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Saturday, October 10, 1981

Tuesday Open Thread

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


Peckhammer said...

Elizabeth Rhodes Responds

After reading the most recent Seattle Times Real Estate article addressing the slowdown, I was rather disgusted by the softened, almost fluffy version that Ms. Rhodes had spun. So, while sitting in my pajamas and spitting coffee at the monitor whilst muttering explitives, I banged out a short missile to the queen of real estate spin. I pressed "fire" and let it fly.

I certainly didn't expect a reply -- not after accusing Ms. Rhodes of being a shill for the real estate industry, or having a leash put on her by her editor -- but she took the high rhode and responded in a polite manner:

"Dear Peckham,

Real estate is both cyclical and seasonal. I think the line you quote is from a story I wrote earlier this year and was accurate at that time. It was for a long time, too. Countywide house prices here climbed for 7 consecutive months -- a much more sustained period of price growth than
we had last year. Now we're going into the seasonal fall/winter market slowing. And we may
be at the end of our price growth cycle, just as we were in 2000. But
it's too soon to tell. Every month I write a story about what happened with the previous month's home sales. So it stands to reason that the story will change. Thus all I can say is what's happening at the moment, and that's that
price appreciation is taking a breather as far as King County
single-family homes are concerned. Not condos, though. They're still

Well, whether I agree or not, the woman is entitled to her opinion and to analize the data any way she likes. By responding she has disarmed me... damn it!

Peckhammer said...

I was reading an article in the Stranger entitled "Taking the Initiative; Sizing Up November's Ballot Measures." What caught my attention was the following line about I-920:

"I-920 repeals the tax on inherited wealth that burdens the 250 richest families in Washington. The estate tax (or death tax, if you talk like a Republican) falls on estates worth over $2 million, exempting farms and timberland if they make up at least half of the estate."

Does that mean what I think it means -- that there are only 250 families in Washington State with a net worth over $2M? If yes, what does that say about the fiscal health of the seemingly endless supply of pawns that are buying homes which appear to be priced for the upper crust?

Grivetti said...

Now we're going into the seasonal fall/winter market slowing.

More like a cyclical '07/'08 market slowing.

Liz Rhodes does respond, I've written a few times. The problem is the response she gave you... this "which ever direction the wind takes me" line that groans of hypocrisy especially when she's quoting RE shills and their ilk who say "30% over the next 5 years!" crowd. She's not a reporter at that point but an editor of Realtor(TM) quotes... which is B.S.

Matthew said...

Don't worry all, 2007 is quickly approaching... Soon we will all have data that will be getting harder and harder for the MSM to deny!

stephen said...

Exactly, she is not a reporter period. She writes RE spin pieces for the RE advertising section in the Times :-)

The Tim said...

FYI, I'm on jury duty today, so I won't be able to read or respond to comments until after 5:00.

Mikhail said...

I took a bike ride through a residential neighbourhood just behind the Crossroads mall in Bellevue last night, and was just astonished at the number of for-sale signs I saw. These are all VERY modest homes from the '60s and '70s (most are 1 story ranch get-ups with 2 or 3 bedrooms).

On one corner there were 3 homes for sale, all spruced up with new siding and newly land-scaped yards.

I wonder why these people are all rushing to put their homes on the market now? Why weren't they selling back in April?

Anyway, it's as if some secret signal just went out that everyone needs to sell.

Eleua said...

it's as if some secret signal just went out that everyone needs to sell.

The greatest fool always knows who he is.

Matthew said...

Great article from yesterday on CNN

Matthew said...

"n the past two years, homeowners took out 1.3 million ARMs with teaser rates below 2 percent, according to Cagan's research."

"Of those, 21.5 percent have negative equity, where the market value of the home is less than the amount owed. The number of people in that spot could go up significantly if home prices fall as forecast or if homeowners with teaser-rate-ARMs experience job loss, illness, divorce or a death in the family, which are the main causes of mortgage default."

Andy said...

Yeah, for some strange reason the owners of the place I'm renting might want to list in November. Huh? I haggled over the length of the lease back in February, because they DIDN'T want to sell in the winter! So I gave in, and my lease does not expire until end of January. Now they want to list right at the beginning of the winter??

Oh, and the house right across the street from me is for sale now too.

Matthew said...

NEW YORK (AP) -- Stocks turned mixed Tuesday morning after Dallas Federal Reserve President Richard Fisher said the decline in home prices won't spark a recession but warned that the U.S. central bank will raise rates again if inflation doesn't ease.

synthetik said...

andy, offer to let them out of the lease now for $10,000

wreckingbull said...

Susan has been pushed over the edge

Susan Ryan posted a new blog entry about the merits of dark hardwood flooring. The first comment was that dark + Pacific Northwest = gloomy. Pretty benign post.

Anyway, comment deleted and blog entry closed to comments.

I have to give her credit for hanging in as long as she did. All I can say is that if I were about to engage her as my Realtor®, I would think twice, based solely on the activity of that blog.

Richard said...

Wreckingbull - I agree. Some of Susan Ryan's comments have been so unprofessional that it's hard to understand why the PI would give her a platform to spew her nonsense.

Nolaguy said...

Western Washington:

September sales down 15.7% yoy

Inventory up 41% yoy

redmondjp said...

richard and wreckingbull - try to live for awhile in Susan's shoes. No matter what your profession is, it's hard to want to keep doing it if you have a very negative viewpoint about it. We all need some sort of warm fuzzy feeling about what we do in order to make us get out of bed and go do it all over again, every day (Groundhog Day, anyone?). By no means am I defending all of her statements here, but I think that optimism about one's own chosen profession is a good thing, regardless of what may be going on in that profession's industry.

Keep these things in mind:

1) Most RE agents spend a lot of time in their cars.
2) Most RE agents a lot of time on their cell phones.
3) There are a lot more RE agents than there were 5 years ago.
4) Most RE agents are going to be missing a lot of sales over the coming months, possibly leading to panic/desperation/anxiety/depression/thoughts of suicide.
5) We are entering the dark, cloudy time of the year when Seasonal Affectiveness Disorder (SAD) comes into play.

Combine all of the above ingredients and stir well.

Now do we really want to have an excess of Lexus-driving, Latte-sipping, phone-talking, desperation-driven, suicide-thinking RE agents on our roads?

The more of them that can somehow manage to stay in their own happy rose-colored world, the safer our roads will be!

Think about it . . . it's true . . .

synthetik said...

is currently featuring the PNW... a recycled report from Inman as well as a report about Bellingham; also imbedded in comments is a post about Oregon.

I expect we'll be part of his regular roll now...

synthetik said...

Home Builders see no end in sight to housing fall

NEW YORK (DowJones/AP) — Several more home builders posted preliminary sales results that indicate there's still no bottom in sight to the sharply deteriorating housing market.
D.R. Horton (DHI) said orders fell 25% in its fiscal fourth quarter while M/I Homes (MHO) posted a 51% decline in its third quarter.

The two companies join a growing number of builders posting sharp double-digit order pullbacks. Previously, KB Home (KBH) reported a 43% order decline in its fiscal third quarter while Beazer Homes USA (BZH) posted a 49% drop-off in its fiscal fourth quarter.

Lennar (LEN) is the lone builder to buck the trend so far, posting only a 5% sales decline in its fiscal third quarter that ended Aug. 31.

In a statement Tuesday, D.R. Horton Chairman Donald Horton said "the current selling conditions in the homebuilding industry continue to be challenging, with higher than normal cancellation rates and increased use of sales incentives in many of our markets."

D.R. Horton's cancellation rate surged to 40% in the quarter from 29% in its fiscal third quarter. However, the company didn't lower its view for 2006.

Robert Schottenstein, chief executive and president of M/I Homes, blamed high cancellation rates and an inventory glut for the weak demand.

He ratcheted down his earnings outlook for 2006 to a per-share range of $5.25- $5.75 from previous estimates in the range of $6.30-$6.65. He now expects the company to deliver only 4,000 homes, down from a previous estimate of 4,500 homes.

In addition to the housing slowdown, KB Home is also facing an SEC investigation into stock-option grants. Last month, it delayed releasing its fiscal third-quarter results until the probe is complete. This week, KB Home indicated that its net income fell 32% to $155 million, or $1.93 a share, in its fiscal third quarter. Other builders are expected to post similar double-digit earnings declines


+0.92 24.76 D R HORTON INC (DHI)
+0.96 45.75 KB HOME (KBH)
+1.02 54.80 CENTEX CP (CTX)
+1.07 34.07 PULTE HOMES (PHM)
+0.72 46.92 LENNAR CP CL A (LEN)
-0.67 57.25 FANNIE MAE (FNM)
-0.03 67.66 FREDDIE MAC (FRE)

did the investors miss the news from an hour ago? heh.

synthetik said...

Shug, I checked zillow and your over inflated Ballard home is now worth almost $500,000. According to the site, it shot up around $6,000 in value in one week!

Nice going!

It's a little like the instant paper millionaires over at Youtube... the thinking part of their brain is telling them to sell their google shares NOW, cash out and buy a some gold bullion, but their greedy side assumes we'll see $500/share google price soon.

Heck, anything is possible. The odds of google stock rising to 1000/share is at least 500x more probably than housing continuing to rise in King County.

Hot! Hot! Hot!

cosmos said...

peckhammer - Regarding the number of estates projected to be subject to WA's estate tax, I couldn't find specifics, but here is some national data from Center on Budget and Policy Priorities:

"Increases in the exemption level have drastically reduced the number of estates subject to tax. Already, the number of taxable estates has dropped from more than 50,000 in 2000 to fewer than 13,000 in 2006, and it will fall to about 7,000 when the exemption level rises to $3.5 million ($7 million per couple) in 2009. Put another way, a little over 2 percent of all estates were subject to tax in 2000. Today, only one-half of one percent of people who die — that is, 5 in 1,000 — pay any estate tax, and that number will fall to 3 in 1,000 in 2009 ."

Kaleetan said...

It looks like interest rates might start trending upwards again with the strong economic news and a renewed concern with inflation.

"Bonds took their third consecutive dive today as traders are losing hope that the Fed might ease rates early next year.

Not only has some of the recent economic data been stronger than anticipated (today's inventory news, Friday's reported low unemployment and an abnormally high annual payroll revision, falling oil prices), but recent comments by Fed officials have reemphasized the central bank's concern with inflation. Today, Dallas Fed President Richard Fisher said that the U.S. economy is healthy and in an interview published yesterday, St. Louis Fed President William Poole said that the Fed did not have to stimulate the economy since the interest rate environment has eased in the last couple of months (long term bond yields have fallen). "

Its looking more and more like the soft landing scenerio.

Does anyone have anything showing we might be leaning towards a hard landing? I have not seen too much and have been looking.

After reading this blog, i have been expecting the economy to collapse -

I guess we will have to wait untill 2007 to see what Synthetic says what will be "most likely worse than anything we've seen since the depression."

Seattle Eric said...

Tim -

How was jury duty? Did you get assigned any juicy cases? Or did you do the whole sit around waiting for something to happen thing?

synthetik said...

>Its looking more and more like the soft landing scenerio.

>Does anyone have anything showing we might be leaning towards a hard landing? I have not seen too much and have been looking.

You might want to stop reading MSM.

I realize you are a troll, but for the benefit of others, try checking these out:

Mishs' Global Economic Trend

Bill Fleckenstein (free page)

Prudent Bear (read commentaries)

Mess That Greenspan Made

Global MacroScope

Calculated Risk

Too many to list...

synthetik said...

And Macroblog, easily one of the best if you can follow him.

EconExchange said...

"Does anyone have anything showing we might be leaning towards a hard landing? I have not seen too much and have been looking. "

There is tons of info out there. In fact, I find it hard to find convincing info that there will be a soft landing. Of course unemployment is low....employment is a lagging indicator, not a leading indicator. In fact employment is usually always at it's lowest level right BEFORE a recession so that means nothing. I suggest Nouriel Roubini's blog and browse through his various older posts on the right side for great analysis.

synthetik said...

Does anyone have an opinion about Peak Oil? I just watched a provocative video about it...

Augh... if I keep this up I'm going to turn out like Harrison Ford in "Mosquito Coast"

redmondjp said...

Does anyone have an opinion about Peak Oil?

Well, a couple of years ago I was over in Hilo, HI at the Pacific Tsunami Museum, where I talked to one of the volunteer docents who was retired from Shell Oil (IIRC) as a geologist whose job it was to help find new locations to drill for oil--a better person to ask this question, I could not find IMO. I asked him about 'peak oil.'

His response was that he was not worried at all about it (running out of oil--OTOH, he's already in his 70s, so why should he?). He said that the oil companies only spend significant quantities of $ on exploration when their current reserves are petering out (in other words, they don't go looking for more until they have to).

I'm not saying that I completely agree with him, but he spent several decades working in oil exploration and I haven't (and never will)! He even gave me a copy of his book entitled (I think) The Twisted Earth regarding his theory on plate techtonics and how the earth's crust has literally twisted to form all of the major continents.

It was a highlight of the trip for me (but not for my wife) to spend an hour or so with this gentlemen.

On another note, congrats everybody--WE DID IT!! Susan Ryan can't handle the truth--no more comments on her blog. I went to her website and found an amusing story about a child of some clients that she took out to dinner in downtown Seattle--something about there being a Starbucks on every corner being the reason why so many people were on the street late at night.

Yup, typical real estate copywriting to leave out some critical details--such as the fact that most of those places close at rediculously early times--something like 9pm IIRC (I don't get downtown very often--I like hanging out here in the 'burbs).

PepeDaniels said...

As for peak oil there's no more scathing a look at it than James Kunstler's site:

James Kunstler web site

He's not everyone's cup of tea for sure but he's compelling reading in many ways. He frequently mentions the housing bubble as one of the lynch pins that's about to pulled out in a big way. That and the phoney baloney money schemes that we call our economy.....

Buckle your seat belt, I think the guy's a riot to read.....

Crashcadia said...

I will be surprised if a market correction does not occur this month.

Smart money will not hold through the elections.

synthetik said...

Here is a great article about those 810,000 jobs we supposedly found.

"Something is seriously wrong if 810,000 jobs have to be added on behalf of past activity. In addition, the economy has finally turned. The leading indicators think so, the yield curve thinks so, and in fact about the only things that do not think so are the stock market and the economic cheerleaders. Looking ahead, plan for more discrepancies in the numbers."

Wanderer said...

Peak Oil... there was a great article in Harpers' August issue called "What If There Was No Oil." That was my first exposure to it and I found the concept equally disturbing and fascinating. Soon after I talked to my sister about it and (half) jokingly discussed where we should meet up with the crap hits the solar powered fan. I also sheepishly told my stock investor dad that I was thinking about getting 15K in gold bullion... totally thinking that he would laugh at me. He calmly said, "You know, it's probably not a bad idea." This is a career stock broker people... and even he sees potential disaster on the horizon.

Christina said...

Does anyone have an opinion about Peak Oil?

I do. I've done some reading, checked out Mr. Kunstler's site weekly since July, made some economic and lifestyle changes and am planning more.

Owning land and a home is nice when one considers making a vegetable garden.

It's been gratifying to discover other people are cluing in as well: I may feel like a doomsayer nut, but at least I am no longer an isolated doomsayer nut.

It's a pity Ms. Ryan is no longer allowing comments. It seemed for a while that as long as the commenters weren't insulting or vitriolic their points would stay on. I wonder if a vulgarian spoiled the comment party for the rest of us.

synthetik said...

Bush urges "serious repercussions" for N. Korea"

...but WMD's are only important if your country has oil reserves. I predict that nothing will be done.

Anyone know if N. Korea has any oil? We're going to be needing some in the near future.