http://www.heraldnet.com/article/20071221/BIZ/301888438/1005

In 71 when the billboard was posted, Boeing had cut 43,000 jobs over the last YEAR at a time when Boeing employed a far greater percentage of the residents of the region.

http://en.wikipedia.org/wiki/History_of_Seattle_since_1940#The_Boeing_Bust:_1970_-_1985

Even then:

Quite likely, Seattle evaded the fate of Detroit through being a port city with a large number of highly educated, skilled workers. Seattle industry did slightly better than the national average during the rest of the 1970s; nonetheless the boom decades of the 1950s and 1960s had been brought to a decisive end.

Microsoft’s profit last quarter was more than google’s revenue, and Microsoft’s revenue streams are considered more recession proof historically than advertising has been, though google’s advertising methods are newer without historical data.

Based on current numbers I would not bet on either of those companies negatively affecting the economy of the region dramatically within the next 10 years.

Yup. We could see a crash like that here again. Companies may cut back on software costs during a recession. Boeing is selling more efficient planes, but they might or might not get lots of orders. Depends on the state of the airline industry. Traditionally, airlines have gone nearly bankrupt in recessions. I think it’s at least possible (thanks to the way the Fed has created and handled this nightmare) we might see a major depression now instead of a recession. The 70’s may look like good times before this is over.

I hark back to the halcyon days of 2000 -2002 when stocks become so much more affordable. I can’t remember what I did with all the money that freed up.

Leave emotion out of it? I pointed out that median prices are already 10% off their peak. Oops, sorry to get so emotional again.

Excellent Posts – Tim should reprint them at the start of every discussion.

Raminder Sandhu
http://www.500realty.net

Pistol Pete Maravich was my childhood idol and I even wore the baggy sweatsocks throughout my high school and college career so it is not an odd handle – it’s a chosen one. Pistol was revolutionary with his style of play.

Let me try and spell it out clearly – 10% +- will be the variance for 2007 sfh median puget sound avg vs 2008 sfh median pugest sound.

I’m not calling for 20%. I”m just saying we’ll see positive appreciation (moderate) and a return to the 3%-5% appreciation historically. I understand that if the market doesn’t collapse, then this blog ceases to exits. There is always an agenda and our host has one. He is not unbiased. Unbiased doesn’t get you on the radio. Try to take the emotion out of your view and look at the situation rationally — it’s not like everyone in Puget Sound is losing their job and moving to another state. I’ll be quiet now and read the emotional attacks.

For now, see you in Jan after the latest numbers are reported by the MLS.

I love this blog by the way. I have turned numerous friends on to it.

Average for calendar year 2007. year over year average change from end of 2007 to end of 2008 will not be greater than 10% either way, up or down. My opinion, right or wrong, is things we’ll tighten and we’ll actually see appreciation in the Puget Sound region for 2008 vs 2007.

Pete, you’re nuts. You’ve also chosen an odd handle. The real Pistol Pete died of heart failure at age 40 despite being in excellent condition. He played in the NBA from 1970-1980. Here’s a very ironic and sad bit of trivia.

At the age of 25 and years before his death, Maravich told Pennsylvania reporter, Andy Nuzzo, “I don’t want to play 10 years in the NBA and then die of a heart attack at 40.”

For what it’s worth, you suggested that all the bears on this page will be way off at predicting the market has already proven to be inaccurate. I can’t find the link, but the forum contained a bet regarding when the market would turn. Overwhelmingly, posters were correct within a few months. So it seems your predictions have already proven false.

Didn’t you take ECON 101?

Keep sticking your head in the sand.

Y’all missed the point, which was, wait until the Fed drops int. rates, so that the contrarian fund drops 15%, which will be a good time to buy it.

Your single story 1955 rambler in a nondescript suburb without a view isn’t the “dream” home for anyone. People may enjoy living there but it’s an entry-level place, the kind of home that is typically bought by folks just getting into home ownership.

These are the people who make perhaps $50,000 or $60,000 a year between the two of them. Those are folks who should be spending $120,000 to $150,000 or so for a home.

It’s very easy when you make a lot of money to lose sight of the fact that many many more people don’t. It’s also easy to forget that many of your neighbors in your $600,000 home actually have no business being there–and when their HELOC runs dry, it’s not just the leased X5 that will have to go back.

STOP BEING A LEGEND IN YOUR OWN FREAKING MIND, GET OFF YOUR ASS AND GET IN THE GAME!

Pot, kettle, black…

and

Don’t pop a vein… screaming on the internet is about as useful as waving to your blind neighbor.

Share of New Loans with ARMS (2006 Q1)
Seattle= 47.0% National Avg.= 28.0% Rating: Unfavorable
That was a line in their own talking points tool kit back in July of 2006. Wonder what the relative activity has been through the rest of 06 & 07? We can really start thinking about the post 2009 local reset schedules, I don’t think 2008 is going to be the lowest point in the valley by a long shot.

Tim is there anyway you can get hold of their most recent “analysis” and drop that PDF in the Library? (The lib is a great thing – thank you)

but real estate is more like hunting than basketball. you only get one shot, so you have to keep your eyes open, know what you’re looking for, and be patient.

A permanently high plateau, perhaps? :)

Good luck with that theory. Even the cheeriest of the cheerleaders in Seattle real estate is hardly optimistic and talks about “returning to normal appreciation” or “price stagnation”.

The case for prices to *continue* downwards is significantly stronger than for some kind of rebound and continuation of the boom.

Because housing only ever goes up, silly! Wake up, smell the coffee, and buy buy buy! Stop sitting on the sidelines, coward! Get some balls and buy! Even if prices go down 50% you’ll still be fine over a 30 year horizon. ;)

We had 4 straight years with 10 to 15% YOY appreciation… why is it only possible to have one 10% drop?

It just is, okay? Sheesh.
</sarcasm>

Demand is relative to supply. Less people selling and moving up to bigger homes. Less new construction. Yes, tighter loans, less demand. However; my point is that the market will achieve equillibrium as these and other factors adjust. It’s not always a peak and valley scenario.

Wouldn’t having a huge peak necessitate a similarly large valley to achieve equilibrium, though?

The one consistent thing I’ve heard from those who might be dubbed cheerleaders is that the 100+ percent increase in the last 5 years was perfectly normal, yet a 50% decline the next 5 years is impossible. The rationality varies, and the measure used varies, but it’s always there.

Really folks, anything more than 10% decline is a fantasy of the non property owner. Demand didn’t leave, it is just adjusting.

We had 4 straight years with 10 to 15% YOY appreciation… why is it only possible to have one 10% drop?

on December 21st, 2007 at 8:51 am

“Pistol Pete”

These are ETFs not stocks. So in order to “Talk them down.” You would have to expect a message board could somehow damage the entire worldwide commercial real estate market. If you want to “talk something down” I would try a penny stock.

Michael – It was sarcasm. I was talking to the comments about housing, not the ETF’s. One way to short the housing market is via financials, builders, etc.

These are ETFs not stocks. So in order to “Talk them down.” You would have to expect a message board could somehow damage the entire worldwide commercial real estate market. If you want to “talk something down” I would try a penny stock.

I should be more specific too. King County SFH median prices are 10% down from July SFH median price. I’m also talking about sales and not asking prices.

I’m not sure what a “2007 avg median price” is. Does that mean the mean of the medians for each month of 2007? If so, prices are probably only down 5% or so (as we’re back to the same price as November 2006, which is probably almost the same as January 2007, if I had to guess).

Regardless, prices are either down the 10%, which you believe to be the maximum and foolish to think of declines more than that. Or we’re halfway down to your 10%. Since July.

Merry Christmas

Amarjit Sandhu
http://www.500realty.net

Wow. Look at all these predictions, sounds like a short seller trying to talk a stock down so they can close their position. Really folks, anything more than 10% decline is a fantasy of the non property owner. Demand didn’t leave, it is just adjusting. Price/Supply mechanisms will take over. How come the inventory isn’t climbing as people panic and try to exit the housing market…cause they aren’t. They’ll stay where they are, the building will slow and in less than 12 months we’ll here how there isn’t anything decent available to buy. Historical trends are not always meaningful in a global economy with changing population demographics. No substitute like low interest rates to spur home buyers off the sidelines and into the markets.

Actually, demand did leave…at least realistic demand did. Pop quiz, a city has 100 residents, what’s the demand for cars in that city? The answer is it greatly depends. Are there 100 families of 1 or 25 families of 4? In 1950, total demand was maybe 30 cars. In 2007, total demand in this make believe scenario is maybe 110 cars.

So the population of King County hasn’t changed. Does that mean demand is the same? Nope! Realtors are blaming bad national news for LOWER DEMAND. That’s right, demand can change with no corresponding change to the real world. But we’ve seen real world changes, like changes in lending standards. This is lower demand.

Didn’t his parents teach him anything? His four letter words convince all of us on the blog, he’s about as persuasive as bull in a china cabinet. Don’t believe a word the buffoon says.

Merry Christmas everyone, most of you are great bloggers!!!

Interesting, as prices are already down by 10% since July, so I suppose that a 0.1% decline from NOW is a fantasy? Do you actually follow the market?

Not a realtor. Own one piece of real estate and that is my house that I bought 12 years ago and will own outright in 4 more years. Rates are already at historical lows. Most of the market is made up of people who want a home to live in. They’re not spec buyers nor are they all subprime no doc loans. Just like a stock, people will buy when the price and yield are attractive (dividend paying). Same for a house. Price adjustment and lower rate = marketability.
Many different entry points based on personal situation but end result is demand will increase again. The market doesn’t have to collapse, it will do as most free markets do, adjust to conditions and return to normalcy. See you this summer

Ray Pepper
Broker
http://www.500Realty.net

Do you even read what you right? For one moment try this experiment — Think.

“STOP BEING A LEGEND IN YOUR OWN FREAKING MIND, GET OFF YOUR ASS AND GET IN THE GAME! STOP "female dogging" ABOUT HOW PRICES ARE UNREASONABLE (YOU CAN FIND THEM REASONABLE IF YOU LOOK HARD ENOUGH).”

Are you that stupid — I guess your are because you wrote that trash. Get in the GAME? Is that the best you can come up with?

Now I know for certain come spring time the S will hit the fan. The more and more frantic some of the post here get the better the real indication that it is starting to sink in with people the “THE GAME” is OVER.

Let the flowers of spring time bloom because the FOR SALE signs surely will. :-)

The flipside – masturbators to blogs like this, who ALSO remain legends in their OWN mind because their FICO is 730 and they earn a living like everyone else, think homes should be given away free! No, let me rephrase that – they think they should be at “DECENT” prices, meaning, a price they WANT/EXPECT for the home they WANT/EXPECT, which usually is never realistic (much like the homeowning legends selling their homes for a ridiculous price).

When people STOP being legends in their minds – they manipulate the price so the home sells, and the other set, leaves this blog and spends their time talking to a mortgage broker (not necessarily a bank, who actually pays their employees whether or not they get business).

STOP BEING A LEGEND IN YOUR OWN FREAKING MIND, GET OFF YOUR ASS AND GET IN THE GAME! STOP "female dogging" ABOUT HOW PRICES ARE UNREASONABLE (YOU CAN FIND THEM REASONABLE IF YOU LOOK HARD ENOUGH). STOP "female dogging" IF YOU CAN’T SELL EITHER (YOU CAN SELL IF YOU FIND THE SELLING PRICE – LOOK HARD ENOUGH FOR IT, AND IT WILL COME).

That means the eastside 750 last year is 675-695 now (I bet that’s about right on actual closings) and that house will settle in at about 595 (real deal)-625 (patient seller). The 450-475 fixer back to 395. West Seallte will start having some 295 bungalows fixers back on the market. Some people will get creamed, but most will be fine. If you bought recently you need to settle down and enjoy your home for a while.

Obviously there will be situations where some houses will sell very very low, but that will be the exception not the rule
..IMHO

Is that enough blood letting? Probably. As Tim says that is an even bigger drop considering inflation.

What is good for everyone is that everything will get back to being at a decent pace. Dallas spent from the early 80’s until the late 90’s for meaningful appreciation after it had a boom/bust local market.

A drop then slow steady appreciation at 3-4% a year for the next dozen years would be the best thing for everyone, and I bet is the end result of all of this…