01.16.2007 - Tuesday Open Thread
This is your open thread for Tuesday, January 16, 2007. Please post random links and off-topic discussions here.
Off-topic comment? Interesting link?
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32 comments:
Nice MILD weather! The rest of the country is having +20 degree record highs right now and we are stuck in a middle of a freaking snow/ice storm!
Thank god I walk to work!
Actually it looks like the midwest and part of Tejas are getting nailed as well, now I don't so bad!
I posted this this morning on Mondays open thred, but wanted to re-post for today....
Here is a comment from a San Diego Buyer in their paper this morning....“I was a naive buyer, I'll admit, but no one should have put me in this loan,”
I wonder how often we will hear that wringing out in the coming year. He lost his condo.
I also see UK news flourishing with Housing Market slowdown news. So this up rise has been global, which tells me that regional factors such as employment, desirability etc.. don't have as much to play in the role as do interest rates and "flexible" lending practices. The UK just suprisingly bumped their interest rate, bringing it closer to the U.S. interest rate and the news is stating that they are already seeing defaults on mortgages etc... And the UN is quite worried how our housing market decline is going to affect the global economy. Couple that with UK now dropping, I imagine thing globaly have some people sweating a bit.
except Shug of course.
BTW, it looks like inventory is back up according to housingtracker!
Perhaps that is why the Shug is away, with inventory up and median price down, he can't quote his week over week stats to us!
Yeah, but day over day, inventory is plumetting in the 9 square block radius that the shugster looks at. ;-)
also to note is the down trend in asking price. But shug would say selling price is what matters, with all these people out-bidding each other in the buying frenzy, the selling price is sure to go up.
Sorry shug if your reading these, At least we aren't dancing on your team emblem like the patriots did to the chargers.
I sent the following comments to Amy Martinez, Seattle Times business reporter responding to her puff piece in today's business section regarding downtown condo developement. Sorry, no link.
Amy:
After reading your article "Mixed-use mixed feelings" in today's business section it's not hard to figure out who's paying the bills down at The Seattle Times. N'er a discouraging word. You should have just stamped "Paid Advertisement" on your article and been done with it. Or better yet, tell us how much The Seattle Times receives every week in advertising dollars from the real-estate industry and let your readers decide who's really writing the stories.
Investigative reporting is not interviewing a bunch of real-estate developers and then regurgitating what they said. Any first grader can do that. Where's the other side of the story? What if these Bozos are wrong? How will that impact the city? Will taxpayers be left holding the bag? Aren't you just the least bit curious?
I feel sorry for The Seattle Times. Every month more and more people are canceling their subscriptions and searching for news sources that are not afraid to print the truth. Sadly, as long as you are beholden to your advertisers, honestly and integrity continue to take a back seat. Maybe, when this housing bubble pops and all that real-estate ad money dries up, you can get back to the business or real reporting. If you're still around that is.
Kudos Green thumb. Last tiem I worte a letter to soemone at the Times, I never got a response.
Mixed-use buildings bring mixed feelings
Folks, get real have you noticed the number of homes marked 'subject to inspection' in the last 2 weeks?! (on the east side). The slow down if any was there is long over.
Here's an article to balance it, greenthum:
NYTimes: Buyers Scares, Many Condos Are For Rent"
"Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling.
In many cities, banks have significantly scaled back loans to condominium builders. Some have demanded that developers sell half or more of the units in a building before even beginning construction.
In hopes of salvaging something from their costly plans, hundreds of developers...are looking to the strong market for apartments, planning to rent their units for at least a couple of years while waiting for today’s condo surplus to shrink."
pop!
I dont know if these are tricks or not. However, when I go out to look at some reasoanble homes I see a lot demand for homes near microsoft. people cant take this lousy communte situation like we have here today. hence good properties with good prices are flying off the shelves. for example: http://www.windermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=17256304
has been listed just 3 or 4 days!
So I dont see a bubble - I see fairly decent demand even now!
Here's Sash's link that got cut off above.
Sash,
What do you suppose a serious slowdown would look like? Would every single home on the market across the entire county have to sit for months without selling before you would consider the local real estate market to be in a considerable slowdown?
Personally, I expect that even in a severe down market, some houses will still sell quickly, and some specific neighborhoods will have many houses that sell quickly. However, that won't mean that the market as a whole isn't in rough shape.
No matter what the condition of the market, there will always be people with more money than sense. That is why I try to wait until I've seen the latest monthly reports before I make generalizations about the condition of the market. Not to say that anecdotes aren't interesting or fun, but pointing out one or a handful of quick-selling houses and saying "the slow down is long over" is as informative as pointing out a few stagnating homes and saying "the market is crashing."
Time, You make good points. To elaborate: 1) there are going to be some neighbourhoods that will see appreciation this yr. This is a demnad fueled appreciation because folks are sick and tired of sitting on 405 or 202 waiting and hoping for traffic to clear. Traffic is so stressful some days when there are accidents. Not sure abt the outlying areas now. 2) well maintained well priced houses will continue to sell.
Now the slowdown is probably because there are ton of homes out there that are not priced right - over priced and poorly maintained or upgraded.
We are heading towards becoming another CA like real estate market where prices go up and just level up for some time and then take off again!
I don't think Sash's anecdotal evidence matches the hard sales numbers.
King County Residential Pending Sales for the last 12 Months:
12/2005 . . . 1,790
01/2005 . . . 1,879
02/2005 . . . 2,206
03/2005 . . . 3,044
04/2005 . . . 2,820
05/2005 . . . 3,183
06/2005 . . . 3,040
07/2005 . . . 2,665
08/2005 . . . 2,832
09/2005 . . . 2,271
10/2005 . . . 2,440
11/2005 . . . 1,985
12/2005 . . . 1,623
18% drop in county-wide YoY sales, but maybe they're only selling in Bellevue.
Sash,
This market is becoming like California?? You need to check your history friend.
California timeline from the past:
1985-1986: Housing is booming, inventory is low.
1987: Housing still booming, prices increasing, inventories low.
1988: People start to question the boom. Realtors assure us the boom will continue. Houses aren't like stocks afterall.
1989: Prices are very expensive; affordability an issue. Sales slow and prices drop. Mention of risky loan types.
1990: Prices take a serious plunge. One article claims that housing booms are a bad thing and we should hope prices stay low. Increasing mortgage rates are blamed for the bust. The word "recession" is mentioned. Gloom and doom.
1991: A "dead cat bounce"? Some folks wondering if the bust has bottomed out or not. Sales are abysmal (e.g., -42%). Other parts of the country showing some signs of recovery.
1992: No one is buying; housing is an investment that no one will touch. Desperate political efforts being made to encourage house buying. Rock bottom prices and lower mortgage rates encourage some purchasing. The year ends with some buying. Another "dead cat bounce"? It's not clear.
1993: It's definitely a buyer's market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980's. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge "for sale" signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style -- be greedy when everyone is fearful and fearful when everyone is greedy. The "slump" may be ending.
1994: Housing begins its comeback. People who had the intelligence to wait for the bottom are buying now at great values. Even rising mortgage rates are not shaking the recovery.
1995: Some parts of the Southland are recovering others are not. People with "negative equity" are in despair.
1996: A tentative recovery is still in the making.
1997: Finally, housing has recovered.
California Housing Bubble Timeline
Sash,
How does living in Redmond make one immune to traffic? My take is that traffic is even worse there than it is in Seattle metro.
You lay out a scenario for a Microsoft worker. I could lay out a similar scenario for a Boeing worker, Washington Mutual worker, an Amazon.com worker. Just because a home is close to a major employer does not make it bubbleproof.
I do see an advantage in that place: Your neighbor could hand you a roll of TP through his window if you run out.
crichard,
Truthiness is sooooo 2006. Everyone who's anyone is talking about "factiness"(© 2007 The Colbert Report) these days.
Matthew, Do we know specifically what was the downturn in areas with a 5 miles radius of the big tech companies there? It was probably lower? My point is there are going to be some areas in seattle or the east side that will continue to incrase in value purely due to proximity to major employers
I've Been running Windows Vista for a while now....
I'm not impressed...
Sasha,
I do not have the exact breakdown of California and how the areas near tech companies fared as compared to areas away from them. What I do know is that the RE runup in this bubble is much greater than the last runup, leading one to believe that the downswing will be much more painful for some.
Sasha,
To come extent, you will be right, many of the areas near downtown and the eastside will feel the effects of the bubble bursting less than housing further away from job centers. However, to say that all housing near Microsoft, Costco, Wamu, etc, will be immune or that the houses in those areas is not inflated, I would argue is innacurate. Inflated as much as a 400,000 dollar house in Maple Valley? Maybe not... We'll see... Condos and houses on the oustkirts of King County will be the first to be hit, from there it will be a domino effect...
BTW, i just started reading up on peak oil (having heard the people on here talk about it) and its scaring the crap out of me!
Yeah, MS Vista is gonna be a big hit..just like the zune
If you actually spend a little time getting an understanding of peak oil, you'll realize it's a real issue. Much worse than global warming...
it's not that the oil is running out, it's peaking; thus creating havoc on the way down. You didn't think this one time endowment of cheap oil would last forever did you?
Its' pretty much front page MSM news these days - if you care to look.
www.seattleoil.com
Check out these books if you like:
"The Long Emergency" Kunstler
"Powerdown" Heinburg
"The Coming Economic Collapse" Leeb
Regarding peak oil theory:
There is a lot of oil available that is not economical to tap right now. As oil becomes more expensive, these reserves will become economically viable and will be utilized. The drop in supply after peak oil will not be exponentially increasing. In fact, we will likely never run out of oil because alternative energy sources will eventually be cheaper than oil and we will quit using it.
And then there are the fringe theories of a "deep hot biosphere" which claims that oil is continuously be generated by organisms living throughout the crust of the planet and that so we will always have an ample supply of oil.
But if supply drop too quickly we may have to go through a painful period of readjustment.
I do not put much trust in the deep hot biosphere.
Thanks for that article from the NYTimes misterbubble! I've given up on MSM for the most part but it's nice to know that the truth is still being reported at least some of the time. The Seattle Times and PI are hopeless.
Local Public Radio this morning said that Seattle is Different in Condo sales and that they are still strong here, prices rising etc... blah blah blah.
>And then there are the fringe theories
Wow, you are not only in deep denial about the housing bust but also subscribe to the same ideology regarding never-ending resources.
Enjoy your hummer...
I think oil has a far greater price elasticity of demand than the peak oil people do.
When oil reaches $120/bbl, (and it will) I think you will see demand going down.
The other thing that caught me as odd was that recent article about the Seattle Peak Oil crowd. One guy rushed out and bought a home next to a (future) transit line. Seems to me that that would be the last place I would want to live if the purported fallout hits. Let's just say I don't think it will be a real 'friendly' place to live.
I try to keep an open mind though, so keep the comments coming...
Does it make sense to even own a home at all in a 'peak' oil scenario?
How will you continue to make mortgage payments without a job?
Rents would most likely fall to meet prices which people could pay.
On the other hand, nobody can boot you out of your house... or can they?
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