Posted by: S-Crow

"S-Crow" (Tim Kane) is co-owner (with spouse Lynlee, LPO-Designated escrow Officer) of Legacy Escrow Service, Inc., an authentic independent escrow firm closing residential purchase/sale and refinance transactions.

154 responses to “Consumers wish list”

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  1. Cougar

    It’s harder and harder to find a “Real Estate Professional” that won’t stab a potential customer like me in the back.
    Comments like;
    “In a brief phone interview, Mr. Little (ReMax) called the case “ridiculous,” adding: “The lady’s a nut job. I didn’t do anything wrong.”
    or
    ”I really thought the people on here are smarter then the average. Once again, i’m grossly mistaken.” (Ray Pepper with http://www.500realty.net)
    Thank you Greg, Ira and SCrow for agreeing to disagree in a respectful manner. Note to self; do not use or let my friends use ReMax or http://www.500realty.net

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  2. ray

    I personally feel Glen is not a great Spokesman for the message of Red Fin. I disagree and do NOT like how he has conducted himself in public forums. He has powerful backers and the company brings on a powerful message. I do NOT see the Passion and he always gets trumped by higher voices in the crowd.

    Please DO NOT take anything personal. The people that bash must at least do 5 minutes worth of research of what they are bashing. It is so readily obvious to everyone that 500 Realty Listings will not keep a company in business. We give this Listing Price as an educational tool. Our focus remains on buyers. Thats what keeps our advertisers fed. Do you think Red Fin wants listings? Yes and No. Every sign that goes up educates more people. But their 3500.00 at closing is nothing. They realized nobody would pay 3500 up front and adopted our 500 fee. But, why gouge the consumer another 3500 or 4k at closing? I tell you why..much higher overhead.

    Greg I personally do NOT know who you are. Someone stated you are a realtor. If you are insulted, I apologize. The only ones I know on Bubble are Amarjit, Tim, and a gentleman from Boeing named Steve. Its possible you did not take the time to look at our website.

    We at 500 Realty welcome any and all companies that help spread the message. Its very difficult for the public to understand where the money comes from. They think its another real estate scam. That is what years of real estate “professionals” have done to this business. We are clumped together with Attorneys and Used car sales people.

    We embrace Red Fin and MLS 4 Owners. We just need more of these companies. But, I know they are coming. personally I wish they would come quicker!

    See you at the Seattle Home Show Feb 16-24. We partnered with Clear WIre on the Main arena floor. You will easily find us. Mention this blog and get your Free T Shirt. **Greg mention who you are and lunch is on me!** I welcome intelligent real estate debate. Just don’t bring charts!

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

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  3. ray

    Cougar may I be so bold while sitting here in Phoenix waiting for another delayed flight.

    If you are a buyer and choose to NOT use 500 Realty please use Red Fin. If you are a seller and choose to not use us then MLS 4 Owners.

    Please make that a note to yourself as well! In the end you will be very happy you did!

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

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  4. Affluent Bitter Renter

    “- Unfortunately the real estate agent community speerheaded by the NAR and Lawrence Yun has taken it upon themselves to predict the future of home values and dispense advice and propaganda from that.

    Yeah, not so much as you would have people think.

    We are independent agents, and many of us – if not most – do not much care what Lawrence Yun has to say.”

    Funny – I have a book in my library called “Why the Real Estate Boom Will Not Bust – And How You Can Profit From It”, by David Lereah (former chief economist of the NAR), written in -oh- 2005. The first two chapters are entitled: “The opportunity of a generation”, and “Why the real estate boom has wings”.

    I don’t recall Realtors protesting that a high official of the NAR was putting out such bad forecasts on behalf of their organization.

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  5. b

    Mack McCoy said,
    You may be right that today’s prices are inflated – only time will tell. But to maintain that you were right about Seattle’s market in 2004 requires some acrobatics, don’t you agree?

    Not really, maybe you should spend more time reading financial newspapers about the global credit markets and their implosion. Seattle house prices are just a symptom of the same disease that caused Arizona and California house prices, $0 down 0% APR Escalades, 300 credit card offers in the mail everyday, and inflated house prices in England, Spain, Italy, other EU states and of course the entire US.

    If you do not think the current, and ongoing, implosion of the worldwide credit markets and the acceleration of deflation is going to adversely effect house prices in Seattle then you are foolish. The EU housing bubble has not even officially popped yet, but it is about to. Mortgages are the biggest consumer driven way to create credit in the world, as they disappear who is going to buy homes at any price?

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  6. Ben

    Mack:


    Ben, I know you’re not the kind of guy who would talk about stuff he didn’t know about, so let me ask you something about Case-Shiller: What obstacle does their method have to overcome in the New York market, and how do they overcome it?

    At the end of the day, the important thing about the Case-Shiller method is the data that is collected. You have the individual price trends for houses, which you can then average out, rather than having prices for individual houses and making trends out of those averages. It is far less susceptible to differences in distributions of house prices.

    I don’t think much about the NY market, because I have spent a grand total of two weeks there, and I never plan to buy anything there. Not knowing much about the market there, I honestly would have trouble thinking about how to apply the Case-Shiller data to it.

    But I will take a stab anyway. From what little I have heard about the NY market, it has a concentration of people with loads of money to spend from outrageous bonuses. Not many people drive there, so I imagine people spending proportionally more money on houses.

    I also imagine that the market is stratified into different price segments, each of which probably reacts very differently to price changes (this is true in any market, IMO, but probably more extreme in NY). The market probably works very differently in Queens than the Upper East side, for example.

    Is the problem that averaging trends of vastly different markets into a single trend is no longer representative of anything? I think that would be a problem in any market, so I will run with that.

    The solution is to analyse the data for a particular region and break the samples into groups based on the trendlines, and then to average the trendlines in each group and describe the groups. It may be sufficient to do this geographically in NY, but describing the regions would probably be tough. This technique would definitely result in less variance in the averaged trends.

    If I could get my hands on the per property data that Case-Shiller has, then I would attempt to do this myself. I could probably try to gather the data manually using the KC parcel viewer or something, but it would take an eternity. Might be an interesting project, though.

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  7. Alan

    For those people who took your “free” advice in 2004, when they were ready and able to buy houses in Seattle, but convinced themselves that you were right and that the market was about to fall, they’re about thirty-five percent behind right now.

    Personally, I did not live in this area in 2004. In fact, I owned in another state. I moved here in 2006 fully planning to purchase and found prices that would break me. During my efforts to understand the market I found this blog and determined that buying at 2006 prices was financially risky and that I would be better off renting now. I give myself five years total here. If I can’t afford a house by then I will move to a less expensive market.

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  8. Ben

    BTW – on the subject of what to expect from agents.

    I am sick of finding incorrect data in the MLS. Three of the most common things that really piss me off:

    a) Saying that a townhome is a single family home. It is not. Condo title is not a single family home, period.

    b) Saying that the built date is the date that somebody did some renovation on the property. This is BS. Isn’t this tantamount to fraud?

    c) Not listing lot size. When I see this, it makes me think that you are either too incompetent to look it up in the records (parcel viewer tells you this in a minute) or that you are trying to hide something. Or just lazy. I don’t want to buy property from an incompetent / sly / lazy agent.

    Real estate agents – if you want your reputation to be better than used car salesmen, you need to crack down on this kind of behavior and do something about it.

    I feel bad for Ira, because he seems like such a straight guy. But with the quantity of bad listings out there, it is hard to have a high expectation of the average agent.

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  9. Ira Sacharoff

    But you’re so right Ben. It pisses me off that all these dang townhomes are listed as single family homes rather than condos. but some townhomes have some land with them and no HOA dues, so they might be hard to classify.
    And I realize that some people want more house and less land, but I mostly consider townhomes to be a blight upon the land, where they tore down perfectly nice older homes to build these tacky, ugly overpriced POS’s.

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  10. leanne finlay

    Nice language, boys.

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  11. what goes up comes down

    Great addition to the discussion Leanne (sarcasm to be understood)

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  12. what goes up comes down

    Mack McCoy = BUY NOW, Housing never goes down.

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  13. notabull

    Mack said:

    “Remarking about the past is not the same thing as predicting the future.”

    Really? The problem with this is that remarking about the past with a nod and a wink is exactly the same thing as predicting the future. You can even state that you’re not predicting the future but statements like below leave people wondering, and the message is clear.

    Classic NAR/realtor comments:

    “I’m not going to predict the future, but I will tell you that real estate has never nationally gone down in value”.

    “Over the past decade or so, people have made a lot of money in real estate.” (wink wink, so could you!!!)

    “People that bought houses at the peak, in the past, still did well in the long run even when prices went down”. (true, but deceptive as these people would have done BETTER if they had waited)

    I’m glad we have the realtor “invasion” on this board as it will make the forum a more varied place, and there is no better place to get on-the-ground information than from a respected realtor. The problem is finding one that doesn’t drink their own Kool-aid.

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  14. Affluent Bitter Renter

    Mack said:

    “Remarking about the past is not the same thing as predicting the future.”

    Well, what about predicting the present? From Mack’s webpage:

    “Feel free to look around . . . some pages are in better shape than others, but all of them help to give you a feel for the raging hot Seattle real estate market, information on some of our communities, and a little bit about us.”

    How many people agree with the assessment that the current Seattle real estate market is “raging hot”?

    http://www.NiceSeattleHomes.com/

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  15. Scuba Steve

    Personally, I did not live in this area in 2004. In fact, I owned in another state. I moved here in 2006 fully planning to purchase and found prices that would break me. During my efforts to understand the market I found this blog and determined that buying at 2006 prices was financially risky and that I would be better off renting now. I give myself five years total here. If I can’t afford a house by then I will move to a less expensive market.

    Hey, that’s my story too! Except replace 2006 with 2007. I really don’t get how people are supposed to afford buying, unless they have 6-figure down payments or make that much more per year. Maybe buy with an adjustable mortgage and be sure to be out of there before the rates go up?

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  16. Mack McCoy

    “Afford” is key. Real estate problems are decidedly middle-class problems – there’s always people in a market who can’t afford to buy.

    And I’m not sure you encountered this thought here – it’s always financially risky to buy real estate. Always. Alla time. Risk risk risk risk risk risk risk risk risk. Anything can happen. Anything. People bought in Pompeii, 77 ad, didn’t work out long term. Northern England, 1938, ouch. Cuba 1956 – what’s yours is now the State’s.

    San Jose, Ohio & Michigan – it can all happen.

    But if you’re able to buy today, you’re essentially betting on whether it will happen or not, and gambling has its consequences. Those who bet in 2004 on Seattle houses built before 1980 are 35% ahead of the game at face value. Those who bet against …

    – – – – – – – – – –

    Ben, thanks for taking a stab at that one. Maybe some of us know more about Case-Shiller than you think.

    – – – – – – – – – – – – – – – – – – – –

    Between ABR’s “I don’t recall” and notabull’s “wink wink,” and “The problem is finding one that doesn’t drink their own Kool-aid,” it’s pretty clear that there are some people in the world that you’re never going to have a reasonable exchange with.

    I don’t know the future, but I think that if you predicted a crash in Seattle in 2004, maybe it’s about time you admitted you were wrong.

    But – there’s still hope! The market may crash this year! Wouldn’t that be great!!!

    Be careful what you wish for.

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  17. biliruben

    I predicted we were in a bubble 2004, bought a house anyway, and I’m pretty certain I was correct. In fact, I even predicted 2007 would be the peak, way back then. Look I even got the hard part, the timing, right.

    I could have gotten probably out in the spring of 2007 for 35%. Now, maybe 20% is my guess. Maybe. When I go to sell in a couple years, I’ll be happy as long as I don’t lose more than 20%. I think I’m safe, but I wouldn’t double down on it.

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  18. Everett_Tom

    …but I think that if you predicted a crash in Seattle in 2004…

    Can we start a Tally on the number of new visitors who show up don’t read enough of the previous post and just assume this?

    Mack, nothing personal.. it seems that people show up and make that assumption at a VERY high rate.. You might try reading the 2nd post under “Read These First” on the right.

    from that post:

    One thing I do know for certain is that the recent trend of rapidly increasing property values (double-digit increases year-on-year) cannot possibly continue indefinitely. If it did, eventually everyone would be priced out of real estate. There has to be a slow-down sometime, and I think it’s coming fairly soon (within the next 3-5 years). I don’t know if it will take the form of a leveling off of values, or a slow decrease, or a sudden decrease (bubble bursting), but I know it is coming.

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  19. Affluent Bitter Renter

    Mack,

    “Between ABR’s “I don’t recall…”” Hmmm… I don’t recall having said that “I don’t recall” (grin).

    It was fairly obvious that a bubble was developing in 2004 – however, predicting the timing on when a bubble will burst is difficult. Only a few people can get out of a bubble at the top of the market – if a lot of people want to get out, then you aren’t at the top anymore. Taking out a suicide loan to buy a house, where I’m financially ruined if the house doesn’t appreciate would never strike me as a good idea under any circumstances – I like sleeping at night.

    Warren Buffet explained the bubble timing problem best:

    “But booms get wild towards the tail end. Its like Cindarella at the ball before the clock strikes midnight. You know that everything is definitely going to turn to pumpkins and mice so Cindarella should leave in advance. But you are having so much fun and the temptation is there to stay for just ONE MORE dance. “The other big problem is that there are no clocks on the wall to tell you when the party will end. Just like with Internet stocks in 2000 and uranium in the 1050s, its easy to get caught when everything turns back to pumpkins and mice again.”

    http://www.valueinvesting.info/2006annualmeeting2.htm

    So, to return to my earlier question, do you think that the current Seattle real estate market is “raging hot”?

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  20. NotaBull

    “Between ABR’s “I don’t recall” and notabull’s “wink wink,” and “The problem is finding one that doesn’t drink their own Kool-aid,” it’s pretty clear that there are some people in the world that you’re never going to have a reasonable exchange with.”

    Mack, I bought a house in 2003 during a time that it was becoming obvious that a bubble (or significant run up in price) was happening. I made a lot of money on that house, and I’m certain I’ll make some money on the next one too once I buy it at a lower price than I could buy it for today.

    The problem isn’t that most people on this board can’t have a reasonable exchange with realtors. There are many on this board that I have a great deal of respect for:

    -Ira
    -Greg
    -Ray “GEMS” Pepper
    (sorry if I missed anyone)

    The problem, Mack, is you. You’re just a bit of an ass, and you know it. In fact, you thrive on it while you wield your “I don’t have to be friends with everyone” sword. Good job, I say… Your like that guy who says “hey, I shoot from the hip” as an excuse to be a prick.

    Mack said:
    “I don’t know the future, but I think that if you predicted a crash in Seattle in 2004, maybe it’s about time you admitted you were wrong.”

    Sigh. Not even the Economist predicted a crash in Seattle in 2004. It may be convenient to lump everyone on this forum in the “zealot bubblehead” camp, but it’s just not true. I suppose if you were to believe that most of us are reasonable people that have actually made reasonably accurate predictions over the last couple of years, then you might have to believe that prices will continue to come down and that you, a realtor, are probably in for quite a hard time, financially. I hope your entire household income is not in real estate sales. Or maybe I do! Hey, just shooting from the hip!! I’m not here to make friends you know!

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  21. Mack McCoy

    Actually, you didn’t ask a question.

    http://www.msnbc.msn.com/id/8475859/

    – – – – – – – – – –

    Everett Tom, do you just walk into clothing stores and tell them, you don’t have my size?

    If the shoe doesn’t fit, don’t wear it. It fits some people, and those are the ones I’m admonishing.

    You can have it both ways, but you don’t get any points for it. May-be is a great hedge, but it doesn’t get you points for being right, and it doesn’t get you off the hook when you’re wrong.

    Somebody wrote that the Seattle market was going to crash “real soon now” in 2004, and they were wrong. Somebody wrote that the Cleveland market was going to crash “real soon now” in 2004, and – I think, I’m too lazy to do the research – they weren’t correct in 2005, but by 2006 they were proved correct.

    Everyone is entitled to their opinion – even, I hope you agree, a Realtor like myself – but be honest when you’re keeping score. You can only count a “victory” in the Cleveland market the way a sports fan says, “We Won! We Won!”

    2005 wasn’t down from 2004.
    2006 wasn’t down from 2005.
    2007 – it’s hard to argue honestly that values fell from 2006, isn’t it?

    Stopped clocks …

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  22. Mack McCoy

    - The problem, Mack, is you. You’re just a bit of an ass, and you know it.

    You make me feel all warm and fuzzy inside.

    – The problem isn’t that most people on this board

    Did I say “most,” or “some?”

    GIGO.

    – then you might have to believe that prices will continue to come down

    Here’s the difference, my new friend. I don’t – and really have no need – to “believe” any such thing. The future, in my view, is uncertain. Always.

    The fact that -you- believe you know the future is one of the ways that -we- are different.

    Then, again, there would have to be a shift in direction, at least in my part of the market place, for values to come down.

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  23. NotaBull

    “The fact that -you- believe you know the future is one of the ways that -we- are different.”

    I don’t believe I know the future. I simply strongly believe that there is a *much* higher chance of prices continuing to come down than there is of a substantial rebound. If prices go up, I’ll say “screw it” and buy anyway. If they go down then I’ll keep waiting until my research indicates that they are not likely to go down much further.

    “You make me feel all warm and fuzzy inside.”

    That’s disgusting! ;)

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  24. Mack McCoy

    - Taking out a suicide loan to buy a house, where I’m financially ruined if the house doesn’t appreciate would never strike me as a good idea under any circumstances

    Yeah, but really – who disagrees with you? Can you name one person who thinks you should risk near-certain bankruptcy in order to buy a home? Really?

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  25. NotaBull

    “Yeah, but really – who disagrees with you? Can you name one person who thinks you should risk near-certain bankruptcy in order to buy a home? Really?”

    No, because nobody who got those stupid loans thought house prices would ever go down. In fact, they thought that they’d continue to go up at 10-20% per year, for the next decade or so (actual study done in LA).

    You and I may see this as a risky proposition, but I believe that most people in those loans figured they’d get out (with profit) before it became a problem. Bankruptcy was never in their mind because they were going to get rich. RICH!!! Muh ha ha ha ha ha ha!!!

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  26. Affluent Bitter Renter

    “Can you name one person who thinks you should risk near-certain bankruptcy in order to buy a home?”

    I think numerous people believed (and were told) that “real estate always goes up”, so you will always be able to refinance your interest-only loan before the ARM resets, or before you actually have to start repaying principal on the mortgage.

    A lot of people out there have loans that they can’t repay unless they can refinance the loan through appreciation in the value of the house – which is the nub of the current problem. Waiting out a lengthy decline in the real estate market isn’t an option for them.

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  27. Alan

    Yeah, but really – who disagrees with you? Can you name one person who thinks you should risk near-certain bankruptcy in order to buy a home? Really?

    The message I take away from Marc’s posts is that I should risk near-certain bankruptcy to buy a house in this market. But certainly I’m getting the wrong message. Right?

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  28. Alan

    or rather Mack…

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  29. Everett_Tom

    Everett Tom, do you just walk into clothing stores and tell them, you don’t have my size?

    Sorry, I’ve got no clue what your trying to say with this…

    Somebody wrote that the Seattle market was going to crash “real soon now” in 2004,

    Ok, that’s fine.. who (if it wasn’t someone on this board, then it seems kinda silly to bring it up..)? There’s all kinds of prediction out there from all kinds of people.. I’m for the ones that seem to get it right most of the time based on models. If your point is that there’s lots of places to get wild quotes that are inaccurate, I agree!

    Everyone is entitled to their opinion

    you certainly are.. but don’t expect to get a lot of respect for it unless you can back it up with something more then anecdotal evidence or NAR quotes (who have had trouble making good predictions)

    oh.. and the stopped clock accusation has already been tried..

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  30. Mack McCoy

    - Sorry, I’ve got no clue what your trying to say with this…

    If my statement doesn’t apply to you, ignore it. If the shoe doesn’t fit, don’t wear it.

    You’re right, I don’t spend much time here, I haven’t lived my life reading all of the posts and catching all of the disclaimers and nuances.

    As you say, there’s all kinds of predictions, from all kinds of people. I’m guessing that you’re not making any, and I’m not making any, so we’ve got no quarrel.

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  31. Mack McCoy

    Alan, I think that -you- should risk near-certain bankruptcy. Just teasing. ABR shouldn’t, either.

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  32. b

    Mack,

    If someone sold all of their Nasdaq index funds on 1/99 because they saw a tech bubble, you would probably call them a moron and chicken little until 2002 and you’d be “right”. Except selling then and sticking it in treasuries you would have yielded more money today than riding it out, let alone if you sold in 99 and bought in 03. The Nasdaq took until last year to reach what it was at in 1999, and that is a far more liquid investment than home buying on margin and the tech bubble was minuscule compared to the credit bubble deflating right now. Hope none of the people you convinced to buy in 2005, 2006, 2007 who are so rich with equity need to sell in the next 5+ years or they might be bringing a bag of cash to the table with them.

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  33. common1sense

    Markets go up and markets go down. Real estate boomed in 1978 – 1979, maybe thru 1980. From 1982 – 1984 it was fairly pathetic in Seattle anyway. 1988 – 1989 was another boom, lots of multiple offers. March of 1990, market quit booming. We just didn’t know the word bubble back then. 2000 another bust, this time caused by dot.commers failing, and it’s my opinion if we had not had 911 bring us to our knees, that market correction time would have gone on for at least 3 years. 911 just helped bring prices to the zone where people felt comfortable to buy again, but certainly not till spring of 2002.
    So, here we are in 2008 with the very predictable market correction happening, and all of you youthful doomsayers think you invented it …

    Gack.

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  34. common1sense

    Oh! And don’t let me forget to mention that in 1971 the Seattle housing market was THE WORST since the depression, due to THE BOEING BUST. Check out this site for a great story and picture of the famous billboard “will the last person leaving Seattle turn out the lights”.

    http://www.historylink.org/essays/output.cfm?file_id=1287

    So, I guess you bubbleboys will enjoy starting to predict that in 2016 or 2017 we’ll see the next bubble. Or will you want to call it a correction by then?

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  35. Everett_Tom

    If my statement doesn’t apply to you, ignore it. If the shoe doesn’t fit, don’t wear it.

    It might apply, I just don’t understand it.. I don’t know what your trying to suggest..That’s all.

    You’re right, I don’t spend much time here, I haven’t lived my life reading all of the posts and catching all of the disclaimers and nuances.

    And I don’t think anyone expects you to. However, I’d really appreciate it if you tempered you comments with the knowledge that there’s a good chance the point you bring up has been discussed.

    As you say, there’s all kinds of predictions, from all kinds of people. I’m guessing that you’re not making any, and I’m not making any, so we’ve got no quarrel.

    Your right, I’m not making any predictions.. However, I am putting my money on Tim’s guesses (by waiting on my home purchase.), so I do have a horse in the race.

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  36. george

    common1sense: So far it’s the biggest housing “correction” since the depression. What, me worry?

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  37. Matthew

    Nocommon1sense,

    Give this train wreck whatever name you like, prices are coming down… WAY DOWN! I don’t think anyone on this blog claims to have coined the word “bubble”, but to deny that Seattle is about to undergo a painful correction at this point in time, (to quote Chris Rock) “IS JUST PLAIN IGNANT!”

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  38. Mack McCoy

    - However, I’d really appreciate it if you tempered you comments with the knowledge that there’s a good chance the point you bring up has been discussed.

    You might, but you do know that there are people reading here who have not sat through the party the entire time.

    – However, I am putting my money on Tim’s guesses

    That’s fine. Time will tell.

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  39. Mack McCoy

    So clearly, there’s not much discussion on agent services – it’s clear that you can have most of the items on that wish list, and a couple of them do require some level of partnership – being treated as a person rather than a lead, for example, comes from developing a relationship of mutual trust.

    The thing is, some people – and I think that some of you fit into this category – don’t really want to know what market conditions are, you want agreement that what you already believe is correct.

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  40. what goes up comes down

    Well then Mark why don’t you educate us.

    Since you said “The thing is, some people – and I think that some of you fit into this category – don’t really want to know what market conditions are, you want agreement that what you already believe is correct.”

    Is the Seattle market for 2008 in your opinion going up, going down, or will it be flat. I say Seattle in general if you want to remark on a specific area please do.

    I am curious what you think.

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  41. notabull

    “So, here we are in 2008 with the very predictable market correction happening, and all of you youthful doomsayers think you invented it …”

    So, common1sense, when did *you* predict the market was going to come down? Obviously the market has its ups and downs, but there were *plenty* of local real estate types that told us Seattle was different and that prices wouldn’t come down. Less subprime, good jobs, Microsoft, Boeing, blah blah blah.

    These days there seem to be a lot more people saying that it was OBVIOUS that we were in a bubble and that prices would come down, than there were just six months ago.

    The problem a lot of us on this forum have is that the “professionals” on the whole got it wrong. So if you’re one of those professionals that’s predicting something or other (not all are) then you should expect to reach a cynical crowd. You can’t pull out your professional credentials and expect it to be taken seriously when others that have done so before you did the same and got it wrong.

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  42. Matthew

    Even at this stage in the game it truly amazes me that people have no clue as to WTF is going on.

    This isn’t a real estate problem. It is a massive credit crunch. Banks made loans to everyone with a pulse. They took these slimy, filthy loans (many of which are now worthless) rolled them into mortgage backed securities, and sold them throughout our nation and throughout the world. These loans are in your 401k, in your life insurance policy, in your mutual fund, and your money market account.

    They have infested the entire financial system. 120 billion has already been written down by major financial institutions with more to come. The entire financial system has been leveraged to the hilt.

    A middle class problem????? WTF are you talking about? We are just in the beginning innings of the game my friend. CEO’s have already lost their jobs, Citigroup and WAMU have just begun to lay people off. Before all is said and done this financial mess is going to have impacted people from the top to bottom. Our entire financial system is headed for a massive reset.

    Sure people have been wrong about the timing of the bubble. Tops and bottoms are tough to call. However, the information available, suggests we are currently undergoing a correction. I have no idea how severe the correction will be or how long it will take, but I know that it is here and Seattle will not be unscathed.

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  43. Everett_Tom

    You might, but you do know that there are people reading here who have not sat through the party the entire time.

    Couldn’t agree more.. hence the request to “tempered” instead of “keep it to yourself”.. Many topics are worth looking at again, even if they have been covered.. :)

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  44. bitterowner

    b, your point re: Nasdaq is a good one and it dispels the nonsense that as long as you are investing for the long term (whether in stocks, real estate, whatever) you will weather short term corrections and end up with historical x% gains over time. This theory overlooks the very important fact that assets purchased at or near the peak of historically inflated values will not yield anywhere near the historical returns. I don’t think you painted a sufficiently bleak picture of the Nasdaq, though. It actually peaked at close to 5000 in early 2000 and is barely hanging on to half that value today….8 years later. Add in whatever inflation number you believe to be appropriate, compounded yearly, and anyone who went “all in” in the NAZ around late ’99 or early 2000 would still be down more than 75% on their investment. How’s that for your 7-10% long-term annual returns? I think the same will be true of housing. Historical returns won’t look so bad even after this correction, but for those having purchased in the last year or two, particularly adjusted for inflation and including all other housing-related expenses (taxes, maintenance, interest, etc) it seems that a long time may pass before any real equity is seen. The same may not be true for those who purchase after a significant correction.

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  45. b

    bitterowner,

    Yes, most people seem to be unable to critically think about this kind of “long term” investing strategy. Sure, you can buy a house at the absolute peak and not care about values because you are not going to sell and can make the mortgage payment. But it puts you in the very precarious situation of being leveraged underwater for an unknown number of years. If you bought with 0% down, then you might be under for 10 years or more. This is not a situation most people want to live in, psychologically you know you are getting screwed every month and if you do have to sell due to a life event you are going to have to pony up cash to unload it. Buying a house last year in Seattle was like buying QQQQ on margin in Feb of 2000. “Oh, maybe there is a tech bubble, but it doesn’t matter if you are buying for the long run!”. Timing bubbles to profit perfectly is very difficult, but timing bubbles roughly enough to be ahead of the average is not.

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  46. Ira Sacharoff

    Two things come to mind here:
    If you bought a home or a strong stable stock every six months for 25 years, you probably will end up doing pretty well, that’s the concept of dollar cost averaging so one buys when the market is low and buys when the market is high. To simply buy a house or a stock at the peak of the market and say ” the market always go up” is foolish and naive.
    2. Yeah, most real estate agents have a vested interest in their predictions. They are not always going to be wrong, but do they have some motive in making a certain prediction?
    Winter 05 Spring 06 I was in a real estate class predicting local price drops and was generally scoffed at and called “Mr. Doom and Gloom”.
    I like to make predictions about everything from elections to football games to the housing market, but I won’t claim that my being a real estate agent makes me any more of an expert in predicting home prices than anyone else here. But I usually win money when I make bets about sports and politics.

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  47. Ben

    Mack,

    So what do you think is the problem with Case-Shiller in NY? I had a stab at it, and I did so politely. Please return the favor and explain what you think the issues are. Being cryptic like you were with your response to me comes across as rude, and does not build credibility with anybody.

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  48. bitterowner

    Ira –
    That is exactly the problem. You cannot really dollar-cost average on the price of a single property the way you can with stocks, although I imagine that real-estate investors (successful ones who know what they are doing and not J6P flipper) do so indirectly by buying different properties over a longer time frame. I am referring to your average family who buys and sells one house to live in at any given time. Regardless of how you finance, you basically are going all-in on the market price at the particular point in time when you decide to buy. Doing so with any inflated asset would seem very risky. However, I keep hearing that if you plan on staying in your house long term (one of the discussions at RCG seems to define this time frame as 2 yrs!) then it would be just fine to buy a house now even if you expect the market to tank as you can ultimately count on recuperating your losses and having a substantial amount of equity. That is likely to be as untrue for real estate now as it was for the NAZ in 2000, and even moreso as owning Nasdaq stocks does not come with carrying costs, maintenance costs, yearly taxes on unrealized and possibly never-to-be-realized gains.

    We haven’t even touched on the opportunity cost of throwing away money in a depreciating asset, which “b” also alluded to above. IE the loss in value of your asset in this type of scenario is compounded by the fact that the money that has been spent and lost is no longer available to grow in other ways.

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  49. Mack McCoy

    - Is the Seattle market for 2008 in your opinion going up, going down, or will it be flat. I say Seattle in general if you want to remark on a specific area please do.

    I don’t know.

    – Being cryptic like you were with your response to me comes across as rude, and does not build credibility with anybody.

    And I’m the first poster here who is rude and in-credible?

    Ben, you took one for the team here, and are to be commended. All of us are in the habit of regurgitating somebody else’s information to support arguments that express our beliefs, without fully understanding what that information represents.

    But we work with what we have. And what we have is a future that is uncertain, just like always.

    There were down markets in 2000, when I first noticed the word “bubble” next to “housing market.” Those who predicted correctly were, well, correct.

    In 2002, there was a long piece in the New Yorker. I’m sure that well-respected venue gave some readers enough food for thought to bail on the market. If they were in New York or Seattle, that didn’t work out so well.

    2003. 2004. 2005. 2006. 2007. And now, 2008. This Year, It Really Will Crash.

    Maybe.

    But don’t you think those who -were- right in making predictions about the market going up, back in 2000 and 2002 and 2004 deserve some props?

    And if we don’t acknowledge the past, how “credible” are we?

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  50. Affluent Bitter Renter

    Mack McCoy said:

    “- Is the Seattle market for 2008 in your opinion going up, going down, or will it be flat. I say Seattle in general if you want to remark on a specific area please do.

    I don’t know.”

    That’s not the impression that you are giving potential purchasers, Mack:

    “Feel free to look around . . . some pages are in better shape than others, but all of them help to give you a feel for the raging hot Seattle real estate market, information on some of our communities, and a little bit about us.”

    http://NiceSeattleHomes.com/

    “Every year, the same old thing!
    Prices of Seattle real estate keep going up, and the chart above illustrates the rate of increase.”

    http://www.NiceSeattleHomes.com/prices/historic.html

    “As usual, we don’t know what the future will bring. But after a rocky 2001 and a sort of unenthusiastic 2002, the market has caught fire here again.”

    http://www.NiceSeattleHomes.com/prices/historic.html

    “The rash underwriting of sub-prime loans helped push the real estate market to record heights, and those gains won’t be evaporating any time soon.”

    http://www.NiceSeattleHomes.com/newsletter/currentnewsletter.pdf

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  51. Thomas

    Mack,
    I’m also curious about the answer to your previous challenge. What is the case-shiller data problem in New York and how do they solve it?

    I’m more curious about another question though: Since Real-Estate is now hyper-local, what does the problem with Case-Shiller data in New York have to do with C-S data for Seattle?

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  52. biliruben

    I owe Mack an apology. Here’s a cut and paste from this thread:
    http://blog.seattlepi.nwsource.com/realestate/archives/130561.asp#comments
    if you are interested.


    I didn’t realize you were fishing for one.

    Ok. I suppose I can accept that there is a possibility that you are merely deluded and number-challenged. I apologize for calling you dishonest. I realize that being thought of as careless with the truth would be a pretty big albatross for a RE agent, so I’ll give you the benefit of the doubt.

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  53. Mack McCoy

    I stand by my data, and I thank biliruben for his apology.

    Thomas, the way you put it is self-answering – if there’s a problem in one market, what makes one think that there’s not a problem in another market?

    I’ll leave you with this:

    In 1989, prices in Seattle went up 20%, in 1990, 33%. In 1991, the C-S Index showed eight consecutive months (May-Dec) of YOY declines. The year ended with a small increase (0.7%) and 1992 was also flat (0.4% gain). Since then, C-S has shown 191 consecutive YOY up months.

    the last time the C-S Index showed six consecutive month-to-month declines in Seattle was Sept 91- Feb 92. Their last four reports (Aug-Nov) have shown declines.

    How can you honestly use this information to predict – or support your argument for – a significant market crash?

    Good luck, kids.

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  54. Mack McCoy

    Oh, ABR. Forgot about you. Well, I’m not coming back to this thread, so how about this: you’re right, I’m a jerk.

    Good luck.

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