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Sunday, February 14, 1982

02.14.2007 - Wednesday Open Thread

This is your open thread for Wednesday, February 14, 2007. Please post random links and off-topic discussions here.

15 comments:

EconE said...

TIC...

The 7 deadly sins and how they apply to the real estate bubble.

Lust.

What all those glass curtain condos with views/granite/hardwoods brought on.

Pride.

The inflated egos because of the money made...sometimes mistaken with pride of ownership.

Sloth...

Flippers/Investors that didn't actually want to work for their money.

Gluttony...

How many damn condos does someone need anyways?

Envy...

You envy your neighbors new X5/granite counters/subzero et al. so you apply for a cash out refi...future interest rates be damned.

Greed...

The pursuit of money by giving someone the economic means to throw their lives away just so you can make a buck.

Wrath...

Give it time...it is only with the industry folks playing the blame game now on the blogs around the country...look around...it's not just in your backyard...Just wait until the wrath hits the consumer that realizes he has been taken by the whole immoral scheme...the last greedy fools in line

Tom said...

Tim,

can you create a posting where we all can post flip properties? give it a title such as fliping in seattle or something that can come up when someone searches on google. this way, we'll make people aware of these flip houses and also may be able to quantify the level of flipping or investing going on in the region.
whoever finds these flip will post it and quickly we will find most of them.
what do you think?
Thanks.

smeegs said...

Tom,

If you are trying to replicate the Sacremento Flippers in Trouble site,(http://flippersintrouble.blogspot.com/) but for the Seattle market, I think that would be a great idea.

Lake Hills Renter said...

Am I the only one that absolutely refuses to consider any house that's under a HOA?

The Tim said...

Certainly not, LHR. I'm totally with you on that one.

As if government regulations on one's property aren't strict enough, with a HOA you actually pay for the privilege of additional restrictions on what you can do with your own property.

No thank you.

Lake Hills Renter said...

My feelings exactly!

Seriously? said...

Hi all,
Thought you might find my experience entertaining. . .

My husband and I moved here a year ago from Reno. We were lucky to sell our house there at the beginning of the slide so we actually weren't hurt too bad, but seeing what was happening certainly made us leery of what might happen here. Still, we rented for a year and began looking at houses. As of this week we are calling it quits. Why? Because of an e-mail we received from our real estate "consultant".

Sure- originally we were put off by the fact that we were afraid for our children to actually live in the half a million dollar homes we were looking at. Fine- we were a little irritated that two Ph.D.s with good jobs, little debt, and a fair down payment would still have to worry about the mortgage payment. (All our friends with Ph.D.s and good jobs are doing the crazy mortgages you guys love so much. . .we are unwilling). But the final straw came in the form of a marketing campaign.

First we received a shiny brochure about buying in this changing market. The fact that our major real estate company is worried enough to make shiny brochures worried us.

Then we receive a letter from our agent, obviously a mass mailing, giving stats and charts about how the market is doing so well here. In our experience, when the market is doing well- we receive mass mailings that beg us to sell our house, not ones that tell us why we should not be afraid to buy.

Finally- I send my real estate lady an e-mail telling her, for the 10th time, no- we don't want to look at houses above the price we gave you- yes we know we qualify for the loan- but we just don't want the payment. And I add- "plus, we feel that the market is shaky and we don't want to extend ourselves just to loose a lot of money." Here is her reply:

****************************
I wanted to address your comment about the market. Over the holiday
months the market was flat, however in the last three weeks in King County the market has picked up tremendously. We are already experiencing multiple offers
(with no inspections and no finanacing contingencies) on properly priced properties. Because the weather has been fairly nice, buyers are already coming out of the woodwork and we are seeing an early spring market (the busiest time of year for real estate). Our office reviews statistics weekly for inventory, pending sales and solds for King County, which is confirming this activity. I hope you received and were able to review the market information that I mailed you recently, as it is also helpful in describing our specific market, recently past and present. Lastly, as an investor/landlord myself, if one is financially able to purchase a home it is a far better business/investment decision (i.e. tax write-offs, paying towards principal and appreciation) than paying for the landlord's mortgage. I hope you don't mind me being frank with you:)
***********************************

Thoughts?

EconE said...

Seriously?.....

She's desperate...the funny money is drying up.

Here is the "flip side" to your anecdote.

Yesterday my father had lunch with a woman out in Pacific Palisades (Part of L.A. near the beach) She happens to be a very wealthy woman. Her home is paid for (worth 5m +/-)
and doesn't need to worry about money even if she lived another 200 years without seeing an additional dime.

But...you know how wealthy people are always considered "cheap"?

She got one of those "pre-approved" airline credit card offers...she went for it...she didn't care about the credit card...she has no use for it...just the free airline miles that she would get just for signing up. (She can afford to fly without a mileage program...hahaha).

She was turned down for the card.

redmondjp said...

Lastly, as an investor/landlord myself, if one is financially able to purchase a home it is a far better business/investment decision (i.e. tax write-offs, paying towards principal and appreciation) than paying for the landlord's mortgage.

There you have it. The old "It's better to own than to rent" adage, combined with the view that a house is an 'investment' and not simply a place to live. Anything to get you off the fence so you can make somebody else a nice big fat commission.

As discussed in today's other thread, each buyer must determine if they can reasonably AFFORD to buy, given such possibilities as loss of job, decline in house's value, etc. If you can afford to buy (w/o an exotic loan), you're not losing any sleep at night, and you won't be financially devastated if you house value either sits flat for a few years or (gasp) actually declines should you have to sell, then fine. And yes, housing prices could keep going up too, I won't exclude that possibility.

greenthum said...

seriously?:

Your ambivalence toward buying a home is exactly what the real estate industry fears the most. The more buyers back away the more extreme their tactics become. Just look at the amount of money being spent on advertising. I've lived in Seattle all my life and I have never seen such an all out effort to turn Seattle residents in to a city full of debt slaves.

Your instincts are correct. Be afraid, be very afraid.

MisterBubble said...

The beat part of that BS spiel was the closing "I hope you don't mind me being frank with you," followed by the emoticon.

Whenever someone says something like that, it makes me wonder how much they've been lying to me the rest of the time.

Realtors are scum. I can't wait for this crash to really take hold so that they can go back to selling vacation time-shares and used cars....

Brian said...

She better relaize that is NOT her realtor anymore. That relationship is completely severed, and that is for the BEST.

Kara said...

seriously?

Loved your post.

My husband and I transfered to Seattle's east side with 2 school age kids and a dog. We also shop the RE market and have had zero interest in buying into this market.

The house across the street from us has been for sale with the owner/agent, she came on with $899,000 and has waited for 9 months to sell. The price eventually found itself at $750,000 and just this week SOLD. I don't know what the price ended up at.

Recently the owner hosted an open house and invited us over to see the place. She shared that they were desperate to get rid of the place. They purchased another house and are already living in it. She bitterly said "I have already lowered the price $150,000 and I won't go any lower." In the next breath she revealed that they need to sell one of the properties and the new house is up next, and that her husband will need to delay his retirement 10 years in order to make up the losses.

The best moment was when she pointed across the street to the house we are in and told us that she knows what we are paying in rent and that we are getting a killer deal. We should be paying at least $900+ a month more.

Nasty Woman! We giggle that she doesn't like our rent payment. Our hearts go out to her that she was so miseable. Tremendous stress was bringing out the ugliest side of her.

rent for now said...

Of course, housing prices never go down and they are not making any more land.

EconE said...

Rent for now...

sure their making more land...they just do it virtually...by building vertically.