This is your open thread for today. Please post random links and off-topic discussions here.
Have a great Labor Day everybody. I’m off to go do some hiking.
P.S. (R.I.P., Steve Irwin.)
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My Sister-In-Law’s landlord just extracted 70K from the rental property via a second mortgage. When she had my sister-in-law vacate the property for a day, I thought she was going to refinance away from her awful adjustable rate mortgages, instead its additional equity extraction. In addition, I believe that the landlord is claiming the property is owner occupied.
So equity extraction, mortgage, and tax fraud are in good shape in the Puget Sound region.
I am starting to look forward to a housing bust, and I am a homeowner.
Call in the artillery and make it danger close.
http://usmilitary.about.com/
od/glossarytermsd/g/
dangerclose.htm
The housing bust IS the owners best friend. Lower taxes and "chocolatey" value appreciation keeps you from doing anything stupid with your home, like treating it like an ATM machine or worse yet, an investment.
Just thinking about how far the standard of living has dropped in Seattle since the days when I was a kid.
In the 1960’s my father and his wife were school teachers (PE and music). On school teacher salaries they had:
1) A 4 bedroom home in Newport Hills
2) Two cars
3) A Catalina 27 sailboat moored at Newport Shores Marina
4) 120 Acres in NE Washington
5) 2 kids and 2 dogs
Later they got rid of the boat and the land and bought a waterfront lot on Hood Canal and built a vacation home.
Fast forward to the present….
I am a professional with a 6 figure income. My wife and I have one car…a Honda. We have no kids or pets. We rent. If we bought today we could barely afford a house in Rainer Beach (da hood).
The standard of living is not what it used to be…
Seattlemoose, it is safe to say that the standard of living is dropping nation wide.
With mortgages, toll roads, ports, jobs, and debt being owned by foreign interests, one has got to think that we are becoming indentured slaves. I have even heard of a proposal to sell National Park visitation fees to foreign investors.
So lets see.
The house you rent-to-own from the bank, has a mortgage owned via treasuries to China and Japan. It is filled with gadgets made elsewhere. The road you drive on your way to work will be owned by the French. The gas you put in the car, comes from the Middle East. The place you work is owned by a European company, and when you go on vacation to a National park, your park fees will be paid to a foreigner. But that’s O.K. because we will be opening the new Cascadia Free Trade Zone to further blood let the American sheeple.
After all, even if we have drained our personal savings and have a negative savings rate, we still have an endless market of servitude.
Even in the mid 80’s, a school teacher could buy a house with 20% down after working 1 and 1/2 years! On one salary!
I know because I did that.
Homeowners are absolutely correct to be looking forward to this crash.
The alternative is ever-increasing property taxes- especially when they start adding on all that money that’s got to go to subsidizd housing for all the teachers, cops, firemen, carpenters, plumbers, techies, Boeing workers, bank tellers ETC. who can no longer afford a house priced at open market.
Not to mention the prospect of children never moving out because of the cost of housing.
This crash is long overdue.
With mortgages, toll roads, ports, jobs, and debt being owned by foreign interests…
I wondered when someone would bring this up. Finally, a wakeup call.
From the Associated Press”
“Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying.
On a single day in June, an Australian-Spanish partnership paid $3.8 billion to lease the Indiana Toll Road. An Australian company bought a 99-year lease on Virginia’s Pocahontas Parkway, and Texas officials decided to let a Spanish-American partnership build and run a toll road from Austin to Seguin for 50 years.
Few people know that the tolls from the U.S. side of the tunnel between Detroit and Windsor, Canada, go to a subsidiary of an Australian company — which also owns a bridge in Alabama.”
Hi everyone,
I just wanted to point out that inventory has been down the last several weeks in Seattle. I’ve been tracking via the MLS. We are now back to the inventory from August 1st.
Seattle Inventory Sep.4: 2,524
Seattle Inventory Aug.1: 2,523
Inventory peaked on August 27 at 2,619. But has been plummeting ever since.
Even the housing tracker site shows a drop: HousingTracker
It shows inventory down over 150 houses (this site covers a bigger area then Seattle proper.)
Mushegy Im officially putting you on ignore~!!
I dare everyone else does as well
You love to skew things Mesy, don’t you?
Word: plummet
1 : to fall perpendicularly “birds plummeted down”
2 : to drop sharply and abruptly “prices plummeted”
I do not think this word means what you think it means.
Inconceivable!
What straws will you grasp at next? LOL. You should really get out of the Real Estate profession.
In latest news… Job growth is up, inventory is down and Ballard is appreciating 16% YOY!
low inventory
While the main focus of this blog is housing, it seems like the builders are overdoing it in the commercial building sector.
In parts of Tacoma and they’re putting up lots of small medical and office buildings, strip malls and fast food joints.
I suspect when the economy slows the commercial sector will start feeling the pain also.
http://tinyurl.com/gfaxz
The housing collapse heard round the world
“Real estate agent Andrea Gaus knew the market was out of whack when the price of a typical four-bedroom house near good schools in the leafy Maryland suburbs of Washington shot past the $1-million (U.S.) mark.
“It got to the point where appreciation was so high that it priced people out of the market,” Ms. Gaus said.
What sold in a weekend here last year is taking months to unload. And increasingly nervous home sellers are slashing prices to get rid of properties before their value sinks even further.
“The once red-hot housing market has fizzled. And the topic du jour among economists, investors and policy makers is whether the end of the housing boom signals the beginning of the end of a long run for the world’s mightiest economy, and by association, the rest of the planet.
The U.S. housing crash may prove to be the economic equivalent of the canary in the coal mine — a warning of impending danger in an economy that has surged too far, too fast. Many experts are now openly speculating about a possible U.S. recession next year, brought on by consumers reacting to the shrinking value of their nest egg. If they’re right, the fallout could prove to be far nastier than the collapse of the technology bubble at the start of the decade.
“It could throw the economy into recession if consumers go into a shell,” worried economist Peter Morici, a business professor at the University of Maryland. “I don’t see anything out there to compensate.”
“Mirroring other recent surveys, the U.S. Conference Board reported last week that its consumer confidence index suffered its biggest one-month drop in August since the devastation of hurricane Katrina a year ago.”
“the United States has been the economic driver for much of the world — Canada included. The United States has been sucking up excess savings and consuming everything in sight, from cars to homes and everything that goes in them.
“It’s hard to imagine that a U.S.-centric global economy wouldn’t be at risk in the aftermath of a bursting of the U.S. housing bubble,” warned Morgan Stanley chief economist Stephen Roach, one of Wall Street’s most outspoken worrywarts.
“The non-U.S. world remains heavily reliant on selling exports to wealth-dependent American consumers. As the United States comes to grips with the aftershocks of another post-bubble shakeout, so too must the rest of the world.”
As he put it: “If the American consumer sneezes, countries in both the developed and the developing world could easily catch a cold.”
” From 1975 to 2005, the average size of new single-family homes grew by 48 per cent — from 1,645 square feet to 2,434 sq. ft. — even as families shrunk in size, according to new data from the U.S. Census Bureau.”
“…some forecasters may be underestimating the potential downside of this housing boom.”
“The decline in housing will not be a mere sideshow,” warned Merrill Lynch’s Mr. Rosenberg. “The housing correction has all the markings of a three-ring circus that has the potential to pull consumer spending to the brink.”
“signs of stress are apparent. Major retailers, including Wal-Mart Stores Inc. and Costco Wholesale Corp., have warned of substantially weaker profit in the months ahead as consumers cut back.”
“The current slowdown is “atypical” because it’s being driven by a “less than once-in-a-lifetime housing market bubble,” suggested Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y.
“Traditional warning signals of impending slowdown are unlikely to work in their usual way,” he explained. “Investors need to focus on the housing numbers, which are fast becoming horrific, and on the implications of the drop in housing activity.”
You got it Peckhammer.
Looks like we have run out of all our assets as a nation and now we are selling off our right to travel freely within our own country. At least when we owned our own tolls, the tax collected went into further expansion of our own infrastructure.
We are truly a broke, brokered, broken nation.
I just returned from a camping/hiking trip in the Bellingham area.
The city and surrounding areas is a forest of For Sale and Price Reduced signs. It wasn’t until I hiked up to a remote spot on Chuckanut Mountain that nothing was for sale. Had I brought some binoculars, I could have spotted a few in the distance on the shores of Lake Whatcom.
One new development really caught my eye as I was driving down Lakeway Drive on the way to Sudden Valley. About a dozen new construction luxury homes called Geneva Hills sprouted 3 and 4 stories off the hillside so I went up and had a look. All but 1 of the homes had a For Sale sign in the front yard. A quick check of the MLS showed that some of these homes have been on the market up to 100 days.
It is truly impressive.
I just wanted to point out that inventory has been down the last several weeks in Seattle.
The sharpest drop was just before the holiday. Same thing happened before Memorial Day and the 4th of July. After those holidays, the inventory started growing again within 2 weeks.
Hard to say yet if this holiday is different.
Here are listings from my weekly spreadsheet.
Date / King Co / Delta / %
07-May / 7302 / /
15-May / 7486 / 184 / 3%
21-May / 7665 / 179 / 5%
11-Jun / 8099 / 434 / 11%
18-Jun / 8154 / 55 / 12%
24-Jun / 8352 / 198 / 14%
01-Jul / 8417 / 65 / 15%
08-Jul / 8758 / 341 / 20%
15-Jul / 9057 / 299 / 24%
22-Jul / 9139 / 82 / 25%
29-Jul / 9044 / -95 / 24%
05-Aug / 9059 / 15 / 24%
12-Aug / 9191 / 132 / 26%
19-Aug / 9348 / 157 / 28%
26-Aug / 9442 / 94 / 29%
02-Sep / 9363 / -79 / 28%
If you look at the dotcom meltdown there was not a constant week to week drop in stock price….it had “false rallys” all the way down. But the trend…was clearly down all the way.
I make my predictions not based on week to week changes but on long term trends and that trend has clearly been an ever increasing inventory.
It is pretty easy to kick the butt of an ostrich coz they have no clue what is going on around them.
OK, so inventory went down just as the summer ended.
Bravo-Foxtrot-Delta
This is about as predictable as the big bright light that heats my living room going away every night after dinner.
This is perfectly normal, as people are taking homes off the market to try again next year, or they are preparing to relist them.
Once the kiddies start school (mine start in just under 9 hours), people fall out of the mood to sell homes. They also fall out of the mood to buy them.
A handy map showing how medium incomes have dropped over the past six years NATIONWIDE http://www.washingtonmonthly.com
/archives/individual/2006_09/009444.php
People should have patience with ’shugy. He’s Canute, trying to command the tide not to come it. It’s fun to watch.
How many Buyers were Artificially added to the market with loose lending?
Imagine- having biding wars with people that several years ago would of never Qualified to bid against you before?
Now the Tidal Wave of Sellers is coming in probably about 6 months to our location~!
1) Real estate speculators who bought solely on the anticipation of rising prices will likely try to unload their properties now that the market has turned.. believe me I personally know about 6-7 of them in Seattle. About 5 of them are still holding on for higher profits.
2) With higher short-term interest rates, those who financed with ARMs will also try to sell their homes to get out from under mortgage payments they can no longer afford to make.
3) A record number of Americans who bought second homes, or vacation properties, will likely reassess the wisdom of those purchases, and put these properties back on the market as well.
4) Finally, homeowners who watched the values of their homes rise for years, but were reluctant to sell them for fear of missing out on even bigger gains, will rush to cash in before all that paper profit disappears.
5) Wave of sellers from economic downturn following the housing Bust… think about all the Jobs that will be lost. Isn’t it about 40-50% of job creation directly related to Housing.
6) How about Government Jobs from Less taxes collected? If values go down wont they be collecting less tax revenue?
7) Or just the normal high divorce rate– or during bad times “Poverty Walks in the Door and Love Flys Out The Window.
Hard to say yet if this holiday is different.
Hi richard…yes, the holiday probably had something to do with it. Hard to say if a long term seasonal downward trend has started yet.