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Monday, October 26, 1981

Thursday Open Thread

This is your open thread for today. Please post random links and off-topic discussions here.

46 comments:

Peckhammer said...

From the Associated Press:

Home Price Drop Is Largest in 35 Years

The median price of a new home plunged in September by the largest amount in more than 35 years, even as the pace of sales rebounded for a second month.

The Commerce Department reported that the median price for a new home sold in September was $217,100, a drop of 9.7 percent from September 2005. It was the lowest median price for a new home since September 2004 and the sharpest year-over-year decline since December 1970. The weakness in new home prices was even sharper than a 2.5 percent fall in the price of existing homes last month, which had been the biggest drop on record.

The price decline for new homes came while the sales pace picked up, rising by 5.3 percent to a seasonally adjusted annual rate 1.075 million homes. It marked the second consecutive increase in sales following three months of declines.


The declines in prices served to underscore the severity of the correction in the once-booming housing market, which had seen sales of both new and existing homes soar to record levels for five consecutive years, propelled by the lowest mortgage rates in more than four decades.

This year, with mortgage rates rising through midsummer, sales have cooled considerably, with housing expected to trim more than a percentage point from overall growth in the last half of the year.

The debate is whether the slowdown will be enough to push the country into an outright recession. The Federal Reserve, recognizing the weakness in housing, halted a two-year string of interest rate increases in August and left rates unchanged for a third straight meeting on Wednesday.

Matthew said...

peckhammer you beat me to the punch! I was just about to post that!!! Funny how sales rebounded despite the fact that prices are plummeting... People buying in at the top of the rollercoster ride, right before it hits the final crest and starts its run back to the bottom.

Joe Consumer said...

From Business Week Online (it's interesting how the headline seems to be in opposition to the conclusions of the analysis):

Is housing out of the woods?

A growing chorus of experts says the worst may be over for home sales


Depending on whom you ask, the winds may already be shifting for the housing market. All year, economists have warned of a bursting housing bubble and its potential impact on economic growth. However, a recent stream of encouraging data has some prominent prognosticators changing their tune.

One of the first in line was Alan Greenspan. As recently as May 18, the former Federal Reserve chairman put an exclamation point on the housing slowdown when he declared, "The boom is over." But now, the "worst may well be over," Greenspan was quoted as saying Oct. 7, after mortgage applications posted their biggest weekly gain since June, 2005.

A growing number of economists and analysts have come around to the ex-Fed chief's view. Some investors may see sunnier skies too, as homebuilding stocks such as Lennar, DR Horton, and Pulte Homes have rebounded since touching 52-week lows in July. Reports on existing home sales for September, scheduled for release Oct. 25, and new home sales Oct. 26 could shed more light on housing's status.

Leveling out?

While the most bearish scenarios may be becoming increasingly unlikely, the housing market probably isn't out of the woods yet. Even the most upbeat forecasts call for new-home construction to keep declining nearly as much as it already has so far. Meanwhile, underlying economic figures may contradict their milder headlines.


Greenspan's assessment followed on the heels of Fed Vice-Chairman Donald Kohn's suggestion Oct. 4 that "[housing] starts may be closer to their trough than to their peak." The data since then could give bulls even more reason for guarded optimism. On Oct. 17, the National Association of Home Builders' housing-market index rebounded to 31 from 30 in September, snapping a 12-month decline from 68 a year earlier. A day later, a Commerce Dept. report showed housing starts rose 5.9% in September, to an unexpectedly strong pace of 1.772 million units.

"The point of maximum deterioration in housing activity has probably passed," says Jan Hatzius, chief U.S. economist at Goldman Sachs, in an Oct. 20 report. "The sharp downturn of the past year seems to have brought total housing starts—single-family starts, multi-family starts, and mobile-home shipments—close to the level justified by the underlying demographics."

Permit plunge

Still, Hatzius comes up with plenty of caveats. Housing activity could drop by another 300,000 housing starts, he projects, as homebuilders work off unwanted inventory and buyers shift from single-family units to multifamily and mobile homes. That would come on top of a decline of 400,000 housing starts already, Hatzius says.

Others maintain that the housing downturn still has a long way to go. "Commentary suggesting housing demand is recovering, based on the latest homebuilder and mortgage applications readings, appears to be more wishful thinking than fact," says Keith Hembre, chief economist at First American Funds, in an Oct. 20 report. Housing may have stabilized somewhat, but it's probably only temporary, according to David Rosenberg, North American economist at Merrill Lynch. The unexpected September surge in housing starts came alongside a 6.3% drop in building permits to their slowest pace since October, 2001. A decline in building permits has accompanied a rise in housing starts only six times since 2003, according to Rosenberg, and starts fell a month later on five of those occasions.

Grim futures

Rosenberg also differs with Goldman's Hatzius over demographics. "Our research suggests that this housing cycle does not bottom out until starts reach the 1.3 million mark," Rosenberg said in an Oct. 19 report. "So contrary to popular opinion, we are barely in the fifth inning of this down-cycle on the construction front."

So far, futures traders are sticking with the pessimistic view. In afternoon trading Oct. 23, investors were predicting declines over the next 12 months in all 10 markets covered by the Chicago Mercantile Exchange's housing contracts. The composite index is seen falling 7% by August, 2007, when the one-year contract expires. That's roughly unchanged from what investors expected a month earlier.

Other derivatives traders may also be betting on a deeper slump for housing. On Oct. 11, the lowest-rated subset of the ABX home-equity index touched its weakest price level since it was launched in January, according to London-based Markit, which created the index with CDS IndexCo. The index tracks a basket of credit default swaps on subprime mortgages and home-equity loans.

Good-news bears?
In an Oct. 9 speech, San Francisco Fed President Janet Yellen painted a possibly even gloomier picture. Yellen spoke of a major homebuilder who calls Phoenix and Las Vegas "the new 'ghost towns' of the West." According to Yellen, price cuts "appear inevitable."

Still, there are some glimmers of hope for housing demand. Peter Kretzmer, a senior economist at Bank of America, points to the University of Michigan's latest consumer-sentiment report, in which the share of respondents indicating that it was a good time to buy a house jumped to its highest level in 14 months.

Meanwhile, some economists are becoming more circumspect in their bearishness. In an Oct. 20 note, Richard Berner, chief U.S. economist at Morgan Stanley, says he still believes the housing slowdown is far from over. "Nonetheless, the latest data suggest that the intensity of the housing decline may be fading somewhat, and with it some of the concurrent downward pressure on housing prices," he adds. "If so, one of the biggest perceived risks to the U.S. economy may be smaller than feared."

After years of defying naysayers' predictions, the housing market has finally cooled in recent months, by virtually all accounts. However, the debate over when the current slowdown will end may be just beginning.

synthetik said...

that's totally irrelevant since it's not local to Seattle.

Goodness!

Grivetti said...

yeah dude, geesh, Seattle's different and stuff... Anyway, the Japanese or Chinese or some one will bail out Seattle... We're hardly part of the US anyway...

Rhodester headline...

Home Price Drop Is Largest in 35 Years (but not here... of course...*sizzle*)

EconExchange said...

Ok, happy synthetik

"Areas that were strong in the second quarter -- such as the Pacific Northwest and the coastal Carolinas -- are now deteriorating because of the large stock of existing homes for sale, Eller said."

talks about the same thing as the other article but then throughs in that little qoute.

http://www.thestreet.com/_yahoo/newsanalysis/homebuildersconstruction/10317514_2.html

Eleua said...

a drop of 9.7 percent from September 2005

Only 70.3% to go.

I will say that I didn't think this would materialize this quickly. This drop is without the accelerant of rising unemployment, ARM adjustments (in full bloom), and a general sense of panic.

This is just an inventory correction. Wait until the other fear accelerants hit the market.

Going down?

Slinky said...

"6.3% drop in building permits" = yikes

The process of applying for building permits implies that existing inventory is being sold at a rate in which the builders can make a profit. In other words, if sales in June are through the roof, you will see lots of applications in July. The actual building will not start until, say, September, and thus demand from June influences starts in September and permits later on.

Having a very large number of housing starts in September combined with a decline in permits implies that while houses are being built to June demand, they are not selling in September to June demand. Thus permit applications drop to September sales levels, and starts begin later...

With that in mind, I can't see how the following quote can possibly be true: "The point of maximum deterioration in housing activity has probably passed," says Jan Hatzius, chief U.S. economist at Goldman Sachs, in an Oct. 20 report.

According to the permits/starts indicators, demand is low. Low demand in September/October generally translates to low demand over the winter. And after that, we have all the ARM/IO loans resetting, and then what will happen?

Spin, spin, sugar, but it won't make the decline any less real or any less painful for many.

The Tim said...

Peckhammer & Joe Consumer,

Would you mind posting links and just a paragraph or two of relevant quotes? Posting entire articles tends to clutter up the comment section, and it is also probably a copyright violation.

Thanks.

Veedra said...

The point of maximum deterioration in housing activity has probably passed

Quite possibly he may be right. What we may now enter is a slow death over many many years at a "minimum deterioration" rate.

Eleua said...

The point of maximum deterioration in housing activity has probably passed

I am curious...

Just how much of that 9.7% drop occured in the past three months?

How much of the 12 month period was a flat to increasing market?

IOW, were we getting the proverbial "stagnation until incomes catch up" phenomenon during the first six months, and then the market just fell out of bed during the summer?

If so, that means we are just starting to notice an acceleration in the deterioration of home prices.

I think any talk about how the worst decline is over is a bit premature.

We still don't have any real fear and certainly no loathing of housing as an investment - two ingredients that are absolutely necessary for a bottom to occur.

I think the real fireworks will be during next summer, when all the dreams of equity sugarplums dancing in the bulls' heads are dashed. Along with ARM resets, higher interest rates, inflation, and a very fragile stock market, holding an expensive house will turn to panic.

Like I said, 70.3% to go.

Mikhail said...

Who is still buying? What really perplexes me is that there still seems to be anyone still buying real-estate right now, at all. Prices are still extremely high, so why would any sane person want to buy now that it is generally understood that a downturn is under way?

Clearly SOMEONE is out there buying (including a few of my friends, who'se rationales I don't understand either)!

synthetik said...

>who is still buying?

[squidword] maaarons! [/squidword]

Deejayoh said...

I was wondering how Seattle compared to other markets in terms of median price performance -where ae we on the curve. I grabbed the data from housetracker.com and plotted a bunch of markets back to March. I wish I could figure out how to post the graph here, but the gist of it is - vs. SF, Boston, LA, SD, Portland, Phx, and Sacto - Seattle, SF and Portland were the only markets that went up over the period, and seem to be "hanging on" better than others. Seems like we are 6, maybe 9 months behind those markets. Maybe I cherry picked the comparisons, but it was interesting to see.

Here is a link to it on my site.
http://deejayohspot.blogspot.com/

Grivetti said...

Ahh, wait a minute? What's with this article?

Apartment Rent, Demand Is Soaring

But Seattle's special... geez, come on, I thought we're the only ones with 'robust job growth' and all that..

In addition, the supply of rental housing tightened in the past year as many apartments were converted into condominiums in places like Florida and Southern California. Some of those units are now returning to rental markets at high prices as owners struggle to sell them

Whew... good thing, due to strong job growth there's none of that underwater condo-flipping-conversion going on here. Our markets based on stark fundementals. We've got Microsoft, I don't knwo what the rest of the country's doing.

Ahh... at least I can retreat to the safe little oasis that is the Rhodster

Chalk it up to strong job growth that's attracting newcomers, condominium conversions taking apartments out of the rental pool faster than developers can build

See, our condo-conversions are based purely on supply and demand, no speculation/investment hooey like in SoCal or SoFL... all jobs, see, we are different. We have strong jobs, so stop lumping us in with the rest of the country!

Man, what's with the hate-speech from the national media anyway... why do they hate Seattle?

The most important economic force is job growth, said Rob Kellum, chief operating officer of Suhrco Residential Properties.

"If job growth increases, apartment demand almost immediately increases," Kellum said.


ah... more like it...

synthetik said...

Housing market his Weyrhaeuser profit

[Federal Way Based] "Forest products giant Weyerhaeuser Co. said Wednesday that its third-quarter profit fell 26 percent as the downturn in the housing market drove wood product prices and demand down sharply.

“While anticipated, the housing market decline was more abrupt and drove wood products prices and demand into a deeper plunge than expected...we remain confident about the residential housing market.”

"Dan Fulton, CEO said an oversupply of new and existing homes is behind the housing slump, unlike historical downturns that have been fueled by high interest rates, weak economies or job losses."

synthetik said...

Boeing forecast disappoints

The Boeing Co. posted a 31 percent decline in third-quarter profits Wednesday and raised concern on Wall Street about the potential for snags with its much-awaited 787, saying it anticipates spending significantly more than planned to reduce the weight of the fuel-efficient jet.

synthetik said...

Amazon Profits drop 37% as expenses rise

SAN FRANCISCO (MarketWatch) -- Amazon.com Inc. late Tuesday reported that even though third-quarter sales rose 24%, profit plunged by more than a third on the cost of employee stock options and heavier spending on technology and marketing.

Another sign of Mr. market insanity. How do you guys think AMZN will do during a recession? Would buying books and other products online be considered a luxury item?

I've had similar thoughts about Starbucks, and while it's been proven that people turn to "sin" (tobacco, cigarettes, etc) during bad times, I'm not sure how a $5 mocha-chocka-chino would fit it... although it might provide them with a temporary feeling of comfort.

These announcemens are just anecdotal evidence of potential bad times ahead for the job market in Seattle, imho.

Peckhammer said...

The Tim: I sourced the 1/3 of an article I posted, and if anyone was to be sue for copyright violations, it would me or the company that is making this blogspace available.

That said, I will condence and link in the future. I was just so excited about the good news that I nearly wet myself. And in my haste... well... I over-quoted.

starling said...

Of course the Seattle-based division of Boeing is doing great, but am I just raining on your parade?

Yesterday's Puget Sound Business Journal:

Boeing Commercial Airplanes' Q3 revenues up 45 percent

Earnings from operations at the Seattle-based division rose to $646 million from $238 million in 2005 and the company said it delivered 100 planes in the quarter, compared with 62 a year earlier.


Oh dear, and they just got five more 787 orders today. I'm so sorry!

synthetik said...

...unfortunately the parade has only begun

starling said...

Yes, keep your spirits up, Synthetik -- maybe things will turn south for our economy soon.

And I'm not going to say anything about Starbucks net revenues at $7.8 billion this year, up from $6.4 billion in fiscal 2005. I don't want you to get down in the dumps!

plymster said...

During the last recession, sellers of small "reward items" did pretty well. Cosmetics, Starbucks, etc.

I remember hearing a news report on it (here's an article on beauty shops after the recession). The idea was that when you have something positive to celebrate, (like a good day at work, an interview, found a company that will send you a reply to your resume/work inquiry) you'll go get yourself a mocha or a new shade of lipstick, instead of having a nice dinner, or buying a new pair of shoes.

If you look at SBUX, you'll see they did pretty well during the last recession. Of course, I'd imagine that the $4-a-day mocha crowd will cut down this time, and they won't have the expansion capabilities they had last time.

I also looked at Estee Lauder (EL), and they followed the S&P 500, but recovered a bit more quickly. So who can say if the "small rewards" argument holds water.

Also, the Boeing info is actually good news for the region. It basically means that Boeing will pay more people to work on the 787 project to get it off the ground. Further, while it's a short-term hit to stockholders, it's a long-term gain to spend the money up front, rather than to try to short-cut/rush the project, the way Airbus did. As long as the slowdown doesn't take too long, Boeing will be healthier for the expense. Plus, those 787 orders aren't likely to shift to Airbus since they're not really building a competing model of aircraft.

What's more, though the stock price has taken a hit, morale (at least from my tiny view into it) seems to be cruising along just fine.

The housing slowdown will destroy the region's economy. But right now, I'm optimistic (or in denial) about Boeing's future.

Eleua said...

Starling,

Do you see any potential hiccups for the PNW economy? Is the wind all at our back?

If the nation-wide Sept-Sept housing numbers are down almost 10%, do you think that the PNW will brave the storm? If so, how so?

If the credit bubble unwinds in an uncontrollable manner, will we be spared, due to our METRONATURAL state of mind?

You talk as if we use a different currency up here, and that our economy isn't integrated with the rest of the great unwashed, who live in the rest of the country.

Often times those that are the last to fall have the most spectacular descents.

Please keep "ringing the bell."

synthetik said...

>maybe things will turn south for our economy soon.

I do not -want- the economy to tank, people to lose their homes and be out of work. If the economy tanks, my wife will most likely lose her job and my clients' will likely need less of my services.

Unfortunately, that is the direction we are headed, faux bull market insanity rally or not. Comments by Greenspin or Lereah about a 'soft landing' will only give people false hope and allow them to buy into housing at the various 'false bottoms' we will experience on the way down, further exascerbating the problem.

I understand that Boeing is going strong, just pointing out today's news about companies in the area that are experiencing a taste of what's to come.

Mr the Horse said...

Just wait til a global economic recession hits, and Boeing starts to get cancellations, especially when they just announced cost over runs on the 787. Defense spending they recieve is almost all distributed to former defense contractors that don't reside in this area.

Mr the Horse said...

http://www.europe2020.org/en/section_global/161006.html


http://chevallier.turgot.org/a408-Fourth_quarter_zero_growth_.html

Hedgies are keeping the stock market going now along with increasing bank credit. M1 & M2 are down and thanks to the Fed M3 isn't reported any more (why not?). M1 & M2 are contracting and once bank credit contracts you will see the sh&* hit the fan.

Joe Consumer said...

It's ironic that many of you are spelling the doom of the economy up here, and I have to assume that this tsunami wave will wipe away your jobs as well (or are you special like Seattle is 'special').

I would think that instead of commenting on and on about it, you would be working hard to figure out how you plan your survival when the crash comes. None of you will have work (excluding those of you who are special..haha), and god knows, if you're in your 20s, none of you will have much in the way of assets.

If the real truth is only found here, we're all fucked.

Brat said...

Interesting article in the San Jose Mercury News today (10/26/06) "Real estate 'agent bubble' deflates as home sales slow".

Also a comment in a construction trade publication that concrete prices are decreasing because of less demand.

synthetik said...

"When greedy investors jump in at the top of a bull market, I accommodate them by selling them my shares, when nervous investors are selling at the bottom I accomodate them buying..." John Templeton

"We are fearful when others are greedy, and greedy when others are fearful." - Warren Buffett

Lots of Groupthink and short-signed emotional speculation is going on, not only in the RE industry but currently in the equity markets.

Did we learn anything from 1999? 1987? 1929? Tulips anyone?

Going to watch CNBC... bbl

synthetik said...

From Wiki on M3:

As of March 23, 2006, information regarding M3 will no longer be published by the Federal Reserve. The other three money supply measures will continue to be provided in detail. On March 7th, 2006, Congressman Ron Paul introduced H.R. 4892 in an effort to reverse this change.

One can only assume they do not want us to see how much money they are printing. Is that correct?

PugetHouse said...

Someone wanted the September sales stats yesterday. Here are some for King County residential housing, which seemed relevant to our discussion Today as well:

9/2005*
New Listings - 4,026
Units sold - 2,914
Avg Sq. Ft. - 2,058
Avg price - $482,369
Med price - $486,508
Price / Sq. Ft - $234
Days on market - 38

9/2006*
New Listings - 3,780
Units sold - 2,203
Avg Sq. Ft. - 2,036
Avg price - $524,663
Med price - $528,172
Price / Sq. Ft - $258
Days on market - 41

There were fewer listings this Sept. than last, but those spent longer on the market before being sold. So both sellers and buyers are more cautious. Thus, fewer houses changed hands. However, the price per square foot went up by around 10%. In my opinion, this means that "the worst" is definitely not over in PNW. The perception that you're getting more house these days for the money did not hold water in Sept. The opposite was in fact true.

Of course, Sept. was the good ol' days when we were all discussing the possibility of a price correction. These days, it's assumed fact that there is a buyers' market. I'll dredge up some October stats to see how that postulation holds up.

*I ran searches Today on sold residentials for the given periods, so that I could find out square footage. These numbers do not match up with the official MLS summary reports.

synthetik said...

As we get closer and closer to housing panic here in Seattle, it seems there is a direct relationship between that and the number of trolls on this blog [see above].

Joe Consumer said...

From WIKI:

"a troll is a person who enters an established community such as an online discussion forum and intentionally tries to cause disruption, most often in the form of posting inflammatory, off-topic, or otherwise inappropriate messages"

Synth - to what disruption are you referring (see above)?

synthetik said...

>9/2005*
New Listings - 4,026
Units sold - 2,914
Avg price - $482,369
Med price - $486,508

Your data looks erroneous to me. From NWMLS data, King County SFH 9/05 Median home price was $381,250 and 09/06 $425,000. Active Listings on 09/05 were 6,149 w/sales of 2,860. Active listings for 09/06 was 7,919 with 2,271 pending sales.

Am I missing something, or did you get those numbers from a different source other than than NWMLS?

synthetik said...

>Synth - to what disruption are you referring (see above)?

What can I say, I have keen troll-spotting ability.

Um, if you read his post, those figures make the local real estate picture look ROSY, despite what he might have said.

Not to mention the smarmy picture. You don't have to click on it to realize he's a realtor. Why are realtors the only profession to put their image on their business card?

Joe Consumer said...

I was too bedazzled by his photo notice. LOL

Eleua said...

It's ironic that many of you are spelling the doom of the economy up here, and I have to assume that this tsunami wave will wipe away your jobs as well (or are you special like Seattle is 'special').

I would think that instead of commenting on and on about it, you would be working hard to figure out how you plan your survival when the crash comes.


I'll take a stab at this.

No, I don't think anyone on this forum believes their job is any more special than Seattle real estate. While I can only speak for myself, my guess is there is some anger with the orgy of speculative excess, and the inevitable bust that will follow. That financial black hole will suck many innoscent bystanders into the abyss - people that had nothing to do with the bubble.

That has me hopping mad. For the record, my job will be one of the first to go when the consumer craps all over himself. Capital has been misallocated for the past 7 years towards extending the sugarplum retirement dreams of the Babyboomers, and when the Bubble Economy finally dies, all that misallocated capital will vanish. We will all be worse off than when it started (save BK lawyers and divorce lawyers).

After that, we will have the twin government bailouts of both the REIC and the Boomer retirements. As if starting over wasn't insulting enough...

As to why it is prudent to discuss and comment on this, rather than looking for a job... Perhaps there is some comfort in surrounding yourself with like-minded people, who are all looking for the same thing. Perhaps someone has an idea that will resonate with someone else, and take that person in an entirely different direction. Also, this serves as a touchstone to a reality that is coming, but not yet here. IOW, this is a small community.

Granted, it would be better to all meet on Thursday evenings at a brew-pub and knock back a few and tell stories, or all go to a ballgame, but the internet is convenient for many.

Nope, nobody is special. Unfortunately, nobody is an island either - that's why I'm pissed off.

Peckhammer said...

"Of course the Seattle-based division of Boeing is doing great, but am I just raining on your parade?"

The surge was primarily in orders for aircraft -- the same aircraft that were responsible for the fall-off in prior months -- so it’s not as exciting as the numbers would first suggest.

Speaking of paradoxes, the REIT Index remains white hot, up 30.1% for the year, which I find astounding. With interest rates rising and real estate sagging like grandma's double d's, The real estate industry is either bucking a tremendous headwind, or momentum is simply pushing prices to an inevitable summit from which the slide will deep scars.

Eleua said...
This comment has been removed by a blog administrator.
PugetHouse said...

Honestly, there are no normal pictures of me, since my wife can't focus a camera. I could take the one from my "official" website, but that one's even worse. Still, I'm glad to provide a little sport.

Synthetik was right about my previous MLS numbers. I had average list prices and sale prices in place of average and median sale prices. SORRY. There is some float to the numbers over time, since some transactions fail, and some agents do lie a tad. Some 2006 numbers changed over the course of Today. Here are the updated y-o-y stats for Sept. & Oct, as of 8pm. In keeping with the PNW trend for 2006, the

number of transactions is slowing y-o-y, but inflation keeps driving along.

The recalculated average/median y-o-y inflations per Sq.Ft. are:
in Sept.--------- 11.0% / 13.7%
for 10/14-10/25-- 19.5% / 17.9%

2005
-------------------------
September
Units sold - 2,941
Avg Sq. Ft. - 2,223*
Avg price - $482,369
Med price - $386,000
Avg price/Sq.Ft - $216.99
Med price/Sq.Ft - $199.48**
Days on market - 38/23***

10/1 - 10/13
Units sold - 874
Avg Sq. Ft. - 2,223
Avg price - $479,418
Med price - $387,250
Avg price/Sq.Ft - $215.66
Med price/Sq.Ft - $205.71
Days on market - 36/21

10/14 - 10/25
Units sold - 969
Avg Sq. Ft. - 2,185
Avg price - $468,652
Med price - $381,000
Avg price/Sq.Ft - $214.49
Med price/Sq.Ft - $198.79
Days on market - 39/22

2006
-------------------------
September
Units sold - 2,208
Avg Sq. Ft. - 2,178
Avg price - $524,448
Med price - $428,750
Avg price/Sq.Ft - $240.79
Med price/Sq.Ft - $226.89
Days on market - 41/26

10/1 - 10/13
Units sold - 781
Avg Sq. Ft. - 2,230
Avg price - $523,779
Med price - $439,900
Avg price/Sq.Ft - $234.88
Med price/Sq.Ft - $228.97
Days on market - 41

10/14 - 10/25
Units sold - 604
Avg Sq. Ft. - 2,265
Avg price - $580,470
Med price - $439,650
Avg price/Sq.Ft - $256.28
Med price/Sq.Ft - $234.28
Days on market - 42/27

* The different MLS stats reports I used give different average square footage. I assumed that the larger value factored out listings with zero sq. ft. and is thus more correct. The MLS stats reports agreed on other values.

** The median of all (price/Sq.Ft.), not (Median Price)/(Median Sq.Ft.). Houses listed with zero Sq.Ft. were not counted.
*** Average days on market / median days on market

Joe Consumer said...

>> Granted, it would be better to all meet on Thursday evenings at a brew-pub and knock back a few and tell stories

I think if everyone showed up at a pub, the dynamic would be completely different. First off, I think that we'd find that though many share the same view here, personalities otherwise would clash. Certain traits hidden by the great equalizer of words would become show themselves.

Also, many here come up with good responses and retorts with the luxury of time to research and compile data, then bind it all together with a cogent argument.

Live, on the spot debate would favor those with good verbal sparring skills complemented by a strong memory for facts.

I also think that if anyone who were truly neutral looking to hear both sides make their case, would only find two sides entrenched in their respective positions.

I'm one of those who enjoy hearing both sides, but when someone tends to see the world with a singular viewpoint - whichever side he represents - he loses credibility with the centrist. Not unlike in politics where political moderates of all persuasions find the extreme beliefs of the right and left, and their predictable inability to give an inch, as unpalatable.

Look at Al Franken. A joke from the left. Same with Rush from the right. Moderates tune them out.

As much as everyone here believes in the existence of a bubble and the coming econmic disaster which will follow, I think the influence of this blog on helping the average joe (thus my user name) is limited by the extreme - and I get that you truly don't view them as extreme - positions of the folks here.

This is an intellectual exercise - macro-econmics and aggregate data don't drive decisions for most people. Pepsi has tried over the decades to present data that a statistically significant number of people prefer Pepsi over Coke..but Coke still is number one in the market. In the same way, the avalanche of data presented here won't sway the vast majority of the audience I think you hope to reach. No, decisions are driven as much by emotion, personal wants and needs, and desires as much as logic and economic data.

I expect to be hammered for my thoughts, and that's fine. I hope you sense the moderate tone in my comments, and I do want to reiterate that I enjoy most comments (some of Eleua most extreme apocalyptic predictions notwithstanding :)

Lake Hills Renter said...

I am a centrist myself, including in politics. I have to say though that I don't see a whole lot of extremism here. Sure, there are some doom and gloom predictions of 70% price drops now and then, just as there is the occasional claim of neverending double-digit appreciation, but one of the primary reasons I like this blog is because it is based in very large part on analyzing data, not on emotion or predetermined points of view. Being a bear or a bull does not in itself make you an extremist if you've arrived at your position based on reasoned anaylsis of the data at hand. That said, I agree with almost everything you said.

Lake Hills Renter said...

I also just wanted to say welcome to some of the new faces we've had lately -- more the better IMO, (trolls aside). Joe Consumer's thoughtful posts are definitely off on the right foot. And Pugethouse, I don't care if you're a realtor or not. You've posted data and anaysis and owned up to what seems like an honest mistake. Can't ask for better than that. Welcome to you both, and anyone else I missed.

PugetHouse said...

Thanks, lake hills renter,

I've learned plenty by following along. And now I won't have to hire a focus group for feedback on my image.

Joe Consumer said...

Hey all - just saw a teaser for the 11pm news on KING about 'Zillow coming under fire for its valuations'...