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Monday, March 29, 1982

03.29.2007 - Thursday Open Thread

This is your open thread for Thursday, March 29, 2007. You may post random links and off-topic discussions here.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

81 comments:

matthew said...

Does anyone else that follows this market find that tracking the market daily becomes almost painful? The constant drip drip drip has me waiting for the leak to fully burst.

Sometimes I think I should just totally stop following the housing market and come back in 6 months to see what happens. The anticipation is killing me!

Becky said...

FYI synthetik, erik, and alan--I blathered on and replied to you on the previous open thread.

meshugy said...

Office landlords sit pretty as demand pushes up rents

Landlords are jacking up rents as office vacancy rates decline to levels not seen since the 2001 recession. And it's likely rents will continue to rise because the majority of office space under construction won't be completed for at least a year and many buildings are being sold for top dollar.

Low vacancy rates in the Seattle area signify it's a landlord's market.

Downtown Seattle's rate has dropped to 9.7 percent from 11.6 percent a year ago, while downtown Bellevue's is down to 4.5 percent from 7.5 percent, according to Cushman & Wakefield, which released its own report Tuesday with similar findings.


Ever increasing demand for office space can mean only one thing: job growth

matt said...

"Even so, rental rates are still below pre-recession record levels of about $37 a square foot in downtown Bellevue and $40 in downtown Seattle. Landlords see that as proof the area can support higher rents, Bohman said."

This is not "ever increasing" growth. This is jobs and office space inventory getting BACK to the levels they were at before, which is admittedly in very good shape.

One cannot positively correlate job growth with increasing house prices if you are not willing to negatively correlate the two. It's the same thing as when realtors talk about lower interest rates raising prices, but not willing to accept that higher interest rates may lower prices.

matthew said...

Mortgage crisis hits million dollar homes.

"Because of the financing that was possible, so many people bought the bigger house, the million-dollar house with the bowling alley or the tennis court outside," says Guzek, who works for GreenPath Debt Solutions, a nonprofit service based in Farmington Hills, Michigan. "People across all income brackets are having financial hardship." "

http://tinyurl.com/2sv67q

synthetik said...

Does anyone else that follows this market find that tracking the market daily becomes almost painful?

Yes, but at least you weren't one of those market bears back in 2002. Who could have thought the markets would bounce back from that catastrophe?

The big crash came in the 2nd week of April 2000, so maybe we're only a few weeks away.

As long as we get a big downturn in financials and tech by Oct I'll be happy and it's kind of pointless to watch the market on a daily basis.

Nice volatility though!

synthetik said...

Great WSJ article and map re subprime hot spots. Seattle doesn't appear to be special here either.

meshugy said...

Seattle doesn't appear to be special here either.

thanks Syn...this chart show Seattle as having:

7.85 of all mortgages subprime
7.5% of suprimes are delinquent

Consider that the troubled cities have:

25.96 of all mortgages subprime
24.94% of suprimes are delinquent

...we're doing really well.

matthew said...

Hi Shug,

Did you notice that the areas included are Seattle-Bellevue-Everett?

I'm guessing that if south KC were included, the number would be considerably higher.

Still 7.5 percent is nothing to laugh at.

Deejayoh said...

I saw that office ret story last night, and I'd have bet money that Shug was gonna post it. Looks like I would have won that bet.

what that has to do with home prices, I don't know. More than seattle's low income growth, I guess.

Mike said...

Article from today's WSJ about the collapse of new century (sorry, subscription required): http://online.wsj.com/article/SB117513373262752793.html?mod=home_whats_news_us

confused said...

Olympia-10.85%
Tacoma-15.05%

I am going to rename Shugy to Cherry Picker.

Chris said...
This comment has been removed by the author.
darth_s said...

Man, again, the argument provides by MeshInfo is quite cherry picked and distorted

Consider that the troubled cities have:

25.96 of all mortgages subprime
24.94% of suprimes are delinquent


Look at the following cities which all have YOY negative, especially San Diego and Boston. In many neighborhoods of San Diego, the YOY decline already approached 20%.

Boston Mass.; N.H. 7.39
San Diego Calif. 9.57
San Francisco Calif. 4.96
San Jose Calif. 6.79
Orange County Calif. 8.13

They have comparable or lower subprime% compared to Seattle. Again, the subprime is arbitrarily defined as people with FICO lower than a certain number, i.e 630 or so. If doesn’t count the exotic loans for the Alt-A or near prime borrowers, of which Seattle is up near the top of the country. So, wait until these loans reset and you will see a totally different picture for Seattle.

Chris said...

Check out this image!

From this article.

I would like to see these data for Seattle, KC, and the rest of the Puget Sound area. County websites don't seem to compile these data though. Too bad.

Kaleetan said...

Its pretty sad you guys take so much joy in the anticipation of a Market Crash and are hoping for a recession, crash, whatever...

Are you are watching the market daily for signs of doom and gloom?

Let me guess? No kids, Darkened one bedroom apartments.
Why, so you can say your right?
Its almost as sick as watching the War in Iraq on a daily basis hoping for failure because you have predicted that the US will lose.

A recession will hurt renters and homeowners alike. Be careful what you wish for...

matthew said...

I just checked with the mayor and he assured me that the magical barriers are in place and that the subprime mess will not spill into the Seattle market!

meshugy said...

I just checked with the mayor and he assured me that the magical barriers are in place and that the subprime mess will not spill into the Seattle market!

Matthew...please leave the magic references to Chris...you really don't have a knack for it.

matthew said...

Kaleetan,

Yes I wish the for the downfall of the housing market. I don't live in a one bedroom apartment, I live in a one bedroom condo. I am stockpiling cash waiting for the market to turn, at which point I am going to buy.

I'm not worried about a recession, I work for Uncle Sam! The eagle lands every other Monday no matter what! Just keep paying your taxes please!

confused said...

darth-

great points. I agree completely.

matthew said...

Hi Shug,

I should have known that you would take a special liking to pink ponies!

confused said...

kathleen-

I am not hoping for a crash, quite the opposite. And I am very aware of what it entails. I don't wish that on anyone. I am just very realistic and got my a$$ kicked in the last bubble. That will not happen to me again.

I think the adversarial vibe you feel here comes from some people who have seen such waste and exuberance that they wish some down times ahead to teach the young naive people a lesson that only sacrifice and humiliation can bring.

I am not sure that it is right or wrong. I, myself, was very bullish on real estate up to about 3 years ago. I thought it was a little wacky but not scary. Not all of us sit around reading this blog and watching the market waiting for the demise of our way of life, promise.

Kaleetan said...

"I am stockpiling cash waiting for the market to turn, at which point I am going to buy."

Matthew ..
yes that would be envy- your gonna have your eyes sewn shut..

those who commit the sin of Envy desire something that someone else has which they perceive themselves as lacking. Dante defined this as "love of one's own good perverted to a desire to deprive other men of theirs." In Dante's Purgatory, the punishment for the envious is to have their eyes sewn shut with wire, because they have gained sinful pleasure from seeing others brought low.

Chris said...

You nattering nabobs of negativity don't get it, do you?

$eattle is a $pecial place. It's a place where all dreams come true. A land of faeries, princesses, unicorns, and +10% appreciation from here to eternity.

You can cite all the "statistics", "figures", and "articles published more recently than a year ago" to make you case all you want, but nothing changes the fact that The Emerald City is a very $pecial place.

So go ahead. Make all the snide comments you want from your dank, dark pit underneath the Aurora Ave bridge you call an "apartment". I'm going outside to feed my pony some gumdrops.

Oh, look. What's that I see out my HELOC-financed bay window? A RAINBOW! Take that, losers.

darth_s said...

Kaleetan,

Actually, nobody wants to see a recession. But if a recession is a remedy to wake us up from the housing hysterical mania, than so be it. Remember Fed chairman Paul Vocker back in the 80s. A lot of economists look at him as one of the greatest Fed chair ever in America. He had the courage to raise interest high enough to kill the inflation dragon even though this brought about a severe recession.

I do have a good job and do own a house, free and clear. But I’m just sick and tired of people around me, relatives, friends, coworkers, strangers, etc. and of course ShugInfo, keep on boasting about how much imaginary equity they have in real estate. They use Zillow as a stock quote site for their arrogance even though they are so stupid to fail to see the complete difference between the two. I feel sorry for the ones I know trying all the desperate ways to jump on the gravy equity train for fear of being left behind. I’m mad at the REIC (Real Estate Industry Complex) that has a complete monopoly on the local Media. They always spin about how great and special Seattle is by cherry picking good data and completely ignoring troublesome data. They complete surrender their journalistic integrity for the sake of advertising money. (This reminds me of the current Bush administration even though I am a republican myself)

matthew said...

Kaleetan,

Sometime you have to blow someone else's candle out to make yours burn brighter!

matthew said...

Kaleetan,

On a serious note, I think that this country could seriously use a recession.

This country has become consumed with SUV's, plasma t.v.'s, granite countertops, and everything else related to keeping up with the Jones'.

The national savings rate is negative, people survive on a "buy now, worry about it later" mentality.

I'm so tired of: flip this house, what is my house worth, real housewives of OC, Million dollar listing, and all the other b.s. housing culture crap that has been created the last 3 years.

A recession is a dire wake up call to this country, and just what this country needs. It's time for the easy money to stop.

matthew said...

P.S.- I don't envy a homeowner. I'm a single 29 year old living in the city. I don't want a lawn, a house to clean, and I don't want a 1 hour commute. I could buy a condo, but why? I can rent one for nearly half as much, and that gives me the mobility to leave Seattle at any moment.

Should the prices drop, which I think they will, then I will probably buy because eventually it will probably be wiser to own than to rent. However, that is currently not the case.

Eleua said...

Kaleetan said:

Its pretty sad you guys take so much joy in the anticipation of a Market Crash and are hoping for a recession, crash, whatever...

Absolutely!! A good kick in the junk is EXACTLY what people need. We have not had a meaningful recession in 25 years, and the entire economy has moved from production to trading paper and speculation. That is not the stuff of a strong nation.

The purpose of a recession is to punish debt, kill overleveraged bad businesses, reprice assets, and establish a risk premium. It is absolutely essential for the long term health of the economy.

(I am also massively short)

I have 4 reasons I fast and pray for a doozy of a recession:

1. Fixing a massive economic dislocation. (see above)
2. Cultural - too many 3rd World peasants are in this country illegally to build houses. They need to go home before they have anchor babies.
3. Too many Californians are cutting down the forest and building Quadrant ghettos, and Roman Villas. Lower prices will stop the development. Kitsap has declining enrollment in every school district (x-Bainbridge), but we are building faster than anytime since WW2.
4. I want to be able to sit indoors on the BI-SEA ferry without hearing some idiot shouting to his buddies about how much money he is making on his "Bainbridge Dream Home."

Are you are watching the market daily for signs of doom and gloom?

About 4 hours per day. The doom and gloom is increasing, so that 4 hours is going to increase as we go forward into the April earnings season.

Let me guess? No kids, Darkened one bedroom apartments.

3 kids, beautiful wife, 3 bedrooom beach house on two acres with a 150 degree view of the Port Orchard Narrows and Bainbridge Isl.

I'm also saving over $3K/mo off the PITI. That $3K is tax free.

In some ways, it is a shame the bubble has to end.

matthew said...

Oil is up to 66 a barrel. Hasn't even hit peak driving season yet!

The Bruce said...

You can bet your last Buffalo nickel that when the resets come, all the sub-prime buyers unable to re-fi due to affordability, lack of equity, or negative equity will simply bow out and go back to renting that apartment for half of what their upside-down mortgage is costing them. What's another big ding on their credit when they aren't getting that taste of the equity gravy train they got suckered into taking a shot at? Gotta believe we haven't even scratched the surface nationally on the pending sub-prime foreclosure implosion.

Kaleetan said...

We should do a daily "foreclosed family of the day" segment where we spotlight a family that is struggling to pay the bills and has to sell the family home.

Preferable this family will have kids and we can laugh at how they will have to go to a new school and find new friends. It would be nice to also maybe throw in a few health problems just to spice things up. We can all post messages how they deserved it and they got what was coming.

matthew said...

Kaleetan,

Only if first we get to play the tape of the family vacationing in Barbados, watching the 60 inch plasma, and then driving the H2 to drop the kids off at school. We can then show dad speaking gleefully to mom "Wow, all this equity sure is great!"

Then the show can flash forward to the ARM reset, the equity disappearing overnight, and the repo man coming to the door.

rentalbliss said...

"We should do a daily "foreclosed family of the day" segment where we spotlight a family that is struggling to pay the bills and has to sell the family home."

Instead we should push the pain further and make even more unaffordable situations? Don't you think now is better than later, the only reason they would be in this situation is because housing has become too unaffordable not the opposite.

Yes you salivate at your huge appreciation your home has made but when you sell, who is going to benefit you or the poor family paying way too much for the american dream.

Eleua said...

Kaleetan,

Had this bubble ended back in '98, when the economy wanted to go into recession, these problems would not be as bad. Blame Greenspan.

At some point, the head-of-household for your imaginary family decided he was going to speculate his way to prosperity by levering up on an overpriced, debt laden, maintenance intensive consumer good.

Since I have been associated with this blog, EVERYTIME someone comes onto the forum and asks an honest question about buying/selling/renting, EVERYONE wants the best for them. Everyone always says: buy if you must, stay low on debt, consider your options.

When you have people all puffed up with the pride of ownership, it is difficult for them to learn anything. An economic catastrophe is probably the best teacher.

In the '80s, over 1 million Texans lost their homes due to speculation and the oil bust. Dallas and Houston never really participated in this bubble.

I wonder if there is a connection?

Eleua said...

matthew said:

Only if first we get to play the tape of the family vacationing in Barbados, watching the 60 inch plasma, and then driving the H2 to drop the kids off at school. We can then show dad speaking gleefully to mom "Wow, all this equity sure is great!"

Perfection! Absolute perfection.

Does anyone remember those commercials that featured the home owner selling his watch, car, etc. in order to pay for junior's education? After the man exhausted himself by taking in a border and mowing lawns, his wife said that she just took out a HELOC to pay for it.

There was also the same company that advertised a couple sleeping at night and a gaggle of bankers was outside their door all competing for their mortgage refi business.

Fast forward...

Those bankers are now serving NODs and NOFs.

meshugy said...

Here's some recent sales in Loyal Heights....all but two sold at or over asking. The two that went under were way overpriced so it's not a surprise they went for a bit less. In general...looks like a hot market with a fair amount of bidding wars going on.

First price asking, second is sold price.

3007 NW 72nd St 599,950 600,000
6717 21st Ave NW 489,950 489,950
3006 NW 66th St 470,000 470,000
8020 27th Ave NW 499,950 499,950
7314 28th Ave NW 850,000 817,500
7722 Jones Ave NW 465,000 463,375
6706 22nd Ave NW 625,000 676,000
7702 28th Ave NW 459,000 460,000
7558 28th Ave NW 499,950 526,000

EconE said...

HAHAHA Kaleetaan.

I have stated before I am not rooting fot a housing crash or recession.

FULL BLOWN HARDCORE DEPRESSION...nothing less.

why?

Because America Deserves it. Most of the other posters have summed up why. Eleua and Matthew did a nice job of it.

Oh...and....don't try to put the fear of God or any of that stuff into me....that fear should have been put into all the greed driven SOB's that will now lose everything.

I don't plan on profiting from this. I'm not shorting stocks. I have no plans to buy homes for pennies on the dollar. Money doesn't have much meaning for me...it actually kind of disgusts me. Money is used to buy "stuff" too many people spent too much money on useless stuff.

In regards to your final idea...

We should do a daily "foreclosed family of the day" segment where we spotlight a family that is struggling to pay the bills and has to sell the family home.

YES!...I already follow it online...it's obvious...I can find you dozens of CL ads that wreak of desperation and preforclosure.

So...lets start that section.

But...let's also start a "sibling" section. For each family that is ""losin it all"...lets do a little bio on a family in some third world country that has lived in squalor working for pennies an hour so that the could support the lifestyle of the soon to be defunct American family...yet never had the chance to "lose it all" because we never afforded them anything in the first place.

I want this to get worse than anyone imagines.

Eleua said...

Hmmm....

Let's quit producing stuff, and sell off the seed corn to Asia. We can then use that money to lever-up and create various financial schemes that will magnify the good parts of a declining economy.

Let's spend what money is left on an end-use consumer good. We will print money like mad and pound down interest rates so low that banks will be choking on the green goo. The government will then quit publishing the total money supply and tell us that inflation is tame and employment is low.

Banks will then lend money to every stiff that walks, crawls, or is wheeled through their doors, and not ask for any documentation that would assure them the money will ever be paid back.

Borrowers will keep borrowing money against the same asset and buy consumer goods at warp speed. Foreign economies that now have our seed corn will accumulate all the wealth of the nation.

We will all be so busy at our financial cube-farm job that we will have to hire peasants from around the world to do the "unskilled" jobs that nobody wants. They will overwhelm our social services and treat the ER as their personal HMO.

Buy-drive-borrow-speculate-consume-buy-drive-borrow-speculate-consume-buy-drive-borrow-speculate-consume-buy-drive-borrow-speculate-consume.

If we go bankrupt, we have Uncle Sugar and all the bleeding hearts bail us out.

Lather, rinse, repeat...

I am so glad I get to grow up in a world that was forged by the Mouseketeers.

matthew said...

Hi Shug,

Link please?

Eleua said...
This comment has been removed by the author.
Eleua said...

Hi Shug,

Link please?

Who is Shug?

Lionel said...

German regulator warns of hedge-fund crisis.

In an interview with Welt am Sonntag, printed March 18, Jochen Sanio, who heads Germany’s financial market regulatory agency BaFin, warned that hedge-fund collapses could blow the entire system apart. He said the Amaranth collapse last September, was a “clear warning signal, strong lightning in the distance. In the next case that size, the lightning could strike and shake up the financial system.” Sanio also said he is worried about the U.S. mortgage market. “I can only hope that we are not now at the beginning of a collapse in the U.S. housing market, which through the U.S. conjuncture would affect the global conjuncture. . . . That would be the last thing we would need.”

Sanio endorsed the German initiative for an international discussion
about hedge funds, the discussion as such would be valuable, because “from now on, the issue can no longer be played down. . . . The highly speculative hedge funds pose a great danger to the stability of the financial system.”

Sanio added, however, that global economic meltdowns NEVER affect Seattle. (Alright, I might have added that part.)

FinanceGuru said...

What we really need is more tax cuts to stimulate the economy, this is the only way to avoid a recession! The US tax rate of 35% is one of the highest in the world, then business will pass the savings on to consumers…ok maybe that last part was going a little too far. However the Washington State (spending) aka Budget is going to increase by 15% over the next two years and this is after a 17.7% increase in spending the prior two years. This state (that relies heavily on sales taxes, which are more volatile) is going to have a hangover in 2008 and likely have significant budget problems. Only Rossi can save us now!

Eleua – The stock market has not had a negative 3rd year of a presidency since the Great Depression. I do believe that the stock market will have ~5% appreciation this year, as the S&P500 P/E ratio is 17.28 with a 1.93% yield (ticker symbol source: $INX). This historical P/E since the 1960’s has been 17.5, thus the market is marginally undervalued. Also with moderating profit growth of companies will cause smaller appreciation this year than in 2006.

Im coming out and revealing the charade, Shug has allowed may of us to log in as him to post (thus the different tones and types of writing) so we could have everyone focus on him (our official scapegoat). Just think about it, how can he post that much every day. Thanks Shug, I love you man, it was great!

FinanceGuru said...

What we really need is more tax cuts to stimulate the economy, this is the only way to avoid a recession! The US tax rate of 35% is one of the highest in the world, then business will pass the savings on to consumers…ok maybe that last part was going a little too far. However the Washington State (spending) aka Budget is going to increase by 15% over the next two years and this is after a 17.7% increase in spending the prior two years. This state (that relies heavily on sales taxes, which are more volatile) is going to have a hangover in 2008 and likely have significant budget problems. Only Rossi can save us now!

Eleua – The stock market has not had a negative 3rd year of a presidency since the Great Depression. I do believe that the stock market will have ~5% appreciation this year, as the S&P500 P/E ratio is 17.28 with a 1.93% yield (ticker symbol source: $INX). This historical P/E since the 1960’s has been 17.5, thus the market is marginally undervalued. Also with moderating profit growth of companies will cause smaller appreciation this year than in 2006.

Im coming out and revealing the charade, Shug has allowed may of us to log in as him to post (thus the different tones and types of writing) so we could have everyone focus on him (our official scapegoat). Just think about it, how can he post that much every day. Thanks Shug, I love you man, it was great!

Sven said...

Hey! This couldn't have been more conversation appropriate...

http://www.msnbc.msn.com/id/17838307/site/newsweek/

Sven said...

Actually, this reminds me of an interesting tune by Megadeth, Foreclosure of a Dream... Anybody remember that tune? Great song.

FinanceGuru said...

There are several reasons I put money down on a condo last summer, and yes there are advantages and disadvantages (gasp) of owning. For one, I bought at the edge of downtown Seattle (98101) near Capital Hill since this area is starting to be cleaned-up/upgraded with newer buildings. I believe this is the next area of Seattle to be “developized” next since it is so close to downtown yet the utilization has not been fully realized.

All the road construction that will be done over the next 5 years will cause commute times to double! With longer commute times real estate closer to work downtown Seattle will likely appreciate quicker (or at least hold up better than outer areas if real estate prices decline). The Alaska Way Viaduct, 520, 405, and all the other major projects are going to make traveling in this region a living hell.

Thus being able to have a 10 minute walk to work downtown would be a blessing. [And yes, I do realize that you can rent places close to downtown.] This is part of my rational for buying where I did. If anyone has any interpretations to this methodology please let me know (as I don’t need to ask for opinions here, lol). I will expound on other reasons in the near future, just going through a few issues at a time.

Sven said...

For those of you unfamiliar with the band and the song, but interested in some YouTube goodness...

http://www.youtube.com/watch?v=EMZslzd85-E

darth_s said...

Financeguru,

I completely agree with you. Withthout ShugInfo, I would not have the incentive to write that much lately. He represents all that is wrong about this histerical mania that inflicts so many folks around me. This gives me the courage and passion to fight it back. I shoud say "Thank you Shug…"

meshugy said...

Hi Shug,

Link please?


Those are all from the parcel viewer...just look them up.

Eleua said...

FG,

You are so right. Why look at overpriced companies and a speculative economy and sift for fundamentals, when you can just look at the calendar and count to three? Nevermind that chip makers have inventory out the ass, and the market for their chips is in decline, we are in year 3 of a presidential cycle.

Home inventories at 16 year highs, finance companies going down faster than a TJ hooker on a $10 bill, NOD/NOF going parabolic, the FED about to crap its pants, oil going up, war with Iran and Iraq, negative savings rate for 3 years running, all but 3 national housing markets in retreat...

At least we have the "year 3" thingie going for us.

1987 was year three. Hmmm...I might have to rethink this.

Remember how the stock market always went up in years the NFC won the Superbowl?

The presidential cycle is of the same intelectual timber as the whole "Seattle is special" pap.

As for tax cuts...

I am in agreement that local and state governments are the only entities that spent money faster than your average pre-foreclosure bozo at Best Buy. All these property taxes were spent before they were collected, and they are going to keep spending. Taxes will be raised on houses with declining values. Watch and learn.

I am for, not only a tax cut, but the elimination of the IRS and any other public agency that forces you to declare income for any reason. It's none of their damn business.

Cut income taxes to zero. I would rather pay a 40% sales tax than a 1% income tax. That way Congress/Legeslatures could not divide and conquer. It would be us vs them.

Eleua said...

sven,

I'll spare my personal anecdote with this. Let me just say that Kitsap will be this article X 1000.

Can you say FUGLY!

Sven said...

Eluea:

That's my grim assumption about a growing number of these areas. It's already happening in Pierce County closer to the Base...

Also, if you take the time, you'll really appreciate the "Foreclosure of a Dream" video. Interesting how historical themes repeat themselves over and over and over and over and over and over...

FinanceGuru said...

Eleua - Wow we completely agree on something. Your absolutely right, we should abolish the IRS and create a National Sales Tax (which would tax richer people more since they spend more $$$). Yet then there would be ~1,000,000 tax accountants and financial analysts (thats me) out on the street…

The stock market in 1987 ended up slightly positive for the year (Jim Cramer, boo ya baby, was one of those that shorted the crash that year). In 2007 there are many areas of the stock market that will be extremely volatile, yet the market as a whole is slowing but not stalled...yet. Good news 4Q06 = 2.5% GDP growth.

I have to agree with Shug on the construction building in the Seattle region (as there are currently 12 cranes up in Bellevue). If you build it they will come, as in workers will migrate towards the high rise office buildings, thus increasing the density of downtown Seattle & Bellevue. Im glad Seattle abolished the height restrictions downtown, yet were stupid to charge developers (as they pass the cost onto buyers & renters) of $19/ sqr ft above the prior restrictions…thus why developers are building significantly more in Bellevue rather than Seattle.

matthew said...

FG,

I thought Bellevue still had height restrictions in place?

FinanceGuru said...

matthew - Actually Seattle didnt completely abolish height restrictions (they did in one part of downtown) yet increased them dramatically. In Bellevue it is set at 42 stories (based on what a civil engineer for the city of Bellevue told me). There are very few buildings being built in either city that exceeds that threshold. Ironically the newest in Seattle is the WAMU center at 42 stories (and I would have been on the 41st floor).

Michael said...

BTW, next Tuesday on KCTS at 7:30pm there will be a program called "About The Money" hosted by Christine Chen and she will be interviewing the head of Seattle Coldwell Banker. Of course the preview shows that guy saying Seattle RE is in a very strong position..... so tune in....

EconE said...

I don't personally like the idea of completely eliminating income taxes.

I do like the idea of a much higher sales tax in order to curb consumption and encourage saving however...when people reach a certain level of wealth, they can't spend their income quickly enough to offset what they should be paying in income taxes.

I can't say where to draw the line in the sand but i feel that income tax should kick in after 75k-100k/year and for the people that are bringing in 7,8 and 9 figure annual salaries...tax the hell out of them. They can afford both the income and the consumption taxes...easily.

Plus...estate taxes...they talk about eliminating them...but I think they should be stiffer. It's funny that many people who think that there shouldn't be estate taxes are people that most likely wouldn't even get hit with those taxes.

MisterBubble said...

"If you build it, they will come."

Good strategy for baseball diamonds in Iowa cornfields. Really stupid strategy for everything else.

This is the kind of quality insight I've come expect from the guru. Boo yah, indeed....

matthew said...

E-

you were waiting for dell earnings?

AP
Dell Delays 10-K Statement, Shares Slump
Thursday March 29, 5:00 pm ET
Dell Delays Filing 10-K Statement As It Continues Internal Accounting Investigation


ROUND ROCK, Texas (AP) -- Dell Inc. said Thursday it will delay filing its annual 10-K financial statement, as it continues a previously announced accounting investigation that has unveiled "evidence of misconduct."


Shares are plunging in after-hour training.

EconE said...

Off Topic...

Allow me to show some people what some people do with their refi $$$'s

This is a quote taken from another forum that I am a regular on.

A quick trip to the mortgage company, a fast refinancing of the house and the X-2s were on order.

In case you were wondering what an X-2 is. Read up here...and don't forget to scroll to the bottom so you can see the price!

www.soundstage.com/revequip/wilson_x2

plymster said...

Econe-

Increase the estate tax? Are you crazy? How will the aristocracy of the US get by then? Do you think the Rockefellers, Bushes, and Hiltons of our nation would be able to command the hoards of wealth that they do? If we had higher estate taxes, then there might actually be some sort of class mobility in the US instead of the celebrity wealthy living off the deeds of their forefathers.

Do you expect Paris, or Dubya to go out and get a real job, or not run a company (or a country) into bankruptcy? Sheesh.

I can't believe anyone would want to dissolve the caste system we have in place here. How un-Amerikan. Next you'll wanna go and tax capital gains from home sales proceeds, revoke the tax deduction for interest payments, or tax corporations like we tax people.

What are you? Some sort of Commie? ... er, uh... I mean Terrorist?

Eleua said...

Matthew,

Thanks for the heads-up. Dell sucks and everyone knows it. They are getting eaten alive by HP and their end markets suck. CC/BBY report on 4/4 and that should be quite a show.

DELL is supposed to be delisted if they can't file any reports. As if that will happen... I think their deadline is May 07, but they can keep this up until May of 2017 before the SEC puts the smack down on them.

Just another case of a bought-and-paid-for federal government doing what the big money interests want...

Take a look at Gateway 2000. That is what Dell's future holds.

Eleua said...

Given DELL's business problems and legal peccadillos, it should be at $10 and on its way to sub-$5. The fact the Lumpeninvestoriat likes this turd is very frustrating.

I have a score to settle with DELL. I'm thinking that I will get paid by July.

Terry said...

It's been a week without my Seattle Bubble fix as I am now in the thriving metropolis of Pullman, WA.

I finally figured out how to use a PC set up in a retirement home here. (I'm not a resident yet, just visiting family).

Seattle bubbleheads might be interested to know that eastern Washingtom is not isolated from the bubble phenomenon - 3000 sq ft, 3 bdrm, 3 yr old on city lot in Pullman - asking $425,000.

For anyone not familiar with Pullman - if it wasn't for Washington State University, there is a good chance the town wouldn't even exist.

FinanceGuru said...

terry - Whats the address (or at least cross streets? I grew up in Pullman so I know that area quite well (and was even born on the WSU campus)...TMI.

As for Pullman, it would probably have almost 3,000 instead of almost 30,000 (18,000 of those are college students with ~5,000 in the summers).

biliruben said...

Last time I was through there, they were building like crazy on the western hills back beyond Dissmores.

425K is crazy prices. It must be that scarcity of land.

MisterBubble said...

No, it's the Strong Jobs that are driving prices in Pullman....someone needs to clean up the cougar crap!

Alan said...

"3000 sq ft, 3 bdrm, 3 yr old on city lot in Pullman - asking $425,000."

That is only $141/sqft. Sound expensive but half or less of most prices I see in Seattle.

My first house ran around $80/sqft. My second condo ran around $110/sqft.

PITI would be around $2500/month I think. I bet you could get five college students in there at $500/month each. It almost flows cash.

Alan said...

Becky,

You accepted the risk with eyes wide open. Your household income has tripled since you purchased. It sounds like you are in a good and stable situation and are not helping to set up the current situation that may lead to high inflation or recession.

meshugy said...

Holy cow! Just went out for a bike ride and there are sold signs everywhere!!

The place right behind me is now subject to inspection:

7311 18th Ave NW

And a place around the corner sold in only 4 days!

1917 NW 73RD ST

Things seem to be heating up fast...now I'm wondering if it's going to be 2006 all over again. It sure looks like it...

uptown said...

Just came in on the ferry to downtown.
Counted 11 tower cranes.

Tom said...

First time home-buyers (who may have been more likely to use sub-prime or risky mortgages) are like plankton in ocean ecologies, and as they go away, the higher life forms (or higher-priced houses) get hit too (from Paul McCulley of PIMCO):
Plankton theory of first-time homebuyers

Also see The Fingers of Housing Instability by John Mauldin.

Richard said...

Hmmm... no deeds on record for 1917. Lately, it seems like the county records website has been slow to update - I've checked on a few homes that went pending more than a month ago, and still no warranty deed or anything has been filed. Last year I was finding it took 3-4 weeks.

audit trail said...

The KC records office must be swamped. With homes selling at record levels this spring it only makes sense that things are so slow. I heard they are looking to double their staff to be ready for another record RE season.

matthew said...

record year all right, record high inventory on the way!

meshugy said...

Hmmm... no deeds on record for 1917.

That's because it sold today! If they paid cash, then it could be in the county record within a week. Most loans will require at least two weeks, and often people set closing dates later for logistic reasons. So sometimes it takes 6-8 weeks.


But the sold sign is there....

S Crow said...

For those that care to argue about how quickly a home sale is completed:

A closed home sale is not completed until the transaction is recorded at the county in which the home resides. Nor is a home technically sold when a "sold" home sign is stapled to a yard-sign. I wish the industry would place a "sold-pending" sign which is more correct, until the transaction is closed.

It does not take weeks for an actual sale to show up at the county. In many cases, it can show within hours of recording. Both King & Snohomish co's are usually swift.

matthew said...

More disinfo from INFO!

Alan said...

Let's not argue semantics, please. Most people consider a house sold when the two parties come to an agreement. The fact that it is not final and recorded until closing is does not invalidate this. Language is just a tool for communication and as long as everyone knows what everyone else means then everything is fine. I think it is perfectly acceptable to consider the house behind Shug to be sold but not closed. He isn't trying to twist the truth this time.