housing slowdown. Will that continue? Hard to say....
I'm not really a bull....I would only buy now if you could put 20% down and keep the house for 10 years or more. It's a turbulent time...not worth taking big risks. But I do feel that over a 10 year period Seattle will do fine.
I actually agree with you on this one Meshugy... this is yet again another wag at attempting to justify rising home sales.
Does anyone have census data handy?
emcityjill: The information you cite about King county building permits is interesting. May I ask where you got that data? I would love to see the trends of building permits in our region over the last few years.
nice...people post some dissenting opinions and they promptly get deleted. Nice blog you have going here. Do you want a discussion or do you just want to have like-minded people post to justify your own opinions? Ridiculous.
The posts I deleted were not contributing to any kind of meaningful "discussion." They were posts that contained little more than name-calling such as "intolerant, arrogant jerks" and "extremely bitter." Furthermore, I deleted posts that attacked people on both sides of the argument, and you may notice that I left up most of the "dissenting" posts, as long as they were not blatantly insulting. When people completely ignore my rules, I delete their posts. End of story.
I'm happy to have a balanced discussion, in fact I prefer that to a one-sided cheer-fest. However, I don't know how I can make it any more clear than I already have: name-calling and petty arguing will be deleted. That kind of crap does not lead to an interesting and balanced discussion, and has no place here.
They were posts that contained little more than name-calling such as "intolerant, arrogant jerks" and "extremely bitter."
I said they sound like. I didn't say they are. There is a difference.
meshugy.. Seems to me every Agrument you have is tied to some statistic that says people are Buying. Or Were special here.
Most the people are are not reading the cover of the book. Were looking at record amounts of dept. Housing as being a major portion of the economy. How if housing is not driving the economy, then whats going to take its place.
If I wanted to simple Read the cover of the book and believe it, I would go no farther than Good Ol President Bush.
Meshugy maybe you should look to the president for Support.
Please read what Robert Cote had to say to Meshugy because it is significant. We have heard his argument over and over and over again and it fails in every area of the U.S.
I think that this blog should allow people to argue, what happens here is that anyone who puts out anything negative is immediately blitzed by Meshugy, then Tim deletes the thread once an argument takes place. It makes this blog second rate and bland, there are no strong feelings that are allowed to breathe here.
Have some backbone, let's mix this thing up. Let's get into it a bit...why is everyone so touchy here about a little give and take.
P.S. Meshugy is wrong, so wrong that people like Midan can listen to him all the way to the poor house.
Have some backbone, let's mix this thing up. Let's get into it a bit...why is everyone so touchy here about a little give and take.
I agree 100%. In order to help the healthy dialogue, perhaps people with a provocative point-of-view can attach some name to their posts, rather than the "anon" handle. It makes it so those of us that have a blog identity don't have to fight a ghost.
I believe that it is possible to express "strong feelings" or a "provocative point-of-view" without resorting to name-calling and empty trash talk. Perhaps I am wrong.
P.S. Meshugy is wrong,
Anyone notice how he used Zip's Olympia numbers showing a 5% increase (june-july) in the average price to indicate a "red hot" market?
Then, when Zip released the Seattle numbers showing the average price had decreased, he discounted that statistic as unreliable.
Which is it?
I commend Tim for keeping this place civil. I'm interested in data and analysis, not namecalling and pissing contents. That type of thing would drive me away in a hurry. It's of no use whatsoever, and is rather detrimental to real discussion. There's a bajillion places that allow it out there, so I cherish the few refuges of civility I can find.
As far as dissenting opinions go, I welcome them, as long as they are backed up by reason and data. That's the standard I hold up for both sides. My problem with Meshugy is he seems to cherrypick his data to support his opinion, rather than forming his opinion based on the data. That's the impression I get anyway. But I don't want him to go away, although I would welcome more discussion of the data rather than "see I told you so".
"So, instead of blindly touting 'median' numbers why don't you FOR ONCE take a look at underlying trends that are taking place all over the country, and now in Seattle and think for a moment. Really, think about it for a moment - do you really think we are different?"
....and here is the place where Meshugy posts his patented "I'm not a real-estate bull" speech, and slips off into the ether, without addressing your argument.
Having escaped scrutiny, the cycle can begin anew. Meshugy will post the same median numbers in another thread (perhaps in the form of a thinly-disguised press release from the NAR), he will make some vaguely inflammatory statement (that ignores the context and logic of the thread that he is hijacking), and inevitably, someone will engage him with an actual argument.
Once engaged, Meshugy will proceed to ignore the contents of whatever argument was made, and will regurgitate another bit of out-of-context data (his favorite bits: the "historically low inventory," the "hot job market," or the prices of homes in his neighborhood).
If the OP is cool-headed, she'll note that Meshugy didn't address her argument, and will call him out, or recognize him as a troll, and ignore him completely. If not, she'll lose her temper, and her post will be deleted. In exasperation, someone will try to reason with him: "can't you see the fundamentals? Why do you think that this place is so DIFFERENT???"
...and we're back to step one.
Meshugy's pattern is that of a classic troll -- hijack thread, post inflammatory comments and slip away quietly. I'm surprised that Meshugy hasn't been dealt with more forcefully -- it's not like he represents the anti-bubble argument with any sort of logic or grace.
....and here is the place where Meshugy posts his patented "I'm not a real-estate bull" speech, and slips off into the ether, without addressing your argument.
Sorry, I'd really like to be able answer all my fan mail on this site. Unfortunately, it's just too time consuming. Maybe Tim can put a permanent statement for me as follows:
-I don't believe Seattle is immune to a crash. It could happen.
-I don't like to make predictions, but if I have to, I'd think it's likely we'll see a return to normal 3-6% appreciation. At worst a flat market. Again, anything can happen. I feel that job growth, a housing shortage, and the overall desirability of the Seattle area will keep the market a float. But that's just a guess based on the current data.
-I would only buy if you can put 20% down, afford the monthly payments, and can keep the house for 10 years.
I think that should clear everything up...most of the time people put words in my mouth. I sort of get pegged as some uber-bull when in reality I'm a moderate. All I'm doing is following the market and posting interesting data when I find it. I don't really have that much of a stake in the market either way. I own a house which I love...and fortunately can afford. I will probably live here the rest of my life. If the market tanks for a few years it doesn't matter too much in the long run. I'll still be here 30 years from now.
I must be psychic.
Unfortunately, the actual data shows that Seattle is at the top 5 markets with creative loans (~55%) and more than 70% zero down...All the signs of a highly speculative market.
Data has also shown that Seattle is one of the cities least likely to experience "rate shock." Because the jobs are here and because there is more demand then supply for houses.
A guy that works for zillow actually came to one of my gigs a few days ago. He said that the general consensus at zillow was that as long as seattle has the currently healthy economy, it'll be fine. But he did say the condo situation had them a little worried. SFH are fine, but condos could flood the market. But he did also mention that condos are appreciating faster then anything else right now (20% YOY).
Smart people put 20% down and buy what they can afford. I'm not saying everyone IS doing that. No way....and I'm confident people will continue to buy more then they should. I think it's risky...however I also think that if the jobs and demand are here they will get away with it because there's always another person ready to jump on a good house in Seattle. So if they get in over their heads they can still sell quickly, often at a profit.
For the record, I never said no one should be able to counter Meshugy's posts (as an example). But calling people "arrogant jerks" and such as Tim cited above contributes nothing and IMO detracts from the discussion. Such threads invariably devolve into shouting matches and pissing contets. I don't mind crap like that being filtered out one bit.
Data has also shown that Seattle is one of the cities least likely to experience "rate shock." Because the jobs are here and because there is more demand then supply for houses.
This is a half-truth Meshugy, you know it dude. This encompasses every loan including refi's of existing loans, not just new purchases... "rate shock" could be anything from a HELOC re-fi do redo a kitchen in a house you've been living in for 20 yrs, or an i/o toxic mortgage on a dot-condo....
I'm sure many smart homehowners refi'd during the credit-glut, they'd be fools not to, but this sloppy statistic you mention to wide an umbrella to cull anything meaningful from it unless you're a mortgage lender and care about the risk mitigation...
Hi all, this is my first post. We are renting right now hoping this bubble will burst soon, but I'm starting to lose faith! One question I have. It seems that if mortgage rates start to stabilize and not rise as much anymore. Wouldn't that mean all folks who took out ARMs will have the opportunity to refinance into a fixed loan in coming years? Would that translate to a 'soft landing'? Or is there more to it than I'm not aware of? Owning a home seems sooo out of reach for us now.
anon 248,
You assume that the Lumpenvestoriat is smart enough to realize that they would be better off in a fixed mortgage product, and this is the opportunity of a lifetime.
That is a MIGHTY BIG assumption, my friend.
My bet is that any reprieve that your basic dumb borrower gets will be used to go further into debt.
There will be no soft landing.
Well, I think people are deluding themselves if they think that housing is going to drop enough in Seattle for families with $80K/year combined incomes to buy in-city. Seattle has morphed in the past fifteen years from the quaint company town to SF North. Even with a slow housing market there is still going to be migration from Cali and outlying suburbs into the city by DINKs and empty nesters. House in the neighborhood ( by greenwood elementary ) SOLD for $900K. Another one listed on the other side of the Greenwood Post Office ( on Fremont, I think ) is listed at $849K ( offers already on it )...
About time we shook out the trash from North Seattle, I am tired of these old blue collar types... I want my fancy cheese stores! ;-)
Anon 04:39:
I also think that it would be silly for me to think that a family with $80K income will be able to afford an in-city home with the influx of high-profile residents. The problem I have is that I've recently been seeing some of these $900K homes NOT being bought by high-profile residents but rather by complete idiots, teams of idiots and companies full of idiots using idiotic funding. The "value" found in a $900K home, to me, is completely diminished if these homes are then rented out to college kids that get kicked down parental funds so they can have "a tight ass pad."
Here's some recent sales in Ballard (click on the link to see the house)
7337 Earl Ave NW
Asking: $475,000
Sold: $513,950
6736 17 Ave NW
Asking: $519,950
Sold: $536,950
7056 19TH AVE NW
Asking: $400,000
Sold: $400,000
7535 JONES AVE NW
Asking: $429,950
Sold: $450,000
Still seems to be business as usual around here. Everything is going at or well above asking. Most houses sell in 1 week....
Again...I must be psychic.
Meshugy, you've given us a comment on the hot job market, and prices on homes in your neighborhood. Want to make the trifecta, and comment on the "historically low inventory"?
Here's three more that are on the county records but not on the John L Scott site:
7050 17th Ave NW
Asking: $489,500
Sold: $536,000
6414 22nd Ave NW
Asking: $400,000
Sold: $429,000
2030 NW 64th St
Asking: $549,000
Sold: $554,000
Dukes, if the market currently in a tailspin, why are people overbidding on so many houses? Especially in Ballard? If there were tons of inventory sitting around in high prestige hoods like Green Lake, Queen Anne, Magnolia, etc....why would people be fighting over houses in Ballard? We're not talking about just one house here...pretty much everything is selling fast and goes at or over asking. Median prices can tell us a lot, but ultimately the best indicator of a market is to go and do a few comps yourself. As you can see, these sales records show that the Seattle market is still very competitive.
We simply wouldn't see such high prices and overbidding if sellers were desperate. You may characterize the average buyer as stupid, but you'll have to admit that in the least they're are going to do a little comparative shopping. If there were 10 awesome, totaly remodeled craftsmans with killer views just sitting on Queen Anne for months, no one would over bid on a house in Ballard. But it's happening all the time, so the only conclusion can be that it's still a sellers market. There simply aren't enough homes for sale to meet the demand.
They just found oil in Ballard. When a long-standing campaign to make Ballard a city succeeds, everyone will be entitled to a share of oil revenues, just like in Alaska. The oil rush in Ballard is on! Even red-bearded hobo by Radio Shack is excited.
A Bellevue Home Worth... $25,000?
Anyone else have this experience?
Here's an example of what you find in the price reduced bin:
7738 20TH AVE NW
The "reduced" price on that POS is $549,000! Ha ha...no wonder in it's been on the market for 42 days. Try $349,000
This is why price reduction stats don't really tell you that much. So many of the reductions are a result of unrealistic sellers. Even in this market, there is only so high you can price a junker like this.
"if the market currently in a tailspin, why are people overbidding on so many houses?"
For christ's sake, Meshugy...no reasonable person is claiming that the market is currently in a tailspin. Nice straw man (does he scare off the s-crows?)
"If there were tons of inventory sitting around in high prestige hoods like Green Lake, Queen Anne, Magnolia, etc....why would people be fighting over houses in Ballard?"
Because houses in high-prestige neighborhoods are a great deal more expensive than the homes in Ballard. If dukes is the kettle, you're the pot -- you consistently choose your "statistics" from one of the least expensive neighborhoods, and pretend that they're representative of the city as a whole.
Is the market crashing right now? Clearly not. Does that mean that it won't tank tomorrow? Again, clearly not -- and the smart money is on our side.
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