Wednesday Open Thread
This is your open thread for today. Please post random links and off-topic discussions here.
Off-topic comment? Interesting link?
Head over to the forums, or click here for open threads.
Head over to the forums, or click here for open threads.
41 comments:
I was out in the Darrington / Concrete / Marblemount area yesterday and there are a lot of houses for sale out there, many more than I've ever noticed before. And some of these houses were pretty old and decrepit, more than likely not houses bought or built in the last decade at least. It made me wonder why they would be selling. I assume it's not because of resetting ARMs. The only thing I could think of were either cashing in on higher prices (assuming prices are higher even in the boonies) or wanting to get out from under higher property taxes. Any other ideas?
Here's an interesting article from the Atlanic:
Where the Brains Are
America’s educated elite is clustering in a few cities— and leaving the rest of the country behind
You have to subscribe to read the whole thing. But this graphic says a lot:
The Uneven Fortunes of America's Cities
'Shug,
Nice graphic.
A and B
Therefore, A causes B
I am wondering why so many smart people are paying 10-13X income for their homes, while toothless morons in Flyover Country are paying 2X, even if they have higher incomes (certain areas).
When our most educated people are drowning in debt, what does that say about our economic future?
When our most educated people are drowning in debt, what does that say about the economic education in this country?
If the graph implies correlation, it is a logical fallacy: Correlation Not Cause. Since Meshugy didn't say it did, I'm giving him the benefit of the doubt, even though it would be consistent with his previous arguments.
I'm not sure what proof of such a correlation would serve, though, as far as housing prices go. Surely no one would assert that the more educated a person is the less likely their housing prices are to decrease?
Short history-we almost bought back in 2002, but moved to Europe. Now getting close to moving home to Seattle but the prices are crazy funny...
One example, a condo in Bellevue we almost pulled the trigger on. Sold in 2002 475k. Sold again June 2005 570K. On the market now for 800K!!!! LOL LMAO!
If someone buys it for anything close to that I will make sure to drop by when I am in Seattle at xmas and laugh at them face to face.
I am loving Redfin since you can see an indicator of days on market and sometimes past sales, sales tax and mortage history all at once. I put the link below to the one I describe above.
Will someone tell me how sleepy Seattle became a RE speculating crazed city???
I looked up some old pals from back in the day and couldnt believe the number of high rate HELOCs and ARMs about to reset.
Maybe we should ride it out in Europe.
http://www.redfin.com/stingray/do/listings-search?searchterms=98004&searchMarket=seattle&x=27&y=9
Although the correlation is consistant with 'Shug's history, my comments were more of an observation than an accusation.
I would think that the more education someone has, the more he might consider future uncertainty when obligating himself to a course of action (30 years of payments). IOW, education should be a tool to use to keep yourself from getting into trouble, rather than a tool to use for gambling.
I'm sure there is an inverse correlation between gambling and education.
A good education in history and economics should help steer our braintrust away from this toxic scenario.
Has anybody wondered about the accuracy of zillow.com's pricing? I've been watching a house in the bay area since Mar. So far the price has been going up except for a couple of small set back.
If the house market in CA is cooling down, what causes the price to keep going up? It puzzles me...
'shugy likes to present data that points to a conclusion without actually coming out and saying it. You can't argue with him because he can always say, "that's not what I said". But his implications are always clear. Doesn't matter anyway, look at the data in the thread above this one. Facts are facts.
look at the data in the thread above this one.
It shows a whopping 12% YOY appreciation for closed residences in KC. Looks like all the brains are still buying and values keep going up...
It shows a whopping 12% YOY appreciation...
While strictly speaking, 13% may indeed be "whopping," appreciation is quite clearly slowing down. Here are the YOY appreciation figures for the past year:
Aug '05 - 17.02%
Sep '05 - 15.55%
Oct '05 - 20.00%
Nov '05 - 15.77%
Dec '05 - 17.31%
Jan '05 - 18.20%
Feb '05 - 14.73%
Mar '05 - 11.88%
Apr '05 - 18.17%
May '05 - 15.51%
Jun '05 - 15.99%
Jul '05 - 16.00%
Average: 16.34%
Median: 16.00%
Aug '05 - 12.99%
As I have said again and again, what I think is important is the trend, not the absolute number. Right now, appreciation is quite clearly trending down.
Looks like all the brains are still buying...
YOY sales, down 13%.
...values keep going up...
Actually, for the last two months, values are holding steady, and as I said above, yearly appreciation is slowing.
Looks like all the brains are still buying and values keep going up...
I don't know if "brains" has anything to do with buying homes in this climate.
Were the "brains" buying tech stocks in '00? You betcha!
Perhaps our colleges are telling students that housing always goes up, rather than teaching the history of bubbles and the economic dislocation they cause.
Heaven knows that our universities get almost all other aspects of history wrong, just to make the current (wrong-headded) paradigm make sense. (feminism, multi-culturalism, Euro-Imperialism, post-Christian Nihilism, etc.) You would have to be very careful not to receive a brainwashing in place of an education, in today's university environment.
Given the nationwide obsession around Texas Hold-em, I'm thinking all these "brains" have gone "all-in" and are betting the "river" card has what they need.
Gambling is the anti-brain thing to do.
My favorite quote from "Thelma and Louise" is from Harvey Kitel's character when asked if these girls (Thelma and Louise) are either lucky or smart:
"Brains will only get you so far, and luck always runs out."
I wish I had the audio.
what I think is important is the trend
Yes...that's true. We are defintly headed towards single digit appreciation. I think this is the last year we'll this kind of crazy appreciation. Next year will be more like 6-8%.
Actually, for the last two months, values are holding steady
MOM #s are fun to look at...sometimes you can try to discern a trend. But even in 2005 there were periods when the MOM went flat or even down. But over a year we still had double digit appreciation.
BTW, Tim you forgot to change the year to 06 after Jan. in your data.
BTW, Tim you forgot to change the year to 06 after Jan. in your data.
Whoops. Indeed, Jan-Jul in the above list should be '06.
And the only reason I mentioned MOM closed sales prices was because you specifically said "values keep going up" (emphasis mine). Closed sales prices are higher than they were a year ago, but they have not "gone up" since May-June.
Closed sales prices are higher than they were a year ago, but they have not "gone up" since May-June.
Sure they have:
Median Closed KC Res May 06: $427,950
Median Closed KC Res Aug 06: $435,000
Most of the appreciation happens in the Spring anyway. That's what happens nearly every year. We had a huge bump this Spring and it's been slower since then. That's what happened last year too. We'll know more come next spring.
I think it's going to be hard to convince anyone in Seattle that Real Estate is looser if their house appreciated over 50K in one year (KC Res median was $385,000 in Aug 05, now it's at $435,000!).
I'm sure I could have been more clear somehow, but what I meant by "since May-June" was that from May to June was the last time that there was any real increase in the median closed price.
June '06: $434,950
August '06: $435,000
I consider $50 to be statistically insignificant enough as to say that there has been no closed price appreciation since the May to June increase.
Yes..there was a big gain from May to June (which is the typical Spring bump). But since then it has been flat, which is pretty normal.
But that's res...look at the condos:
KC Closed Median Condo June 06: $250,000
KC Closed Median Condo June 06: $269,500
Nearly 20K up since June!
Sorry...that's:
KC Closed Median Condo Aug 06: $269,500
I started reading this blog recently and am starting to think that the regulars are without a degree and house.
I love this quote...
"When our most educated people are drowning in debt" .. you really beleave that eleau??
I moved out here after getting my degree and outside of my mortgage hold no debt. The job market has been great. I have been very happy with the current market situation.
So what if prices fall, or inventory goes higher..as long as I sell the house for what I paid I am happy.
anon @ 04:30:38,
Regarding your debt situation... Good for you! (I'm being sincere, not sarcastic.)
However, you should know that you are definitely in the minority. Americans carry $8,562 on average in credit card debt alone, and likely an additional $10,000+ in auto loans.
I'm with you. Staying out of debt (with the exception of a reasonable mortgage and possibly school loans) is the way to go.
starting to think that the regulars are without a degree and house
I have a good job, good salary, and a college degree. I'm debt free, including auto, contributing a good deal to retirement, and have a sizeable and growing savings. I'm stil not buying a house until prices are back to sane levels. If for some reason they never come down, and I think that is very unlikely, I'll just buy land in the country and build on it when I retire. These houses in the metro are not worth the price right now, and I'm certainly not risking my financial future (aka risky loans) just to squeeze into one. I'd rather continue renting.
Although I am debt free, I am also "house poor". I have kept my mortgage payment right at the 33% percent of income but it is still tough.
I have a long commute "drive till you qualify" and two kids. Fortunantly my wife has been able to stay at home and we have avoided the "double income trap"..
the thing that gets me is health insurance..........I am just thankfull I have a fixed mortgage and a 1% cap in tax increases
People always migrate WEST...smart people go to school in the east..then go west young man for work.
That is part of what is happening, plus the influx in californians and the quality of life...its a no brainer..buy now or never
buy now or never
Funniest line all week! Thanks for the laugh! Letme guess, and real estate on goes up!
Anon 05:56, have any data to back up those assertions, or are you just throwing out platitudes?
Tip of the Day:
To: Meshugy or whoever else wants to be a pro
Please, do not use the term "value" to describe "price", as in..."values keep going up and up"
Two diff things, most of the time relatively synonymous, but as of late? Not sure...
Learn it, know it, live it...
Tim-
thanks for the monthly appreciation list.
Very pertinent I think that the appreciation dropped by more than a few points from July to August.
Previous to that it was just one point drop per month.
This sudden drop in appreciation is what has happened in other bubble markets prior to the big falls.
I love this quote...
"When our most educated people are drowning in debt" .. you really beleave that eleau??
Yes, I do. The Tim addressed most of your point, so I'll not replow that ground.
Debt free, regardless of how you define it (x-mortgage, x-college loans, x-etc.) is, BY FAR, the exception rather than the rule for most Americans. When the highly educated are taking out payment-option mortgages, on top of school loans, loans for a fancy car, and the credit card debt, you have to wonder about their ability to steer clear of financial chaos, should the need arise. My guess is there is a high correlation with the above scenario and those that live in the sexy, coastal metro areas.
My guess is that bears, of any stripe, are more likely to be debt-free, than your basic perma-bull. Bulls, by definition, think that it is smooth sailing, so they take more unhedged, and half-baked risk. Not so with bears.
You are making a pretty big statement of how you will be fine, as long as you can sell for what you paid. Things turn pretty fast, and some inopportune optismism will only bury you further. Good luck.
Initiative 747, approved by nearly 58 percent of voters in 2001, limits increases in regular property tax levies to 1 percent per year without voter approval
Lake Hills Renter.
It is common knowledge people migrate west. This has been going on since the 1800's. I am talking about Manifest Destiny, which is a phrase that eventually became a standard historical term, often used as a synonym for the territorial expansion of the United States across North America towards the Pacific Ocean.
I am quite aware of the concept of Manifest Destiny. Do you have any data to back up your assertion that "people always migrate west" other than "common knowledge" from the 1800's? By that logic, NYC would be empty by now. How about some actual data or stats? Platitudes and 200 year old migration patterns are worthless.
Wow! Its amazing that even though we're "Where the brains are, '06'" we have the dubious honor of being in the same boat as places like Texas and Mississippi when it comes to mean income drops over the past six years! Wow, and how does that coordinate with 100% price surges in the past six years? I dunno, maybe I'm missing something. Maybe people just recognize that we're so whip-smart that our houses should be worth more, even if we're making less to pay for them.... sweet.
LHR,
My point is that people go to school in the east where all the best schools are, then tend to move westward in search of a great place to live and nice jobs. Just a opinion. These are the smartest people in the world with very high salaries.
San Deigo, San Fran, Denver, Seattle, LA.
Do I need to leave graphs, charts and stats.
Can I be an armchair economist too??
When you say things like "its a no brainer..buy now or never", you better indeed have charts and graphs to back it up. If you don't care enough to back up your own absolutist assertions, why should anyone take them seriously?
Grivetti-
thanks for posting that. WA State is in the high percentage for income drops over the past few years.
- 8% median income. One of the highest in the nation.
Check out that link.
Let me try a different tack on this.
I'm interested in any data that affects the local housing market. You seem to be saying that the housing market in Seattle is bolstered in part because of educated people moving here from the east after graduation. If that is indeed the case, then it's another factor I'd like to consider for the local market conditions. But where's the proof? Do you really expect me to just take your word for it, or to believe you solely based on a generic concept from 200 years ago? If that's really the case, then this should be documented somewhere, and since you raised the assertion it's your duty to back it up. If it is really the case, then I really want to know about it. But I'm not going to take the word of an anonymous poster on a blog. I base my opinions on interpretation of real data. If you can provide that, great. Let's see it. If not, then I don't think it's worth more than cursory consideration.
Yes, I have no degree. I'm a complete idiot. I know nothing about markets, trends, and have failed to look at the national data.
Who am I?
I'm the last sucker to buy a house in a declining market.
Is seattle different? Yes, it has 8% wage deflation. Looks like all those "educated" people with thier basketweaving degrees can't seem to make it.
I still believe it is a no brainer - buy now or never - you wont see prices this low ever again.
If its too much for you move to Idaho or continue renting your apartment.
Seattle is different...
If you are unable or unwilling to give any credence to your claims whatsoever, then I'll be sure to give them the consideration they deserve -- none.
Post a Comment