I had a chance to listen to your radio interview, certainly you were consistent with your long expressed perspectives on the issue. However, as I mentioned to you before, as both a reader, and small patron, of your interesting Blog, I would be interested to see you investigate the following:

Have you ever posted a chart measuring the price of real-estate, over time relative to the price of gold over the same time?

Going forward, the aforementioned classic tool of measurement, for land, housing, and other commodities, might be well leavened, by an estimated cost of “space born” real-estate and commodities.
Sincerely,

Chris Worsley

I think you could have inserted more comments without waiting for the host to call on you for a statement.

You have some clear opinions on your blog — well supported by your data — that didn’t come out on the show.

You could have been more assertive and decisive about your positions. Instead I think you were wishy-washy, you did not take a side, you backed off the positions you justify with data on this blog, with words like “kinda” or “I sorta think that…”

For best radio, know your positions and state them clearly and decisively. Not like FOX news hysteria, but like an expert with an opinion.

Just a few weeks ago, I went jogging through some St. Paul neighborhoods on a business trip. Yes it was a bit chilly, but man did those city fathers know how to build a home.

HAAAAAAA…Nice try Matt. I never said that. Those are your words! When the Dow hit 14k it was so obvious it was short time my friend. Still long my EGHT over 70k at an avg pps 1.03….. My only holding in the mkts. Although I continue to trade in/our of THC at 4.00-5.00..

I think you were thinking of one of your Real Estate pals…

Don’t place words in my mouth…Here is what I say…………Find your GEM………Do you need a definition of GEM again?…research my posts…..If you find a GEM, and can secure a loan you will be fine in 5-10 years… My Gems are currently in Dayton Nevada and thats where I find value. But, if the mkt still corrects another 20% off these lows I’m still in the money 10%..

Come get your bumper sticker and lets talk the mkt, stagflation, real estate, and GEMS! I think you will learn something if you meet me IN PERSON!

http://www.500 Realty.net

I’m sure “the Tim” has [historical mortgage rates] graphed somewhere.

Indeed. You can find that graph here.

Good luck with those t-shirts!

Beige Book Hints at Stagflation
Amid Slow Growth, Prices Pressures

http://online.wsj.com/article/SB120474193760314079.html?mod=googlenews_wsj

http://research.stlouisfed.org/fred2/data/MORTG.txt

I’m sure “the Tim” has this graphed somewhere.

See –> The late 1970s / early 1980s. Mortgage rates around 15% and I seem to remember the economy was f-ing horrible.

Does anyone know why mortgage interest rates seem to have shot up to 6.5%, despite the weak market indicators of today?

Alex – you might want to read this article at bloomberg

Wasted decade.

Worse. 77million Mouseketeers have all their wealth riding on overpriced real estate and the same overpriced 600 stocks everyone else is holding, at a period of historic low interest rates.

We are priced for perfection NOW. Wait until we price in the appropriate risk in the credit markets.

Ugly. Even in Seattle.

I wonder if it will play out in the same way.

Hmmmmm is that what you want? Bring it on!! I will tell you exactly what you want to hear. Pumpers–were going up!! Bashers– were going down!! But all the while you will hear that there is only 1 way to BUY real estate that is listed on the MLS!………….

Get me on KIRO! Let the Fireworks begin! I have not listened to the broadcast but I’m sure you got your point across…..

But, Tim for godsakes I hope you mentioned something like this……..

” I just want your listeners to know that if you choose to Buy now, in spite of a trendline down market, then you really owe it to yourself to call 500 Realty. They tell the consumer go out and look…. Always Look…. BUT NEVER ……… EVER………… CALL THE NAME ON THE SIGN!….. IF YOU DO…….YOU LOSE BIG…….I MEAN REAL BIG!!”

I’m hoping you said something like that. I will listen to the broacast tomorrow in between a few showings with fingers crossed and high expectations………

If you didn’t mention 500 Realty no new shirt for you!! The new ones arriving in a week are very form fitting and to say the least very controversial. But I will give you a 500 Realty bumper sticker for the Tim mobile either way.

http://www.500Realty.net

Regarding home price declines…

Am I still the most bearish person on SB for price declines? I am still holding to an 65-80% decline off the peak for most of the PNW market, and no, I’m not off my meds.

My sources tell me that the reason the higher end of the PNW market has been soft has been due to the fact Californians are trapped in their homes and can’t relocate with all that wonderful equity. I know for a fact the $800K+ market on Bainbridge is dead (top half), and this is strictly a phenomenon of no X-Cal locusts scooping up properties at well-above market prices. There was a dramatic shift in October ‘07 where one day Californians could buy, and the next day they could not.

I also remember from the 2006 SB days that we estimated that a very large percentage of new jobs in the PNW were actually created in the REIC, which enticed many people to move here. Real estate became its own self-licking ice cream cone. I anticipate the REIC jobs to get hit hard as well as the tech/aerospace mainstay of the King/Sno/Pierce economy.

Unless you have been deep in the Amazon on missionary work/Peace Corps, every headline on the planet deals with the implosion of our financial infrastructure and how that is both caused by, and weighs on real estate (self-licking ice cream cone is melting). What is not said is the undeniable fact the US banking system is out of money. Yes, you read that correctly. The banks in the US are insolvent, and all private banking reserves were exhausted in Dec ‘07, and now every dime of reserves is borrowed from the FEDERAL RESERVE, and this is the first time that has happened in the lifetime of anyone reading this blog. Records of this are kept at the FED and show us to be tens of billons of dollars in the hole.

Yes, YOUR BANK is on lifesupport. It is a matter of public record, and is the biggest story not being told.

Lending standards will be going through the roof in the very, very near future, and that means higher interest rates, and higher down payments, with no transported equity (there isn’t any).

Anyway…you could have purchased a house in Seattle for $187K back in 1997, and there is the very, very real chance you could be underwater by Christmas of 2010. If you bought anytime in the past 2 years, that will likely happen by this Christmas. If you were in the habit of taking out HELOCs, then you are really going to feel it.

Entire neighborhoods in many parts of the country are now vacant and held by the banks. The banks don’t market them because they are afraid of having their entire stock marked to an abysmal market. That will happen here. We are not special. We get money from the same capital markets that the rest of the nation uses, and we are subject to the same laws of economics that everyone else is.

Views, mountains, water, lakes, Microsoft, Starbucks, and mild summers will not support your home prices. If the median household income on Bainbridge (the 24th highest in the state) is $73K, that tells me the median home should sell for $200K-$275K, not the $840K it currently does.

BTW, that is predicated on the job market staying hot and people have $60-100K in free cash available for a down payment. Unfortunately, that won’t be the case.

20 cents on the dollar is coming to a neighborhood near you.

Thanks for the mention on the show.

I just wish you would have covered my butt a little by using my actual
prediction of a 10-20% drop in home prices this year rather than just
saying I predict a “20% decline.” ;)

Not that I’m afraid of that prediction.

I am sure that some neighborhoods will drop 20%, but not all of them. That’s the reason I use a range.

Good job on the radio. Next time jump in there more often and don’t let the callers take up so much of your time.

It’s interesting that everyone who called with a contrary point of view was someone with a financial interest in the success of the housing market. Even then, I dont think any of of the realtors outright refuted your statements, they were more likely to talk about the pockets that were doing better.

BTW, nice plug by the caller on the basket company. Think he was an owner? :-)