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Friday, February 12, 1982

02.12.2007 - Monday Open Thread

This is your open thread for Monday, February 12, 2007. Please post random links and off-topic discussions here.

37 comments:

Eleua said...

OK, I'll open the bidding.

Is there anything out there, which is not along the lines of "wishful thinking," or "gee, it really can't get THAT bad," or "Eleua is off his meds again..." that would say that the bottom of this huge housing bubble will be just a fart of a decrease? (15-20%?)

Bulls say RE never goes down, while many bears say RE goes down, but not that much.

Why?

T,V & Mr.B said...

Because it hasn't had a major drop since WWI, but it took forty years for it to recover on real dollars from that drop.

People don't look at history if they don't remember it happening to them. Hence the words "never goes down"

Sadly, history ALWAYS repeats itself one time or another. ALWAYS!

T,V & Mr.B said...

Let me clarify, on the "major Drop" I mean in terms of a National Level that has been sustained for a period of 5-10 years or more

T,V & Mr.B said...

Hey guys I need some help. I know some of you finance or numbers guys have very adequately explained, numerically why renting is saving money over buying right now and crunched the numbers. Can one of you do that again or show me which post that is located at as i can't find it at the moment. Thanks.

Matthew said...

The housing market is already deteriorating even with a booming economy. This is a historical bull market, once this bad boy hits a bump in the road (which I am predicting it will this year) it will be the catalyst that ends this house of cards.

Matthew said...

I can't wait to see the housing tracker data for today!

Matthew said...

Mortgage defaults: Latest woe for housing

Borrowers with less than stellar credit could find mortgages out of reach - the last thing the struggling real estate market needs.

http://tinyurl.com/yv2f5z

deeplennon said...

"I can't wait to see the housing tracker data for today!"

I'm guessing two to three hundred added to inventory.. the big weekly gains begin in March.

Matthew said...

My favorite part...

Fratantoni said the mortgage securities market will make the proper adjustments based on news about defaults and losses. He said the more serious problem for the housing market is if there is legislation or regulation that restrict such loans because of concerns about the risks to borrowers.

"We are watching to make sure there no regulatory action takes place to choke off the supply of this type of financing," he said. "This is an important source of mortgage credit for borrowers."

T,V & Mr.B said...

More help,
OK guys, I am counting on you. What fees would one expect to pay and what fees would one expect the mortgage borker to take in to re-fi a arm to a fixed?

WTF said...

Not sure what this means, but a 4th brand new building appears to be under way near my office. There is Olive8 to the south, a new site across the street from that, the Cosmopolitan, and they just fenced off the site next door to it. How many of these projects will be idle in a few months? Any guesses?

T,V & Mr.B said...

None of those projects will be idle in the next few months. they will go ahead and build them to completion, telling investors that all will be cherry, ending up flooding the market even more.

matthew said...

Agreed, the projects will be finished. If they don't sell them as condos they will just convert them to apartments ALA DC and Boston.

EconE said...

once again...I agree with Matt.

Builders build...and they will continue to do so. Considering that during the "boom" they were probably making a 50%+ return on their money...they will continue to build even if it means that they only get a 20% return. As long as they can make a profit...they will continue to build. Not to mention...now that the price of copper and other building materials have plummeted back to their "pre-boom" levels...construction material costs will be cheaper...hence...$ per sf cost will go down for the builder.

I can't see a builder really caring about the people that paid 500k+ for a 1br. If they can still make a profit (albeit a smaller one) selling the same condos for 300k they will continue to build and really don't care if the resale condo market takes a dive because they already sold *those condos and made their money on them.

With regards to the trend towards changing their plans from condo's to apartments one thing makes me curious.

If the apartments are hi-rises...then they will be expensive as they probably had intended them to be luxury condos initially. Obviously they will cut costs where they can, however...how much can you "dumb down" (for lack of a better term at the moment) these units to bring them into an affordable price range. Sure...they may swap out formica for granite...hardwoods for carpeting...stainless steel appliances for white ones, cheaper cabinetry...and may even find a few more corners to cut (building amenities?)...but in reality...those things are chump change in the big picture.

Granite is actually pretty cheap...just look at DIYGranite.com

Flooring?...Ifloors.com

Wanna know how much those cabinet and drawer pulls cost?...Myknobs.com

Door Handles...Quicklocks.com

now....couple all this with the fact that the people who are trying to rent out their 2200 condos on craigslist are having a hard time. I have a suspicion that anyone who will be able to "afford" these new condos come apartments...already own a home...the rest...they'll do just fine in their $1000/month 2 br in North Seattle.

just my 2c

WTF said...

"Granite is actually pretty cheap...just look at DIYGranite.com

Flooring?...Ifloors.com

Wanna know how much those cabinet and drawer pulls cost?...Myknobs.com

Door Handles...Quicklocks.com"


Funny how when you add all of this up, the flippers think this crap is worth a 100K - 250K bump in their price from when they bought it 2 months earlier!!

data said...

ok, I have been reading posts here for about 3 weeks and some of the info is great, of course realestate fluctuates, I learned that in the 5th grade. BUT, I see the same posters over and over and over write the meanest things about anyone one who has an opposing opinion, even going so far as to say "why are you posting here you troll, you idiot,etc." and " oh dont ya love these trolls that post once then go away" you are effectively telling anyone who does not subscribe to your doomsday realestate theories to go away, which then begs the question, why are YOU here? Actually I know why. Only people with no lives and/or no money, hope there will be a bubble or major collapse because they want all the people with things they dont have, to be brought down to their level, before you frantically try to type a scathing retort to this post, just understand that it is perfectly natural to want what you cannot have, and of course misery loves company, which is why you all doomsayers post here daily, always patting each other on the back about all of your incredible insights into the immenent bubble that will ruin us all. I will be wrong about some of you, but so right about others it is funny. so enjoy your studio apartment and ramen noodles and pray for the demise of people with means, or go find out what makes this country better than any other.

The Tim said...

I for one am glad that people like "data" post the occasional drive-by comment here. It makes for great comedic relief.

WTF said...

troll

The Tim said...

Sure, people like "data" are trolls by definition:

An individual who ... regularly posts specious arguments, flames or personal attacks to a newsgroup, discussion list, or in email for no other purpose than to annoy someone or disrupt a discussion. Trolls are recognizable by the fact that they have no real interest in learning about the topic at hand - they simply want to utter flame bait.

But I find it much more agreeable to have a chuckle and forget about them than to get caught up in their empty arguments and name-calling.

EconE said...

"why are YOU here?"

For me personally...I find that there are some people that have interesting things to say about the economy. I got my B.S. in Econ many years ago so things like this interest me.

"Actually I know why."

Really?

"Only people with no lives and/or no money,"

who knows...maybe some...I'll admit...I do have too much time on my hands as being a "trust funder"...I don't have to work. Also...for myself...being financially comfortable allows me a pretty nice life also.

" hope there will be a bubble or major collapse because they want all the people with things they dont have, to be brought down to their level"

no...actually most of those people with those "things" are already below my level. Being that that is the case...why on earth would I wish for economic disaster for others?

As I stated...One of my hobbies is Economics...I have been studying it for the last 15 years since I received my degree. So...I find that this is a fairly worthy blog IMNSHO....and can be very educational....however...you actually have to want to learn something.

You...Data...on the other hand...you just seem like a noveaux rich wannabe with an ego problem.

And if you think that we aren't in for some serious hard times...go talk to an economist (your local UW Econ professor...whoever) IN PRIVATE...and ask them what they really think about the situation....and why economists like to try to paint a rosy picture for the public.

You might be surprised by what you hear...if you actually LISTEN.

uptown said...

data:

If you think we're bad, check out
thehousingbubbleblog.com

Matthew said...

Hold on a sec, let me check my W-2 for last year...

Wages, tips, other compensation - $99,630.07

You are right, I have no means. I couldn't afford to buy a house. I'm doomed to eating ramen noodles for eternity!

Move along TROLL!

p.s. I am secretly wishing for your demise but it has nothing to do with housing!

flotown said...

I believe some of those lines cited by Data were directed towards me. I am not a troll by definition because I was not here to annoy others and I am interested in the topic at hand. I ran across this site and found posters fairly knowledgable and wanted to engage in some debate.

I don't know the goals of this blog, but if one is to garner a broader audience then some more civility might be a good idea, even it it requires some degree of patience with posts/ideas that regulars here might consider tired.

WTF said...

Sorry about calling you a troll right off the bat without giving you a fair shake. Tell you what, I'll be happy to call you 'data' if you have any to support your arguments. That is, if you want to do anything other than blow more pro-RE sunshine up you know where. Put your cards down on the table and let's see how they play out.

MisterBubble said...

Just heard this on the radio:

A local NPR reporter will be doing a story on condo conversions in Seattle (headline: "condo living is 'in'...") on Thursday during Morning edition (6:30 AM, 8:30 AM), and apparently again during All Things Considered, in the afternoon.

It sounds like it might be interesting (one of the sound-bites has a guy saying "I have to go outside of the city to rent? You go outside of the city to buy, not rent!").

Matthew said...

When I go on the RCG, I realize that its a pro RE blog, and I should be expected to take some flack as a "bubble head".

Come on to Seattlebubble.com, start posting pro RE ideas, you should probably be prepared to take some flack. So why don't you stick around, make a couple dozen posts or so with some sort of logical analysis based on data and/or historical reasoning, and people will probably respect you in the long run.

I have a problem with people that don't do the following:

Read the archives. Yes this blog has been around for a while, therefore you would do yourself, and everyone else, a huge favor by doing some research. Therefore we don't have to listen to the same washed up arguments over and over again.

Don't make posts like the following:

"I have been following this blog for X weeks. I am so tired of you guys on here saying X about X. Blah Blah Blah."

Read the archives! Don't just follow 2 weeks of people discussing the bubble, go back and read several months of discussion. You will do yourself and everyone else a great service.

WTF said...

Matthew - word.

T,V & Mr.B said...

Hey there Data, I hope you don't just post and run like others who lambast us do. I and the other "have nothings" would love to talk with you for a while and see if you can give us some facts that would dispell our train of thought.

the first thing I would tell you if you haven't run off already is this...(and I am semi-quoting from a real estate theory of London economic theorists)The REAL law of supply and demand in realestate states that "demand for real estate is latent and therefor theoretically insatiable." It further states that "there can be no such thing as too much supply. Every house built will eventually be absorbed by a buyer " and the current oversupply in the U.S. could could have even more units added to it and it would still find buyers.....eventually. Read that again please...eventually. The ONLY thing to prevent buyers from coming forward is a lack of availability of money and credit. There is the big stickler Mr. Data.

Demand is ultimately driven by money supply. People obtaining loose lending from banks that allow them to do so. As yourself if you really think the average person can actually afford the average house here without doing some Enron style accounting. When money supply and credit is liquid, real estate sales will be brisk. Ask yourself if you think this has been happening the last couple of years and why the 3rd largest bank in the world is writing off 10 BILLION dollars in default loans.

If you actually HAVE been reading this blog for some time now, then you would realize that most of these people probably can plunk down some good cashola, and pick up one of these places. I could if I thought it would be prudent to do so. Hell I just sold a house in San Diego for 995K and will have to pay taxes on the gains if I don't put it into a home soon, but still don't want to do that because I KNOW that as George Bush Senior says..."It wouldn't be prudent at this
juncture." Or at least Dan Carvey imitating GBS.

So if you are going to come in here spewing crap, expect some back. and look at the facts. You will be one of us...You will be assimilated....eventually

matthew said...

The whole "subprime" fiasco is getting ugly. I am following the conversations on Capital Risk and it appears that the mortgage industry is going to get a lot tighter.

Probably a few factors playing a roll in this. The first being the loss of revenue from the subprime market due to rising defaults. The second being the fear of big brother stepping it to regulate if they don't regulate themselves first!

matthew said...

Wait until the prime market starts being hit, then the real problems will begin.

matthew said...

Sorry that post should say Calculated Risk, not Capital Risk... Though buying a house right now could be a "capital risk"

rent for now said...

I've owned a couple of houses over the years...its overrated...in fact, owning anything is a pain...who wants to buy my stuff?? except i need my bike because i like riding it to work, sorry, wrong blog.

rubyfan said...

I just ran across this and thought others might find it interesting. Apparently Fremont mortgage co (one of the larger ones) came out today (2/12/2007) and said they would no longer be funding 2nd mortgages. No more 80/20s:
http://calculatedrisk.blogspot.com/2007/02/fremont-lending-changes.html

Also, seems like most of us are preaching to the chior in these bubble-blogs. I've actually taken to commenting on those RealEstate agent blogs - you know the ones, full of happy-talk. So far the comments are staying, I'm a bit surprised, they've been up about 24 hours now. Anyway, I would encourage people to visit those happy-talk blogs and post a bit of reality about realty. Be polite and explain things as concisely as possible. Most people out there looking to buy have no idea about the turmoil in the subprime mortgage markets for example or what that could mean to them (as in it's a good time to wait).

greenthum said...

data:

I can understand how, at first glance, the people who contribute to this blog regularly might seem intolerant of opposing points of view. But I think you'll find, if you stay, the energy that keeps this blog going is not resentment of "those who have things" but a burning desire to know the truth.

I respect and encourage anyone who makes an attempt to think outside the box. Those who question MSM, government, business and refuse to always believe what they're told will forever have my energetic support.

I believe that is why Tim works so hard week after week to keep this forum alive. It's the best way to effectively counter the lies and half truths we're being asked to swallow day in and day out.

I'm glad I stayed, I've learned a lot. Maybe you will too.

data said...

I enjoy this site for info, and some of you have great info. but I was moved to respond by a select few, the only people that should be upset about this are the one I am right about. maybe my 3 weeks of reading posts here was not enough ( I looked at various posts, even from months back), but in those three weeks I have seen countless personal attacks on anyone involved in "rosey"-realestate,claiming BS-this and idiot-that, I see the same 4 or 5 posters call people idiots and trolls who had differing opinions, and I respondeded in kind, no I am not an agent and am no way involved in realestate, I am not rich nor wish to be, I am just interested in urban development, and calling it like I see it. My opinion differs from most here, but Im still here.

now attack me one last time and then just back on the topic,(oh yes, I am a hypocrite sometimes, that doesnt seem to go over to well here )

Alan said...

I think some areas in the Puget Sound will drop more than others.

Take a look at this map from Redfin listing SFH's under $350k.

matthew said...

Data,

Don't come on this forum, compare the level of info you are receiving on here as to something you would have heard in the 5th grade, and then expect to throw a big pity party.

If calling someone "a troll" is the meanest thing you have ever heard, well then you haven't been on the net for long. 99 percent of the conversation on here is civil. Once in a while a troll will come along and have a drive by posting that merits them being "called out" by people that post here.

Then you talk about everyone on here being "priced out forever and eating ramen noodles". So you are going to attack everyone that subscribes to the bubble theory as a poor destitute gutter snipe that is just jealous of home owners?

I have news for you. There are home owners on this blog that subscribe to the theory. There are both current and previous home owners some of which cashed in mightily on the gravy train but yet still recognize that the current trend in housing prices is not sustainable and based on irrational speculation and not on strong economic fundamentals.

By you supposedly "calling out" a select few, you are no better than the select few. You have dropped to their/my level and resorted to name calling. Good job!