Seattle Bubble

• What happens to listings?
• Home Buying Demand vs. Price Changes
• Does Record Inventory == Larger Selection?
• NWMLS Statistics from Around the Sound
• NWMLS: Closed Sales Drop Through the Floor

Jump to the bottom to add your comment. ↓

136 responses so far ↓

• 1 professional // Oct 22, 2007 at 9:21 am

  you crazy bubbleheads and your mystical voodoo “mathematics”!

  Less math, more GUT!

• 2 Dave0 // Oct 22, 2007 at 9:26 am

  I’m a bit confused by the absorption rate. Did you mean to say that it’s pending sales/active listings? That is the only way that it would make sense to have listings go up and sales go down and absorption rate go down as a result.

• 3 Myrtle Beach Condos // Oct 22, 2007 at 9:31 am

  So you guys are at a screeching halt as well huh? Myrtle Beach has taken a dive in sales over the past few months as well. Hopefully things will pick back up in the Spring…

• 4 deejayoh // Oct 22, 2007 at 9:35 am

  I’m a bit confused by the absorption rate. Did you mean to say that it’s pending sales/active listings? That is the only way that it would make sense to have listings go up and sales go down and absorption rate go down as a result.
  Oops! Let me just fix that…. it was a late night post

• 5 notabull // Oct 22, 2007 at 9:38 am

  Great analysis. I’d like to suggest another statistic that would be an interesting to measure for this season, and to compare against previous years.

  Every year has a peak and trough for inventory. I’m guessing this year will be no exception. However, I suspect that the ratio of must-sells to like-to-sells is going to be different for this season. The theory would be that if you are experiencing a market with more must-sells, then the inventory *reduction* we normally see (in %) on a seasonal basis, would be less than the inventory reduction (in %) we saw in previous years.

  My general hypotheses for this year is that a number of sellers just could not sell towards the end of summer, and some of these will leave the market (as is happening) and some will stay on. The ones that stay are much more likely to be must-sells, and are likely the ones that will continue the price pressure in the Spring when the like-to-sells come back.

  I’m not sure how to graph this, but it would be nice to somehow plot it alongside the absorption rate.

• 6 Alan // Oct 22, 2007 at 9:57 am

  an event which I think has about a 0.1% probability of occuring due to random fluctuations.

  Inferring event probability from Gaussian models only makes sense when you are dealing with random fluctuations. Imagine a tank of water filling up. You measure the water level, but waves created by the water pouring into the tank prevent you from getting an exact measurement. Still, you can measure the trend line and model the error with a Gaussian. This model works great until the tank fills up. Then the system changes. It doesn’t make sense to say that after the tank fills up (and either bursts or starts overflowing) to say that your readings indicate events occuring that only happen once in ten thousand years. The system is operating in a new region of dynamical behavior.

  You can however say that we are observing events so rare that the system is probably operating under new rules. That is what the stats in this post suggest. This market is not the same as the market of the past seven years. If you try to treat it the same you will make the same mistake that the good people at Bear Stearns did.

• 7 Chuck Ponzi // Oct 22, 2007 at 10:16 am

  Sorry,

  Still have to disagree. Just like selling the NASCRASH when it was 3000. It’s still a great time to sell a house. It’s only going to get worse.

  Chuck Ponzi

• 8 notabull // Oct 22, 2007 at 10:38 am

  “Still have to disagree. Just like selling the NASCRASH when it was 3000. It’s still a great time to sell a house. It’s only going to get worse.”

  Agree. It’s a terrible time to try and sell a house for what the comps from 6 months ago suggest that you to sell for. However, houses are still selling (at dramatically reduced rate) and if you price near the bottom of the current inventory, your house will sell and you’ll make a ton of money. The question is: where ya gonna go? Alabama?

• 9 biliruben // Oct 22, 2007 at 10:44 am

  Sweet graphs as usual, DJO.

• 10 rose-colored-ghoulaid // Oct 22, 2007 at 10:45 am

  I’d say this is a great time to sell a house, and a lousy time to try to sell a house. If you actually sell, you’ve made out like a bandit and passed the bag. Wahoo!

• 11 softwarengineer // Oct 22, 2007 at 10:49 am

  THE COLD WET WINTER MONTHS ARE A BAD TIME TO SELL ANYTHING

  Automobiles are another big ticket item that sells cheaper in the Winter, likely less buyers out and/or Christmas and winter power bills drains us dry?

• 12 [troll] // Oct 22, 2007 at 10:54 am

  Ww - stmbld pn ths st thrgh Sttl P - y gys r dprssv! Yh - sls r ff 30% r wht nt frm lst yr ths tm, bt spps t ws ‘nvtbl’. dn’t hv crystl bll s wn’t prtnd knw th ftr (lk Cnn ’Brn nd hs “n th yr 2000″ sktch :)… thgh n thng dn’t ndrstnd s tht ppl r thr hldng r drppng thm , bt nt by whl lt…

  sld twnhm n Sn Dg, C nrly 4 yrs g - prc f t tdy vrss thn hsn’t chngd mch - s my _pnn_ (nd tht’s ll ths s - n _pnn_, lk n ss***, vryn’s gt n :) s tht prcs wll prbbly drp slghtly, bt wll hld fr th mst prt.

  Dn’t hld yr brth fr 20-30% drps n Sttl. t _n’t_ hppnng, spclly nt n lrdy rsnbly prcd prprts. spps y cld nflt th prc t ny lvl nd thn cll t “drp” bt th mdns rn’t gng t g dwn by mr thn 5-10% (t _mst_).

  3 mlln ppl n ths r, nd knw f n n tht s crrntly rntng tht sn’t plnnng n byng thr cnd r twnhm r hs…. rntng, t ny rt, s cmplt wst f mny…. (nlss t ‘fts yr lfstyl’ r whtvr tht mns)

• 13 notabull // Oct 22, 2007 at 11:15 am

  “Don’t hold your breath for 20-30% drops in Seattle. It _ain’t_ happening, especially not on already reasonably priced properties. I suppose you could inflate the price to any level and then call it a “drop” but the medians aren’t going to go down by more than 5-10% (at _most_).

  3 million people in this area, and I know of no one that is currently renting that isn’t planning on buying either a condo or townhome or a house…. renting, at any rate, is a complete waste of money…. (unless it ‘fits your lifestyle’ or whatever that means)”

  Sigh. Same old arguments… Renting is not a waste of money when buying a house/condo (the alternative to renting) is *more* of a waste of money, as it is right now. Please try and realize that conventional wisdom only applies in conventional times. We are not in conventional times and the conventional wisdom does not apply.

  So if you think the median is going to go down 5-10%, why would anyone buy RIGHT NOW? If I put down 100K on a 500K house and that house goes down 10%, then it’s now worth 450K. Leverage is a "dog", and works both ways: I would lose 50% of my 100K down payment. Please explain how that is a sensible decision?

  I like how you say that yours is nothing more than an *opinion* and then state absolute *facts* about the direction of the market. You’ve taken your opinions and converted them into truths.

• 14 notabull // Oct 22, 2007 at 11:22 am

  “Wow - I stumbled upon this site through Seattle PI - you guys are depressive!”

  Also, I’d like to add that we’re not depressive, or depressing for that matter. It may sound like depressing news to someone who bought a home very recently, but to everyone else it’s no big deal ot it’s actually GOOD news.

  Imagine that you’re 21 right now and about to get out of school. Would you rather hear that the high home prices are going even higher, or that prices are coming back to historically normal levels? It’s good news to first time home buyers that prices come down to levels they can afford. Similarly, if prices continue to go higher then we won’t be able to attract good quality teachers/police/IT-people/whatever from out of state. This is what happened in CA. High home prices are not good for anyone but the granite industry and the local BMW dealer.

• 15 Alan // Oct 22, 2007 at 11:39 am

  THE COLD WET WINTER MONTHS ARE A BAD TIME TO SELL ANYTHING

  My wife wants to buy only during the wet months. That way she can detect leak and mold problems more easily. It is a lot easier to hide problems during the dry warm months.

• 16 melonleftcoast // Oct 22, 2007 at 11:47 am

  Bubbleicious,

  “Don’t hold your breath for 20-30% drops in Seattle. It _ain’t_ happening, especially not on already reasonably priced properties.”

  OK, why do you (and so many “mainstream thinker types”) think Seattle is so special? Why is it more special than Boston? Or SF? Or San Diego?

  In the handful of places I’ve lived in the US (North Idaho, SF, Philly, Boston), there are pluses and minuses to all of them. These are places where people love living there (well, except Philly) and have already seen price declines or have really slowed down this year.

  The list of reasons why my husband and I are concerned about moving to Seattle is:

  -6 months of clouds and rain

  -good and OK, but not excellent, schools

  -lack of public transportation and the likely need of two cars

  -not enough diversity/opportunity for high tech jobs
  -lack of world-class culture (relative to other places we’ve lived)

  Reason why we would move to Seattle:
  -closest US city to both our families

  So sell me on Seattle! Why is it so special?! Is it because everyone born there wants to live there (like Boston)? Or is it because so many people have emigrated from other locales and want to stay, if they can afford it (like most of CA)?

  I think The Tim has done a post (or ten) on Seattle’s specialness, but maybe you could do a poll on the reasons why Seattle is so special? Seriously! I’ve never lived there and I’m very curious! Maybe the results will shed some light and convince us to move there afterall.

• 17 Angie // Oct 22, 2007 at 11:56 am

  I’m with biliruben on this (hey! when did I ever think I’d say that??)–but yeah, sweet graphs, DJO.

  I still don’t think it’s all worth freaking out about. Look at that absolute numbers graph…listings were chugging along in 01-03, numbers dropped in 04 and 05, now the pendulum is swinging the other way. Eventually it’ll get back in the other direction.

  Alan, you’ve got a smart wife!

• 18 notabull // Oct 22, 2007 at 12:07 pm

  “So sell me on Seattle! Why is it so special?! Is it because everyone born there wants to live there (like Boston)? Or is it because so many people have emigrated from other locales and want to stay, if they can afford it (like most of CA)?”

  Responses from perma-bulls will be something like:

  -Boeing
  -Microsoft
  -Jobs
  -Mountains
  -Water

  On a serious note, I’ve lived in a number of different places in my life and in a couple of countries. Seattle is indeed a great place to live IF you can tolerate the many months of gray skies and rain, for a number of months of the year. Personally, I’m fine with that and IMO it beats a lot of the country with the humidity and the freezing/hot temperatures.

  What the permabulls and ill-informed never appreciate is that other areas of the country are nice too, and their prices went down.

  -Jobs? SoCal has plenty. I hear you can get a job in LA if you want to!!!
  -Mountains? Montana has them too!
  -Water? How are those “Great Lakes” this time of year?
  -Boeing? Yeah… Chicago HQ, and something like 30% less jobs right now than at their peak employment. They’re not doing BADLY, but are they doing BETTER than before when prices were sane? No, they are not.
  -Microsoft? I hear Qualcomm hires a couple of people too. Maybe there is mass unemployment in Boston these days? Must be, otherwise prices wouldn’t be going down!!! Inconceivable!

• 19 Angie // Oct 22, 2007 at 12:19 pm

  Melonleftcoast, Seattle is largely a city of immigrants. Lots of people come here, like it and decide to stay. Here are some things that make Seattle special:

  Yes, we get 6 months (or more!) of clouds/rain–but generally temperatures are very mild. No super-hot summer, and no HUMIDITY! Very little snow or ice in the winter. The landscape is lush and green all year round. Roses bloom into *December* here.

  Public school quality does vary widely within the city school district and across the metro region. I can’t imagine that any other urban area is excellent across the board, either. Involved parents can find great educational opportunities anywhere. I live in a part of town that has a reputation for having crappy schools (SE Seattle) and my kid goes to a totally terrific elementary with dedicated teachers, lots of parental support, and great outcomes.

  Within the city limits, especially close to downtown, it is certainly possible to have a family and only one car. My family of four does. We also walk, bike commute, bus commute and carshare (flexcar.com) as needed.

  Tech jobs: this is a biotech and computer technology hub–not to mention that little aerospace company down the road. There are some kinds of high-tech jobs that don’t have a big presence here, but there is quite a bit of diversity represented by the umbrella terms “biotech” and “computer technology”–may not fit your particular strengths/training, though.

  Seattle certainly doesn’t stand up to NYC, LA, Chicago in terms of outstanding museums and performing arts, but we do have respectable institutions, definitely best in this quadrant of the country!

  Other good things–a totally beautiful area, low crime relative to other cities, close to a wide variety of outdoor environments (mountains and water) for lots of great outdoor activities, more laid-back/low-key/casual that most other cities, well-educated population and (not coincidentally) a strong progressive streak in politics, excellent local food, and of course a great love of coffee.

  Today it’s well into fall, there’s been a break in the clouds and showers and it’s beautiful and sunny outside. They say “you don’t know what you’ve got til it’s gone”–well, when you get a break from the typical gray, a little sunshine feels like heaven!

  Come on over and check us out. I’ll bet you’ll like it here!

• 20 Mama // Oct 22, 2007 at 12:25 pm

  melonleftcoast,

  Seattle has great schools but they’re in areas where two bedroom condos are upwards of 450K and houses at 650K+. In areas where housing is more affordable (300-350K) schools are actually really bad. I work at Microsoft and we’re seriously considering moving away — I earn well but not well enough to afford a home in a good neighborhood. Even Boston, with the recent price drops, seems more affordable (at least in the first home/condo market). I would NOT move here unless you have a job offer for 110K+ or you’re independently wealthy :)

• 21 Mama // Oct 22, 2007 at 12:27 pm

  Angie, do you mind sharing what school that is — we passed on a few homes in SE Seattle after looking at WASL scores of the elementary schools in the area — they seemed horrible across the board…Did I miss a public school?

• 22 on topic // Oct 22, 2007 at 12:29 pm

  what’s nice about Seattle?

  it is pretty much the only game in town. if you want to live in a big city in the PNW, there is only one choice.

  being mildly allergic to sunlight, I appreciate the clouds

  the consensus on this blog in terms of real estate is that Seattle is perfectly average, just behind the curve by about 18 months. any claim otherwise must be based on pink ponies, mystical creatures that ensure perpetual double-digit appreciation.

• 23 [troll] // Oct 22, 2007 at 12:31 pm

  > Y’v tkn yr pnns nd cnvrtd thm nt trths.

  Wht s yr mtrc fr rtnlzng tht w r n ‘ncnvntnl’ tms? r y 90 yrs ld nd n xprt n cnmcs? S y’v sn svrl cycls lk ths?

  _knw_ wht’s gng n - bt clmng t hv “bttr” trth bsd n wht _Y_ (s wll s r nyn ls) thnks bt th trth, s jst pln hbrs…

  Whn y rnt - yr mny gs dwn th drn rrvrsbly, dspt flcttns n yr hm prc tht y’d b byng fr rght nw fr lss (r mr, r whtvr). f y r t sty n yr hm fr whl (.g. > 5 yrs), cn nt s hw y nd p lsng.

  Whn th mrkt ds rcvr - wll y stll b hr?

  gn, ’m nt gng t rg wth y - bt t lst hv th dcncy t dmt tht y r dng th xct sm thng - trnng yr pnns nt trths - xcpt th cntxt n whch y r dng t rght nw ( dwn mrkt) srvs y t “prv” y r rght nd (r nyn lk m) s nt..

  Tht’s ll br… Nw g hd nd rp m nw n - y’d b rght ll lng.

• 24 johnnybigspenda // Oct 22, 2007 at 12:43 pm

  RE: % change vs. previous September… this measure could be quite mis-leading. Example: if September 2006 was one of the lowest September inventory levels ever then lets say inventories returned to ‘historically normal’ levels, as a % change, it would appear to be a HUGE increase although that increase would really only be a return to the norm. (caused by the small denominator)

  In our case, its likely that the pendulum swung from one extreme and now is on the way to the other… eventually the pendulum will return to the middle. (I admit that it will swing with a Newtonion consistency of equal and opposite amplitude to the ‘high inventory’ levels before we see normalcy)

  DJ: Can you post ‘absolute’ values instead of relative year over year?

• 25 wet, cold, and miserable // Oct 22, 2007 at 12:43 pm

  melonleftcoast…

  6 months? try 9+. many years the infamous summer never arrives. this town absolutely sucks. no one is mainstream. seattle urbanites hate sports and apple pie. its full of introverted, passive aggressive, pinheads who can’t drive. compared to the other “great” cities you mentioned, culture is non-existent. indie plays are NOT the the-a-ter. local music never recovered from grunge. try eating salmon, mussels, greens, shrooms, and berries almost all year long… NW wine is nice and one dimensional. europe is sooo far away. god, if I could do it all over again, I would have never moved here from the East Coast. what a mistake. folks who try to sell Seattle to outsiders are completely disingenuous and want nothing more than for others to share in their misery. no one wants to stay here. they’re stuck b/c they can’t sell their houses. please, stay where you are and visit the fam in late August when they’ll finally be in a decent mood:)

• 26 Alan // Oct 22, 2007 at 12:49 pm

  If you are to stay in your home for a while (e.g. > 5 years), I can not see how you end up losing.

  Very easy. I know people who have done it. It very nearly happened to me (and actually did if you take agent fees into account).

  Statements like that, which are verifiably incorrect, tend to lower the confidence one can put in your other opinions. Your lack of understanding how someone can lose money by owning RE for more than five years may be similar to your lack of belief in prices falling over the next few years.

  If you have a strong argument how current prices can be supported long term it would be welcomed and applauded here.

• 27 Mike2 // Oct 22, 2007 at 12:50 pm

  Tech jobs: this is a biotech and computer technology hub–

  We had a meeting this afternoon at work where the VP in my department said “this area has full employment in tech, the unemployment rate for programmers is basically 0, we can’t find anyone else to hire though we need more staff”.

  And it hasn’t rained here in a month. It was 85 degrees at lunch time. The leaves are turning and it is beautiful. You want cultural activities? DC is a few miles away.

  Yet just down the road, hundreds of homes are sitting on the market, vacant, with prices slashed to 2005 levels.

• 28 notabull // Oct 22, 2007 at 12:57 pm

  “What is your metric for rationalizing that we are in ‘unconventional’ times? Are you 90 years old and an expert in economics? So you’ve seen several cycles like this?”

  All you have to do is research the topic. Simply take a look at the Case Shiller home price charts over the past 50 or 60 years and take a look at prices since 2000. They have gone well beyond established (not by me) ratios of price:rental-income or price:wages values and are indeed in unchartered territory. You don’t need to take my word for it, just get out there the research the topic. You don’t have to be 90 years old to be able to look a subject and create your own conclusions.

  Anyway, most of the “experts” and economists have be wrong regarding the local and national real-estate bubble. They also missed how the subprime mortgage mess was about to spread across non-housing credit markets. Also, nine out of ten economists said the country wasn’t going into recession after the dot-com collapse. Too bad the statistics (GDP) later showed the economy was already in recession at the same moment they predicted we wouldn’t have one. In short, economists suck. If they were any good they wouldn’t be writing columns on MSN, they’d be out there running businesses and keeping their opinions to themselves. After all, if you tell people how the situation truly is (good, or bad) you lose the ability to gain an advantage over others.

  In addition, “creative financing” is WAY beyond conventional. Talk to anyone older than 40 about mortgages and what it used to be like. You had to have down-payment and you had to actually pay back the loan over the term of the loan (horror!). No interest only, negative amortization, stated income, or various combinations that layered those risks AND made them freely available to anyone with a pulse.

  “When you rent - your money goes down the drain irreversably, despite fluctuations in your home price that you’d be buying for right now for less (or more, or whatever). If you are to stay in your home for a while (e.g. > 5 years), I can not see how you end up losing.”

  During conventional times, I 100% agree with you. Hell, I used to own a house for many years. I’m not *against* home ownership or anything. The only reason I’m looking to buy right now is that I moved back to the Seattle area after being out of state for a while. If I hadn’t left, I would be one of those in the “don’t care what happens” camp sitting on my equity. As it happens, I’m sitting on a big bank balance instead, waiting for the right time to buy.

  However, during times in which house prices are going down (even a little) and when the prices are high, it just not make financial sense to buy if you’re possibly going to sell in 5 years. Think about the return on the down-payment that I’d be giving up. Instead of paying interest to bank, I’m getting paid interest FROM the bank! When home prices are stagnating, I’m winning, no question about it.

  Finally, I’m *not* doing the same as you. I’m actually looking at the data and forming my own opinions, and I’m not pretending they are fact. In my *opinion* (based on research) house prices in Seattle are likely to drop 10-20% over a few years, in real-terms (inflation adjusted). This is more like a 5-15% decrease in nominal terms. This is my opinion.

  When you come onto a blog and make statements of fact like “prices will not go down more then x%” you have to be expected to be challenged.

• 29 Angie // Oct 22, 2007 at 12:58 pm

  Mama—I’m sure you can understand if I’m being a little veiled, since the internets can be a little weird at times and we’re talking about my kids. Suffice to say there’s a school down here that is something of a magnet. The scores look just as bad as the “regular” schools—but what you can’t tell by a cursory glance is that a significant number of the student body are kept out of WASL testing altogether because the parents think standardized testing is BS. The state records those as scores of zeros and they are not dis-aggregated from the rest of the school scores, hence the overall scores are brought down.

  Only one school in the district actually came out of the recent school-closure debacle with a better building for an expanded program, and it’s in the south end…

• 30 Dave // Oct 22, 2007 at 1:25 pm

  I’ve said it before and I’ll say it again. Seattle is NOT a biotech hub. Last year we lost 3 of the 4 largest biotech employers in the city and AMGEN (the biggest) is laying off 10% of their workforce. We are a Biotech hub like Baltimore is Biotech hub - we aren’t.

  I will debate the point as you wish.

  Dave

• 31 The Bruce // Oct 22, 2007 at 1:26 pm

  Apparently realism can be depressive.

  Hooray for playing make believe! Its a natural anti-depressant!

• 32 Erik S // Oct 22, 2007 at 1:30 pm

  Melonleftcoast,

  Back in the the “golden age” (in my personal opinion, roughly the time following the “turn out the lights” of ‘71 up until the mid-’90s) Seattle had a really nice mix of livability (modest traffic congestion, affordable housing, jobs that didn’t require PhDs, wonderful natural surroundings if you could stand the rain) and big, or at least medium city amenities (in the ’70s Seattle gained the Mariners, Seahawks, Sonics, Pacific Northwest Ballet, and a tons of theater companies to add to the Opera, Symphony, and UW). It was a nice mix.

  These days, there are plenty of developments to please the status-conscious “World Class City”, but the city feels expensive, crowded, and soulless. To be fair, Lake Washington is cleaner now and so is downtown, but the livability has gone out the window. I am not surprised anymore when I hear that someone is moving to Portland.

• 33 Erik S // Oct 22, 2007 at 1:36 pm

  …and, in today’s Seattle, you get to listen to east coasters that moved here complain about the fact that Seattle isn’t on the place they left.

• 34 The Bruce // Oct 22, 2007 at 1:41 pm

  melonleftcoast -

  I’ve lived in Vegas, Phoenix, Orange County, CA - Central Valley, and CA - Bay Area..

  Have absolutely loved living in Woodinville since Feb. Favorite place we’ve loved. Love the rain, loved the mountains, the water, access to health food, outdoor activities galore… Trails abound.. And to me, 50* and misty is a positive, not a negative. Can’t really beat CA coastal weather, but who can? Don’t get the amazing scenery up here, and drawing in breaths of crisp, clean, evergreen-scented air is worth the extra cake I pay to rent here vs Phoenix (where we sold our home a year ago, but would be renting if we still lived there because I *hate* losing money). But I’m willing to rent here. Demand for Seattle is higher than on the immediate suburbs, but I have three daughters and we have been happy with Northshore school district so far (although class sizes are worrisome), but in my opinion education starts at home, with active parenting, regardless of a school’s pedigree. Give my kids a good pool of kids to choose friends from, and a responsible teacher, and we can make do by making sure our kids are progressing.

  If you’re thinking of moving to the Northwest, and have similar priorities, there is no place like it.

• 35 [troll] // Oct 22, 2007 at 1:42 pm

  ntbll - s yr rsnng, t s wll thght t bt n th cndtn tht yr prdctn bsd n yr bsrvtns bt whr th mrkt s hdd.

  t’s cl tht y’r sttng n lmp sm f csh - vn f t’s n 5% CD, y rn’t lsng … hp y ‘nl’ th rght tm t by thn.

  wsn’t rgng bt my ‘rghtnss’ - t jst rlly psss m ff whn ppl thnk thy “knw” r “sw t cmng”. Wht y “knw” s tht wht gs p mst cm dwn vntlly, r rnd nd rnd w g, r hwvr y wnt t ‘phlsphclly’ pt t - vrthng s cyclcl, vn th ntr f th nvrs (ccrdng t th ‘bg bng’ thry) - s frm tht spct, cn s hw y’r bttr ff nt byng… Y’r prlly sngl/n fmly, ’m gssng? Bst f lck wth tmng th tppng pnt.

• 36 The Bruce // Oct 22, 2007 at 1:43 pm

  Jeeps, I have got to get new batteries for the wireless keyboard.. excuse the pununkiation / grabamatical issues..

• 37 Chris // Oct 22, 2007 at 1:47 pm

  Dave,

  I’m interested in your point. Which three companies did we lose last year? I’m seeing the biotech hub (or rather hype) of SLU is becoming more of a corporate retailing hub

• 38 notabull // Oct 22, 2007 at 1:52 pm

  “I wasn’t arguing about my ‘rightness’ - it just really pisses me off when people think they “knew” or “saw it coming”.”

  Bubbleicious, that pisses me off too. Every person out there can only operate on their own assumptions and conclusions, and I’m operating under my conclusion that prices are going to go down. Recent history is supporting my conclusion (even in Seattle) and I’m hoping that things continue this way. If they don’t then I’ll buy anyway. :)

  Married, but no kids (yet) unless you count my needy dog - basically a permababy with fur and big teeth.

  All the best….

• 39 [troll] // Oct 22, 2007 at 2:03 pm

  ntbll - ’m gld y lmt yr ‘trthnss’ t jst yr wn ntrprttn f wht s vlbl t hnd, t th crrnt mmnt (nd tht’s s fr s ’d g t). ’v rd rnd ths blg - nd ths s nt th crrnt M.. f lt f ppl wh blg n hr. spclly nt sm tht thnk tht thr’s gng t b n 80% rdctn n prc n “crtn rs f th Sttl mtr r”… Yh - tht cld b, f rqs r rnns nvdd th .S. mnlnd, strtng wth Sttl… Sr, cld s prprty vls g dwn 95% thn…

  nywy - hp y by smthng y lk, rgrdlss f prc.

  Tk cr.

• 40 deejayoh // Oct 22, 2007 at 2:37 pm

  DJ: Can you post ‘absolute’ values instead of relative year over year?

  Johnny - the lower chart shows absolute values for inventory and pending sales (right hand axis). Only the “absorption ratio” is an index/percentage (left hand axis)

• 41 LeftOverpricedSeattle // Oct 22, 2007 at 2:40 pm

  I came to Seattle in 1975, when the Evergreen Point bridge cost a dime to cross in a carpool and a quarter if you weren’t in one. I finally left for the first time in 1996. I came back in 2001 and have now left again, leaving someone else to hold the bag on my last home.

  Seattle isn’t worth, to me, the skyrocketing prices, the congestion, the crooked politics, the KC Executive’s budget proposals, etc.

  There are a LOT of places in the US where the trees are green, culture is better, it rains enough, jobs (in my field) are available, commutes are easier, and prices are much more in line with incomes.

  As I see it, Seattleites are somewhat sheltered in their view of the rest of the US, believing that what you get in Seattle, you cannot get anywhere else.

  They are wrong, IMHO, but hey, I took the money and ran!

• 42 Rob Jellinghaus // Oct 22, 2007 at 2:43 pm

  Since most of us here tend to be trend-watchers and possible pessimists, here’s one big fat reason my wife and I are planning to move to Seattle (from the SF bay area) sooner or later: WATER.

  http://www.nytimes.com/2007/10/21/magazine/21water-t.html

  California and the entire Southwest (from Colorado on down to Mexico) are probably going to be REALLY hard up for water in the 21st century. I’ve got a two-year-old and a two-month-old. I want to raise them somewhere that isn’t a desert in disguise. 6+ months of clouds and rain? Sounds fantastic! Especially compared to 6+ months of NO RAIN WHATSOEVER! (Just look at Southern California, burning like a bonfire in a wind tunnel as we speak.) Combine that with the liberal politics and the high tech, and PacNW is looking like a winner to us.

  Of course, our neighborhood has already seen 10% - 20% actual price drops (e.g. the houses that sell are $100K off their $550K price levels previously), so we’re probably somewhat screwed since there’s no way Seattle prices will drop as much as coastal California. But hey, we bought our three-bedroom in Nov. 2002 for $380K, 30-year fixed with $40K down, and we paid off another $20K of equity line and $20K of principal on the jumbo (no “home ATM” for us!)… so now our house would have to drop to under $300K for us to actually be underwater on our mortgage.

  Assuming the current inflated market price for us is $500K (e.g. comps actually selling for $450K but no one wants to admit that’s the real market yet), that means we could handle a 40% drop from current levels before we’d get seriously screwed. And if we wind up having to move way out in the sticks (e.g. distant, distant Woodinville or something), so be it!

• 43 Ira Sacharoff // Oct 22, 2007 at 2:44 pm

  meonleftcoast,
  For a big city, Seattle is awfully pretty. It has montains nearby and water and lots of trees, and is very green and cool most of the time. Unemployment is low, and there are a lot of educated people here, and a big arts scene. Good film festival, good bookstores, good restaurants. A center of left wing politics ( good or bad, depending on your point of view).
  There are lots of things that are special about Seattle, but really nothing so special about it that will make it immune to real estate downturns. Some of the RE boosters here make it sound as if we’re not only special, but actually another world entirely, completely disconnected to the national or global economy.
  Seattle is special, but people are no less greedy, and have made the place that much less special by building like crazy, building houses with zero lot lines, building on slopes, converting tacky old apartment buildings into overpriced condos and filling in every conceivable spot with housing.

• 44 jdog // Oct 22, 2007 at 2:50 pm

  The NWMLS does not include much of that downtown condo inventory. The marketing companies typically list just a representative sample of thier inventory, may 10% or less.

• 45 James D. // Oct 22, 2007 at 3:52 pm

  Your interesting analysis is somewhat skewed for going back no further than 2000; arguably most of that period represents something of an anomaly. The historical context looks rather different if you look back as far as the 1980s (admittedly, it would be more work to dig up statistical data from that period). Most likely today’s market would look somewhat less bizarre against a fuller historical picture of what’s “typical.”

• 46 MacAttack // Oct 22, 2007 at 4:04 pm

  Hey Bub,
  We DO see it coming. I’m a homeowner, outside Portland. It’s starting to happen here. It will get you next quarter. P.S. winter is a great time to buy a house in the PNW because you can see if there’s water in the crawl space.

• 47 rose-colored-ghoulaid // Oct 22, 2007 at 4:04 pm

  “I’ve read around this blog - and this is not the current M.O. of a lot of people who blog on here. Especially not some that think that there’s going to be an 80% reduction in price in “certain areas of the Seattle metro area”… Yeah - that could be, if Iraqis or Iranians invaded the U.S. mainland, starting with Seattle… Sure, I could see property values go down 95% then…”

  I think you refer to one guy on this blog. So apologies from the rest of us who don’t believe in the 100% decline boogeyman.

  That said, I can’t believe we’re even having a debate regarding whether or not housing affordability is at a historic low in this region. It is. It’s a fact, and agreed upon by … everyone. Even the NAR has released announcements that they think affordability is a major concern for their members trying to earn a living.

  Finally, Seattle is special only in the way that every snowflake is special and every special child might grow up to be the next president. Can’t we get over this mindset?

  Hasn’t anyone else noticed that all popular references to Seattle (sports events, Fraiser, and ???) always play the same Pike’s Place fish throwing footage and then show the Space Needle?

  Let me be very clear. The only features of Seattle that are interesting to people not living here are a tallish 50 year old tower and guys throwing fish. Well, people like Starbucks Coffee. It’s not just those in London or New York City who aren’t interested, it’s people in San Diego, and Portland, OR. Heck, go to Bellingham, Yakima, Olympia, or Port Townsend and see who cares about Seattle.

  Yep, Seattle is a precious snowflake.

• 48 MacAttack // Oct 22, 2007 at 4:11 pm

  Bubbleicious: Go to p.25 of this to see Seattle’s market as of 10/4.

  http://www.realtownblogs.com/uploads/CentralFloridaRealEstate_BofA_Agent_9-07_Survey.pdf?ref=patrick.net

• 49 Garth // Oct 22, 2007 at 4:40 pm

  I am not a housing bull, or a bubblehead, but I still don’t understand how some of the commenters here think the same cascading foreclosure problems that are hitting Ohio, Michigan and parts of California are going to happen here.

  So far from everything I have read the places affected most by foreclosures and the ensuing large price drops seem to have similar issues leading to a sudden drastic decline (Stockton being the exception, as it seems to be more like cities surrounding Tokyo in the Japanese crash than Cleveland or Detroit today.)

  Most are frequently included in “Poorest Cities in America Lists”
  Large neighborhood developments were built, and now many homeowners in the same neighborhood are simultaneously experiencing financial difficulties.
  Median prices closer to $200,000 – 300,000 than the $500,000 we see here
  Substantial racial diversity

  Where in Washington has there been activity like that?

• 50 rose-colored-ghoulaid // Oct 22, 2007 at 4:40 pm

  Gah! I had an image in my last post. Tim, does the comment section not allow images? I saw it in my preview, but now it’s gone.

  Thanks.

• 51 rose-colored-ghoulaid // Oct 22, 2007 at 4:46 pm

  Garth, I doubt many are insisting Seattle will play out like the rust belt. But there are such a diversity of places in decline. Can we compare to the Rust Belt? Inland Empire? San Diego? Las Vegas? Phoenix? Florida? Washington DC? Dallas? San Francisco?

  What does it mean when all real estate is local and all locals are in decline? It means Seattle is a local too, and we are on the precipice now.

• 52 rose-colored-ghoulaid // Oct 22, 2007 at 4:47 pm

  oops (’locals’ should be ‘locales’ and add an e to the second ‘local’ as well).

• 53 on topic // Oct 22, 2007 at 4:51 pm

  Garth, have you heard of quadrant homes?

  the main claim here, though, is that prices here went up b/c of speculation and now they will correct back to the prices suggested by the fundamentals of the area b/c there is no money to be made speculating anymore, so there is no justification for a speculative premium.

• 54 Obsessed/In Exile // Oct 22, 2007 at 4:59 pm

  I am struggling with the urge to rush back there to buy a house at the moment!

  It’s because we’ve been babysitting this bubble since May of 2003, shortly after reading an article in the Economist that explained what we intuited. And so we rented. For us, mixed race couple, older, that has been difficult. We never fit the norm of renters–me unemployed, husband retired–a dog and two young children.

  I want to get into a house while the rates are down, and I guess I’m thinking that even if the prices go down, if we have a 30 yr fixed, and we can afford the payments–then it is better than renting.

  We first came to seattle in ‘89, Seattle’s halycon days. It was cool and provincial, now it’s slick and soulless as someone said.

  So why do I want to return? Community and because of our racial make up, and the mountains. And I like that I can have chickens and goats in the city.

  Worried about the schools, however. They all seem not good. Seattle has low property taxes, which reflects the state’s unwillingness to commit to public education. In NY, ME, NH–where property taxes are much higher, the schools seem to be better. Someone told me that the problem with Seattle is that it’s a libertarian town. This could explain the absnce of support for schools and public transportation–they voted down a referendum in 1919 to put in a subway–soo Seattle.

  The suburban schools, I noted, have classes that are too large, and I suspect that the same is true of the city because they spend so much money bussing the kids to their chosen school that they can’t afford to pay staff.

  I started thinking I needed to return to Seattle when I found the comparable prices here and considered that there is only a touristic economy here. And when you add on 5,000 to 6,000 in property taxes vs. 2,500–it makes a big difference in affordability–along with the high heating bills in the NE. You don’t need much heat in Seattle in winter. Just put on one of your fleece jackets!

  Regarding the city’s water supply, I am concerned that Seattle will run out of water. Its water comes from a dwindling snow pack. And during the dry season, Seattle is dry–note the brown lawns.

  What I like about Seattle is the culture–theater, ballet, early music, books and film–and the mountains.

  But you know–we almost bought about 10 houses from 03-05–we were the buyers from hell. We would make an offer, lie awake all night, and then find a way out. And to be quite honest, we were very hard pressed to find one suitable neighborhood, and the houses were disgusting–the ones we felt were in our conservative price range. Seattle does not have good housing stock.

  Yeah, maybe we can’t afford Seattle….And when I read the very valid criticisms of the city above, I remember why the bloom was off the rose for us and we packed out. (We left in ‘98 and returned in ‘03 and left again in ‘06.)

  Still, I may fly out in a day or two, go to the dentist, get my glasses repaired, get a med check up, and look at a house or two, and then, being reminded why we left, fly back here to the peace and quiet of the NE. Or find a job and buy one of those over-priced houses—at least they’ve been fixed up!

  It’s only paper and we can’t take it with us. Furthermore, I figure if the housing drops as much as some have suggested, there won’t be anything safe, except gold.

• 55 CliveL // Oct 22, 2007 at 5:08 pm

  on topic, I am not following the reference to quadrant homes here. They, I think, are the largest builders in this area.

• 56 jon // Oct 22, 2007 at 5:12 pm

  To: Rob Jellinghaus

  Consider renting for a while before buying. I think that’s good advice even in an up market. You never know how the job situation will work out, and it will give you time to hunt for the best house. The money you would have to pay to buy your way out of a lease is smaller than what you can save through a more careful house/condo search.

• 57 Garth // Oct 22, 2007 at 5:47 pm

  on topic,

  Yes I have heard of Quadrant homes, in fact I have commented on them on this blog and forum several times. Quadrant is owned by Weyerhaueser Real Estate, which is owned by Weyerhaeuser.

  http://www.weyerhaeuser.com/aboutus/facts/5.1_Wreco.pdf

  I am pretty sure they are the largest homebuilder in this area, and they did not go Dr Horton, Hovnanian’s or Lennar crazy here. Quadrant and the other home builders owned by Weyerhaueser provide almost 4 billion a year in revenue to several Weyerhaeuser divisions.

  I imagine they are tough to compete with as they probably bought the land 100 years ago, and build the house with wood and building materials from Weyerhaeuser.

• 58 Plissken // Oct 22, 2007 at 6:34 pm

  Anybody who doesn’t believe Seattle is an extremely desirable city needs a brain check.

  I lived in Europe for 20 years and I wouldn’t go back there if I was offered twice my current salary. Incompetent politicians (yes even compared to ours), high taxes, low quality of life, pollution, … and the list goes on. My dog wouldn’t even live in what I’ve seen referred to here as “world class cities”. Unfortunately I had to.

  I lived in the rural southeast for a while. It was nice enough. The weather was pleasant (save for 2 months in the summer when the heat and humidity will kill you if you spend more than 10 minutes outside). The locals are generally friendly provided you pretend to agree with the crap some of them spew out of their mouths. Underneath all that there’s a lot of ugliness and a lack of knowledge of the rest of the world that makes even the Europeans look smart. I don’t know if anybody knows that British show Top Gear. It’s a car show on the BBC. Recently they did an episode where the hosts bought sub $1000 used cars in Miami and drove to NOLA. One of their self-imposed “challenges” was to paint slogans that would be considered offensive to southerners on their cars and drive across Alabama (Hillary for President, Man Love Rocks, or Nascar Sucks). It started out as a joke but they were actually assaulted at a gas station. I don’t believe that would’ve happened in Seattle. People here would actually get the joke.

  Sure we have the occasional retarded-Italian-American-named-after-a-cartoon-character running for governor but hey, you gotta give those chimps who live east of the mountains the illusion that maybe they have a shot at running things around here. It’s either that or a full on remake of “Conquest of the Planets of the Apes”.

• 59 LeftOverpricedSeattle // Oct 22, 2007 at 7:24 pm

  Well, I am not saying Seattle is undesirable, but I think it IS overpriced for what it is and what it offers when you compare the cost of living to other, cheaper places.

  If someone else is willing to pay, more power to them (I cannot fault them, otherwise how would I have made a bundle selling my place last year?)

  I just decided life was too short to spend all that time commuting, dealing with traffic, taxes, etc. for a view of Mt Rainier on a clear day.

  It just wasn’t worth it to me, but each person has to put a value on what something is worth to them, be it time, cars, homes, etc.

  I considered my loss of time at home with the wife and kids more valuable than be able to say “I live in Seattle”, but that’s me.

• 60 Affluent Bitter Renter // Oct 22, 2007 at 7:26 pm

  “Sure we have the occasional retarded-Italian-American-named-after-a-cartoon-character running for governor but hey, you gotta give those chimps who live east of the mountains the illusion that maybe they have a shot at running things around here. It’s either that or a full on remake of “Conquest of the Planets of the Apes”.”

  Ahhhh… Seattle liberalism and inclusiveness….

• 61 Nolaguy // Oct 22, 2007 at 7:36 pm

  PIissken,

  Very nice how you comment on the lack of tolerance and acceptance for diversity in the SouthEast, but in the next paragraph you’re able to spit the same venom you’re criticizing when it comes to retards, italian americans, republicans and the entire eastern half of Washington State. Well done.

  See how many grins you’ll get in Seattle with a “Bush, Nascar and Hetero Love ROCK!” bumper sticker.

  Back on Topic:

  IMO, the dissapearance of subprime loans will only increase the inventory. And unless they raise the limit for jumbo loans, it will continue. Eventually, people who have to sell, will be setting the prices at the margin.

• 62 Plissken // Oct 22, 2007 at 7:41 pm

  Ahhhh… Seattle liberalism and inclusiveness….

  Actually, having lived in uber-conservative parts of the country I can say you’re better off being a republican in Seattle than you are being a democrat in the south. I’ve never heard of any seattlite being beaten up or losing their job for having a “W” sticker on their vehicle.

  We’re nice to retards here. We even let them have an AM radio station. Another great thing about Seattle!

• 63 Dave // Oct 22, 2007 at 8:37 pm

  Chris

  Okay - on the subject of Biotech.

  Icos laid off 550 (bought by Eli Lily for patent value only).

  Glaxo Smithcline has laid off about 200 over the last two years (Bothell company ID Biomedical).

  Amgen is laying off 50 - but has also stopped hiring and stopped construction on Elliot Bay.

  You might think small numbers, but these are the big players in Biotech in Seattle. Where are thsoe employees going to go? We don’t have the industry to absorb them.

  Many biotechs have gone to a “contractors only” model - as have alot of other companies. It isn’t too stimualting to job growth when employees are limited to being temps with limited contracts. Hard to be home owners when you don’t have health insurance or sick days either. Trust me, I’ve been there (never again).

  Zymogenetics is doing well as far as I know.

  So we have alot of biotechs under 10 people, and a few with some VC money that are praying that their one product gets to production so the owners can cash in. No, they don’t have any other products in the pipeline. As soon as clinical trials are done say good bye to the R&D people (those well paid people who can actaully afford houses). Neither of these groups can really stimulate anything like the housing market.

  Anytime a politician comes out and says that their city is going to be a biotech hub and brign in all this money to the city - they are lying. The cities that are biotech hubs are already biotech hubs. San Fran., San Diego, Boston, New Jersey etc.
  Dave

• 64 Crashcadia // Oct 22, 2007 at 9:20 pm

  http://online.wsj.com/article/SB119310205429367896.html?mod=mkts_main_news_hs_h

• 65 matthew // Oct 22, 2007 at 9:59 pm

  King county is caught up in the SUV turmoil. But I thought Seattle is special??

  Thx for the link crashcadia.

• 66 EconE // Oct 22, 2007 at 10:43 pm

  ditto on the thanks Crashcadia…

  I found this quote from the article to be interesting when they refer to SIV “lites”…

  “King County also invested in a risky form of SIVs known as SIV-lites that typically invest more than SIVs in securities tied to residential-mortgage securities, including subprime loans.”

  Who isn’t holding the bag? Be it an overpriced house, 401k’s and pension plans holding overvalued securities… there seem to be so many holes in this dike we’ll have to find an inconceivable amount of dutch boys to try to plug it.

• 67 B&W Nikes // Oct 22, 2007 at 10:43 pm

  Will condo wave swamp the market?
  “83 percent of the more than 1,200 new downtown condo units that came on line in 2007 sold. All of the more than 1,400 downtown units built from 2000 through 2006 have sold, according to market research firm Realogics.”

  Does that mean that almost as many condos were built in 2007 as were in all of 2000-2006? Am I misreading bigtime or is the story bogus? Weird.

• 68 Crashcadia // Oct 22, 2007 at 10:46 pm

  EconE
  One might say it leaks like a siv.

• 69 Economic Crisis // Oct 22, 2007 at 11:21 pm

  The amount of impressionistic crapola in this thread is, um, depressive. Look, children, whether it’s a house or a stick of gum, people make two decisions about every single thing they buy: What they like, and what they will pay. It’s obvious that the Seattle area is desirable as a place to live. But that doesn’t mean people will pay stupid prices.

  Now, back to inventory and sales number. I’m on vacation out of town right now, but when I get back I’m going to post the numbers from Magnolia that a realtor publishes every month. Inventory has gone way up since early summer and sales have gone down.

  Interestingly enough, that seems to be the same in one of my old neighborhoods in the Boston area. I drove through it today and was struck by the proliferation of For Sale signs everywhere. People who were on the fence are running for the exits, but mortgage money is drying up and foreclosures are rising.

  It’s not just a California phenomenon. It’s everywhere. In a different of my old neighborhoods, this one in Boston itself, a condo is being auctioned off. Not one single unit sold. Not a one. And we’re talking about a luxury building in a pretty desirable area. This stuff is spreading, whether you like it or not!

• 70 Economic Crisis // Oct 22, 2007 at 11:24 pm

  One other thing: In the one Boston-area neighborhood where I noticed all the signs, I stopped by a realty office. There were a couple dozen ads posted in the front window. About half of them had notations that the prices had been reduced. Prices are still too high in Boston just as they are in Seattle. We are only in the early stages of the crash.

• 71 what goes up comes down // Oct 22, 2007 at 11:55 pm

  Economic Crisis is right on, for all those people who keep “selling” the same old, tired crap of “if you hold it for >5 years it won’t matter” get a clue. Why would any person with half a clue not want to wait now when the odds and I stress odds are you can buy next year for 10% less.

  Pretty simple buy later at a reduced price than stay in the house for more than five years and have greater equity.

  Btw, I sold about 2 years ago, made a great return, moved to Europe and guess what Europe is pretty nice too, will I return to Seattle — someday for sure, Seattle is nice no doubt. But I won’t make a stupid financial decision based on “nice”.

  After all it is a market and right now supply is up, demand is down and that means one thing for prices — period.

• 72 johnnybigspenda // Oct 23, 2007 at 7:23 am

  I think there is a significant amount of pent up demand. People are in ‘wait and see’ mode. Why would I upgrade my condo to a bigger house right now when I know prices are coming down? Most of the demand in the housing market comes from people moving from city to city and even moreso from people upgrading in the same city. (first time home buyers are a much smaller % of the market and only drive a certain price point). Some would call these same city buyers ‘discretionary’ since they don’t ‘have to’ move, they just ‘want to’. At this point I would be taking on more risk since the same % drop on a bigger mortgage means a bigger absolute drop. Plus, everyone is waiting for a ‘deal’.

  I would bet that almost all of the ‘discretionary buyers’ are going to sit it out for the next few months. In my opinion, they will become less discretionary as time goes on (more kids, wife, access to schools, ect will drive them to buy a house somewhere).

  What % of buyers do you think MUST buy now vs. WANT to buy at some point? Anyone who only WANTS to buy is going to wait it out… I think that is a significant portion of demand.

• 73 Angie // Oct 23, 2007 at 7:26 am

  Dave—you’re probably one of those people who thought that the dot-com bust meant that all that silly World Wide Web stuff was all washed up, too.

  Businesses rise and fall and reconstitute themselves. Happens all the time. Even as I type there’s a list of job openings as long as my arm over on the wabio web site. Someone (many someones) are still hiring.

  Seattle’s got a huge concentration of life sciences research expertise in stable, academic or at least nonprofit institutions (UW, Hutch, Children’s, Benaroya, SBMRI, Institute for Systems Biology). They’re the petri dish for business development and biotech companies rise and fall outside this domain. People move back and forth between private and public institutions, to the benefit of both. And, importantly, people come to Seattle to learn or work in science, and decide to stay even when their job or circumstances change, because it’s a great place to live! That generally doesn’t happen in, say, Richland.

  When people in general talk about “biotech”, they’re talking about both public and private institutions. Buildings that need lab space in lieu of office space. Seattle has been for years, and will continue to be for a long time to come, a magnet for well-educated and generally well-paid science workers.

• 74 notabull // Oct 23, 2007 at 8:52 am

  “What % of buyers do you think MUST buy now vs. WANT to buy at some point? Anyone who only WANTS to buy is going to wait it out… I think that is a significant portion of demand.”

  But who “must” buy? I’m renting right now, and I want to buy. But I can’t imagine a situation in which I absolutely MUST buy. I have a dog and two cats, and even if the only rental I can get is crappy, in the middle of nowhere, and overpriced, I still don’t HAVE to buy.

  I think that’s the difference between sellers and buyers right now. Yes, there is pent-up demand. Not sure how big it is, to be honest. Regardless, I feel that pent-up demand is all very nice, but you’re going to need a down payment, and you’re not going to get that suicide loan that you could have got back in April.

  You can *want* to buy that 700K rambler all you like, but the bank’s not going to lend you the money any more. (unless you have money, income, and a good FICO, and don’t mind the Jumbo loan rate, etc etc. i.e. MUCH smaller buyer pool than before)

• 75 SunTzu // Oct 23, 2007 at 8:52 am

  Angie,
  What’s this monomania about Seattle’s biotech? You seem to think biotech will be Seattle’s next big thing just like grunge rock or starbucks once were. To become a center of excellence a city must attract enough intellectual capital plus there must be a sustaining business “eco” system. Look at SF. The 2 great univ. there Stanford and Berkeley alone attracts international intellectual capital. There are Nobel winners in their faculties. They produce comp sci, elec eng, and comp eng. students who are first caliber from high SAT, GRE scores. They either start new companies or become workers for cutting edge established companies. They have venture capital firms to support new companies. And the companies feeds off of each other meaning Google will probably but hardware from Sun and Intel. In essence, it’s a self sustaining business eco system.
  I hate to tell you this the best and cutting edge bio research environment is not here in the US because there are certain people against stem cell research. The best bio research (and bio entrepreneur) environment are in Singapore, S. Korea, and Europe.

  How does a frog in a well looks at the world? Only thorugh a small opening.

• 76 matthew // Oct 23, 2007 at 9:39 am

  angie,

  I would argue that the tri-cities area is growing faster than Seattle. Nice jab at Richland though.

• 77 Dave // Oct 23, 2007 at 9:57 am

  Hi Angie;

  Since you started with an insult I will follow your example: You are a clueless dimwit when it comes to commenting about the biotech industry in Seattle.

  I’ve been in the industry more than 10 years at this point and have worked for several different employers in both the for profit and non-profit worlds. Try to pay attention and keep up.

  The Seattle Biotech communtiy (indeed the entire PNW) is NOT doing well. We are not a Biotech Hub. San Francisco is a Biotech hub - in the city alone there are over 300 jobs in Biotech. The website you referenced is a good indicator for the PNW - almost all jobs in Biotech in WA (and many in ORE and some in CA) are ususally listed. We have at most 125 in the entire state. Now I didn’t see Wazoo in the listings so unless you are making the argument that Pullman is a secret biotech hub, it simply isn’t true.

  Okay - so we certainly don’t have near the number of listings city to city. Check out Biotech in California - there are jobs listed in the thousands.

  Sooo….. keeping up so far? We are a small player in the biotech market.

  Now we work in the quality of the jobs that are available. Did you know most of theindustry is moving to the Microsoft contractor model? 1 or 2 one year contracts and you are out. How great a motivator do you think that is for peopel to move here? Oh yeah - no benefits either.

  Ask anyone in Biotech how easy it is to get a job in Biotech in Seattle. Odds are if they have ajob they will get a worried look in their eye and say it isn’t too easy.

  The Universities you say? Yes, absolutely they hire people. for usually starting between 30-35,000.00/year for experienced people. People with no experience? Wecloem to be ing within spitting distance of the poverty rate. Univeristy employees are usually desperate to get into industry simply because they are not paid enough to be able to live here.

  And lastly? i ahev travelled alot in the uS and abroad going to differnet Biotech companies and regions. Every single city large enough to have an office park is pitching the idea that Biotech will come along and generate all this new business. But we have U Dub and Fred Hutch - you might say. Not to insult those institutions but there are alot of top notch instituions in the US and abroad. The Harvards, Yales, Johsn Hopkins, the Baylors, UC system, the Northwests, the Stanfords, the Berkleys.

  So what does this mean?