You should meet my friend. He lives in Texas and keeps all his money in physical gold & gems in a safe in his house. He also has a lot of guns to protect it.

Dave

CL has stopped posting the aggregate number of listings at the top of their categories

I just replace “min” with “1″ in the rent/price search field so that I get a total number of listings. Seems to work.

Thanks Jillayne for your comments. It’s interesting to see where these people are, because I think they may be a leading indicator of where the market psychology is going. Even if the agents in the trenches are fearful, it seems like the average Joe on the street is not yet. The sellers are pricing like they are anxious or in denial, and most people just believe the regular propaganda out of the Times that it’s different here. I appreciating that, at least so far, the east side really is different.

The rental rates for the first hill area are actually quite strong as many of the hospital workers like to live close to their jobs (or the hospitals rent them out for their higher level semi-perm doctors.) Those that are doing their residencey also like to live within a few min walking distance.

There have been several sales since it turned condo in June 2006 (all due to job related issues) and they all sold for between 10% and 23% gains. My neighbor bough his studio for $150k and sold it one year later for $185k. A one unit slightly smaller than mine sold for a 21% increase. The main reason theirs appreciated more is that they got in on the very first stages and the developers raised the prices every month in the summer of 2006, thus by the time I locked in my rate unit they had increased the selling price.

My other theory is that once they start working on the 520 bridge and traffic times from the Eastside to Seattle double people will be more willing to pay a higher price to rent or own near downtown (a 5-10 min walk to the core downtown). Its also a general rule that the closer you are to the downtown core the less your property depreciates in a downturn…thus the max 10% decline I am predicting for Downtown Seattle (for my 98101 zip code)

Attendance at Realtor continuing ed classes fell dead in December, right after the windstorm, then we had the snow and ice in January. After that, attendance all across the board has been dead all year. Realtors aren’t coming to class. The first thing they cut out when times are tough is education and training; they’ll put it off until the last possible moment, which means I’m going to be busy next year. The Realtors now fall into a several different categories. (If I’ve missed one, please feel free to add a new catagory)

1) Eastside and Seattle agents with an established clientele are having a slower year but are still doing fine.

2) Agents who are working the cream, which means Microsoftie buyers, prance around like the world revolves around Redmond, Mercer Island and Bellevue and seem to have the opinion that if their little corner of the world is fine, the conversation is over. They’re not even in anxiety mode.

3) New to newer agents who relied on the buyer market are struggling but not yet in panic mode.

4) Part time grandma agents who write a deal or two a year for extra money are not as affected by all this because their need to support a family is not as great. They’re totally out of the loop on what’s happening with the market.

5) Agents who are desperately clinging to hope and trying to diversify. Some have already aquired another part time job.

6) There are very few agents in blind denial. They are scared "chocolate"less and don’t want to talk about it because mentioning their fear makes it real and transfers it to buyers and sellers, which means even less business. I’d say the majority of agents I see are in this mode.

7) Then there are the battle scarred veterans. These folks have lived through many real estate cycles and they’ll live through this one, too. These agents are beacons for the public. They tell the consumer the truth, hard and fast, even if it hurts, and even if it costs the agent their commission. These folks aren’t always avid bloggers because, well because they are usually asleep by 7PM

In order to become a battle scarred veteran, agents need to live through a cycle like the one we’re experiencing. There are thousands of agents in the Puget Sound area who have never lived through such a cycle. Many will exit the industry. Between now and then, agents might move their license to a place where they pay a low monthly fee without any expectations for production from their broker.

With regards to *condo* inventory, if you have kept a close eye on what’s been going on in the downtown area, you will notice that many units have been pulled from the MLS and have not been sold. Many units have not even rented that are not listed in the MLS also but rather on places such as CL and other rental sites…some have sat for many many months. Also I have noticed on my CL searches that all of the search phrases I use seem to bring up more pages of inventory. I did find it interesting that in the last couple of weeks, CL has stopped posting the aggregate number of listings at the top of their categories. I was using those as an economic indicator of sorts as I checked different locations around the U.S. such as Miami, Phoenix, San Diego and Los Angeles. Miami’s numbers were shooting through the roof in the RE section (50k or so) and Seattle…believe it or not…was closing in on Los Angeles. (approximately 18k vs 20k).

I will say that it is nice to have “devils advocates” on the site and I even appreciate Meshugy’s input. Who knows…maybe he’s actually in a financial position where he can cheerlead for fun knowing that he can laugh off a “potential” equity loss.

Can you?

Do I believe that the market will have a downturn, yes, I have never denied the possibility and estimated prices would be in the +/- 5% range in 2007. So far my predictions have been correct as my condo has appreciated 10.5% (with hard appraisals and locked in that value) since Sept of last year, with about half of that since the beginning of the year (~+5%).

Overall I often play devils advocate to add some spice to arguements…and do admit it is fun to ruffle some feathers.

At least Im not a blind optimist like Meshugy, as Im a realist. I make calculated financial decisions and assess the odds of where the market is going. I dont believe the market will decline more than 10% on a median valuation basis during this correction in the city of Seattle (only in the city).

Just plain speechless. After she followed your chicken little post with her CFC post directly contradicting yours, I haven’t seen you address any of the substantial issues she brought up.

Knock it off.

We don’t live in a one lender world. Let’s say you’re a lender and you’re smart. It’s 2002-2003 and you recognize people are starting to qualify for loans they can’t truly afford so you refuse them and steer them towards a smaller purchase. Those clients want a big house, so they go elsewhere to less distinguishing lenders. Now you are not making as many loans, while others are getting rich. You have the choice of making loans you think are bad ideas or going out of business. So you decide that if everyone else is doing it, maybe it’s OK after all. It’s almost your only choice.

There’s plenty of blame to go around. Buyers are to blame for greed. Wall Street is definitely to blame for making the market for mortgage backed securities. The FED is to blame for reducing rates so much that yields fell, forcing pensions and other big buyers to look for other investment grade bonds with decent returns. The guys creating CDO tranches that met those grades are to blame. The rating agencies are massively to blame for rating those bonds so highly. Local papers are to blame for pushing lies.

anybody who buys a house in this current market (assuming they can get financed) must be out of their minds… and if they lose money then it’s their fault… it’s not like you can’t see it coming… not when even the MSM admits there is trouble…

unfortunately the only folks that have enough or make enough to get a non-conforming loan likely are too smart about their money to know better…

when the ice cracks the wall doesn’t fall in chips… it comes crashing down…

when every house on the street is priced at 417K which one will sell first?

One thing I have noticed is that the Inventory numbers in the upper left hand corner for King County (the only one I pay attention to) have flatlined over the past several weeks.

08.01.2007: 10206 listings
08.21.2007: 10475 listings

Your keen analytical skills continue to impress me, guru.

Biliruben has it right, inventory is usually flat to a little bit down in August, then back up in Sept (usually peak month)

I predict this year
1) Contrary to what Finance says, inventory will be up in August. This is unusual, and I wouldn’t interpret it as a sign of health
2) October will be the peak month for inventory, as more sellers will hang out with their “wishing” prices. See “denial” stage above

Having read your blog and comments, I still think you are all wet.

Where are they? Perhaps that’s the new face you see that says, “Welcome to McDonalds, can I help you?”.

They wouldn’t dare ban her. She has knowledge, experience and credibility and presents her case with tact and solid facts. She teaches ethics to mortgage brokers, for goodness sakes.

I’m sure they realize that she gives there site incredible amount of credibility, regardless of her feelings regarding the direction of housing.

She really left Reba spluttering, that’s for sure.

We’re almost there. Reba certainly has that frightened, put a brave face on, sort of tone.

Inventory usually begins to decline in August.

Second, DJO they do watch madden and report on it like it is the real superbowl. Here’s a recap of how Madden Football predict the Colts victory over the Bears. The predicted score is a little off…but it’s eerily accurate. In fact, Madden is 10-0 in picking the winner, which I’m sure is better than what the real John Madden could do.