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Friday, April 09, 1982

04.09.2007 - Monday Open Thread

This is your open thread for Monday, April 9, 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!

33 comments:

Unknown said...

Am I a bad person if I sell the home I bought in 2003 at 300K for 500K today and move away? I've got the most to gain from double-digit appreciation, but something just doesn't feel right, so I'm getting out now and taking the profits. Hopefully, it won't sit on the market for months. :-(

Puget Sounder said...

Nothing wrong with selling at the peak of the market.

Unknown said...

Well, my mother-in-law thinks I'm nuts for selling right now at all. Yes, of course, she's a RE agent. Her thing is, "homes always go up in value". Where I say, "they don't in some other places....people have to be millionaires to buy homes around here. the prices have to come down" and then she says "but the Seattle area is unique". Even my wife thinks she's funny.

Matt Rivett said...

From the Bellingham Herald

County home prices still on the rise
Average time to sell a house also increasing


Note this nugget...

The rise in home prices has little to do with recent price appreciation and more to do with the fact the market has changed in the past 12 months, said Julie Hansen, an economics professor at Western Washington University.

...Housing prices didn’t really start to flatten out until midyear (in 2006), so that hasn’t showed up in the numbers yet...

...Johnson added that sales continue to be strong in the high-end housing market, which could be skewing the average price....

Again, median home prices is a piss-poor barometer of the market... it tells you almost nothing of a market's dynamic.

Why people keep using it here to measure anything is beyond me.

Unknown said...

Richard.

That is pretty much exactly what I went through.

I bought in 1999 and sold in 2006. I too got a queasy feeling about what was going on. I felt bad for the person that leveraged themselves to the hilt in order to buy my old Ballard P.O.S.

As for me, I plan to take my capital gains and pay cash for a modest place somewhere else. To me, money is about saying F-U to the 'man', not slowly climbing the ladder to the Ultimate Dream House as Meshy-boy talks about. In my book, freedom beats granite and stainless any day.

Unknown said...

At least what I have going for me is that my house isn't necessarily a POS, but my wife and I want the ability to play ball with my son in a YARD, not the postage stamp we have now. We joke and call our house "the apartment" because our neighbors are so close to us; we hear everything. When I see what all of my friends in other cities have and what they paid, I get sick to my stomach. And you can't really say salaries are higher here in Seattle; I've got two job offers for double digit increases in salary, where here in Seattle I don't get anything like that.

blueskitten said...

Richard,

I'm in much the same boat as you, bought in 2003 and my condo is currently on the market. No offers yet, but fingers crossed... we do need to move at some point (job change) but can afford to be patient and negotiable on price. Really the best position to be in as a seller right now, I think.

meshugy said...

The rise in home prices has little to do with recent price appreciation and more to do with the fact the market has changed in the past 12 months, said Julie Hansen, an economics professor at Western Washington University. ...Housing prices didn’t really start to flatten out until midyear (in 2006), so that hasn’t showed up in the numbers yet...

Maybe in Bellingham...but if you look at the King County #s you'll see that the March Median Res price is at an all time peak of $454,950. If you look at mid-2006, the median was $435,000. So if prices didn't budge till August 2007, we'd still have almost 5% percent YOY appreciation which is very healthy. But that's unlikely as we are clearly having a strong spring and that means rapid price increases over the next several months.

Again, median home prices is a piss-poor barometer of the market... it tells you almost nothing of a market's dynamic.

Actually, if you take a look at the March MLS #s, you'll see the vast majority of sales were under 500K which makes the entry level market the majority of sales.

Lionel said...

All this home price rising is great news to me! I figure the only way that homes could be doubling in price is if salaries are also doubling! What great news! I can earn double what I'm earing now just by moving to Seattle! And if housing prices go up even more, that means I'll earn even more! Wow!

Lionel said...

Work?! Wait a doggone minute! What am I thinking? You don't have to work in Seattle. You just buy a place and watch the value rise and rise! Work, geez, what a stupid idea.

Deejayoh said...

Did the good readers of this blog see this gem from the Friday PI?

America defined by boom and bust

Just think about what those higher credit standards will require: A significant down payment, good credit and, in Seattle, a high income.

More than likely, what it will really mean is that the supply of homes will grow -- and prices, sooner or later, will fall.

How big a descent? Gross estimates housing prices could drop 15 percent to 20 percent and return to normal "affordability" levels. But Gross also writes that "while the Fed may be willing to allow U.S. homeowners to suffer a little pain ... a double-digit decline would risk consequences that few central banks would be willing to underwrite. So a forecast of home prices almost implicitly carries with it a forecast for interest rates."


wow. the local REIC must be up in arms!

rentalbliss said...

Did anyone notice the huge upsurge in foreclosures today,

http://www.foreclosure.com/state/wa.html

Over %50 more than last week, anybody tracking them?

refractedthought said...

Actually, if you take a look at the March MLS #s, you'll see the vast majority of sales were under 500K which makes the entry level market the majority of sales.

Ha ha ha! What a load of bullshit!

The median sale price was $454,950. That literally means half of all sales were the same or higher, which hardly constitutes a majority of sales for the "entry-level" market -- not even close.

Alan said...

I'm watching foreclosures in King County. Acutally, I'm watching "Notice of Trustee Sales". That includes estate sales but does not include preforeclosures. It also does not reveal which homes recover from foreclosure.

On Friday, 42 trustee sales were recorded in King County. The average for April before Friday is 11 per day. Including Friday, April's average is 17.2. The average for all of March was 17.5 per day. The highest day in March had 27 notices.

In March 2007 there were 386 trustee sale notices. The previous 12 month average was only 263. March had a 47% increase in trustee sales announcements over the previous 12 month average.

MisterBubble said...

"The median sale price was $454,950. That literally means half of all sales were the same or higher, which hardly constitutes a majority of sales for the "entry-level" market -- not even close."

Good catch, refractedthought.

I've got the March MLS numbers right in front of me. For the closed sales histogram (page 16), there are only three bins above $500,000:

$500k-$749k: 1064 (13.7%) sales
$750k-$999k: 299 (3.8%) sales
$1,000,000+: 209 (2.7%) sales

So together, these three bins account for a bit over 20% of closed sales -- or in other words, the 80th percentile of Puget Sound sales.

That's some "entry-level"....

Unknown said...

Nice to see what classy people the RE industry employs! Scumbags!

http://seattletimes.nwsource.com/html/localnews/2003657148_bigamy08m.html

Unknown said...

"After Link's firing, he and Lahey obtained real-estate licenses, he said. The couple is listed as a "husband and wife power team" for a downtown Bellevue office"

BanteringBear said...

"Actually, if you take a look at the March MLS #s, you'll see the vast majority of sales were under 500K which makes the entry level market the majority of sales."

That doesn't mean they're first time buyers. Most aren't. And with first time buyers priced out, prices fall. Plain and simple.

Terry said...

Couple of comments from Ben Jones blog - can't say I see "seattle price drop's" point. Go Lake Hills Renter!!

Comment by seattle price drop
2007-04-08 22:07:16
Lionel-
Had to laugh when you said “I’ve spent an enormous amount of time on the Seattle Bubble blog trying to convince…”. More power to you , keep up the good fight! But I finally quit going there because , as you’ve politely stated, it’s exhausting!
That blog is about one hairs breadth more relevant than the local newspapers. It gets better as things become MORE and MORE ****OBVIOUS****. By the time Seattle’s crashed completely, they’ll all be in agreeement about the “coming crash”.
Sad. Seattle is a city that really needed a good bubble blog.
Reply to this comment

Comment by Lake Hills Renter
2007-04-09 11:14:07
So you’re saying the bears at Seattle Bubble don’t see the light? I’d have to disagree. Most of the regulars there are incomplete agreement of the coming correction. The problem is there’s one or two bulls that intentionally stir things up, and many of the regulars fall for it every single time. It’s become more about countering the bull’s points rather than objectively analyzing the data, which is what I loved about that place. I can find arguments anywhere, I don’t need them there too. It’s really turned me off to the place. But it’s not the bears, it’s the bulls and their constant data cherrypicking.
(Comments wont nest below this level)

MisterBubble said...

"The problem is there’s one or two bulls that intentionally stir things up, and many of the regulars fall for it every single time. It’s become more about countering the bull’s points rather than objectively analyzing the data"

Sigh. Guilty as charged. I don't reply to the meshuginfogurus as much as I used to, but I'm certainly guilty of hauling out the big ol' sack of Troll Chow for the occasional feeding....

I don't know, though...sometimes I think it's bad to let the trolls run the board with no response. There's only so much "data analysis" that can be done without a prompting question. For as much as "debating" these guys is like playing logical whack-a-mole, sometimes, it forces us into interesting perspectives.

I can think of more than a few of Tim's posts that have been prompted from ongoing debates with the local trolls, so it can't all be bad, right?

BanteringBear said...

I think most would agree there is one main problem with this blog; meshugy. He talks the most, but offers the least. Diarrhea of the mouth turns a lot of people off. Rather than skip endlessly over his tired old rants, many just stop tuning in.

biliruben said...

I don't think Meshugy is really a problem, per se.

I think the problem is Seattlites' renowned "tolerance" for a "diversity of viewpoints".

He thrives on this shiznet, and in fact has started to shift his tactics to take advantage of it.

I can see right away which threads he contributed too, however. It's the ones with a lot of responses!

Terry said...

Part of what I like about the Seattle Bubble Blog are the bulls and their posts. As a thinking person I can evaluate their opinions for what they are worth (and as a confirmed bear, I find their opinions mostly flawed). IMHO the goal of this blog should not just be a place where housing bears can rant in unison, INTELLEGENT dissenting opinion should be encouraged. It’s the debate that keeps this blog interesting.

plymster said...

I agree with Terry. INTELLIGENT debate does make it interesting. What makes it irritating is debunking the same tired deceptive posts.

Lies like "5x annual income is the benchmark of affordable housing" can seem credible to a thinking person without a some time to legitimately explore the financial ramifications of that assertion.

Posting a 3-year-old article about multiple offers on pricey homes can fool some folks pretty quickly.

Posts about how prices are skyrocketing*, but leaving out critical sampling information is far from INTELLIGENT debate, and is really more of a lie than anything else.

*In a 3 contiguous block area of Ballard, some houses excluded.

These behaviors detract from the conversation, and frustrate the adults. I can understand why SPD doesn't drop by anymore.

Kevin Krouse said...

A fun little video of US home prices adjusted for inflation plotted as a roller coaster:

http://www.speculativebubble.com/videos/real-estate-roller-coaster.php

Surkanstance said...

I think Mushugy is largely mis-understood. It's not so much that he is saying that Ballard, or Seattle in general, is "special", but that there really isn't any national real-estate bubble, or recession in the offing.

I've seen Meshugy post links to bullish articles on California real-estate, so it is simplistic to believe that he thinks Seattle is the only place where people should be buying real-estate with abandon these days.

To that end, I would have to agree that the onus is on the bears (like me) to prove our case, since the economy has been defying all bearish expectations for years now.

Ironically, the more real-estate, and the economy, defy gravity with continued debt growth, and asset appreciation, the more my knuckles whiten with fear of what lies ahead. But that doesn't make my case for a crash any stronger. I have plenty of friends who have decided I am just a crank since I've been calling wolf for some six years now.

Only time will tell...

Unknown said...

My main draw to this blog is watching the Hammer and Finance 'guru' squirm and toil in their postpurchase conginitive dissonance.

Nothing says "I bought a POS for too much money and am trying to convince myself otherwise" more than the Hammer's posts.

Priceless.

Terry said...

I stole this from Ben Jones blog. I know it may be inappropriate to steal posts from other blogs, but this post was just to good to not share:

Comment by singapore
2007-04-08 22:34:59
hi i am from singapore
we experience a housing boom 1990 to 1996
it busted in end of 1996.
i have brought a property in 1990 then and it is a public housing.
it costed $135000
it rocketed to around $650000 in 1996
i did not sell it then,
when it went down to $500000 in 1997 i still hope for higher prices.
i only sold it when it in 1999 when at $420000
the price of the house now? $335000.
during the height of the boom, many have brought their house at
$500000 and above.
how much are they worth now? around $300000 and that;s ten years after the bust. now singapore is experiencing a boom in property again. but the prices of these houses are still not going up very much. it is always the new developments that go first.

your sub prime rate looks very similiar to the time in singapore in 1990’s. Back then HDB our national developer will loan to anyone whether be he 60 or 35 years old with or without job 80% of the loan. it was in 1995 when they decided to tighten the critireon that housing begin to slide. Back then i was pratically euphoria. people gong for holidays, people buying new cars etc..

meshugy said...

I think Seattle PriceDrop was just too embarrassed to show himself around here after last years debacle. If you look back it his posts on this blog from this time last year he was claiming wholeheartedly that the market was crashing as we speak. As the year went on, prices climbed ever higher and he simply couldn't ignore the fact that he had completely misjudged the market. So now he just hangs out on Ben's blog which just a big echo chamber anyway. Makes him feel good....

Anyway, I'm not really a Bull because I don't think housing is a great investment in a purely financial sense. It was a few years back because you could flip houses in a year and make $100K. I think that's getting harder to do. However, I do think it's worth buying a house as a place to live...assuming the benefits of owing matter to you: security, fixed payments, ability to modify home, etc. If those thing don't matter then renting is a great way to go. So I'm more of a housing moderate really...because I think it's worth buying a house to live in. And I believe the local market has strong enough demand to support current prices. I do think it will slow down, but to single digit appreciation or possibly flat for a while

EconE said...

My dad just listed today in Cali.

Someone is already showing the house.

right now...although I disagree with Shug with regards to the future of home appreciation...I'm hoping that he's right in my case...lol.

Matthew said...

The only thing that Shug ever says on here is "The sky hasn't fallen yet, so its never going to fall".

He will never have a debate about easy money, tightening credit, etc. etc. His logic is the same old tired rhetoric that you used to hear in other parts of the country prior to their bubbles bursting. Once the bubble bursts here, he'll be gone like a fart in the wind.

Anonymous said...

think most would agree there is one main problem with this blog; meshugy. He talks the most, but offers the least. Diarrhea of the mouth turns a lot of people off. Rather than skip endlessly over his tired old rants, many just stop tuning in.


As usual, Bantering Bear, well said.

Eagle Eye said...

Today, late in the afternoon two suited men rang our doorbell and introduced themselves as real estate agents. They want listings; we told them “Thank you, we rent this house.” They politely walked on down the road.

This is gorilla marketing, the most grueling basic sales tactic. Could it be that this market is changing that much that fast?

We sold last year in Minnesota; our house was the last one to sell 12 months ago in our development. The market there is dead. We used an experienced agent who used a team of sales people one of whom was out knocking on doors on our behaf. I thought they were crazy, but it worked.

We have been around the block with home depreciation and will rent for now.

Seattle home owners don’t want to hear any of the truth from the rest of the USA. It is too unpleasant, besides a lot of them want folks like me to move to town and pick up the tab on the new SUV or vacations they have taken. Sorry, not going to happen.