tag:blogger.com,1999:blog-15223784.post115237615973270980..comments2023-10-08T06:24:07.089-07:00Comments on Seattle Bubble: A More User Friendly Seattle BubbleThe Timhttp://www.blogger.com/profile/14832570891451659976noreply@blogger.comBlogger46125tag:blogger.com,1999:blog-15223784.post-1158686986752447762006-09-19T10:29:00.000-07:002006-09-19T10:29:00.000-07:00Are you referring to this comment in the Weekend O...Are you referring to <A HREF="http://seattlebubble.blogspot.com/2006/09/weekend-open-thread_16.html#c115848543701233612" REL="nofollow">this comment</A> in the Weekend Open Thread? Both the Friday open thread and the weekend open thread are still up and running, as far as I can tell.The Timhttps://www.blogger.com/profile/14832570891451659976noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1158686771349219322006-09-19T10:26:00.000-07:002006-09-19T10:26:00.000-07:00What happened to Friday's open thread? I posted a...What happened to Friday's open thread? I posted a link to a financial expert - wanted to see what others thought. The whole thread is gone.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1158101414360071482006-09-12T15:50:00.000-07:002006-09-12T15:50:00.000-07:00Renting makes sense is a tough argument in my opin...Renting makes sense is a tough argument in my opinion. Knowingly losing money every month GUARENTEED, versus the POSSIBILITY of your home value dropping in the coming years. Tough to convince someone who, rather than rented for the past one or more years bought instead, and even with a 30% drop in the market, will still receive money above what he paid initially. Let alone someone who has owned long term. Sounds as though speculation may go both ways.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157524366053350372006-09-05T23:32:00.000-07:002006-09-05T23:32:00.000-07:00with what is going on in ca now. I am guessing tha...with what is going on in ca now. I am guessing that there will be fewer of them coming here. Besides, californians for several years have been moving to places like pheonix and las vegas and the homes homes had gone up substanstantually, look what is going on in those markets now. by the way, just moved here from sunny cal and do not plan to buy a ------ thing. I think that owning a house is so over rated, at least in this market. Renting really makes so much more sense. Don't take my word for it - just do the math.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152563698919141472006-07-10T13:34:00.000-07:002006-07-10T13:34:00.000-07:00Seems like we'd all do well to remember the discla...Seems like we'd all do well to remember the disclaimer that appears on mutual funds: <B>"Past performance is not a predictor of future results".</B><BR/><BR/>* Indicators that have been bearish in the past could not result in a bear market for RE right now.<BR/><BR/>* The fact that Seattle RE has only flattened in the past doesn't mean it can't drop in the future. <BR/><BR/>During the height of any bust, it always seems like everyone is getting screwed and things will never get better. But in hindsight, most people end up OK, and plenty of markets recover. If you stood in the middle of the Great Depression, you might conclude stocks were to be avoided. You'd have been wrong. Instead we can all see that the stock market recovered and returned 10%/year for the last 70 years (making it better than most other investment vehicles).<BR/><BR/>The dot-com bust is now a memory and most people's 401ks have recovered (most, not all. If you had all your investments in Enron or some other company stock, you were one of those stories we read about). That's a scant 5 years out.<BR/><BR/>So, we could even have the great RE crash in 2007 or 2008, and it will look terrible for a little while, and then maybe we'll all recover. I'm sure all the bears here will swoop in and buy the "RE on the cheap" that they've been waiting for, thus pushing prices back up :-)<BR/><BR/>Or it will be the dust bowl for everyone. Mass chaos. Cats and dogs, living together. Ragnarok!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152560392760564172006-07-10T12:39:00.000-07:002006-07-10T12:39:00.000-07:00The number of years that the "buy and hold" strate...<I>The number of years that the "buy and hold" strategy requires has been increasing all year.</I><BR/><BR/>I was being conservative...appreciation is so rapid right now that if you buy a house this month it could be worth 10K or more next month. Some areas of Seattle had a 30K increase MOM in June.meshugyhttps://www.blogger.com/profile/12332798876700147445noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152559997466369862006-07-10T12:33:00.000-07:002006-07-10T12:33:00.000-07:00The number of years that the "buy and hold" strate...The number of years that the "buy and hold" strategy requires has been increasing all year.<BR/><BR/>Anybody else notice that?<BR/><BR/>Last Fall it was 5 years, winter 5-7 years, now it's 5 -10 years.<BR/><BR/>Any predictions where it'll be next winter?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152559432475507162006-07-10T12:23:00.000-07:002006-07-10T12:23:00.000-07:00wait around til it's actually happening and become...<I>wait around til it's actually happening and become part of the group who gets "whiplashed" by falling prices- as described in the Post Intelligencer article of the last Seattle crash, circa 1990.</I><BR/><BR/>Let's look at some #s from the Seattle PI records:<BR/><BR/>Seattle Median Price 1990: $144,800<BR/><BR/>Seattle Median Price 1991: $143,800<BR/><BR/>Seattle Median Price 1992: $145,900<BR/><BR/>Seattle Median Price 1993: $145,000<BR/><BR/>Seattle Median Price 1994: $149,950<BR/><BR/>Seattle Median Price 1995: $155,000<BR/><BR/>Seattle Median Price 1996: $163,000<BR/><BR/>Seattle Median Price 1996: $174,950<BR/><BR/>etc..up and up.<BR/><BR/>I don't think anybody really got whiplashed. The Seattle market did what it always does. Went flat for a while and then kept on appreciating. Which is what it most likely will do in the future. So just buy something you can hang on to for 5-10 years and you're good.meshugyhttps://www.blogger.com/profile/12332798876700147445noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152554254008879532006-07-10T10:57:00.000-07:002006-07-10T10:57:00.000-07:00Agree with everything Biliruben and Bill said.We a...Agree with everything Biliruben and Bill said.<BR/><BR/>We are right on schedule. Every few days more info is released to verify that.<BR/><BR/>And every once in a while, we get a real shot in the arm:<BR/><BR/>- CNBC's acknowledgement a few weeks back that RE may NEVER again in your lifetime be worth what it is right now. <BR/><BR/>_ More uber wealthy folks ditching their RE holdings (the truly rich rarely get burned by collapses. They're concerned about their money and don't indulge in "false hopes")<BR/><BR/>- My personal favorite:<BR/><BR/>The Wall Street Journal article last week with the interviewee expecting a 50% drop in RE prices.<BR/><BR/>You can either 1) predict the crash and get out (if needed) or don't buy beforehand.<BR/><BR/>OR<BR/><BR/>2) wait around til it's actually happening and become part of the group who gets "whiplashed" by falling prices- as described in the Post Intelligencer article of the last Seattle crash, circa 1990.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152509640616021262006-07-09T22:34:00.000-07:002006-07-09T22:34:00.000-07:00I gotta disagree with you bill. I believe that RE ...I gotta disagree with you bill. I believe that RE bears have lately been guilty of "moving the goalposts". Everything that should be leading directly to a crash (according to bears) hasn't caused it. So every month that goes by, they keep loosening their definition so that every bearish signal over the last 5 years add up to things "[seeming] to be heading the way they thought they would" - even though most of their original predictions have long since past due. I think it's a rewriting of history to say that the bearish predictions have been right all along about where RE is headed.<BR/><BR/>Here's a "food for thought" example: If 2007 and 2008 pass with only a small number of stories of suicide-borrowers losing their homes but we still have YOY price appreciation in King County will that be evidence that bears are wrong? At least about the effect of ARMs? Or is there literally no evidence that can be produced to show bears are wrong? Is every negative real-estate story is another sign that the bubble bursting is imminent? <BR/><BR/>To me it really feels like the flip-side of how the NAR/overly bullish RE people think/talk. There's literally no evidence (e.g. Tokyo, Texas in 1980, NY in the 70s) you can point to that will dissuade those people from believing home prices only go up.<BR/><BR/>I don't, however, disagree with you when you said:<BR/><BR/><I>You see there are some pretty sound reasons there for why we can EXPECT a drop.</I><BR/><BR/>I can certainly see why certain economic indicators and factors in the RE market (especially the number of buyers stretched thin) feel, to some, like sound reasons why real estate might be poised for a drop. But it hasn't happened yet, especially not here. <BR/><BR/>I'm not convinced the primary reasons listed here (suicide loans, affordability, etc.) will be the cause of the bubble bursting. Another war, terrorist attack, flight of foreign capital, major unemployment increase due to recession, etc. are far more likely candidates, imho.<BR/><BR/>I guess we'll have to wait and see (and speculate wildly in the meantime). Or, you could all be the boy who cries wolf. Remember what happens at the end of that story? Only now the wolf eats the townspeople.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152506752607453642006-07-09T21:45:00.000-07:002006-07-09T21:45:00.000-07:00"I haven't seen evidence of prices dropping the wa..."I haven't seen evidence of prices dropping the way bears have been predicting"<BR/><BR/>jcricket-<BR/><BR/>The poster listed reasons why prices could be EXPECTED to drop- NOT why they already have.<BR/><BR/>Because they have not and everybody knows that.<BR/><BR/>Re does not suddenly drop overnight like stocks.<BR/><BR/>If you go back and look at the list, you'll see there are some pretty sound reasons there for why we can EXPECT a drop.<BR/><BR/>The word "expectation" carries the connotation that it has not happened yet but can be EXPECTED to do so in the future.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152470010312216302006-07-09T11:33:00.000-07:002006-07-09T11:33:00.000-07:00Note that for now, the "no anonymous posting" is m...Note that for now, the "no anonymous posting" is merely a "strong suggestion." If it gets out of hand I will eventually set it up so that only registered Blogger users can post, but hopefully people can be curteous enough to follow the suggestion. That's asking a lot, I know.The Timhttps://www.blogger.com/profile/14832570891451659976noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152468668627164422006-07-09T11:11:00.000-07:002006-07-09T11:11:00.000-07:00I suspect the "no anonymous posting" rule is nigh ...I suspect the "no anonymous posting" rule is nigh unenforcable, short of deleting them all. ;)<BR/><BR/>I welcome all opinions and data from both sides as long as they aren't chocked full of insults and attitude. Unfortunately we've seen a bit of that lately, from both sides. If a case can be made for a bullish market based on reason and accurate data, then bring it on. I welcome it. Discussion is good, but arguments are unproductive.Shadowedhttps://www.blogger.com/profile/02275066426135302508noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152464725051282312006-07-09T10:05:00.000-07:002006-07-09T10:05:00.000-07:00I believe he has one more post to go...You are cor...<I> I believe he has one more post to go...</I><BR/><BR/>You are correct, and sorry if you took my post to imply that you were lax in writing a response. I was referring more to the comments, where all I saw were complete dismissals without analysis to back them up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152461453158141482006-07-09T09:10:00.000-07:002006-07-09T09:10:00.000-07:00The blog series written by Gregory Wharton at the ...<I>The blog series written by Gregory Wharton at the Seattle PI, for example, pointed out a number of ways why the real estate market are different than the stock market, and why he believed Seattle isn't a bubble (as in something that will crash 30, 40 or 50%). There was almost no analysis of his argument here other than a couple of dismissive comments.</I> <BR/> <BR/>I have a very lengthy response already written, but I don't want it to get lost in the string of posts about the June numbers, and ideally I'd like to wait to post it until he actually finishes the entire series. I believe he has one more post to go...The Timhttps://www.blogger.com/profile/14832570891451659976noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152426575861016152006-07-08T23:29:00.000-07:002006-07-08T23:29:00.000-07:00It's true, we may be in for a surprise, but so far...<I>It's true, we may be in for a surprise, but so far things seem to be heading the way we thought they would.</I><BR/><BR/>Really? I would argue that at least as of now, I see no evidence that prices have dropped the way bears have been predicting. Price drops aren't convincing to me when YOY appreciation continues. We might be seeing the beginning of a trend, but I'm withholding judgment.<BR/><BR/>Even in areas where prices have stagnated (see Jim the Realtor at http://www.bubblinfo.com/ pointing out that San Diego YOY prices peaked in 2004) they haven't crashed 10, 20, 30, 40 or 50%. People are still buying and selling homes. Many sellers are making money. Some are not. Many buyers are getting a deal. Some are not. That's what I'd call a "balanced" RE market. <BR/><BR/>To me this points out that the statistics bears are using to justify the crash is imminent argument have not (yet) borne fruit. The "great crash" may still happen, but simply dismissing all contrary evidence isn't convincing. The blog series written by Gregory Wharton at the Seattle PI, for example, pointed out a number of ways why the real estate market are different than the stock market, and why he believed Seattle isn't a bubble (as in something that will crash 30, 40 or 50%). There was almost no analysis of his argument here other than a couple of dismissive comments. I think the amount of information he provided about inflation, regulation, the cost of construction, buyer psychology, etc. is an order of magnitude more convincing than simply looking at MLS or Zip Realty statistics. But maybe that's just me.<BR/><BR/>There are several good example markets in real estate that show RE is not simple: SF and NY. Both have experienced price drops before, significant ones in the late 70s. However, one could easily argue that both places have been "ridiculously priced" for more than 20 years, and yet prices keep going up. Will they do so forever? I don't know. But neither place has been getting more affordable, and yet everyone I know who's lived there wants to stay and has made money on the RE they own. People who work in those areas have been willing to buy tiny studios or live with hour long commutes. Will that trend continue? I don't know, but it has.<BR/><BR/>Simply put, I'm not convinced the simple explanations offered by either bulls or bears. There are all sorts of things that could happen to real estate, and I personally suspect we'll see every zip code and every price range acting differently. The "dues ex machina" of government intervention might have a huge impact in the next couple of years.<BR/><BR/>If everyone who has an ARM that resets in 2007, 2008 or 2009 is "screwed", but rates go down, perhaps they'll stave off being screwed for another 5 years. Or perhaps they'll get fixed rate mortgages. Or sell their house because it's time to move (every 7 years is the average). Or, even if the 30% of people who got ARMs in the last 5 years get screwed, the vast majority of Americans (most of whom are either on fixed rate loans or renting) swoop in and buy some places on the cheap. <BR/><BR/>Who knows. I am actually happy to discuss it, but I think it's easy to see that so far all we have is two opposing sides each believing a small number of statistics prove they're already right. And if the great crash comes, expect to see all your stock market investments down the drain too. No way the stock market escapes that great a economy-busting incident unscathed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152425625278451242006-07-08T23:13:00.000-07:002006-07-08T23:13:00.000-07:00The Housing Bubble Blog reported that due to Arizo...The Housing Bubble Blog reported that due to Arizona's sagging housing market, construction (REIC) jobs, and <I>retail</I> jobs (HELOC) jobs were on the wane.<BR/><BR/>It would follow that the job creation in the PNW (the bulk of which are REIC and RETAIL), would likely turn sour when our housing bubble goes kaput.<BR/><BR/>When an economic phenomenon feeds on itself for rapid growth, it is a bubble. All bubbles break harder than anticipated.Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152423286278059122006-07-08T22:34:00.000-07:002006-07-08T22:34:00.000-07:00The fundamentals are great depending on where you ...<I><B>The fundamentals are great depending on where you look. </B><BR/><BR/>Nothing out of the ordinary is happening thus far.</I><BR/><BR/>I guess if you choose not to look at the mortgage industry, and the criminally irresponsible toxic loans that have pushed prices to what we now see, the "fundamentals" would look great.<BR/><BR/>So, if interest rates are just off their historic lows, where is the path of least resistance, given that inflation is getting a bit uppity?Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152418784354736532006-07-08T21:19:00.000-07:002006-07-08T21:19:00.000-07:00Anon-It's true that bears look at the ARMS resets ...Anon-<BR/><BR/>It's true that bears look at the ARMS resets as one thing that could bring housing down.<BR/><BR/>But they also look at rising interest rates worldwide, possible loan regulations, people freaking out in general (the "Oh my God what am i *thinking* of, buying a 1200 sf/500K house or 400sf/200K studio??!!" syndrome), a general panic that ends manias and speculative behavior (specuvestors are already getting burned), a whole host of things that could burst this bubble.<BR/><BR/>Anyway, the slowdown in sales, rampant price reductions, closed mortgage offices, realtors wanting to make career changes, rising interest rates, Home Builder stocks plummeting, media finally talking about RE depreciation, BOJ raising rates (IF they do that next week!), there are alot of things that give bears confidence in their view.<BR/><BR/>It's true, we may be in for a surprise, but so far things seem to be heading the way we thought they would.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152414116021179642006-07-08T20:01:00.000-07:002006-07-08T20:01:00.000-07:00You like to look at wages, I like to look at rates...You like to look at wages, I like to look at rates and unemployment. As for ARM reset, it is only less than 1 year from now before the verdict comes in. I call that the last hope for RE bears.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152412977342833652006-07-08T19:42:00.000-07:002006-07-08T19:42:00.000-07:00That's right, we'll be just fine!That's right, we'll be just fine!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152410991258117502006-07-08T19:09:00.000-07:002006-07-08T19:09:00.000-07:00Nothing out of the ordinary is happening thus far....<I>Nothing out of the ordinary is happening thus far. </I><BR/><BR/>Nothing huh? Employment and interest rates are hovering around the levels they were in 1998. It's taken us 8 years just to get back to this point. Meanwhile, houses cost 80% more, KC wages have lagged inflation, and over 50% of mortgages in this area are adjustable, in a rising rate environment.<BR/><BR/>Nothing to see here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152408734319884602006-07-08T18:32:00.000-07:002006-07-08T18:32:00.000-07:00The fundamentals are great depending on where you ...The fundamentals are great depending on where you look. Low rates and low unemployment are supportive of the RE market. Now that rates are gradually going higher, RE is cooling. Seattle didn't go up as much and as fast so it is not cooling as much and as fast.<BR/><BR/>Nothing out of the ordinary is happening thus far.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152406063895783792006-07-08T17:47:00.000-07:002006-07-08T17:47:00.000-07:00I'd agree with the UK/Aus. scenario if it weren't ...I'd agree with the UK/Aus. scenario if it weren't for the fact that global liquidity does seem to be primed for a drying up.<BR/><BR/>If it's global liquidity that got this puppy going then the US bubble is timed just right for a squeeze, along with all the other overpriced world markets.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1152405898536935752006-07-08T17:44:00.000-07:002006-07-08T17:44:00.000-07:00richard -- well said!<I>richard</I> -- well said!whetherforecasthttps://www.blogger.com/profile/12061419022463486648noreply@blogger.com