Gregoire: “The economy is strong. Buy your home.”

Everybody’s pal Christine Gregoire gave a pep talk to the Washington Realtors last week in which she made some interesting comments.

Gov. Chris Gregoire told about 400 Washington Realtors on Thursday that she has been working to meet goals the group has for transportation, affordable housing, education and quality of life.

Gregoire, who spoke a day after Republican gubernatorial challenger Dino Rossi went before the group, cited a report in Fortune magazine and said the state is a good place to do business. She also offered encouragement for an industry slowed amid recession fears.

“The only thing we have to fear is fear itself,” Gregoire said, quoting former President Franklin Roosevelt and referring to national recession fears. “It is a very frustrating time, I know, for you, and it is for me. … I’m struggling to get the message out to Washingtonians. The economy is strong. Buy your home.”

From the Associated Press account of the same meeting:

Addressing the politically powerful Washington Realtors, the Democratic governor said she sometimes wishes people wouldn’t watch the evening news because of all the “doomsday” talk of a home mortgage meltdown and a pending recession.

Gregoire said that in actuality, the state economy has seldom been so strong, with record low unemployment, 222,000 new jobs created in the past three years, and national publications praising the business climate here.

She conceded that the national news is having a psychological effect on home buyers, even though there are relatively few mortgage failures here.

“This is a very frustrating time,” the governor said, adding “Our economy is strong — buy your home. … There is no good reason for a slowing of home purchasing in the state of Washington today.”

Now why do you suppose Mrs. Gregoire would promoting the idea that Washington State residents go out there and throw caution to the wind, ignore the warning signs of declining prices, and jump into that real estate market right now? Obviously one likely reason is the usual pandering of politicians telling people what they want to hear. In this case, the people in question are a room full of “professionals” whose income depends on suckers consumers continuing to buy homes all the way down the declining price slope.

I think there may be another reason though. I think Mrs. Gregoire may really be on the Realtors’ side here, not just talking the talk. Here’s a story that appeared in yesterday’s P-I(emphasis mine)

Gov. Chris Gregoire and leading Democrats in the House and Senate have reached one early agreement in this year’s budget negotiations: It’s time for a reality check.

Anticipating a bleak revenue forecast, they’ve agreed to start looking for places to trim the $33 billion budget they passed last year. They say they want to have their priorities in order in case the slowing economy forces them to find efficiencies or even cut programs altogether.

Gone are the halcyon days of a skyrocketing real estate market and a ballooning economy that had led to back-to-back-to-back upward adjustments in the state’s revenue forecasts.

And gone is the free and easy feeling about spending, the unflinching commitment to “targeted investments” that Democrats have enjoyed for the past three years.

Gregoire already has called for frugality this election year and has asked lawmakers to adopt her budget that leaves $1.2 billion unspent.

But her budget also calls for $244 million worth of new spending.

Is it really any surprise that Mrs. Gregoire, who has overseen a 33 percent increase in state spending since taking office (source), would want people to ignore the “doomsday talk” and just buy, buy, buy? What do you suppose has enabled spending to increase by so much? Could it perhaps have been the high-flying home prices and red-hot pace of home sales in 2004-2006 (every one of which puts more money into the state coffers)?

And now Mrs. Gregoire wants us to ignore reality so she and her pals can fund their pet projects. Yeah, that sounds like a great reason to keep this bubble alive. Who’s with me?

(Brad Shannon, The Olympian, 01.25.2008)
(David Ammons, Associated Press, 01.25.2008)
(Chris McGann, Seattle P-I, 01.28.2008)


About 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.

23 comments:

  1. 1
    nightwatch says:

    It will be a good idea to buy a home if they fix the mortgage mess first. Politicians are talking about raising the mortgage cap to 625k of which I believe it will stimulate the hurting real estate market and entice more buyers to follow what the politicians are asking us to do.

    Without any real fix to the current mortgage structure, some buyers find it hard to get a loan when the cap is set at 412k and the median price in a lot of areas that are considered safe are averaging around 600k.

  2. 2
    Scotsman says:

    Ouch! I had no idea our state budget had grown by a third over four years. As a conservative, I’ve effectively given up on trying to have any effect on Washington State politics, and rarely pay attention these days. But the coming years may force a turn toward more fiscal responsibility, especially if recession sets in.

    As a side note, I heard on the radio this morning that Case-Shiller showed an 8-10% MOM drop in national prices for November. Another “Inconvenient Truth”.

  3. 3

    Gregoire said that ” there is no good reason for a slowing of home purchasing in Washington State.”
    How about the fact that prices have become astronomical?
    How about the fact that one can rent a home for about half the cost of a mortgage payment? And what about all the stories in the news about crooked lenders, appraisers, and real estate agents?
    Or does that only apply to real estate professionals in other states? Are Washington’s real estate professionals the only honest ones in the country, or are loan originators and real estate agents everywhere simply innocent scapegoats just trying to make a living?

  4. 4
    CCG says:

    “The only thing we have to fear is fear itself”

    The only thing we have to fear is the inevitable and imminent consequences of years of arrogance, ignorance, greed, fraud, ineptitude, and malfeasance at all levels of our society and across the world.

    I’d say it’s time to s—t your pants.

  5. 5
    Orion says:

    These comments from Gregoire means she is either ignorant of what is happening in the markets or she is well aware and would still encourage Washington residents to jump into an overinflated market, risking individuals for the greater good of tax collection. Disgusting. And I voted for her. Do you have any transcript of what Rossi said to the same group the day before? Not that we want to get too political on this blog, but this entry is already going there. I’m not a Rossi supporter, but I’d be interested to read how he handled his talk.

  6. 6
    Affluent Bitter Renter says:

    Buy! Buy! Buy!

    I’m sure Governor Gregoire will indemnify you personally if the house purchase turns out to have not been such a good investment…

  7. 7
    Scotsman says:

    Correction to my post above: Case-Shiller is down 8.4% YOY, and 2.2% MOM.

  8. 8
    michael says:

    Washington state government is a mess. I’m of the belief that government works best when it has accountability. Having one party with unchecked power usually means only corrupition, waste, and mismanagement. The left – right divide is far less important in day to day management than people think it is. I can’t stand Rossi (Bush Jr.) or Gregoire (couldn’t manage an IHOP).

  9. 9

    You don’t suppose that Rossi would tell a group of realtors
    “Prices are way too high and so is inventory. Many of you will be out of this business in two years and the local real estate market is really going in the tank.”

  10. 10
    notabull says:

    I actually think that she probably believes what she’s saying. There are many trade groups out there that are telling her that everything’s fine, and Seattle is special, etc. What group exists to put forth the opposing view? Unless Gregoire checks out Roubini’s blog every so often, I doubt she ever gets the bear’s side of the argument.

    Her next speech will probably be to low-income families where she’ll talk about programs for affordable housing and how she’s concerned about high house prices. What’s the solution? Well, how about we give everyone that’s looking to buy a house $50,000. That should help everyone be able to afford that little bit extra, right? ;)

  11. 11
    The Tim says:

    Looks like Rossi (himself a former real estate agent) focused on growth management and other political issues Realtors are concerned with.

    From The Olympian:

    Republican candidate for governor Dino Rossi sharply criticized Gov. Chris Gregoire’s record on growth-management and housing issues Wednesday in remarks to nearly 300 Washington Realtors in Olympia.

    Rossi said the incumbent convened a task force on housing and land-use issues in 2006 at the request of Realtors, but “not a single one” of its 150 ideas or recommendations — later distilled by the state Affordable Housing Advisory Board — was sent to the Legislature, proving someone else needs to be in Olympia making key decisions.

  12. 12
    Scuba Steve says:

    Buy, buy, buy! Ok, if prices for something other than a shack in the woods become attainable for a 30 year fixed rate loan at a salary of XX,xxx per year. I see unreasonable prices as being one of the biggest reasons to leave an area in favor of another, given equal jobs at both locations.

  13. 13

    THE REPUBLICANS ARE MAD AT THE DEMOCRATS IN WASH ST FOR THE FAMILY LEAVE BILL THEY QUICKLY VOTED IN

    I beg to differ with the Republicans on that issue. Family leave saves money by improving worker morale, as the workers also don’t get “phony sick” so much with family leave to take care of their kids, as they don’t have to lie anymore, family care applies to sick leave legally. Why would this cost voters a dime? Its the worker’s sick leave and they were using it before with lies anyway.

    On real estate, re: related overpopulation environmental destruction of the Seattle area to make a State buck [and cause a horrifying bubble]. Most of the Democrats aren’t liberal at all anymore, in my book. There’s a recent book out on CNN on just this subject, its called, “LIberal Fascism”….our Governor would be horrified over it, especially the title…lol

  14. 14
    nitsuj says:

    I wonder if she (or John L. Scott or any of the others out there) would take this bet. We each put $100k into a CD this year. If RE goes up, she would get the interest earned on my money PLUS whatever % of the $100k that RE went up by. Should it go down I get her interest plus the % of her money that RE went down by. Of course that would assume anybody preaching about how good the market is would put their money where their mouth is.

  15. 15
    David McManus says:

    “Of course that would assume anybody preaching about how good the market is would put their money where their mouth is.”

    I’ll go even further. How come most of the Realtors out there aren’t practicing what they preach and buying every home that they can get their hands on? After all, they tell us it’s such a great “investment” and that it always goes up.

  16. 16
    nitsuj says:

    EXACTLY! And you can ALWAYS rent it out in the hot rental market with rapidly increasing rents.

  17. 17
    EconE says:

    Why aren’t they practicing what they preach?

    Because most of them are trying to sell their own stock of “investments”. Just do a KC parcel search for the many of the new condos…you’ll see that there are quite a few Realtor/flippers.

  18. 18
    Moe Ronn - Realitor says:

    Rents will increase no more rapidly than wages, period.

  19. 19
    Cougar says:

    Whoops – here it comes!
    seattletimes.com: FBI: 14 companies under investigation for possible subprime loan fraud;
    http://seattletimes.nwsource.com/html/businesstechnology/2004152351_websubprimefraud29.html

    How will this effect sales?

  20. 20
    [troll] says:

    Th Tm – whn y rn fr gvrnr, ‘ll vt fr y. knw y wll b bl t td thr Chrstn r Dn n nythng! Y d mn – y fgrd t hw t st p blg ll by yrslf!!!!

  21. 21
    nitsuj says:

    “Rents will increase no more rapidly than wages, period.”

    You’re obviously not listening to your local RE agent

  22. 22

    […] does anyone remember back in January, when Gregoire said this: I’m struggling to get the message out to Washingtonians. The economy is […]

  23. 23

    […] I called out this garbage at the time: Is it really any surprise that Mrs. Gregoire, who has overseen a 33 percent increase in state spending since taking office (source), would want people to ignore the “doomsday talk” and just buy, buy, buy? What do you suppose has enabled spending to increase by so much? Could it perhaps have been the high-flying home prices and red-hot pace of home sales in 2004-2006 (every one of which puts more money into the state coffers)? […]

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