Follow-Up: Local Radio On the Bubble

Well, 710 KIRO has completed their 5-day series of reports on the “housing bubble.” I put housing bubble in quotes because they slyly changed the name of their report from CloseUp: Housing Bubble to CloseUp: Betting Against The House. All in all, I’m a bit disappointed in this “close-up” report. The first two parts were decent, actually talking about the risk of a bubble and the importance of thinking long-term with respect to financing and investment, but the next three parts seemed all about “get in now while you still can!” Here’s a prime example from Part 3:

Brooks: Sellers can get greedy waiting for the perfect moment, but the deck is stacked against buyers.
Pace: “If they take the time to sleep on it overnight, to decide whether or not they want to make an offer, by the time they make up their mind somebody else has already made arrangements to move their bed into the house that that buyer wanted.”

Oh no! Get in now, make a snap decision or you might miss out! Buy into the hype! If I were to give a title to each part, Part 3 would be “Get In Before It’s Too Late!”, Part 4 would be “Making the Most of the Hot Market”, and Part 5 would be “Kenmore: An Example of Seattle’s Great Market.” Nary a word about the liklihood of a bubble. Here are some more choice quotes:

Pace: “But at the end of the day the American Dream is a home of our own, it’s not a rental agreement.”
…
Gamble: But the market is hot. Like in Seattle where Stephanie Klein tries to book houses for the show “Sell This House.”
Klein: “I get a ton of calls, and they’re like: ‘You know we just don’t have anything.’ Things are selling in like, four days.
…
George: “It’s a hot market, I guess.”

Again, I’ve transcribed parts 3 through 5 below for reference when they take the audio feeds off their website.

View/Hide the full transcript of Part 3.
Brooks: Everyone wants to make money, the faster the better.
Al Pacino (as Ricky Roma): “Stocks, bonds, objects of art, real estate… what are they? An opportunity.”
Brooks: And that’s the first risk when it comes to real estate.
Pace: “Buyers and sellers will miss out on opportunities.”
Brooks: Sellers can get greedy waiting for the perfect moment, but the deck is stacked against buyers.
Pace: “If they take the time to sleep on it overnight, to decide whether or not they want to make an offer, by the time they make up their mind somebody else has already made arrangements to move their bed into the house that that buyer wanted.”
Brooks: Sam Pace is a housing specialist with the Seattle King County Association of Realtors. He says in bidding wars, buyers are offering terms that include no inspections, waving title review, or forgoing a guarantee for homeowner’s insurance.
Pace: “If you don’t have homeowner’s insurance, you’re in default on your loan. And if you’re in default on your loan you could lose your house.”
Brooks: A lot of people are rolling the dice with their mortgages, choosing adjustable rate mortgages that offer lower rates, but could prove more expensive down the road when interest rates rise.
Alec Baldwin (as Blake): “Money’s out there; you pick it up it’s yours. You don’t I got no sympathy for ya.”
Brooks: Investors have also got to watch out.
Pace: “I’ve never been a big fan of flipping properties quickly.”
Brooks: Pace says your best chance at making money by buying and selling quickly is to put some sweat equity into the house, otherwise you could get burned if the market quickly turns south—something that shouldn’t hurt you if you’re sticking around for the long run.
Pace: “But at the end of the day the American Dream is a home of our own, it’s not a rental agreement.”
Brooks: Jason Brooks, NewsRadio 710 KIRO CloseUp.
Hide the full transcript of Part 3.

View/Hide the full transcript of Part 4.
Hazard (on TV): “We want to broaden our potential buyer spectrum.”
Gamble: That’s Roger Hazard, the design consultant on the show “Sell This House” on A&E. What they do is they take houses that aren’t selling, clean them up, and then put them back on the market.
Lamson: “They might have a collection of Teddy bears, which they think is great, but when people come to look at the house they’re not seeing past the pile of Teddy bears and seeing the room, they just see the crap that’s in the room, and they can’t see the potential of the room.”
Gamble: Kelly Lamson is one of the producers; he says there are really two things that everyone should do. Get rid of clutter, and paint.
Lamson: “When people move into their house, it doesn’t matter if they’ve been there six months or twenty years, they start expanding their clutter and their collectables…”
Gamble: And it’s not just reality TV producers. Alex Eckhart is a Seattle Real Estate agent with Windermere.
Eckhart: “What you want, is you want to get as many offers as possible. If you have four people come through, who will write an offer on your property regardless of what the house looks like, well then you have two more who would not have written an offer. If the house wasn’t in as clean a shape as it is right now, you wouldn’t have had-you would have had four offers instead of six. So the value of the house clearly goes up.”
Gamble: But the market is hot. Like in Seattle where Stephanie Klein tries to book houses for the show “Sell This House.”
Klein: “I get a ton of calls, and they’re like: ‘You know we just don’t have anything.’ Things are selling in like, four days. So, you know, we kinda try to target people who that like ‘my house is on the market for sixty days—I need help.’ But now it’s come down to ‘my house has been on the market for two weeks and nobody’s called me.’”
Gamble: Or in that case, fixing up your place might not matter, but of course it’s always nice to get more money out of your investment. Pete Gamble, NewsRadio 710 KIRO.
Hide the full transcript of Part 4.

View/Hide the full transcript of Part 5.
Brooks: Homes are flying faster than George can knock down the pins in Kenmore Lanes.
George: “It’s a hot market, I guess.”
unknown: “This one’s got a two car garage with an extra… side space.”
Brooks: Developers are trying to keep up with the demand in this small community that straddles the north-east end of Lake Washington. You see building notices posted all over Kenmore.
Rodden: “The last time that Kenmore had seen this kind of a-a real growth was from like 1960 to 1979 and that’s when fifty percent of the homes were built out.”
Brooks: Tiffany Rodden with Coldwell Banker Bane says the average home in Kenmore sells for about $375,000—nearly one hundred grand more than a year go. (sound of geese taking off) They’re taking off in large part because they’re so close to the lake.
Rodden: “I think people are-are surprised when they get up here how beautiful some of the territorial view are and things like that.”
Brooks: That’s a huge selling point to Rodden who works with a lot of people moving from other states to work for Microsoft, but face sticker shock.
Rodden: “Not so much, you know, how big of a yard you have or anything like that, because around here we have the park systems, and we have the beautiful, you know, forest lands to go enjoy.”
Brooks: The north end of Lake Washington has the perfect access for Pat Brown.
Brown: “Great location. As far as… living close to Seattle or living close to Bellevue and-and Kirkland.”
Brooks: How do you strike gold if you already own a home in Kenmore?
Rodden: “You’ve got a rambler, hang on to it, because that land is worth a lot of money.”
Brooks: In Kenmore, Jason Brooks NewRadio 710 KIRO CloseUp
Hide the full transcript of Part 5.

(Jason Brooks, Pete Gamble, 710 KIRO, 08.17.2005 – 08.19.2005)