tag:blogger.com,1999:blog-15223784.post115733177490896310..comments2023-10-08T06:24:07.089-07:00Comments on Seattle Bubble: Seattle Times: We Are Immune, So Says HistoryThe Timhttp://www.blogger.com/profile/14832570891451659976noreply@blogger.comBlogger36125tag:blogger.com,1999:blog-15223784.post-1157558564814225452006-09-06T09:02:00.000-07:002006-09-06T09:02:00.000-07:00SPD,I'm with you. Never underestimate the power o...SPD,<BR/><BR/>I'm with you. Never underestimate the power of peer pressure.<BR/><BR/>Markets are about the movement of the herd. When the herd moves one way, it takes a lot of guts to go against it.<BR/><BR/>When you are a contrarian, or against the herd, you are essentially telling everyone that you know something they don't, and they are being foolish. They are telling you the same. <BR/><BR/>That is why "buy low - sell high" is a helluva lot more difficult than it seems. "Buy high - sell low" is far easier (and more commonplace).<BR/><BR/>By definition, the peak is the best place to sell, but is also the very point the herd mentality is screaming "buy" the loudest.<BR/><BR/>The RE shills know what they are doing.Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157525326429526582006-09-05T23:48:00.000-07:002006-09-05T23:48:00.000-07:00Anon 8:31-re: "Relax, a lot of people bought homes...Anon 8:31-<BR/><BR/>re: "Relax, a lot of people bought homes to live in, not flip"...<BR/><BR/>So, that makes it okay to actively encourage people to go out and mortgage to the hilt on a depreciating asset? Just because they're going to live there for a long while?<BR/><BR/>Great logic. Tell that to the girl who bought the overpriced condo in Ballard, 1/2 the size and twice the monthly payment as her rental.<BR/><BR/>Can't go out now, no extra money to spend.<BR/><BR/>She thinks she got in on the bottom wrung and will be trading up for a house some time in the future.<BR/><BR/>Here's a prediction: She's going to be stuck in that tiny condo for YEARS while friends who had the sense to keep renting go out and buy a house in a couple years. Their mortgage on a house will be the same as her mortgage on a POS overpriced condo.<BR/><BR/>Granted, she could have used her head a bit and done some research before jumping in.<BR/><BR/>But she had a LOT of encouragement from the local lying rah rah Seattle media.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157439925062446372006-09-05T00:05:00.000-07:002006-09-05T00:05:00.000-07:00The thing that's so very dangerous about the comin...The thing that's so very dangerous about the coming decline is that it's an abnormal one. It's not going to be initiated by job losses or recession. That means that prices have gone up WAY more than they have in previous crashes, because there were no brakes. Now we're going to get the job losses, the recession, and the housing crash all rolling into a ball and feeding off of each other. Usually they happen in sequence, this time we're going to get them in parallel, which makes the whole thing very unpredictable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157417843044491982006-09-04T17:57:00.000-07:002006-09-04T17:57:00.000-07:00Has anyone here taken the time to sit down and wri...<I>Has anyone here taken the time to sit down and write Ms. Rhodes a nice email about how INSANE and DAMAGING her cheerleading will be to many people?</I><BR/><BR/>Yeah, I tried to respond, but after I read it back to myself, it sounded like Lee Ermey auditioning for Full Metal Jacket.<BR/><BR/>I'm working on a more avuncular draft.Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157411933538611392006-09-04T16:18:00.000-07:002006-09-04T16:18:00.000-07:00"Yawn, don't you people get it? Seattle is still ...<A HREF="http://mysite.verizon.net/vzeqrguz/housingbubble/" REL="nofollow">"Yawn, don't you people get it? Seattle is still going to appreciate. White flight out of California, coupled with the most incredible outdoor opportunities ( and varied ) in the country... Go home to your apartments and cry"</A> <BR/><BR/>whomever's website that is is ok in my bookjohn_law_the_IIhttps://www.blogger.com/profile/14231101798981208231noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157410052927734012006-09-04T15:47:00.000-07:002006-09-04T15:47:00.000-07:00Anon 01:20:10 This country has gotten weak in so m...Anon 01:20:10 <BR/><BR/>This country has gotten weak in so many ways and being "politically correct" is one of them. <BR/><BR/>I prefer a big stick and boots over "oratory" any day. Guess I spent too many years in Texas. Rural Texans don't put up with limp wristed BS and I like that about them.<BR/><BR/>As I have posted before we have scoured King country checking out rentals and of 30 places we physically looked at, about 25 of them were "flips" and of those 20 were "foreigners" (asian or arabic sounding names.)<BR/><BR/>And I concur with one you on another point. A lot of the contact phone numbers on Craig's List were...you guessed it....LA.<BR/><BR/>I believe that speculation is the 800 lb gorilla in the room with respect to this bubble. I think it is vastly understated. I met one guy who had a dozen properties. He was mid eastern and probably in his mid-20's.<BR/><BR/>You take all these bozos out of the market and all of a sudden the "tight supply" is looking about as tight as the employees of the ol Chicken Ranch in LaGrange TX.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157403025264303082006-09-04T13:50:00.000-07:002006-09-04T13:50:00.000-07:00Has anyone here taken the time to sit down and wri...<I>Has anyone here taken the time to sit down and write Ms. Rhodes a nice email about how INSANE and DAMAGING her cheerleading will be to many people?</I><BR/><BR/>I have numerous times, but she usually answers with the "I guess we'll have to wait and see!", and "I only report the numbers", etcetera... you can never her engage her in any fundemental questions, especailly the ARM question which she blows off wholesale.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157401485790447702006-09-04T13:24:00.000-07:002006-09-04T13:24:00.000-07:00Let's recap --No housing price drop since Boeing a...Let's recap -<BR/>-No housing price drop since Boeing almost closed in the 70's and took the Seattle economy with it.<BR/>-It took 2 decades for prices to recover.<BR/>-Californians can't sell their houses so no more rich retirees moving up here.<BR/>-Rest of the country thinks it rains all the time in Seattle (thank you Hollywood) and wouldn't want to live here.<BR/>--I'm betting prices will drop again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157401210430931332006-09-04T13:20:00.000-07:002006-09-04T13:20:00.000-07:00RE: MLS # 26142194 (long and possibly offensive)I'...RE: MLS # 26142194 (long and possibly offensive)<BR/><BR/>I'll tell you what your missing - amateurs and stupid foreigners still trying to make a quick buck, I see it more and more, even this late in the game. No offense to the Middle Eastern folks on this blog, but there is a helluva lot of them and what looks to be the Russian mafia flipping/building garbage, mostly in S King County. Looking for the American dream.<BR/><BR/>Do everyone a favor and DON'T bid on this kind of nonsense. I'm sure you wouldn't even look, but spread the word and maybe the potential list of FB will shrink.<BR/><BR/>Sale Date 3/6/2006 Sale Price $605,000 <BR/><BR/>Seller Name<BR/>SAUVAGE ALAN W <BR/>Buyer Name<BR/>ARAVA ASA+KHORDIAN AVRAHAM+SHACHAF ZIVA<BR/><BR/>That is mostly land value - amateur hour made the cardinal mistake of remodeling the POS instead of demo and build. Prob bailed on the idea or bank said no thanks (plans come with the place). New const loans are different from all the funny money (existing SFR) that is out there - if you dont have your shit together (plans, specs, costs, experience), no dice. <BR/><BR/>Just recently, many pros and custom builders started to dump high-end lots/tear-downs on the Eastside (leading indicator for softness in the $1.0-2.0+ million range). Just want to get rid of them at little to no profit. 3 "scrapers" I looked at this weekend listed for exactly 7-8% above recent closed price. Comprende? Builder's cost basis plus expected closing and sales costs. All are negotiable and there will be even better deals going forward.<BR/><BR/>Looks like they thought improvements were worth about $100K, as fair price was prob $500K for the dirt based on what is (WAS) supported there, a 4,000 SF custom @ $350-$375/SF, or $1.4-$1.5 million (33-36% lot-house ratio).<BR/><BR/>Regardless, crappy flip overall. Even if it does sell for $749K (best case), take out a 6% commish, 2.5% closing costs, that leaves net proceeds of $685K. Less 6-month hold (100% financed based on the lie that it's owner occupied, interest only @ 6%), thats down to $675K. So if they did the work themselves on the cheap, that's another $25K ($20/SF). That leaves an overall basis in the property near $650K and a best case net profit of $45K (6% of list price). These are soft costs they don't teach you on "Flip That House".<BR/><BR/>Sorry, that's not a win-win IMHO. Need a minimum profit of 15-20%. I can't wait till these morons exit the market stage left. BTW, this particular "flipper" is from - you guessed it: La La Land.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157400442593539842006-09-04T13:07:00.000-07:002006-09-04T13:07:00.000-07:00Yawn, don't you people get it? Seattle is still g...Yawn, don't you people get it? Seattle is still going to appreciate. White flight out of California, coupled with the most incredible outdoor opportunities ( and varied ) in the country... Go home to your apartments and cryAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157395397982166252006-09-04T11:43:00.000-07:002006-09-04T11:43:00.000-07:00If that happened, he's confident the Federal Reser...<I>If that happened, he's confident the Federal Reserve would take measures to stimulate the economy, allowing Seattle to again escape a sustained decline in home prices.</I><BR/><BR/>Hahaha, good one dude! That a joke? ... no serious.<BR/><BR/>Yeah, I'm sure the Fed's looking at its 'misery map' right now and going...<BR/><BR/>"Yeah, South Flordia, Boston, D.C., SoCal, yeah those guys can hang but Seattle... we must make sure there's no price drop in Seattle! Seattle's the housing-bubble's Stalingrad, we mustn't let it fall! Here's a blank check for the bailout!"<BR/><BR/>Let's see... hmmm... up interest rates to keep the stock market afloat, or save the miserable numbskull barrowers that submarined on their neg-ams?... Ha! that's a good one! <BR/><BR/>Is this guy kidding? The Fed will let the average F'd barrower fold on his mortgage quicker than Superman on Laundry Day. I give Berneke 2 seconds to throw the homeowners under the bus. If you think the Fed's looking out for the little guy, I've got some swampland in the Duwamish to sell you...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157394927239649802006-09-04T11:35:00.000-07:002006-09-04T11:35:00.000-07:00Wow, Seattlemoose, I haven't been paying attention...Wow, Seattlemoose, I haven't been paying attention to Bellevue lately, but those are some ridiculous prices... ala www.burbed.com type stuff. 1 Million for a split level? Geesh... "Brazen Realty" indeed!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157394733942381962006-09-04T11:32:00.000-07:002006-09-04T11:32:00.000-07:00Economist Conway doesn't include the adjustable-ra...<I>Economist Conway doesn't include the adjustable-rate-loan scenario among the possibilities that could cause a local dip.<BR/><BR/>"It would take some combination of a recession, a jump in inflation and a jump in mortgage rates to cause a big drop," he said.</I><BR/><BR/>OMFG! Yeah, that sounds as unlikely as martians coming down from outer space and hitting Ballad with a Death Ray doesn't it?... crazy talk there, wow, talk about wildly hypothetical arguements, geez...<BR/><BR/>In all seriousness, ignoring the adjustable-rate-scenarie? Is this dude serious? Too bad you can't be dis-barred from practicing 'economics', what a joke! That's like analyzing World War II without dismissing the events of World War I....<BR/><BR/>Somebody's been putting extra tint in those rose-colored glasses Liz Rhodes wears...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157394689638537272006-09-04T11:31:00.000-07:002006-09-04T11:31:00.000-07:00MLS 26142194 sums up everything that is wrong with...<A HREF="http://brazenrealestate.net/srch_mls/pickpage.php?multi_cou[]=King&level=DSR&multi_cit[]=Bellevue&multi_dsr[]=Enatai" REL="nofollow">MLS 26142194</A> sums up everything that is wrong with current Seattle area prices.<BR/><BR/>Ft2=1240<BR/>Bed=3<BR/>Bath=1.75<BR/><BR/>1) 1996 price=$177K<BR/>2) 2006 "Fair Price" assuming 4% per year=$262K<BR/>3) Improvements=$25K (a guess)<BR/>4) 2006 "Total Fair Price"=$262K+$25K=$287K<BR/><BR/>Zillow Zestimate=$590K (Overpriced by 51%)<BR/> MLS List Price=$749K (Overpriced by 62%)<BR/><BR/>What am I missing here? This is a small crappy 1950's rambler!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157393166924323682006-09-04T11:06:00.000-07:002006-09-04T11:06:00.000-07:00Having come from South Florida I was no stranger t...Having come from South Florida I was no stranger to rosey outlooks on the RE market. Still, I was surprised that the article in the Seattle Times was so glib about things and had so little actual data or even a counter opinion in it......<BR/>Yeah, people will be shocked when they see that they aren't protected by some mysterious "bubble" thing here.<BR/><BR/>I guess they don't call it Emerald city here for nothing do they?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157390717346531672006-09-04T10:25:00.000-07:002006-09-04T10:25:00.000-07:00"What can a stable family afford, and still live w..."What can a stable family afford, and still live within their means, while affording a budget-conscious, normal existance?"<BR/><BR/>Who gives a shit about the average faimily anynore?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157390601221030332006-09-04T10:23:00.000-07:002006-09-04T10:23:00.000-07:00("When we see declines in prices, it's nearly alwa...("When we see declines in prices, it's nearly always driven by a local economic shock first," said Mark Milner, PMI Mortgage's chief risk officer. "So what this index is basically answering is how vulnerable Seattle is to a local economic shock: not nearly as vulnerable as Southern California.")<BR/><BR/>so why the heck is the rest of the nation's housing market in shambles?<BR/><BR/><A HREF="http://mysite.verizon.net/vzeqrguz/housingbubble/seattle.html" REL="nofollow">this chart says Seattle has seen price declines</A> <BR/><BR/>words from mr. toll<BR/><BR/>"In his 40 years as a home builder, Mr. Toll says, he has never seen a slump unfold like the current one. "I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy," he says. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."<BR/>-WSJjohn_law_the_IIhttps://www.blogger.com/profile/14231101798981208231noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157388820830382872006-09-04T09:53:00.000-07:002006-09-04T09:53:00.000-07:00HELOC = Home Equity Line Of CreditHELOC = <B>H</B>ome <B>E</B>quity <B>L</B>ine <B>O</B>f <B>C</B>reditAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157378452912418782006-09-04T07:00:00.000-07:002006-09-04T07:00:00.000-07:00What does Heloc mean?What does Heloc mean?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157353618427747302006-09-04T00:06:00.000-07:002006-09-04T00:06:00.000-07:00Moose,You are talking about what I'm talking about...Moose,<BR/><BR/>You are talking about what I'm talking about. This is a perfect storm.<BR/><BR/>I'm more of a Van Halen kinda guy than a Dylan fan. Here is a Van Halen song that fits:<BR/><BR/>Dream Another Dream<BR/><BR/><BR/>(Words by Van Halen) <BR/><BR/>Psst! <BR/>Hey, come on man. Wake up<BR/><BR/>Yea-yeah!<BR/><BR/>I see the power changin' hands<BR/>Risin' from the streets<BR/>A self-made businessman<BR/>Knows how the system can be beat<BR/><BR/>Oh, we're the lost generation<BR/>Have no place to go<BR/>The road to destruction <BR/>Is all we need to know<BR/><BR/>'Cuz it's a rip-off<BR/>We're stepped on and cheated<BR/>We're flat stone cold lied to<BR/>We're not defeated. No!<BR/><BR/>It's ah, easy money<BR/>It's a way out<BR/>Join the family<BR/>No middleman. No IRS<BR/>Your ticket out of poverty<BR/><BR/>Oh, we're the lost generation<BR/>I hold fate from a string<BR/>Lookin' for a direction<BR/>Reachin' out for anything<BR/><BR/>So, dream another dream<BR/>This dream is over <BR/>Dream another dream<BR/>This dream is over <BR/>Dream another dream <BR/>This dream is over <BR/>Over, yeah <BR/>So dream another dream!<BR/><BR/>(obligatory Guitar Solo)Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157352843727983072006-09-03T23:54:00.000-07:002006-09-03T23:54:00.000-07:00People will overpay for a house, and beat their ch...People will overpay for a house, and beat their chest with pride. We all stand aside in awe of their financial brilliance.<BR/><BR/>FB: "I paid $900K for a 2 bedroom craftsman in a vibrant neighborhood."<BR/><BR/>Joe Public: (hushed)"Wow! You are now on the real estate escalator. What a brilliant financial move."<BR/><BR/>----------------------------<BR/><BR/>FB: "I paid $75K for a '05 Volvo S60."<BR/><BR/>Joe Public: "What a moron! They MSRP for $30K!"Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157352682557032862006-09-03T23:51:00.000-07:002006-09-03T23:51:00.000-07:00Let's use the inflation calculator at http://www.w...Let's use the inflation calculator at http://www.westegg.com/inflation/ to see these prices in 1984 dollars:<BR/><BR/>1984: 79950 -> 79950<BR/>1990: 145000 -> 78337<BR/>1995: 165000 -> 89142<BR/>1999: 230000 -> 124259<BR/>2003: 295000 -> 159375<BR/>2005: 410000 -> 221505<BR/><BR/>It appears the price increased by a factor of 2.77 in real terms over 21 years, or about 4.98% per year.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157352152991449292006-09-03T23:42:00.000-07:002006-09-03T23:42:00.000-07:00anon 1113,True. I should take a deep breath. I'v...anon 1113,<BR/><BR/>True. I should take a deep breath. I've seen better "analysis" on bathroom walls.<BR/><BR/>My predictions are based upon an entirely new paradigm of how real estate will be valued. Right now, people (primarily Baby-boomers) view real estate as a trust fund, or a Swiss Annuity, when it is no more of an investment than a Beanie Baby. <BR/><BR/>Just how 77,000,000 people plan to retire in style by selling their McMansion is truly a wonderment. Just who is going to buy them out so they can live the Golden Girls version of La Vida Loca? GenX? Great! Taquerias and nail salons will float the Baby-boom.<BR/><BR/>...and Janet Reno will be a best selling porn star...<BR/><BR/>In the same Sunday Seattle Times, there is a pull-out Sunday Magazine that features how aging workers will keep on the job. IOW, the Baby-boom will not retire.<BR/><BR/>Duh.<BR/><BR/>They can't. The average amount saved, outside of their home equity, is less than $20K per Boomer. How long will $20K last at these interest rates? The housing myth has caused them to sink all their savings into their homes, and if we hit an air pocket...?<BR/><BR/>Nope, the Baby-boomers will leave the office with a toe tag, and not a minute earlier. Virtually none of the 77,000,000 have paid off their home, and most have levered-up to extend their real estate "wealth."<BR/><BR/>Once people look at homes as a necessary EXPENSE, not an investment, prices will fall in line with incomes. <BR/><BR/>I guess living in suburban Dallas has given me perspective on this. In the Southern Denton County area (Flower Mound, Highland Village, Double Oak, Copper Canyon), you have some VERY nice homes. People buy homes for living, not investments. It's not that they can't afford high priced homes, as that region has a higher income than any comparable region in the PNW, it is just not an investment priority.<BR/><BR/>If that paradigm hit the PNW, you would see prices get cut by 50% overnight, and probably drift down to 1/3 of what they now are. That is with a healthy economy. Good luck finding a healthy economy when people are $300K underwater on their "investment."Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157350989885522342006-09-03T23:23:00.000-07:002006-09-03T23:23:00.000-07:00"I don't think you need to add 4% for every year t..."I don't think you need to add 4% for every year thereafter."<BR/><BR/>I know. I was being "conservative" for the sake of Baby Blue and the other bulls.<BR/><BR/>I think this bubble is far worse than any in history because the economic fundamentals are uniformly bad across the board. <BR/><BR/>Also, the same "herd psychology" that caused prices to go up so much will cause price drops to overshoot in the negative direction.<BR/><BR/>The "perfect storm" of cheap money, toxic loans, sleazy RE/Loan practices, speculation, and a media fed "feeding frenzy" caused gravity to switch off for a few years.<BR/><BR/>Combine this with record government debt, endless war, record oil prices, a FED who is in a catch-22 (raise rates and kill the economy or cut rates and kill the dollar), and record consumer debt...and we have the makings of a disaster. <BR/><BR/>"But you and I, we've been through that, and this is not our fate,<BR/>So let us not talk falsely now, the hour is getting late.<BR/><BR/>All along the watchtower, princes kept the view<BR/>While all the women came and went, barefoot servants, too.<BR/><BR/>Outside in the distance a wildcat did growl,<BR/>Two riders were approaching, the wind began to howl."<BR/><BR/>B. Dylan.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1157350658070807592006-09-03T23:17:00.000-07:002006-09-03T23:17:00.000-07:00How would you factor in depreciation?I would look ...How would you factor in depreciation?<BR/><BR/>I would look at median income to median house price at historic interest rates. If King County's median income is $55K, and the traitional ratio (prior to the speculative booms in RE over the past 20 years) is 3:1, then we are looking at $165K for the median house.<BR/><BR/>Mercer Isl would be $275K, Bainbridge Isl would be $225K.<BR/><BR/>Sketch out how a family of 4 would spend $55K/yr, and see if $165K @ 9% (gift) would fit in traditional ratios (28% max) of their income. Could the median family find $33K for a down payment?<BR/><BR/>Any worthwhile analyis needs to be done without consideration of "AND THEN A MIRACLE HAPPENS" money. Internet stocks, Microsoft stock options, X-Cal equity, inheritance, meth sales, bank robberies, HELOC, etc...<BR/><BR/>What can a stable family afford, and still live within their means, while affording a budget-conscious, normal existance?Eleuahttps://www.blogger.com/profile/08248482892459370601noreply@blogger.com