Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

98 responses to “Poll: What’s your new year’s housing resolution?”

  1. Cougar

    I am looking forward to buying a home this year. Vast selection to chose from, I’m pre approved with Wells Fargo, and I love to shop for a good bargain. With all the knowledge tool sites available on the web I will know when I see the right home for me.

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  2. Mama

    we’ll also probably buy…not sure if it will be in WA though ;) We’re also preapproved but I can’t find a house that I think is worth the prices around here.
    Does anyone really have a _resolution_ to buy? I’m sort of with Cougar — if we see a home that’s priced right and we like, we’ll buy it…but I always wonder about the people who “must” buy (yes, I do have a 90lbs dog and a few kids)

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  3. Ira Sacharoff

    I’ll just mutter profanities as I realize that my property taxes are increasing on my home that’s losing value.
    And will continue to monitor and maybe buy tax foreclosed lots , out of state.

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  4. Tom

    Ira,

    What are property tax increases (decreases?) linked to up here? What would like take for them to go down?

    – Tom

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  5. Jonny

    DECREASES? Hehehehe.

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  6. Jonny

    “What would like take for them to go down?”

    People would have to behave like financially responsible adults. In other words, it can’t happen.

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  7. Ira Sacharoff

    Property taxes are supposedly linked to assessed valuation…they have “ratables’ which state how many dollars per thousand dollar valuation they can charge, like 10 dollars per thousand , so if the assessed valuation goes down, they can find a way to raise the valuation to say 12 dollars per thousand. Then there’s stuff that the voters vote on seemingly every year to add to the property tax, for schools, firefighting, libraries, parks, etc, which doesn’t make a lot of sense to me. shouldn’t parks, schools, libraries and firefighting be fully funded and not have to depend on a pissed off electorate?

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  8. Tom

    Thanks..

    So. Basically it’s like just about any other tax.. it can go up, but it really can’t go down.. maybe just up slower…

    (sigh)

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  9. David McManus

    Hey, it’s nothing but liberals up here, so what do you expect? Taxes going down, hah!!

    Get ready for the state income tax!

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  10. Lake Hills Renter

    Enough with the political bashing already. Christ.

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  11. David McManus

    Countless comments on this blog have slammed conservatives and Repubs, but yet when I call out libs, it’s “enough already”?!?

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  12. biliruben

    “Get ready for the state income tax!”

    I wish. Too many bone-heads willing to sell their children’s future so they can continue to use their money to buy flat-screens and Hummers for an income tax or some other sane, fair and progressive taxing method to ever be politically viable in this state.

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  13. popcorn

    Our New Year’s housing resolution –
    Stay away from open houses, real estate ads, real estate spin, and real estate promotions of any kind until the bubble has hit bottom. In the mean time, save, save, save.

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  14. MisterBubble

    Tim:

    While you’re in FL, pick up a few condos for me. I hear they’re cheap now.

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  15. Ben

    David McManus –

    People have been slamming liberals and conservatives, democrats and republicans. Seems like some people want to blame the politicians and parties that they hate for everything they don’t like.

    With the election season starting to fire up there will be BS about politics everywhere you look. Please don’t bring it here. There is already a dearth of intelligent discussion about real estate in this area, I don’t want the best source to be polluted.

    Please don’t act like a pariah because I don’t want to listen to politics here.

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  16. Cougar

    Popcorn,

    You might miss out on the “blue light specials” that agents will have hourly due to high inventory on the market! As far as taxes it’s part of the purchase equation, as well as HOA dues etc. Puget Sound area has ballooned like a Blow Fish the last few years. Now it’s time to do some purging and reasonable (not cheap) buying.

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  17. Lake Hills Renter

    “Countless comments on this blog have slammed conservatives and Repubs, but yet when I call out libs, it’s “enough already”?!?”

    Where did I say anything about either side? I said it was enough already — the whole lot of it. You’re the one that brought it into another thread, so I called you on it. I don’t care what your or anyone else’s slant is, I just don’t want to hear it. It has little to nothing to do with housing.

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  18. crystalball

    A “blue light special” in Seattle or Portland in 2008 will be in the “bargain basement” at 20% to 30% off sometime between 2010 and 2012.

    For example, a $600K house in 2008 will be $420K to $480K in 2010-2012.

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  19. johnnybigspenda

    Happy New Year!

    Take a look at the inventory level tracker. Its back to 2003 level according to the Tim’s last report:

    http://seattlebubble.com/blog/wp-content/uploads/2007/12/kingcosfhinventory200711.png

    It should start rising again this month… it will be interesting to see how much it diverges from historical levels.

    I still don’t really like looking at inventory as a measure though… I think there are A LOT of people ‘fishing’ right now, seeing if they can sell at what they ‘think’ their place is worth. If they don’t sell, they will likely just keep it since they bought the place for $250K in 2002 or whatever and its unlikely that they would be able to upgrade for less than that.

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  20. geon

    I put down rent, but my wife will put severe pressure on me this year to buy, having sold in Sept. of ’05. I’d told her we could sail off with big bucks if we continue to pay our current housing cost for 4-5 more years. Well, we’ll see how it plays out come mid-year.

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  21. incessant_din

    Nice find, The Tim. If that’s just one agency’s inventory, then Florida really is as toasted as I’ve heard. It should be interesting now that they have started lowering prices en masse.

    I was looking at the San Diego market this morning, and the asking price reductions are finally starting in earnest. People are just chasing the market, though. I figure San Diego and Florida are about 12-18 months ahead of the LA and SF area markets. Seattle is still another 18 months or more behind those. Nice to see 2-3 years into the future.

    Of course, no way did Seattle boom as much as those other markets, so falling should be somewhat muted as well. We’ll see if this interest rate/foreclosure abeyance talk slows the fall in these bellwether markets. If so, maybe time to buy in Seattle will be sooner. I doubt it, but worth watching.

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  22. Buceri

    Taxes are never cut McManus; they are simply postponed. Especially when you have a $9 trillion debt. Kind of like the credit card bills arriving at home. You can transfer the balances for so long, before you have to pay them.

    Really looking forward to the first trimester when homes that got pulled off the market get back in. How long before we hit 11000 again?

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  23. MisterBubble

    Of course, no way did Seattle boom as much as those other markets, so falling should be somewhat muted as well.

    Maybe, maybe not.

    There’s a school of thinking that the last city to fall will be worse off, because there will be a lackluster/depressed national economy to go with the inevitable decline in home prices. Basically, all market support will be gone, whereas the first cities to falter at least had other economic metrics going their way….

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  24. Gary

    It might be daring to say so, since this blog doesn’t seem particularly seller-friendly. But, I’ll (somewhat sadly) be selling in 2008. I say “somewhat sadly,” both because of the market and because I’m going to miss it here terribly. My wife and I have to head back to the East Coast to be closer to family due to a lot of different issues.

    As for the sale, I’m not looking to soak anyone or make a killing. Just hoping to do okay (meaning… just find a seller willing to pay a reasonable current-market price for the house).

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  25. Markor

    Our New Year’s housing resolution –
    Stay away from open houses, real estate ads, real estate spin, and real estate promotions of any kind until the bubble has hit bottom. In the mean time, save, save, save.

    Of course you won’t know the bottom hit except in hindsight, so you’ll start looking on the upswing, with a new lower bottom still possible.

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  26. Cougar

    What is the formula to price a home today to sell? It’s easy to say “price it right and it will sell”. Does one set a current market price and keep reducing it until a buyer says yes?

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  27. betamax

    I might buy in ’09, but not likely sooner.

    And Markor: it doesn’t matter if people miss the absolute bottom; there’s a huge difference choosing not to buy in the midst of a bubble (as in the last few years) and waiting for the technical bottom before buying.

    The fundamental bottom is when houses cost 100-120 times rent. That’s close enough to market bottom to buy in.

    In other words, your post is just rhetorical nonsense.

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  28. Markor

    What is the formula to price a home today to sell? It’s easy to say “price it right and it will sell”. Does one set a current market price and keep reducing it until a buyer says yes?

    That’s most of the strategy. But buyers are irrational, so there are other important factors. The current market price isn’t an average of what comps are listed for; it’s what a buyer will pay, so you won’t know the current market price until after you list it. If you don’t price your house right to begin with, even after you reduce the price to the right price many buyers will assume that it’s a dog, based on the idea that someone else would have bought it by then. Some buyers may not even see the price reduction, because their internet searches show only newly listed houses. So the best choice is to underprice the house (based on comps) initially.

    Also many buyers won’t consider a house that needs even 2% of the price in upgrading, even if the price is 20% off, and a subset of those buyers will overpay for a staged house. Someone could end up paying you $500 for that apple pie smell.

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  29. Markor

    And Markor: it doesn’t matter if people miss the absolute bottom; there’s a huge difference choosing not to buy in the midst of a bubble (as in the last few years) and waiting for the technical bottom before buying.

    I didn’t suggest otherwise.

    The fundamental bottom is when houses cost 100-120 times rent. That’s close enough to market bottom to buy in.

    Has that been the case at any time in Seattle in the last 20 years? 30 years? The price-rent ratio can fall by rents rising while house prices stay flat, even if incomes stay flat too, so I wouldn’t necessarily call a return to some historical price-rent ratio a “bottom”.

    In other words, your post is just rhetorical nonsense.

    I don’t see how you’ve made your case.

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  30. Markor

    I put down rent, but my wife will put severe pressure on me this year to buy, having sold in Sept. of ‘05. I’d told her we could sail off with big bucks if we continue to pay our current housing cost for 4-5 more years. Well, we’ll see how it plays out come mid-year.

    Maybe you could appease her by renting a nicer place that would still let you save loads of $$ if house prices fall, say, 5+% annually. If you’re already renting such a place, then, out of curiosity, why does she want to buy?

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  31. mike2

    I think there are A LOT of people ‘fishing’ right now,

    Really, who are the fishermen? The main group that will fish for any extended time are the recently retired.

    Kids have gone off to college and into the workforce, no job to commute to. They can wait a few years before selling.

    The “fisherman” group will grow substantially as Baby Boomers enter retirement.

    But how long will they hang on to overpriced costal properties before settling down in a retirement destination? Time will tell, as it has before.

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  32. Markor

    The “fisherman” group will grow substantially as Baby Boomers enter retirement.

    Baby boomers don’t factor substantially into my financial thinking, because each one of them is to be replaced with 2+ kids/immigrants.

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  33. Markor

    Oops, I mean each couple.

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  34. Geode

    I just cant wait any longer. Its time to buy a house after 7 years renting. I know I will take a bit of a beating, but hopefully not much.

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  35. Peckhammer

    Poll: What’s your new year’s housing resolution?

    I’d take it, but there’s not a choice for our situation: Homes paid off, comfortably enjoying properties in three states, and being a millionaires by not buying into this crazy voodoo market.

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  36. patient

    I will feel content with watching my savings/downpayment grow and prices to decline in 2008, thank you very much!

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  37. Ira Sacharoff

    Gary,
    it’s not like the real estate market is dead here. yes, inventory is up, sales are down, and prices have started coming down, but houses are still selling. slower, but still selling. Now might be a better time to sell than a year or so from now,

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  38. popcorn

    Our New Years resolution for 2008 is to stay away from real estate. The world’s largest housing bubble just popped.

    Buying a house within 3 to 10 years might be OK if… a suitable well-built house is priced about 200 times rent per month; you can pay cash — or the mortgage is 15 year fixed and payments are no more than 25% of your monthly take-home pay.

    15 year fixed or cash is the way to go. We agree with Dave Ramsey on this.

    Dave Ramsey’s home buyer advice: http://www.daveramsey.com/etc/realestatecenter/index.cfm?FuseAction=dspContent&intContentID=8594

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  39. Olaf

    Talk about a severe case of Fox News poisoning….

    Believe it or not, McManus, the nation is not divided up into right and left, Us vs. Them, Right vs. Wrong. I know Rush has you convinced that there’s a leftist conspiracy against all right-thinkin’ Amurricans… but the simple fact is, most people have not bought into this Manichean crap. Most Americans are still able to think through matters of public policy without automatically demonizing anybody who thinks differently.

    God I’m tired of conservatives with persecution complexes… this was such a nice little housing blog before this right v. left stuff started up.

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  40. Buceri

    Good luck Gary; I had to move east 6 years ago closer to family for “many reasons” (mainly, health). Getting off that fast train called Seattle is easy because you will probably paid less for a similar or bigger place in your new city. Good luck.

    Olaf – right on.

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  41. David McManus

    “Most Americans are still able to think through matters of public policy without automatically demonizing anybody who thinks differently.”

    You haven’t lived long in Seattle, have you?

    I totally enjoy how everyone has stereotyped me into being a Rush Limbaugh Republican. Dead wrong, but it’s been friggin hilarious to watch. In any case, I’ll drop the political banter if everyone else keeps a lid on it.

    Now everyone get out there and BUY, BUY, BUY!!!!

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  42. James Antley

    Oops, I meant to post this earlier before Dave M.’s post above:

    I have no idea why these idiots are giving McManus a hard time for bringing up politics – this entire housing bubble deal has a lot of politics underlying it.

    McManus was only stating the simple fact that taxes will not ever go down when left-wingers are in power. Are you gonna tell me that Seattle (or King County) is not left-wing? Or, are you going to tell me that left-wingers don’t like to forceably take money from the population “for the children,TM”

    If you believe either of those statements, shoot me an email, and we can talk about that condo in SW Florida – no neighbors at all – it borders on the swamp – do not worry about the gators, they will not touch you, as you are an endangered species (Homeos Flipperous Floridianus). No that was not a gay joke, get your mind out of the gutter, sicko!

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  43. Cougar

    Where I am looking to purchase a home (Bellevue,Redmond,Kirkland) values stay pretty consistent. I have lived in this area for “50” years and have witnessed the economical growth and there is more to come. The inventory available now makes it an attractive time for me to look, research and find a home that will fit me for the next 30 years or until I meet my maker. Reason to stay on the Eastside, family. I will keep everyone posted on my progress. Cheers to 2008!

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  44. jimmycrackcorn

    What about the option of
    D) Pay extra on the principle and pay off mortgage by retirement.

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  45. biliruben

    Yo Antley – take a look at the actual facts over the last 30 years. Spending increased under every Republican president substantially more than the Dems.

    Sure Liberals think educating our populous is a good idea, and may toss an extra dollar at it.

    But conservatives of the last decade or three take that extra dollar, and another, then another 98 for good measure, and give it to corporations, the rich and the military instead, mortgaging all of our futures. Yes, even the kiddies you appear to think don’t matter.

    Just because they don’t raise your taxes today, if they continue to deficit-spend, it’s going to be a tax on someone. Eventually. It’s just a dishonest and hidden tax.

    Unless you are a rapturist believe these are the end of days and don’t give a fig, this should be obvious with just a few moments of thought.

    If it isn’t, I have some land to sell you in West Texas. Waterfront. Good development potential. Really.

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  46. Buceri

    “Taxes are never cut, simply postponed.”

    Inventory did not wait to shoot up 200 units in a bit more than 24 hours.

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  47. Ben

    Antley,

    There is a difference between pointing out what politicians are doing in general, and using the blog comments as a platform for you to hate on a particular party or individual.

    Thanks for calling me an idiot BTW. It really raises the quality of discourse.

    To be clear, I don’t mind a discussion of how legislation affects housing prices. I just don’t like people spouting foamy mouthed crap about how dumb liberals/conservatives/democrats/republicans are. Once you bring that debate here, it spreads like a disease and kills productive discussion. Like it has started to do.

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  48. Ben

    In an effort to discuss what this blog is really about, I am curious what observations people have for the Eastside.

    None of the big builders seem to be doing anything like 10% price drops yet. I have seen some 2-3% drops on new homes from some builders, though. Are they just dropping the prices without advertising it?

    Education hill in Redmond still has a bunch of new home inventory up there, around the $750k – $1000k range. These places seem too small and too cheap for the Microsoft folks that have already struck it rich, but still too expensive for the rest of the MS folks. So who is going to buy them?

    I am in a position where I know that prices are falling down, but I want to live in a bigger place than the townhouse I own and I hate to rent. I figure that as my current place depreciates and other properties in the same area depreciate, that things should get cheaper over time. But inventory is the problem.

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  49. TJ_98370

    This party is going to boogy on for awhile yet.

    Sector Snap: Homebuilders Slip

    Homebuilder Stocks Decline After Residential Construction Spending Falls in November

    …..Builders have recorded major losses in the past year as they contended with declining home prices and sales, plus ballooning supplies of unsold homes. The disrupted credit markets have diminished the pool of qualified home buyers, and a spike in foreclosures has dumped more supply onto the market.
    .
    Most economists believe the housing slump will last through 2008, forcing builders to further slash prices on already built homes and sharply curb construction plans….

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  50. CliveL

    Given the rising inventory on the Eastside, I think the builders are waiting for the “spring bounce” to bail them out before they start to reduce the prices.

    As for price drops, it seems builders are banking on incentives. Buchan is providing $100 K worth of incentive on houses priced greater than $1.2 M, membership to a private jet club.

    http://rismedia.com/wp/2007-12-19/taking-home-buyers-sky-high/

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  51. David McManus

    And the party will continue on in the financials as well…

    http://www.forbes.com/2008/01/02/national-city-bank-biz-wallst-cx_lm_0102nationalcity.html?partner=yahootix

    Any predictions for where WM will be 3 months from now?

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  52. Ray Pepper

    Happy New Year Tim. I went home for New Years to Dayton Nevada. After haggling with the Florida Based Bank that foreclosed on the property I decided to pull the trigger and buy. Heres how it went down:

    4 year old home in Dayton Nevada.

    Home hit a high of 292k 2.3 years ago.
    Originally Sold for 169k.
    Listed at 227k .
    All comparable comps are on the market for 249-265

    My Offer 188k plus 3k seller credit towards closing.
    Counter 194k from Bank. no concession
    My Counter 188k plus 3k credit towards closing.
    FINAL COUNTER FROM BANK 190k 2k concession

    I accept! Home is 1400 sq feet and needs nothing. I had the Agent sign a seperate addendum that he would have the carpets cleaned professionally and have the home meticulously cleaned as well, out of his commission. DONE!

    Just another Rental that averages 1100 month income. Nice gated community. Did I hit the bottom? Maybe? If I didn’t I’m close enough! Lets check back in 5 years. I suggest it will be 250k or higher. Not bad returns!

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

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  53. EconE

    Dayton Nevada eh?

    The only thing I know of out that way are whorehouses.

    At least that’s a growth industry!

    Prediction…many out of work REIC move to the Carson City area to become legal prostitutes.

    Dayton BOOMS!

    Ray Peppers house sells for MILLIONS in 2013!

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  54. biliruben

    This ain’t the bottom Ray. This is pretty dang far from the bottom. I don’t know Dayton, NV from Dayton, WA, but my guess is any area than ran up close to 100% in a short time still has a heck of a long way to slide.

    When did it sell for 169K? Was it new then? Are there a lot of new homes on the market now? What is the inventory like? What is the rental vacancy rate? Do you have a renter lined up?

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  55. patient

    Ray, 17% off listing price and 35% off peak value. Seems like a decent price on a property that is likely within the affordability range for a relative large percentage of buyers taken that it’s below the national median. Good luck finding that in Seattle…

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  56. Cougar

    CamWest.com is a good builder to watch. They are building quite a bit on the Eastside with a few more communities in the works. I don’t see their prices declining yet, outstanding inventory is average with even a few pre sales. Will the Eastside be affected by the Bubble Pop in pricing? It may not as history has shown, I predict a lot of homes will be on the MLS and it will be interesting to see what they are selling for.

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  57. patient

    Cougar, ask yourself how many of your friends that have the downpayment and income to get approved for the loan required for a new eastside home (~$700k and up). If it’s most you might not see a big decline on the Eastside. If it’s few, well you figure.

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  58. David McManus

    For the record that’s 140K in cold hard cash for a 700K home. Jumbo rates on Bankrate.com 6.71% so that’s is $3617 per month PI.

    Guess they better be millionaires or DINKs!

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  59. Ray Pepper

    Yes, there are the Legal brothels only 10 min away. I must confess I just drive by and look(not a frequent customer).

    The community is all new within a golf course community. They rent easily for 1000. There just is not a very high surplus of rentals there. Many Carson City Folk move there because they want the peace full bliss of Legado and the golfing. I’m not a golfer though.

    The new ones available now that are the same model are 240k minus a 10k concession. 230k bottom line. they wont budge. But, this home has all the upgrades and a full patio and all the landscaping done in front and back. A no brainer at 190k. I already have 1 rental in there I bought for 168k. 5 in Fallon 50 miles east. They all rent easily because they are new.

    2008-2010 will provide many such deals like this. patience, patience, patience. This home went into foreclosure a year ago. Finally they placed it on the mkt. Always be looking. The golly AGENT wont give me 75% of his commission though. And I found the HOME!. Hes not a fan of our model!

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

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  60. b

    David McManus said,
    For the record that’s 140K in cold hard cash for a 700K home. Jumbo rates on Bankrate.com 6.71% so that’s is $3617 per month PI.

    Guess they better be millionaires or DINKs!

    According to some people on this blog that is lower middle class kind of money and most people have several hundred thousand in their bank accounts and make 7-10k a month. So many of those people roam around the King County area that there is no way the bubble will ever pop, especially on the Eastside.

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  61. disbelief

    Ray,
    Sounds like a decent deal when looked at as a snapshot in time. But that’s far from a guarantee that the value won’t fall further (instead of rise) in the coming years. The past value prior to the bubble peak is, I would think, one of the best indicators of the future value once any residual effects of the bubble have dissipated. Figuring from that point forward at a historic appreciation rate would possibly yield an even lower value than what you have paid. I cannot help but think that an area such as this was more susceptible to investment driven purchases than many other areas. It is after all not a prime destination for those still in the job market.

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  62. WestSideBilly

    Ray, not to burst your bubble, but so freakin’ what? You got a spec home on a golf course in a small town in Nevada. Any average Joe can find a spec home in small town America and probably get more for less. Considering Dayton’s population (6000?), income level ($40k household in 2005) and average house price ($110k in 2005), I think you’re being a bit overzealous in your fantasy of that house being worth $250k in 5 years.

    I don’t disagree with your assessment that there will be relative ‘deals’ in the next 3 years, but Seattle’s core housing prices are still so out of whack with how much people here make, it’s not even funny. A median income family in Dayton can easily afford an above-median house; a median income family in Seattle needs exotic loans to be able to buy a studio condo anywhere in Seattle proper.

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  63. David McManus


    #
    b said,

    on January 2nd, 2008 at 3:11 pm

    David McManus said,
    For the record that’s 140K in cold hard cash for a 700K home. Jumbo rates on Bankrate.com 6.71% so that’s is $3617 per month PI.

    Guess they better be millionaires or DINKs!

    According to some people on this blog that is lower middle class kind of money and most people have several hundred thousand in their bank accounts and make 7-10k a month. So many of those people roam around the King County area that there is no way the bubble will ever pop, especially on the Eastside.

    10K per month = 120K per year and just the house payment is 36% of their income. That’s not counting any other debts that they have. 120K per year is lower middle class? I would imagine then, that the county median income should be somewhere around 100K.

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  64. Ben

    There are thousands of people working in Redmond that make more than 120k a year, even before bonuses.

    The problem is that most of them already have houses, or make way more than 120k and therefore expect better than a 7000 sq ft lot and a spec home.

    Another factor is that even reading MSM now you can see that housing is not a sure bet to go up all of the time.

    Despite all of this, they are still posting sales in the Eastside. I cannot fathom how it can seem reasonable to pay 800k for a house slightly larger than your average family home from the 80s, but enough people are paying for them to prop it up.

    My biggest fear is that there is enough cash on the Eastside to just create a very long cycle with mostly flat prices, because folks just decide not to sell for 5 more years. The small number of foreclosures are eaten up by the people who want to live close to Redmond.

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  65. disbelief

    And if that were the case, there would be a good argument against RE going sour in the greater Seattle area. But the median or better, mode of income, is no where near that. And that’s the best argument for a considerable decline.

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  66. disbelief

    Ben Said:

    “There are thousands of people working in Redmond that make more than 120k a year, even before bonuses.

    The problem is that most of them already have houses, or make way more than 120k and therefore expect better than a 7000 sq ft lot and a spec home”

    True, and what’s more these people will likely not prop up the East-side market. If prices for higher end homes start dropping in surrounding areas then at some point it will be to much of a premium to pay to live in Redmond, etc. With all these new high rise condos in Bellevue, it will take quite a lot of these MS super-stars to hold prices up. I just don’t think that there are enough of those folks to make that kind of impact, since, as you point out, they also have to be in “in the market”, I think if there is a “shock” to the market in the spring / summer for instance, it could put a big damper any remaining momentum on the eastside. This local market will be one of the most interesting to watch in the new year. If it goes down considerably, then other areas don’t stand much of a chance.

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  67. TJ_98370

    Hey disbelief,

    Creative financing and ever appreciating real estate values make median income and affordability irrelevant issues, dontcha know?

    Step onto the home equity escalator and ride on up to infinite riches! What could go wrong?

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  68. disbelief

    OK TJ, I Give! You finally broke through my denial. I don’t know how I could have believed all this bubble hype! The fact that everybody and their Grandmother was jumping in the game should have told me all I needed to know :-)

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  69. Ray Pepper

    I was just addressing the question about buying/selling/nothing. I buy and sell all the time. I’m an investor at heart. 190k at 1100 a month works for me. Upside potential in 5 years far outweighs downside. I’m also selling a commercial building in Fallon as well. Bought 2 years ago for 116k and came to agreement on Sunday at 195k.

    My point. Wait and wait and wait. But, always look. Always. There is always a deal but you must find it. There will be more in 2008 and 2009.

    The caveat is I can get booted on the 190k home. The Agent called me today that it had 5 showings…Even with a SOLD sign and a pending status people are looking for homes under 200k. Hes doing all he can do preserve his 2% commission. He gets 3% to list. His 2% through me is a bonus. Buyers must sign off that if a better offer comes along up and until the day of closing they can reject mine. Thats the Foreclosure game. (But, I do get a credit back on my appraisal). Either way is fine with me. I do not get in bidding wars. EVER.

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

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  70. disbelief

    Point taken Ray, but some might consider the possibility that there will be far better offers down the line- I bet “the Don” would :-)
    Also, It’s good that you’ve had a chance to inspect this place- I’ve seen some pretty frightening things when it comes to foreclosures that investor firiends had aquired in the past.

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  71. Shawn

    yes, off topic, but…
    1. You know the state flower (Mildew).

    2. You feel guilty throwing aluminum cans or paper in the trash.

    3. Use the statement ‘sun break’ and know what it means.

    4. You know more than 10 ways to order coffee.

    5 You know more people who own boats than air conditioners.

    6. You feel overdressed wearing a suit to a nice restaurant.

    7. You stand on a deserted corner in the rain waiting for the ‘WALK’ signal.

    8. You consider that if it has no snow or has not recently erupted, it’s not a real mountain.

    9. You can taste the difference between Starbucks, Seattle’s Best, and Veneto’s.

    10. You know the difference between Chinook, Coho and Sockeye salmon.

    11. You know how to pronounce Sequim, Puyallup, Issaquah, Oregon, Yakima and Willamette.

    12. You consider swimming an indoor sport.

    13. You can tell the difference between Japanese, Chinese and Thai food.

    14. In winter, you go to work in the dark and come home in the dark while only working eight-hour days.

    15. You never go camping without waterproof matches and a poncho.

    16. You are not fazed by ‘Today’s forecast: showers followed by rain,’ and ‘Tomorrow’s forecast: rain followed by showers.’

    17 You have no concept of humidity without precipitation.

    18. You know that Boring is a town in Oregon and not just a state of mind.

    19. You can point to at least two volcanoes, even if you cannot see through the cloud cover.

    20. You notice, ‘The mountain is out’ when it is a pretty day and you can actually see it.

    21. You put on your shorts when the temperature gets above 50, but still wear your hiking boots and parka.

    22. You switch to your sandals when it gets about 60, but keep the socks on.

    23. You have actually used your mountain bike on a mountain.

    24. You think people who use umbrellas are either wimps or tourists.

    25. You buy new sunglasses every year, because you cannot find the old ones after such a long time.

    26. You measure distance in hours.

    27. You often switch from ‘heat’ to ‘a/c’ in the same day.

    28. You design your kid’s Halloween costume to fit under a raincoat.

    29. You know all the important seasons: Almost Winter, winter, Still Raining (Spring), Road Construction (Summer), Deer & Elk season (Fall).

    30. You actually understood these jokes and will probably forward them.

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  72. just_checking

    That was good shawn. LOL !!

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  73. SteveH

    Hey McManus, this blog used to be a bit of fun to read and respond to, but you seem to have hijacked it. I’m done. Thanks a lot.

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  74. Shawn

    McManus Poll:

    Who thinks he has destroyed this blog?
    Who thinks he is just speaking his mind?

    ;)

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  75. bitterowner

    I did not think I’d ever agree with Ray, but I am completely on board with his comment: “I do not get in bidding wars. EVER.” I bought my place about 8 yrs ago when the market was ramping up and roping buyers into bidding wars was all the rage. At the first hint of a bidding war we just simply bowed out and kept looking and never regretted our decision.

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  76. David McManus

    “McManus Poll:

    Who thinks he has destroyed this blog?
    Who thinks he is just speaking his mind?”

    Guys, I said I would drop the politics and talk about RE. Or am I just banned from talking about RE too?

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  77. Ray Pepper

    “I don’t think I would ever agree with Ray”

    Agree with what? I speak the truth about everything and offer the Best Deal in the nation! What specifically do you not agree with?

    Don’t buy if you dont want to!

    Wait and Wait but always look. Always! I’m not buying anything either until my price point hits. Patience. They are coming down friends! But, there will be many opportunities in 2008 and 2009.

    **** I know when it comes time for you to buy you will remember me. *** If you don’t YOU LOSE!..Not me.

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

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  78. WestSideBilly

    My point. Wait and wait and wait. But, always look. Always. There is always a deal but you must find it. There will be more in 2008 and 2009.

    Excellent point, Ray. There are deals for those with the means to buy without fully financing the home. That doesn’t change the fact that the bulk of Seattle is still woefully overpriced for the people who live here, though.

    Good luck with your purchase.

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  79. WestSideBilly

    Hey McManus, this blog used to be a bit of fun to read and respond to, but you seem to have hijacked it. I’m done. Thanks a lot.

    Bah, he’s a lot better than the RE industry trolls/cheerleaders who’d swear on their e-bible that there was no bubble, and were screaming that 2007 was a great time to buy, no need to worry, prices will go back up up up in 2008.

    Oddly enough they all went away.

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  80. WestSideBilly

    Wish I could edit that last post. Woops.

    There are thousands of people working in Redmond that make more than 120k a year, even before bonuses.

    This got me to wondering about income distributions in Redmond, so I checked the census data. Unfortunately Redmond’s is old (1999) but there is 2006 data for Seattle, Bellevue, Kent, Everett, and Tacoma. Figuring Bellevue to be fairly similar to Redmond, here’s some numbers:

    50,000 households
    34% (17000) have over $100,000 income
    9% (4500) have over $200,000 income
    $76,800 median household income
    $102,500 mean household income

    Using a traditional 3:1 price:income borrowing limit, it doesn’t seem like there’s a really huge market for $600k plus houses in Bellevue. A quick look at RedFin shows a LOT of houses priced well over $600k in the Bellevue/Redmond area. It does seem like $300k-$600k houses would be in hot demand, but those are comparitively scarce – especially below $500k.

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  81. Cringe

    You forgot to add “Continue collecting rent checks from all you renters” from your list!

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  82. Ben

    David McManus,

    I saw that you said you were dropping the politics talk and I for one appreciate the gesture. I welcome your input about RE.

    And no, this is not sarcasm. I think some folks are being a bit rough on you now.

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  83. Ben

    WestSideBilly,

    I think that your data shows what I am feeling around the Eastside. There is a sizeable quantity of people (probably around 20% – 25%) who can afford housing on the Eastside.

    There are many more who purchased here before the prices were silly. Plenty of folks in 500+k homes who purchased them when they were in the 200s.

    What is ironic is, whoever did not buy a SFH on the Eastside back in 2002/2003 feels like they were priced out forever. I hope that they are wrong.

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  84. David McManus

    Well, I, for one, bought on the Eastside in 2003 and I was complaining then about how expensive it was even though my crib only cost 300K. I could have probably sold at the peak for right around 500K. I guess what bothers me the most is that I see around the rest of the country how much housing costs and realize that I could buy a friggin mansion for straight cash with the proceeds from my current abode. And please, no b.s. about how Seattle salaries are greater than the rest of the country. I had a job offer from a firm in Dallas back in Apr. 2007 for 20% over what I was making up here. Same position, better benefits, higher salary. You will find that salaries are about the same as they are anywhere else, with California being the exception. Where you win is the cost of living.

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  85. James Antley

    “Thanks for calling me an idiot BTW.”

    “To be clear, I don’t mind a discussion of how legislation affects housing prices. I just don’t like people spouting foamy mouthed crap about how dumb liberals/conservatives/democrats/republicans are. Once you bring that debate here, it spreads like a disease and kills productive discussion. Like it has started to do.”

    Dude, complete sentences OK? Not like that last one of mine (possibly no subject, no verb). Same with that one. OK, that last one of mine at least has an implied subject. That one was perfect. Got it. (oops, dang)

    Anyhoo, I wasn’t calling you an idiot – I just mentioned that only an idiot would believe that left-wingers would ever lower taxes. I would not put you in that category, as you seem to know something about … ummm … eastside real estate.

    I think the topic at one point was about assesments and whether millage would go up to compensate for values (assessed or market) going down. That is what brought up the fact that since Seattle/King County is full of left wing bleeding-heart s(oops “people who are liberal with other people’s money”, to be PC), there will be no property tax decreases. Not. A’Gonna. Happen.

    So, don’t start a subject without expecting the answer to bust your “seattlebubble”.

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  86. Ben

    Antley,

    I was giving McManus a hard time about bringing up politics, and you said people giving him a hard time were idiots:

    “I have no idea why these idiots are giving McManus a hard time for bringing up politics – this entire housing bubble deal has a lot of politics underlying it.”

    Mr McManus was gracious enough to sense the mood that political discussion was unwelcome, and he offered to cease and did so. I wish that you would follow his example because you act like you are trying to turn SeattleBubble into a bad episode of CNN Crossfire. Frankly, I feel bad making it sound like he is anything like you because he sounds like a stand up kind of guy.

    I won’t argue the rest of your points because it sounds like pointless foam-mouthed political drivel mixed in with something to do with property taxes. That is the problem with your posts IMO – you spend too much time hating on your political enemies and not enough getting to the point. I don’t care what strange grammar related insults you make to me, I won’t fail to point it out because I like this blog and your behavior threatens it. I know I am not the only one with this opinion too.

    If your conjecture is that property taxes have anything to do with the bubble, I think that makes no sense at all. In Redmond at least, the property assessments have been slow to catch up to real sales prices. The payments on the overly inflated houses dwarf any tax implications.

    For the record, I think that the biggest real estate related legislation issues in the area are:

    Developers having to average 7000sqft per lot
    CAO (this might be behind the first point, not sure)

    However, this legislation appears to push development further out (which it was meant to stop) or creates bad value for new housing (because there are now developers who have to make 3000sqft lots to make up for all of the normal sized lots that they made). I am not sure that it drove prices up any, just changed what has been built.

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  87. James Antley

    “If your conjecture is that property taxes have anything to do with the bubble, I think that makes no sense at all. In Redmond at least, the property assessments have been slow to catch up to real sales prices. The payments on the overly inflated houses dwarf any tax implications.”

    Ben, you can’t comprehend a series of posts, can you?

    The talk was about the bubble, but then went on to what the deal would be when places were re-appraised, as it’d only be right at least (as a consolation to some homeowners) your taxes would go down.

    That’s when McManus posted his correct thoughts on the negative possibility of said decreases due to , uhhh, the things that you don’t want to think about. Nobody wrote anything about the property tax differences being any kind of factor in the whole housing price/availability situation.

    So, I think ,in your paragraph above, you are confusing cause/effect on my part.

    I’ll give you a pass on the grammar this time. No, even as a stand-up guy, you should stand up for what you believe in. That is, on this blog, I would not just add a random political comment, cause, as we know, it is a blog on the Seattle Housing bubble. However, when Dave explained why taxes won’t go down. you start to go ape-s__t. Don’t keep doing that.

    No, I don’t hate you, but you’ve just got to read the posts above to see the sequence of the posts, and I’m not gonna let you lie about it, period.

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  88. James Antley

    I was giving McManus a hard time about bringing up politics, and you said people giving him a hard time were idiots:

    “I have no idea why these idiots are giving McManus a hard time for bringing up politics – this entire housing bubble deal has a lot of politics underlying it.”

    OK, I apologize for that one. I need to find better wording.

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  89. Ben

    Thanks for the apology.

    And I have been trying to follow your posts. Sorry, but you do sprinkle so much hate for certain entities into your posts that they are hard to follow.

    If your point was that local governments as a whole tend to never lower taxes, I would have wholeheartedly agreed with you.

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  90. James Antley

    No, the point was that a city and county filled with left-wingers will never lower taxes. You almost have it.

    Man, I HATE to have to write 4 or 5 posts to finally get a simple point across.

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  91. Ben

    You were so close to getting it. But then you had to go and start making characterizations about the left wing.

    Everybody could tell on your first post that you don’t like the political left. Nobody cares.

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  92. Dave Lincoln

    Hey Ben,

    It was a statement relating the fact that property taxes will never go down in Seattle (even with lower valuations) to the fact that there are too many left-wingers in the area.

    That is all I am saying – it is not rocket science, and I would not call the absolute truth “a characterization” You are one dense dude, Ben.

    Of course I don’t like the left-wing. Who in his right mind does? I will not go into details about this on the blog about Seattle Housing Prices. Get back to the eastside, Ben, and call it a day.

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  93. what goes up comes down

    Hey Dave Lincoln why don’t you hit the bricks, including the one you are using as a head.

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  94. what goes up comes down

    James Antley your political insights are outstanding — Really, I am sure there are one or two people somewhere that really give a crap about reading them — so why don’t you go find that place?

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  95. Dave Lincoln

    OK, guys, I just wanted to finish getting my point across to Ben. I think he has got it now (whewww, finally – it was getting like work)

    I you don’t like it, why are you writing back? This thread is like, way old…

    I don’t get the brick reference, but, maybe I’m just think ( as a …)

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  96. Dave Lincoln

    oops, “thick as a …”

    Jethro Tull reference

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