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Sunday, October 04, 1981

Wednesday Open Thread

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


synthetik said...

Check out the comments on Seattle Real Estate Professionals "Just Say No to Bubble Talk"

20 comments has to be new record or something. Mad props to Susan Ryan for not deleting the post or the comments.

I'd never posted there before thinking that they always censored contrarians.

Guess I was wrong! Nicely done.

MisterBubble said...

Susan Ryan's response is a scream. I especially like the way that she portrays herself as an unbiased observer of the local real estate market....what a load!

I'm glad that you called bullshit on her I-make-money-in-any-market line, but I think that you also missed one very important point: even if Susan Ryan is the most ethical, hard-working agent on the planet, and even if there are just as many sales in a down market as in a hot market (not a chance), her comission is always going to be based on a percentage of the home prices that she negotiates.

Susan Ryan's bottom line is inextricably linked to the sales prices of the properties that she represents. If home prices go up, she makes more money per sale. Period.

That Ryan tries to paint herself as impartial would strike me as dishonest, if she hadn't already repeatedly demonstrated that she's a simpleton.

Oddleif said...

Nice Post synthetik. You did an excellent job of painting the imminent credit bubble burst.

What I don't understand is how RE professionals can have such a narrow view of a bubble. Ok, so there's no bubble in RE by your definition... That argument she gives completely ignores the glaringly obvious truth; it's not a housing bubble it's consumer funding bubble...

It's RE pro's like her that are going to be hit the hardest since they have idea of the fundamentals that drive the industry they work in... Geesh...

Kaleetan said...

There is a big report out today from Moody's called "Housing at the Tipping Point". The report projected that 133 of the nation's 379 metropolitan areas would suffer price declines.

I did not see any mention of Seattle in the report - good or bad.

The Tim said...

How did you get your hands on the actual report, Kaleetan? All I can find is an option to purchase the report for $4,000(!)

Kaleetan said...

I financed the report with my HELOC!

Ok Tim - you stickler.. i read the news reports about it - i dont have the actual report

The Tim said...

Heh. Points for the witty reply.

From the snippets provided on the preview page, it looks like Washington was left out of the report entirely. I'm sure if it had said anything even remotely positive about the Seattle market it would have been plastered all over the Seattle Times yesterday.

meshugy said...

Excuse me if this was already posted:

The Good Fight

Eager to find new sources of growth, the company that Bill Gates built is financing efforts to break into half a dozen major new markets. To staff those ventures, the software giant is expanding like crazy, bursting from its Redmond campus boundaries and spilling prosperity across the region. The result is more jobs, more research, higher salaries and perhaps even better working conditions. What is bad for Microsoft, it seems, is especially good for Seattle.

More important for the Seattle region, Microsoft’s spending spree means more jobs – lots of them. In the past year, the company added 10,000 employees worldwide, including nearly 4,000 in the Puget Sound area – twice as many as expected. “These are high-wage employees,” explains Chang Mook Sohn, Washington state’s chief economist. “The whole economy benefits from Microsoft’s expansion here.” And that growth is turbocharged, because for every new hire at Microsoft, another 2.5 full-time jobs are created in the larger economy, according to Seattle economist Dick Conway, who is conducting his third study of the impact of Microsoft on the local economy. That means more than 116,000 jobs in the Seattle area depend directly or indirectly on Microsoft.

These new hires are buying houses, luxury cars and appliances, fueling the local retail and residential real estate markets. “You know the joke: If you want to know how to get to Microsoft, follow a BMW,” says Jan Teague, president of the Washington Retail Association. “Microsoft builds millionaires. They spend a lot of their money in the state.” The median price for a single-family home in King County jumped nearly 16 percent in July 2006, to $435,000. Million-dollar houses have become commonplace in Bellevue and Sammamish. And the hot housing market buzzes with tales of multiple offers on homes that then sell far above their list price. Brokers credit the big hiring push at Microsoft, and at the many companies launched by former Microsoft employees for many of these gains.

Underscoring its plans for aggressive growth, Google is expected to lease an estimated 280,000 square feet of office space in Bellevue, enough to house as many as 1,000 employees. The move is “aimed directly at Microsoft,” says Bohman.

Money made at Microsoft has rippled far and wide through the Seattle economy. Many Microsoft alumni have created start-up companies, most notably the Internet media giant RealNetworks. The largest information technology fund in the state is a $1 billion fund managed by Ignition Partners, a venture capital firm founded by former execs from Microsoft and McCaw Cellular. The $29 billion Bill & Melinda Gates Foundation has changed the face of philanthropy with its funding of global health and education, and also contributes locally through its Pacific Northwest program, which focuses on early learning, supportive housing and community grants. Lesser-known Microsoft employees and alumni have invested in golf courses, renovated the Paramount Theater, spearheaded environmental causes, volunteered in local schools, and donated to art museums, the performing arts and many other regional causes.

Knute Rife said...

I love Susan's initial comment, "There is no real estate bubble and never will be." Sorry, deary, I've been through three big bubbles in three locations, one in Seattle. Apparently she's too young to remember 1970-71. If that wasn't a bubble, Seattle must have gotten into the brown acid.

synthetik said...

>$4000 report on housing

Not a bad deal.

I bought a report yesterday for only $3,500 regarding the likelyhood of precipitation in the Seattle region over the next few months.

synthetik said...

>Susan Ryan's bottom line is inextricably linked to the sales prices of the properties that she represents. If home prices go up, she makes more money per sale. Period. That Ryan tries to paint herself as impartial would strike me as dishonest

It seems like you are implying that she wants prices to go up so she can make more commission.

Technically, she would make more commission, however price is not a factor for realtors.

The -ONLY- thing the realtor cares about is the sale, period. They will do anything in their power to manipulate both buyer and seller to facilitate the sale.

An extra $500 bucks made by convincing the buyer to pay an extra $20K does nothing but jeopardize the sale, period.

These people are not evil; they are simply part of a system that does not work anymore.

I believe in the inherent good of MOST people. That being said, millions of realtors can't all be crooks. They do what they have to do to make the sale. The good ones will be able to make both the buyer and seller believe that they are representing both their best interest.

Think about all the different types of commission-only sales people.

Insurance (health, life, property), Recruiters, Car Salesman... etc. None of those careers evoke positive feelings no?

The main reason is that the majority of people in those fields are NEW. Being new, they make a lot of stupid mistakes. One of the greatest errors is "thin slicing" (re: BLINK), where they make an instant judgment of someone based on their appearance.

Does that piss you off when that happens?

Anyway, I'm off track.

The point is, in general, sales people must believe in their product or service in order to effectively sell it. I believe Ms. Ryan believes what she's saying.

She MUST continue to drink the punch because her livelihood depends on it. Period, end of story.

synthetik said...

One more thing. Have you ever bought a diamond? (retail)

Commission only again. How was your experience? Sucked right?

Redfin is to Coldwell Banker what is to Tiffany.

Redfin seeks to take the pain out of buying a home... has figured out how to take the pain out of buying a diamond.

The world is changing; hopefully this means we'll have less people lying face down in small country in South America.

Matthew said...

Bernanke: housing to take 1% off GDP growth-
Fed is closely watching for "spillover" of slowdown to other areas of economy.

Nolaguy said...

To add to Matthew's post.

``There is currently a substantial correction going on in the housing market,'' Bernanke said. The decline residential housing construction is one of the ``major drags that is causing the economy to slow.''

Peter Taylor said...

Craigslist flipper of the day:

Remodelled central district, 4 bed, 2 bath, on 21st between James and Jefferson.

Flipper bought on 6/22/2006 for $392,110.

Looking to sell now for $549,999 but will cut you a deal for $532,399 if you don't use a buyer's agent.

Here's what you get if you pay the $150,000 flipper premium:

* Brand new copper plumbing and electrical throughout.
* Huge brand new kitchen with tons of cherry cabinets, ALL brand new stainless steal appliances included!
* Brand new bamboo hardwood flooring throughout.
* New Paint (inside and out)
* Newly renovated, brand new bathrooms with chair rail and wainscoting – all new fixtures.
* All new double pan, double-glazed windows.
* New doors

Where's the granite countertops in the kitchen?

synthetik said...

Get in and nice and settled before the holidays

Translation: Please buy this house from us before we won't be able to sell it!

Nice 1' of clearance in between homes...

Lake Hills Renter said...

Love the gravel yard too. No mowing needed!

Whenever I see these flipper's houses with "all new" this and that, I immediately wonder about worksmanship and quality. I've seen too many scenes from those flipper TV shows where they had absolutely no idea what they were doing. They basically did the cheapest thing possible, including their own unskilled/unknowledgeable labor. Screw that noise.

MisterBubble said...

"Stainless steal appliances" just about sums it up, doesn't it?

MisterBubble said...

"Washington CEO" magazine?? You're scraping the bottom of the bubble barrel, Meshugy!

Your article, as is usual for pom-pom pieces, cites a lot of big numbers, most of which are irrelevant to the discussion -- "116,000 jobs" (how many of those are janitors?), Google's (anticipated) office space lease, the size of a venture fund, and the endowment of the B&MG foundation.

Save the first statistic (which is dubious at best), none of these data points do more than instill a vague feeling of frothy goodness in the reader. They say nothing direct about the buying power of Seattle residents...a population that we already know is significantly overextended!

plymster said...

Typically, I would agree that Meshugy's post of an 8-month-old article about an MS hiring binge is a load of crap, but it does help to explain why Seattle RE prices are flatlining during this hiring binge, instead of plummetting like the rest of the country.

Basically, I read this article as explaining what has sustained the RE market locally up until this point. Now that the MS hiring binge is over, expect to hear a loud popping noise.

synthetik said...

I really don't think any "binge" has done much to prop up the housing market.

Again, if you compare this region to other bubble markets we got a late start. (look at inventory levels and rising home prices, paints fairly clear picture)

...and as you can see from Tim's latest post, it looks like we're right on course.