tag:blogger.com,1999:blog-15223784.post8658330156221144365..comments2023-10-08T06:24:07.089-07:00Comments on Seattle Bubble: 04.12.2007 - Thursday Open ThreadThe Timhttp://www.blogger.com/profile/14832570891451659976noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-15223784.post-67511621686970758952007-04-13T08:27:00.000-07:002007-04-13T08:27:00.000-07:00Flotown,You are indeed correct...we did have rents...Flotown,<BR/><BR/>You are indeed correct...we did have rents at an average of around $39 for Class A office in 2000...look what has happened since then. Starting in mid 2001 until early 2004, prices dropped to a class A average of $22, simply because landlords couldn't give away space. Yes, the dot com bubble was an outside influence, but is still shows that RE is cyclical. We are on the crest of another downturn right now, and by early 2010, rents will be back down in the Mid-20's. <BR/><BR/>Lab rents are traditionally called "Flex" or "Bio" space in RE circles, and are actually counted with industrial rents in some markets. Since Seattle has so many bio-tech buildings, especially up in Canyon Park area, we have our own statistical category for lab space. When you hear someone discussing "office average" they are only counting traditional office buildings, although this changes city to city. If you would like to talk more, e-mail me at<BR/>danielc@kennedyusa.comDan C.https://www.blogger.com/profile/08948279495749857675noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-14146552785109714732007-04-12T23:56:00.000-07:002007-04-12T23:56:00.000-07:00i was reading in Forbes...bwahahahahah!!!!<B>i was reading in Forbes...</B><BR/><BR/>bwahahahahah!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-15223784.post-13974907876971077062007-04-12T21:13:00.000-07:002007-04-12T21:13:00.000-07:00okey doke -- I'll expect to rent for at least six ...okey doke -- I'll expect to rent for at least six mos. We'll look at the smaller homes on commute-friendly Bellevue neighborhoods (Clyde Hill, Yarrow Pt, where we used to live) first, based on jp's advice. <BR/>Thanks a bunch!NewDadhttps://www.blogger.com/profile/03217439056140552980noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-1399887038185932672007-04-12T18:19:00.000-07:002007-04-12T18:19:00.000-07:00Dan- Well then nice work. Curious about the commen...Dan- <BR/><BR/>Well then nice work. Curious about the comment "Seattle cannot support rents higher than $35, and they are bound for a downturn." If we were there in 2000 why not in three years?<BR/><BR/>Also, my understanding is the bio-tech office rents are signifiantly higher than general office rents. Are you saying Seattle can't suport a blended average of rents in 2009 won't hit $40 gross or no development can support that? <BR/><BR/>Thanks in advanceflotownhttps://www.blogger.com/profile/10811489236750260275noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-61221097713136639902007-04-12T17:12:00.000-07:002007-04-12T17:12:00.000-07:00finance said: As for condos, my rational is that ...finance said: <I>As for condos, my rational is that the closer I am to the major workplace (downtown Seattle) the better since there will be stronger demand to live closer to work... </I><BR/><BR/>I'm not sure I completely agree with you on this one, finance. Sure, up until 15-20 years ago, downtown Seattle was the major employment center. But the Eastside has been the largest-growing area as far as new job creation goes for some time now.<BR/><BR/>Want proof? The 520 commute has shifted substantially since 15-20 years ago, when most people were going into Seattle in the morning and out in the evening. That's why there are fewer westbound exits on 520 from Redmond to 405--they designed it assuming that people were going to be driving all the way into Seattle, which is certainly not true now. Now, there are many nights when traffic is ugly westbound (people going home), but wide open eastbound. [I just checked the WSDOT traffic map, and at 5:05pm eastbound 520 is wide open from I5 to 405, but westbound is stopped from 405 to the bridge.] I attribute this to all of the young, mostly single professionals who work on the Eastside but want to live in the hip neighborhoods in Seattle (it's not cool to be young and single and live on the Eastside--nothing to do at night unless you want to hang out at Bellevue Square with the spoiled high schoolers, although the Crossroads mall does have live entertainment at times).<BR/><BR/>And families with children will rarely want to live downtown for many reasons. For them, a more desirable neighborhood is likely to be a bit further out from downtown.<BR/><BR/>So I think that what constitutes a desirable neighborhood varies widely depending upon a multitude of factors. You could say that all of Bellevue is desirable, but then again, there are parts of SE Bellevue which look like another county (no names mentioned, heh heh).<BR/><BR/>I desire to live on the Eastside where I do because no matter where I end up working in the greater Seattle area, I can pretty much get there in a 30-minute drive (afternoon commute, a different story however). I've worked in Kirkland, Redmond, Tukwila, and now Monroe, all in the past 10 years.<BR/><BR/>My $.02Unknownhttps://www.blogger.com/profile/06887397094679559048noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-87538291123931669152007-04-12T17:11:00.000-07:002007-04-12T17:11:00.000-07:00NewDad said... I'd like advice from Tim's board: w...<I>NewDad said... <BR/>I'd like advice from Tim's board: which Seattle neighborhoods are relatively "bubble-proof", in your opinion?<BR/></I><BR/><BR/>Newdad - <BR/>I am sure you well get all kinds of conflicting advice on this. I had to make a rent/buy decision last August. Bid on a bunch of houses, lost them all (never fell victim to the "Winner's Curse"!). Finally locked in a townhome and then got cold feet and backed out. To date, I am ahead $55k because they keep lowering the price.<BR/><BR/>So in my case, renting has worked out really well. I found a nicer townhome in a better location, and am paying 30% less in rent than I would have for a tax-sheltered mortgage. If you check Craiglist, you will find plenty of nice homes for rent. I know others have had different experiences, but I really don't see any reason to lock in right now. At best, predictions are for appreciation to be flat for a while and at worst - who knows! <BR/><BR/>I know if I bought I would have already given back half my down payment to the market.<BR/><BR/>Just my $0.02Deejayohhttps://www.blogger.com/profile/09392753896126085751noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-51427705130685215822007-04-12T16:43:00.000-07:002007-04-12T16:43:00.000-07:00newdad - First of all what is your price range (as...newdad - First of all what is your price range (as in how much do you want to spend?). Second, you should probably rent for a little while until you get a feel for the neighborhood you want to live in. Third, there are always "motivated" sellers...look for them…people on here will tell you not to buy for 2-3 years.<BR/><BR/>I personally bought a condo (conversion) downtown Seattle 5-10 min walk to Pike Place Mkt. For the SFR market a more secure environment or Bellevue would probably be your best option (less taxes in Bellevue as well). As for condos, my rational is that the closer I am to the major workplace (downtown Seattle) the better since there will be stronger demand to live closer to work...Financehttps://www.blogger.com/profile/10942862156434184911noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-544756425907409102007-04-12T16:12:00.000-07:002007-04-12T16:12:00.000-07:00I'd like advice from Tim's board: which Seattle n...I'd like advice from Tim's board: which Seattle neighborhoods are relatively "bubble-proof", in your opinion?<BR/><BR/>We'll be moving back to Seattle (~July '08) after a 20 yr hiatus in SF; things have changed so much there that I hardly recognize it anymore. What kind of home purchases are arguably less "bubbly" than others? Should I focus on certain neighborhoods and stick to particular property types (e.g., avoid condos and stick to SFHs in "established" neighborhoods)? <BR/><BR/>Thanks for any advice you can give.NewDadhttps://www.blogger.com/profile/03217439056140552980noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-28508468020849440982007-04-12T15:12:00.000-07:002007-04-12T15:12:00.000-07:00Senators urge aid to stop wave of foreclosures<A HREF="http://www.ocregister.com/ocregister/money/subprime/article_1650340.php/" REL="nofollow">Senators urge aid to stop wave of foreclosures</A>Terryhttps://www.blogger.com/profile/11828480316508814814noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-70991993195018164702007-04-12T15:07:00.000-07:002007-04-12T15:07:00.000-07:00Let's try this again!Your taxpayer dollars at work...Let's try this again!<BR/><BR/>Your taxpayer dollars at work!<BR/> <BR/><I>Banking committee members said the federal government should spend "hundreds of millions of dollars" to bail out subprime mortgage borrowers facing foreclosure.</I><BR/><BR/><A HREF="http://www.ocregister.com/ocregister/money/subprime/article_1650340.php" REL="nofollow"/><BR/><BR/>..Terryhttps://www.blogger.com/profile/11828480316508814814noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-50222029861012130272007-04-12T15:02:00.000-07:002007-04-12T15:02:00.000-07:00Your taxpayer dollars at work! Banking committee m...Your taxpayer dollars at work! <BR/><BR/><I>Banking committee members said the federal government should spend "hundreds of millions of dollars" to bail out subprime mortgage borrowers facing foreclosure.</I><BR/><BR/><A HREF="http://www.ocregister.com/ocregister/money/subprime/article_1650340.php" REL="nofollow"/>Terryhttps://www.blogger.com/profile/11828480316508814814noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-80294516303765032002007-04-12T14:57:00.000-07:002007-04-12T14:57:00.000-07:00Patrick:Wait till next year for all parts of Pierc...Patrick:<BR/><BR/>Wait till next year for all parts of Pierce to buy if you can. Every part of T-town, even the "north and Northeast parts will see price declines. It's already happening on a micro scale depending no how desperate the seller is (look at 4107 N 24th, 98407; 6 price drops in 5 months...). <BR/><BR/>This Fall may even prove to be an excellent time to buy if the spring selling season is as big a flop as it's shaping up to be. <BR/><BR/>Also, about investors in that market, I got outbid by a couple a month or so ago who promptly put the house up for rent on Craigslist before it closed....and it was a flip property.Anonymoushttps://www.blogger.com/profile/07365222077216077016noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-3699702065423700352007-04-12T14:51:00.000-07:002007-04-12T14:51:00.000-07:00Flotown,Thank you for the compliment...I helped cr...Flotown,<BR/><BR/>Thank you for the compliment...I helped create both the timeline piece, and the new development tracking map that goes along with it. I used to be an office broker with Colliers, and now work on the instituitional side.<BR/><BR/>The Gates Foundation and Amgen are included for illustration purposes. Amgen is indeed looking for space right now, as they have not finalized their expansion yet. A majority of the figure (4.5m) sf comes from Greg Smith's proposed development in Sodo, which is on hold due to the viaduct. My comment said that only 3-5m will probably be built. <BR/><BR/>Nonetheless, there is a correlation between residential downturn and commercial downturn, with the former usually happening first. Seattle cannot support rents higher than $35, and they are bound for a downturn.Dan C.https://www.blogger.com/profile/08948279495749857675noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-9492307349875264232007-04-12T14:44:00.000-07:002007-04-12T14:44:00.000-07:00Dan, Not to pick nits but I think absorption in 20...Dan, <BR/><BR/>Not to pick nits but I think absorption in 2006 was closer to 1.9 million SF<BR/>http://www.downtownseattle.org/content/download/transient/CBDOfficeReport07.pdf<BR/><BR/>and I think the best graphic I've seen of the development pipeline is Colliers', which depicts about 8 million sf in the pipeline:<BR/><BR/>http://www.colliersmn.com/prod/ccgrd.nsf/publish/5C1592F669778215882572220080ADB0/$File/Development+Timeline+4Q06.pdf<BR/><BR/>Of the 8 million, a solid portion is owner -user, which is not typocally included in commercial reports, including Amgen expansion, and the Gates Center HQ. It important insofar as these users won't be looking fo rnew space, but once these buildings are occupied they won't be included in the commercial inventoryflotownhttps://www.blogger.com/profile/10811489236750260275noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-70287087089010138672007-04-12T14:38:00.000-07:002007-04-12T14:38:00.000-07:00Hear Yee!!! DeejayohHear Yee!!! DeejayohThe Klondikehttps://www.blogger.com/profile/07641020238476061731noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-47839128644412501762007-04-12T14:36:00.000-07:002007-04-12T14:36:00.000-07:00In 1997 there were tax changes that impacted the r...<I>In 1997 there were tax changes that impacted the residential real estate market. This probably had a large impact on the market. Wouldnt additional tax benefits reduce the volatility (at least reducing the downside) in the market? </I><BR/><BR/>This is something I have been thinking about. The last set of tax changes relaxed the exemptions for capital gains on housing - which I would argue was, when combined with 1% short-term interest rates, a primary catalyst of the bubble.<BR/><BR/>Not sure how you get that horse back in the barn. IMO Congress could not backtrack at all on that or mortgage deductability w/o sending the housing market into a worse tailspin. And given the number of people underwater today, further loosening the exemption would have no effect at all - they have no equity to protect!<BR/><BR/>BTW - I think the Australian's hypothesis is complete BS. Their market has been driven same as ours and everyone elses - by the global liquidity bubble.Deejayohhttps://www.blogger.com/profile/09392753896126085751noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-47493224185002697392007-04-12T14:17:00.000-07:002007-04-12T14:17:00.000-07:00Thought this was interesting about whats going on ...Thought this was interesting about whats going on in Australia.<BR/><BR/>“Brian Redican, senior economist at Macquarie Bank said imminent changes to the tax treatment of retirement savings could be behind some of the trends in housing finance. From July 1, retirement-fund payouts will be entirely tax-free, so housing investors are selling properties and reinvesting in more tax-effective retirement funds. As these investors are leaving the property sector, there is a willing group of new investors seeking to jump into the property market, he said.”<BR/><BR/>In 1997 there were tax changes that impacted the residential real estate market. This probably had a large impact on the market. Wouldnt additional tax benefits reduce the volatility (at least reducing the downside) in the market?Financehttps://www.blogger.com/profile/10942862156434184911noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-35178987785478595322007-04-12T13:32:00.000-07:002007-04-12T13:32:00.000-07:00Good for you for caring about self-improvement, Fi...Good for you for caring about self-improvement, Finance. I wish you the best.Shadowedhttps://www.blogger.com/profile/02275066426135302508noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-21659957767361993412007-04-12T13:11:00.000-07:002007-04-12T13:11:00.000-07:00This comment has been removed by the author.BanteringBearhttps://www.blogger.com/profile/10329027394184122851noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-89420386805729402112007-04-12T12:51:00.000-07:002007-04-12T12:51:00.000-07:00yet just observing that we have never had a -10% d...<I>yet just observing that we have never had a -10% decline in a year. </I><BR/><BR/>This side of the lake didn't. The Eastside however did see double digit declines in the early 90's. <BR/> <BR/>A highschool buddy of mine's parents (both Realtors!) bought a house planning to flip it in '89. They ended up holding it until 95.Unknownhttps://www.blogger.com/profile/16830648627643608057noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-74977598430585308592007-04-12T12:49:00.000-07:002007-04-12T12:49:00.000-07:00There is a PNW focused posting over at HBBLooks li...There is a PNW focused posting over at <A HREF="http://thehousingbubbleblog.com/?p=2632" REL="nofollow">HBB</A><BR/><BR/>Looks like the bubblicious pedestal on which Seattle sits is built of sand, and it's being eaten away by the tides...<BR/><BR/>Medford<BR/>Cowlitz County<BR/>Olympia<BR/><BR/>omg! it's moving northDeejayohhttps://www.blogger.com/profile/09392753896126085751noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-49874653075205040672007-04-12T12:45:00.000-07:002007-04-12T12:45:00.000-07:00According the King County, a resonable occupancy s...According the King County, a <A HREF="http://www.metrokc.gov/dias/ocre/occupancy.htm" REL="nofollow">resonable occupancy standard</A> for a household is two persons per bedroom (although that may not be an upper limit).<BR/><BR/>Suppose that a <A HREF="http://www.redfin.com/stingray/do/printable-listing?listing-id=635804" REL="nofollow">five bedroom house</A> were purchased by members of large but close-knit family. King County thinks is is reasonable for 10 or more people to live in this house. Now assume that each of these occupants work 60 hours a week at $12/hour jobs. That brings their household income to $360k per year.<BR/><BR/>Suddenly, that $565k price tag is looking pretty cheap.Alanhttps://www.blogger.com/profile/05660201775008638301noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-39678790436251317582007-04-12T11:50:00.000-07:002007-04-12T11:50:00.000-07:00Just did a survey on the real estate listings with...Just did a survey on the real estate listings within a given<BR/>zip code in Tacoma. 98405 has<BR/>196 listings. Of those listings<BR/>between $250,000 - $465,000 there<BR/>are 100 listings, here is how they<BR/>break down 13 Subject to Inspection<BR/>and 4 are contigent. 17% Total possable sales. If you consider that the actual number is 13% this<BR/>is a poor number going into what should be the busy season for RE<BR/>in Pierce County. After reviewing<BR/>what is going on now with what appears to be investor wannabes bailing, My Money is on waiting at<BR/>least another year and see how <BR/>many bullish RE Investors are left<BR/>standing.bathhousebitchhttps://www.blogger.com/profile/13450946965994993956noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-73921160609568267492007-04-12T11:46:00.000-07:002007-04-12T11:46:00.000-07:00Mr. Finance, I too will work on how I deal with p...Mr. Finance, I too will work on how I deal with people, namely you. Glad to see the name change as well. Regarding your comment "yet just observing that we have never had a -10% decline in a year." I would tell you that Japan had't either up until the collapse they went through.<BR/><BR/>It's like my neighbor saying, "My house has stood up this long, so any upcoming earthquake won't knock it down." <BR/><BR/>It hasn't happened, until it does.The Klondikehttps://www.blogger.com/profile/07641020238476061731noreply@blogger.comtag:blogger.com,1999:blog-15223784.post-57295004706480535952007-04-12T10:58:00.000-07:002007-04-12T10:58:00.000-07:00More bailout news. http://articles.moneycentral.m...More bailout news. <BR/><BR/>http://articles.moneycentral.msn.com/News/1BillionToBailOutHomeowners.aspx<BR/><BR/>The same lending institutions who encouraged predatory lending are planning on ponying up money for a bailout. Since banks never do anything for philanthropic reasons, it's clear that Citibank and BOA are now terrified of a housing collapse.<BR/><BR/>I think this hurts Seattle. All of this (literally) free money will dry up before most of Seattle needs it. Even $1 billion is less than a drop in the bucket for the housing industry.Anonymoushttps://www.blogger.com/profile/06300629821751688687noreply@blogger.com