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.

85 responses to “Puget Sound Counties March NWMLS Update”

  1. Jack

    While you’re in the mood to update graphs, I’d love to see the most recent numbers added to the Case-Shiller Total Decline From Peak graph. Of every graph I’ve seen, I feel it’s the one that tells the best story about closing price trajectory.

    Thanks for all your work here btw.

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  2. David McManus

    <sarcasm>
    Mr. The Tim,

    I don’t know what you’re talking about. We had a house in our subdivision sell 3 weeks ago, so sales are up 100% YOY from my perscpective. Even though the price it sold at was at what the poor people from California bought it for in early ’06, that’s still not a decline!

    Sincerely,
    Everyone in my hood
    </sarcasm>

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  3. james

    3 comments ? one by the orignial blogger…

    The only thing falling faster than home sales is Seattle Bubble readership.

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  4. Buceri

    If we have a weekend like last, inventory could hit 12000 by Monday morning.

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  5. patient

    Related to pending sales. When browsing the broker sites for properties in the past some of the properties in your search criteria were sti ( subject to inspection ). Since the beginning of 2008 I can’t recall having seen a single property in sti, not one,zero, nada, zilch. Not very scientific but telling none the less.

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  6. Dave

    Hey Tim;

    Are you worried about falling readership at all? (off topic i know but curious). I mean when the bubble was going on we were all rebels – going against the grain of society. Now that the bubble is popping are you worried people will start to think – “Housing Bubble? Meh.. that’s obvious”.

    Dave

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  7. Sniglet

    when the bubble was going on we were all rebels – going against the grain of society.

    I can’t speak for others, but I still feel like a rebel. Most of my friends still think I am batty predicting a major price decline for Seattle area real-estate, and an even greater drop nationally than has already been seen. Most of my friends and acquaintances have bought into the “it’s a good time to buy” story now that prices have actually fallen a wee bit.

    I think there will be a place for this bubble site for years to come, since this downturn is going to get progressively deeper for a LONG time, and there will be a need for a place that doesn’t parot the party-line that things have already hit bottom.

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  8. patient

    I agree sniglet, especially for people who are not actively in or looking at the market. They might have heard that prices have flattened and are down in some hoods (not their own of course) but thinks it’s just a little hickup in the apprecation heaven. This makes me personally less concerned of a run in banks like WaMu from ordinary folks since most don’t even know what FDIC is or care at this point. Investment banks as BSC are different since their customers actively follows the market. ( Don’t take this as advice on where to put or withdraw your deposits ).

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  9. biliruben

    Even those that are actively in the RE market are often clueless.

    My flipper next door has become downright surly, as he works far into the night. Where he once was bubbly and talkative, since we discussed what we were listing our respective houses for, I can barely illicit a grunt from him. I think he has done a bit of research on recent comps since then, and he’s worried.

    I think he’s pissed I’m pricing my house to actually sell. It’s going to make it hard for him to make a profit, and I think he was blind-sided by the change in the winds.

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  10. Everett_Tom

    ….My flipper next door has become downright surly, as he works far into the night. Where he once was bubbly and talkative…..

    Are you sure he would have done ok in a good market? The few times I caught the flipper show on hgtv it seemed that the people doing the flip almost always got screwed on their schedule and their budget. Or at a bare minimum ended up fighting with their spouse/business partner during the end of the project.

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  11. biliruben

    Uh – I dunno.

    He claims he’s done a number of flips in the past and done okay. He also owns a number of rentals. I know he’s behind schedule, as he claimed he was going to beat me on the market and he won’t. Dunno about over-budget, but he was pretty annoyed at having to return a huge slab of granite the other day.

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  12. Slumlord

    The problem with the decline is that it is emotionally difficult to accept. Despite having positive cash flow on my rentals, they are dropping in value. I am not over-leveraged, at least to the degree that many are. My stocks are doing well; however, my net worth is shrinking. My plan to be free of my day job is vaporizing. I hate this.

    Just imagine how the real estate agents and mortgage brokers are feeling as their day jobs disappear. It must be horrific. We should not forget to mention those who are loosing their homes to foreclosure. Finally, there is the stress of having your recently foreclosed upon brother-in-law sleeping on your couch.

    The only people winning are the bank executives who profited from the whole mess. Remember that it is you and me, the taxpayers, who are rescuing the banksters by way of financing from the Fed.

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  13. Sandy

    What I want to know is why this flipper is still working on his project? When did he buy? I can’t fathom why anyone would have bought a property to flip after last July, and even if they did, why they would still be working on it! You do not make money on a flip if you do it in a market that won’t support it, and you won’t make money on it if you take too long getting the job done. Jeez, doesn’t this guy watch any TV? :-)

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  14. rose-colored-coolaid

    #4 It seems to me like it’s only the posts with graphs which receive fewer posts. I’d speculate that it’s more difficult to argue against the numbers, because they clearly show that housing prices are in decline. For the trolls out there, it makes it much harder to start a firestorm if you cannot actually argue with the post’s content. You are instead left to trolling about readership levels (apparently).

    For what it’s worth however, even if the number of posts were in decline, that would neither prove, nor disprove the direction that readership is moving. It only proves the direction that posting is going. CNN for example does not have any reader responses at the bottom of their posts. Does that mean that Seattle Bubble has far greater readership than CNN? It would sure be wonderful for The Tim if that were true.

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  15. biliruben

    Sandy – I was amazed when he bought last fall as well. I assumed it would be a tear-down, as bad a shape as it was in, but he’s been doing a ton of work on it – all the way from the walls to the roof to the foundation, to squeezing in a 3rd bedroom.

    I actually feel for him and hope he sells for a profit. I really do. My animosity for flippers has dissipated. The market can be harsh.

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  16. magnolia44

    the sky is falling the sky is falling.

    Good luck guys… I just threw a few thousand into my house this week on some updates, I must be crazy though becasue the house is going to lose 20 – 50% so any updates are = to declines of 20 – 50% + x in updates.

    Bottom line even if homes decline 15% this year most who are loyal bubbleheads wont buy because they think there is another 15% on its way. Life is short man, but living in a nice place to call home goes a longer way than thinking about your potential equity or lost equity at every waking moment. I would think most homeowners who originally were not looking to flip or sell are not even batting an eye.

    Sigh…good luck

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  17. Garth

    Gonna have to burst your bubble Tim, this is a bubble site, the word bubble is in the name. Without a name change the revenue will never match the traffic as most of the people who would buy advertising on a local real estate site would not buy advertising on one called seattle bubble. That is why currently you have to run that scam ad for “Recession Proof Home Business.”

    The other thing I don’t understand is that it seems like the housing problems have lead to increases in the readership of realtor’s sites and not bubble blogs look at seattle bubble vs raincity guide for this year

    http://siteanalytics.compete.com/seattlebubble.com+raincityguide.com/?metric=uv

    You would think with increased media exposure for Tim and more sheepish realtors, tim’s traffic would climb and theirs would drop, but the opposite has happened.

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  18. Everett_Tom

    Wonder if Garth missed the disclaimer along the top of the page :

    We have little data for seattlebubble.com, raincityguide.com, so these are rough estimates. With more data, we can cover more sites.

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  19. Garth

    From my experience the panel is a good item to include in stats as it can collect data that other methods just can not .

    I don’t trust alexa’s panel either which is why I posted a graph from compete. I have used Compete for about a year and has been pretty good, they just sold for $75 million. Alexa just changed their system to factor the toolbar much less now (unfortunately their stats only go back 9 months now) to better compete with compete.com

    From a quick glance of the raw stats you posted, 62% of your visits are for less than 5 seconds. Since it is not really possible that the majority of the visitors here leave after five seconds (blog is good, and it is difficult for humans to open and close anything in 5 seconds) and having caused this a number of times myself, I would guess somewhere your code is refreshing / being hit a lot or your feeds are not properly telling syndication readers when it was last updated. This can cause excessive pings to the blog servers which then can lead to lots of visits for short durations. Since both those stats and sitemeter show your top entry and exit pages being http://seattlebubble.com/blog/ by an enormous margin i would guess it is something to do with syndication.

    These personalized homepages and social networking sites do all sorts of crazy stuff to stay updated. If you have relatively custom code running, exclude the rss feed locations in your robots.text and site analytics scripts if you can and track the feed information separately. I imagine feedburner is better at tracking rss specific stats anyways.

    The combination of pingservers, search engines following ping servers and rss feeds being pulled into widgets and ajax pages can generate a ton of strange statistics depending on how your blog software is written and configured.

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  20. 50%off

    Hey The Tim,

    Don’t sweat the naysayers. It is a bubble site and it has a long way to run in my opinion. I’ve been with you for quite a while. (has it really been 2 years or more already for me?)

    I wouldn’t darken the doors (portal?) of ANY Real Estate Blog. I’m after information. The anecdotal stuff is why I check in. Anyone can read headlines. It’s those like yourself who don’t sell Koolaid that I trust.

    Keep going.

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  21. TJ_98370

    James said:

    3 comments ? one by the orignial blogger…

    The only thing falling faster than home sales is Seattle Bubble readership.

    I cannot speak for others, but as a long time reader of the Seattle Bubble blog I will continue to read The Tim’s work because I have found it to be the most objective reporting that I can find about the local real estate markets. I am truely disgusted by the incredibly consistant “this is a great time to buy” bias that I find in the MSM, not to mention the outright diversions from the truth. Tim backs up what he says with facts that can be verified. Just because posting may not be active does not mean readership is declining. In my case I have cut back on posting because it seems that alot of comments are points that have been made several times before.

    Yes, the MSM has caught on to the fact that the real estate bubble is real. Now we sit back and watch it how it progresses. I fully expect the Seattle Bubble to evolve into more of a monitoring mode, which will be just as interesting IMO.

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  22. bbraddock

    It’s been iinteresting to see some extreme price drops in the last week in Seattle, especially in the $750-850K price range. I’m seeing $50-75K drops that are still not spurring sales. Sellers are finally realizing that homes just won’t sell at yesterday’s high prices. The bubble rocks, Tim.

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  23. Garth
  24. Garth

    A little perspective on the appeal of real estate blogs in general

    http://www.quantcast.com/search/westseattleblog.com

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  25. Scotsman

    Is it just me. or does there seem to be an increase in the personal attacks on Tim and the site? Who else wonders what the poster’s connection to the real estate industry is, and why they feel compelled to attack the messenger instead of discussing the message? If we were to graph these posts I bet I could tell you the general slope of the line, and it’s correlation (inverse!) with home prices.

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  26. Mirtika

    Why does anyone other than the blog owner(s) care about the increase or decrease of readership? :)

    I’m a new reader. Just a couple of weeks now. I am not in real estate. I did not buy/profit during the boom. We (hubby and I) actually did want to buy a home, but the prices in recent years were positively horrifying, and I refused to get shackled to a high mortgage (with the consequent wild taxes and insurance here in Miami).

    I started reading cause we might relocate to Seattle. I suspect that a lot of those short visits are to check to see if there’s new content. I drop by daily, but click away fast if there is nothing new..ie, within seconds.

    Keep blogging. Good stuff. And for those of us not up on RE, educational.

    Thanks, T. T.

    M.

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  27. mujalifah

    Tim, ignore attacks against you or the site. It will only make you bitter to take them serious. And that’s probably their desired affect, because I can’t quite figure out how it is intended to benefit you.

    Besides, readership means as much to the validity of your analysis as filling church pews with more people validates the truth.

    Discourse on real estate market analytics is much more interesting and relevant here than discourse on web analytics.

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  28. Garth

    Scotsman,

    Assuming people are in real estate if they don’t agree with you or tim is kind of silly.

    Anyone who reads this blog very much has noticed the dramatic recent decline (short term) in comment activity here, wondering why does not make you an attacking real estate agent.

    It is my work with website statistics, not real estate that leads me to wonder why all the data I have available is showing that since december or january growth in traffic to the bubble has been much less that of than RCG. As I said previously, this seems counter to what I would have expected with Tim on TV and the radio more presenting his common sense ideas and realtors being sheepish.

    There is a ton of demand in my job and field right now for help with building a community of users, and from the data I have been looking at, Tim’s community is one of the most engaged for it’s size that I have seen. In the beginning of the summer I started noticing blog authors from RCG were commenting here a lot more. I had only gone there from links from seattlebubble previously, but I thought it was an interesting case of commercial social web use on the RCG (their posts are a way of advertising their services and expertise in their field) getting scrutinized heavily by another community. My stats sources show that RCG gets 3-5 times the traffic of seattlebubble while often half or more of their comment activity is from posters I believe would proudly label themselves as bubbleheads. This is interesting to me.

    From my work and personal experience with website communities, if I was Tim as a one man show I would be very proud to be a third to a fifth of the size in traffic with a more engaged community. Traffic without good context is worthless, commenter’s who stick up for you in your absence are golden.

    I was excited to see that RCG is signed up for quantcast because I know from reading Tim’s work over two years that as soon as he can he will set up seattlebubble for an actual apples to apples comparison.

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  29. TJ_98370

    Garth –

    Just curious, what is your relationship with quantcast? Also, I don’t totally discount what are saying but how do you account for Ben Jones’ The Housing Bubble Blog success? It’s got “Bubble” in it’s name.

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  30. AndySeattle

    I am a regular reader of SB but a very infrequent poster. Usually because someone has already asked my question and received a good answer or stated what I felt ought to be stated. I will continue to view the RSS feed in iGoogle and continue to peruse the threads. It’s the content from the Tim and DJO that brings me back; the objective analysis.

    Compare this site to other ‘bubble’ sites and there is a completely different attitude and culture. This site is more inline with what I’m looking for so I will continue to treat it with high regard. And to that end I have shared it with many folks who are nervous about what’s going on with the RE market in the Puget Sound, and I will continue to do so.

    Readership down? I doubt it. Comments down? Meh… If The Tim posted a compelling question that polarized his readers and caused some flamewars I’m sure we would see triple digit comments more frequently. Frankly I don’t see a ton of value in that.

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  31. AndySeattle

    magnolia44

    Bottom line even if homes decline 15% this year most who are loyal bubbleheads wont buy because they think there is another 15% on its way. Life is short man, but living in a nice place to call home goes a longer way than thinking about your potential equity or lost equity at every waking moment. I would think most homeowners who originally were not looking to flip or sell are not even batting an eye.

    I’m going to purchase a home in the future. It’s not going to be an investment but a place to call my own for a long time. I fully plan on purchasing something that I can work on, because I enjoy that. But why would I buy something with premium dollars today when I can wait a mere 12 months and buy with less? In my opinion I think we have a ways to go before the dust settles. It just doesn’t make financial sense to me right now to buy.

    I’m glad you got what you wanted. What bothers me now is why you come back and try to inflict your values on others? Why do you care what we do?

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  32. Garth

    TJ_98370,

    I have no relationship with quantcast other than having used them on customer sites when there was a need for verifiable stats to show to potential advertisers or clients. As a clarification I never said that sb traffic was down, I have noticed that it is not currently growing as fast as RCG (since about january), which I don’t understand.

    I think the ben jones blog pretty much illustrates my point, for a national site their monthly uniques are about 25,000. John L Scott who sells houses in 3 states gets about 200,000 uniques a month and the westseattleblog.com gets about 35,000.

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  33. EconE

    OMG….Tim’s site isn’t banging as many hits as RCG or JL Scott!?!?

    whatever.

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  34. Lake Hills Renter

    Quality not quantity. I couldn’t care less how many visitors this site gets compared to RCG. The content is 10x better.

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  35. alex

    I think this site is a very valuable source of RE research, and I think mainstream media agrees (that’s why Tim gets frequent quotes on TV and radio). I recommend the site to people I know who want to research more – I must have “converted” several people into readers. I think the great content will keep this site alive for a long long time – even after the name “seattlebubble” loses its immediate meaning.

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  36. EconE

    Oh…also…

    more people watch American Idol than PBS.

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  37. george

    Garth, maybe you should start your own blog on web statistics for various Seattle websites? I’m sure it would be fascinating!

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  38. george

    Who can tell me what’s happening to the Seattle rental market right now? From reading between the lines on the listings I’m seeing a lot of places that look like frustrated sellers decided to become landlords. Is this the latest trend?

    If so, why? Are agents telling these poor suckers that the market is about to bounce back?

    If there’s anyone on this site who recently became a Seattle landlord on a SFH property rather than selling it, can you tell us why?

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  39. Michael

    Those metrics systems that you are refering to are not even remotely accurate because they have almost nothing to base their metrics on. The only companies that produce these “tools” are SEO spam companies that need some excuse to post millions of pages and acquire junk traffic so they won’t get killed by search engines. Those companies make their money from SEO spam advertising not metrics. The only accurate way to asses the value of a site is through IIS or Apache server logs or Google analytics. Even then you need to understand the millions of ways you can game logs with bots and spiders. Don’t believe everything you see online. It is impossible to tell how many people visit a site without access to server logs.

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  40. Michael

    Garth,

    So, if you think these guys are so accurate please explain how you think they acquire their data. I checked my server logs against their metrics and everything they produce looks like pure fiction to me.

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  41. Alan

    Who can tell me what’s happening to the Seattle rental market right now? From reading between the lines on the listings I’m seeing a lot of places that look like frustrated sellers decided to become landlords. Is this the latest trend?

    We’ve been prediction this for months. First rents would rise slightly as housing was restricted by vacant units up for sale. The rents would drop as frustrated owners demonstrate loss aversion by renting instead of selling for less than they think it is worth.

    The joke is on them though because they are going to have to accept even lower rents as everyone follows suit and sales prices are going to drop even futher.

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  42. Ira Sacharoff

    George said
    “From reading between the lines on the listings I’m seeing a lot of places that look like frustrated sellers decided to become landlords. Is this the latest trend?

    If so, why? Are agents telling these poor suckers that the market is about to bounce back? ”

    I don’t think it’s so much that the agents are advising that prices are going to bounce back ( although they probably are giving that advise), as much as houses just not selling, and sellers just not being able to sit on their properties.

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  43. BubbleBuyer

    I would caution against falling into the bubble lemming mindset. I was a bubble proponent for years, since shortly after the dot bomb implosion. As a result I rented while housing prices rocketed. I was confident housing prices were not based on fundamentals and the trend would end precipitously. This view was confirmed by like minded people reading and posting on bubble blogs. If I had bought then, I would be sitting on a tidy pile of equity despite the flat and declinging market characteristics.

    A large portion of posters here tend to spout the same biggotted view on RE. Housing prices will fall, rents will fall….25 – 50% price drops are in the bag. Well, if you are hoping for declining rents you should check out rent trends in Californian cities like SFO and LAX. Rents are increasing not decreasing. They are increasing because demand for rentals outweighs the supply as people defer purchases despite homeowners puting homes on the rental market that they cannot sell without realizing a loss. Is Seattle different? Perhaps but I doubt it. Yes, prices are declining but the externalities make it far from certain how prices will decline.

    As to my story, I bough 12 months back and couldn’t be happier. The joy of having bought is that I no longer agonize about buying a house. I already own one and enjoy the fact I own my dream home in my favorite neighborhood. My interest in RE extends to watching mortgage rates for an opportunity to lower my borrowing cost and or pre-pay my mortgage. You cannot time the market. You buy when your personal and financial situation dictates you are ready to buy. Don’t be a lemming, buy when you are ready based on the best information available to you not on biggotted views on the economy or housing.

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  44. david losh

    Anyone who reads this blog very much has noticed the dramatic recent decline (short term) in comment activity here, wondering why does not make you an attacking real estate agent.

    I have noticed that it is not currently growing as fast as RCG (since about january), which I don’t understand

    I understand it.
    Look at the comment threads. All the mortgage, Real Estate types are posting multiple comments to the post. They are all talking to each other in a chatty way.
    You might recall they were all coming over to the SeattleBubble for a while and a couple of bubble heads took the bait and raided the Real Estate sites which in turn created more drama.
    I’d be interested to see data showing the RGC site is getting more traffic. I can’t imagine why. There is nothing there. As a matter of fact I’m having a hard time finding real information on any of the Real Estate sites.
    I come here for data, insight, and perspective. This is the site I recommend to my clients. It has something to offer.

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  45. Mirtika

    One of the things I’m concerned about as a possibly near-future renter in the Seattle area (haven’t decided westside or eastside yet, still researching), is what’s happening here in Florida: Renters getting evicted, sometimes with only a day or few days notice, cause the homeowners got foreclosed on.

    I want to rent a house, rather than an apartment. Is this same sort of thing likely to happen in the Seattle area, or less likely? Any reports of that happening already there?

    And how would a renter be able to check that a homeowner is up to date with mortgage?

    Mirtika

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  46. EconE

    After calling us lemmings…Bubblebuyer said…

    “I was a bubble proponent for years, since shortly after the dot bomb implosion. As a result I rented while housing prices rocketed. I was confident housing prices were not based on fundamentals and the trend would end precipitously. This view was confirmed by like minded people reading and posting on bubble blogs.”

    Ok…so the dot-com implosion was in 2000…and you were a “bubble proponent” from 2001? Who and where were these “like minded people people reading and posting on bubble blogs” at that time?

    Oh….and pointing to the economic meltdown that we have been watching hardly makes us “bigots”

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  47. softwarengineer

    SAME SCENARIO IN 1990

    When real estate prices dive, the sellers stay put or like Ira said, become landlords.

    The difference between 1990 and now is the banks, prices and wages mitigation.

    A good percentage of the households in 1990, with double incomes, could afford the 10% interest $100K homes.

    The retirees were also spending their 8-12% interest retirements into the economy [today its like 2% to -15%]; allowing the worker wages to continue increasing back then with airplane ticket, automobile, etc purchases by the graying population.

    We hadn’t added another 50M to the country’s growth [putting strains on energy and food supplies, mitigating home buyers' wages and driving the energy based food and material costs way up], outsourced all our industrial base tech jobs [software is not an industrial base, either is video game S/W] yet either, so permanent wage degradation wasn’t implemented back then, like today.

    Seattle’s growth was horrifying in 1990 [the roads were hopelessly clogged back then too] and we’ve added five times the people since then with the same basic freeway systems, drove Boeing’s Auburn Plant out [and other manufacturers] because our clogged highways can’t get the parts to Renton and Everett cost effectively.

    We didn’t implement insourcing of lower waged workers back then either in the hoards we do now.

    But lower wages in Seattle with more massive growth, means more companies will be interested in coming to Seattle? Not if history is the future, its just the opposite, it drives them out.

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  48. biliruben

    How many years? I can tell you there just weren’t any bubble blogs in 2004.

    I started reading what little there was to read about a bubble in 2003, and bought in early 2004. I promise you, I am not sitting on a “pile of equity”. Taking into account costs, if I sell for my optimistic price, I am still taking a loss.

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  49. Locust

    In my opinion, the continued success of Seattle Bubble vs. RCG, in a world where the bubble is conventional wisdom instead of a contrarian idea, will depend on the objectivity and quality of the number crunching and analysis here. Many readers are keenly interested in trying to figure out the severity and timing of market moves. You can’t count on RCG for objectivity on that score, although they have gotten better.

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  50. Civil Servant

    Per Bubblebuyer: “Buy when you are ready based on the best information available to you.” Yes, precisely. And this site is part of that.

    I am sure that many other readers/participants here also get information from a variety of other sources that cover real estate, finance, markets, and macroeconomic trends. If Seattle Bubble’s analysis and reporting were substantially out of sync with my other reading, I might be willing to entertain your point about the site being “bigotted” [sic]. But it isn’t, so I’m not.

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  51. Sniglet

    The difference between 1990 and now is the banks, prices and wages mitigation.

    Actually, I think the really big difference is that today we have a far higher percentage of home-owners with little or no equity, leaving them with no cushion should they face any difficultied (e.g. unemployment, divorce, etc).

    Further, the global nature of this bubble is truly breathtaking, with booms from Shanghai to Madrid, Dublin, Saskatoon and Seattle. Now that credit is contracting we are seeing everyone hurt. There won’t be any country left to bail us out.

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  52. faster

    I use to post a lot more comments, but now I mostly just read the board. I check on it once or twice a day to see if anything new is posted.

    As to the comment about Rain City guide comments being mostly talk amongst the very people who write it, that’s spot on. Look at the comments on this post:

    http://www.raincityguide.com/2008/04/17/seattle-real-estate-2008/#comments

    I got bored counting, but out of the first 32 comments, 20 or so are from the various authors on the site and it seems to hold true for the remainder of the comments too.

    So lots of comments lots of readers

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  53. Ubersalad

    RCG is simply a blog for the sake of advertisement. Every once in a blue moon you’ll find an interesting entry there, and the rest is just some scattered data being posted half ass. You’ll see entries like, “blah blah blah % blah blah…that’s it for now, I’ll finish it up later” and that was the end of it. If you have nothing to do and 40+, RCG is a great place. Like a weekly Thursday night housewives gathering…or a local book club.

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  54. Ira Sacharoff

    Ageist dog! I’m 50+ and find Seattle Bubble much more interesting than RCG. But maybe that’s only because I’m so youthful and cool.

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  55. Michael

    BubbleBuyer

    “A large portion of posters here tend to spout the same biggotted view on RE”

    What?

    Wow, you really feel passionate about this. I guess protecting real estate agent’s income has become the new civil rights movement. Maybe NAR can get the Dalai Lama and Amnesty International to take up their cause. As for me I’m ready to put on my robes, dance around a burning sub prime mortgage, scream about financial ruin, and scare the sh#!@ out of every home owner in the Seattle metro area.

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  56. TJ_98370

    Wow! Interesting thread. To be fair I think Grarth’s comments are along the line of the classic confrontation between engineering personnel vs marketing people that you see in Dilbert comics.

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  57. Garth

    Michael,

    Did you filter out AOL(most traffic from virginia), you and any staff members, your syndication pages and any visits shorter than a human could read X words (average person takes about 1 minute to read 150 words). Do that and i would guess it will become much less of a fiction.

    Raw server logs include every activity on your site, including visits from robots and updates from assorted ajax pages and social network stuff that often have numerous ips and don’t accept cookies generating all sorts of bad data that needs to be filtered out. AOL still creates a unique visit for each page a user visits and unless they are logged in for a quick analysis I just filter out all of Virginia.

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  58. matthew

    Bubblebuyer,

    How ironic is it that while you were supposedly a bubble advocate you watched prices skyrocket, and now that you are anti-bubble, you are about to watch them plummet?

    Not one for timing are you?

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  59. bitterowner

    bili – “I promise you, I am not sitting on a “pile of equity”. Taking into account costs, if I sell for my optimistic price, I am still taking a loss.”

    I’m sure you are being more thorough in your financial analysis than most , who simply look at the difference between selling price and purchase price and claim that the difference represents how much money they ‘made’. I bet if most people really crunched the numbers and looked at all the costs of homeownership and then factored opportunity cost and inflation into the equation, they would find that they are not as far ahead on their ‘investment’ as they thought and might even be in the red. I remember reading a PI post last year in which a bunch of old timers were making comments about how you’d be crazy not to buy as much house as you could as soon as you could b/c they had purchased their house for X amount in 1958 and just sold if for X++ . Although the return seemed impressive (based on 2006 valuation, I wonder what it would be if they sold now), I punched that information into an inflation calculator and it turns out they barely broken even just based on sales vs purchase price so were considerably in the red when factoring in the rest of the costs, despite benefiting from the most spectacular housing price appreciation in history. My comment to that effect was not greeted with much appreciation or comprehension.

    Mirtika – for God’s sake don’t move from Miami to Seattle. There are almost 300 cloudy days a year. It’s currently about 34 degrees outside, only 10 days or so short of May. What are you thinking? I am stuck here…there is still hope for you.

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  60. bitterowner

    To Bubblebuyer: “You cannot time the market.”

    True to a point, but various indicators can give you some clues about likelihoods and risks and it looks like your timing might have been particularly bad. Only time will tell, but if you can continue simply being happy that you are a homeowner without having considerable buyer’s remorse if the market takes a significant hit and your neighbors are able to buy comparable properties at a major discount from what you paid, then you are a stronger person than me.

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  61. george

    Sorry your timing was off Bubble Buyer. Twice.

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  62. BubbleBuyer

    The bubble bigots out there are amusing. It’s a wonder how people feel so strongly about their decisions on housing…whether to buy or continue to rent. If anyone suggests a different perspective they feel they are being attacked personally. As to the comment on when the housing bubble blogs began to emerge: Actually, the concept of a housing bubble began to emerge in the Bay Area shortly after the dot bomb implosion. Primarily due to limited hosuing availability and being the epi-center of the implosion with large nunbers of people receiving haircuts in the stock market. Housing was perceived to be a safe investment. The movement grew as interest rates were kept at ridiculously low levels stoking prices. In that regard Seattle is behind the bubble.

    I will give you that the current trends should give anyone pause in moving forward purchasing a home. However, the verdict on whether now is a good time to buy or not is far from certain. For those of you 100% convinced now is a bad time to buy and completely committed to this position I would suggest you don’t have a very good grasp of economics. If you did you would at least acknolwedge the role of externalities in determining the outcome of a complex economic market with a multitude of forces. I would guess that most of you are engineers that lack formal economic / financial education. To my point, you buy when your personal situation dictates. My home may be worth $900k or $850k or $800k…I really don’t care. I don’t plan to sell. My 401K portfolio is down 20% over the past 12 months yet I continue to invest in it each month and I am not losing sleep over it. My personal brokerage account is 95% cash right now but I am looking to invest shortly. Life goes on. The good thing about the USA is you make decision and live with the consequences …unless of course you are a deadbeat subprime borrower or investment bank.

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  63. BubbleBuyer

    …”From the this site’s About Page.”

    Tim, I am not referring to this blog but to people who blindly cling to a belief and will not consider an alternate position. These people are no better than the “Now is the best time to buy a house” realtor BS. I think there are good housing purchases to be made and there are bad housing purchases to be made. IF you are at the point in your life where you want to buy, then find a good home in a good neighborhood at a good price and buy it with a mortgage you can afford. Qualified buyers are in the drivers seat and you have strong price negotiating leverage which can provide you with a cushion if the market continues to decline.

    I negotiated a pretty hefty discount on the home I purchased in a close in neighborhood arguably at a time the market was relatively strong. I also forced my mortgage broker to drop my rate by 0.25% if he wanted my business. The real estate market in seattle is not homogenous, it is bifurcated (at its simplist) both in terms of buyers financial wherewithall as well as housing quality. Applying averages does not work. You need to go house by house, neighborhood by neighborhood and mortgage by mortgage. Then, make an informed decision and let the chips fal where they may.

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  64. BubbleBuyer

    bitterowner, sure I would rather have the value of my house increase each day than decrease but I look at home ownership as a long term investment which traditionally yields a return just above inflation. My home is part of a diversified investment portfolio and I do not plant to extract any equity from it. In fact, 1 year after buying I am sitting on a pile of cash equivalent to 1/5th the outstanding loan principal that I will pre-pay if the jumbo (or conforming jumbo) mortgage market ever unfreezes and I can get a better rate otherwise I will invest in the stock market if opportunity arises.

    If 10 years from now my neighbors can buy an equivalent home in my neighborhood for less than I paid, I would be upset. However, the odds of that happening in one of the better Seattle neighborhoods are pretty low in my opinion. I do miss spending all my extra income on wine, women and good restaurants when I rented instead of plants, furniture and renovations like I do now but that is life!

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  65. deejayoh

    Oooooh Garth! Is it a Seattlebubble/RCG race? or maybe a grudge match?

    should I get some popcorn?

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  66. bitterowner

    Bubblebuyer: RE your comment : “I look at home ownership as a long term investment which traditionally yields a return just above inflation”

    I have mentioned this before and might be sounding like a broken record (I know, what’s a record?) but I’m not sure that referencing historical or traditional norms in appreciation does much to reinforce the argument for buying a house during the current unprecedented positive deviation from these norms.

    IE when people say that housing historically appreciates at a rate just above that of inflation, to me that does not mean that this traditional degree of appreciation occurs independent of the point at which any house is purchased. What it means to me is that over the past 100+ years or so, housing prices in the long term have followed a relatively consistent and somewhat straight line of appreciation, at a rate slightly greater than inflation, Short-term positive and negative fluctuations are therefore aberrations that must subsequently correct to this consistent, long-term line of appreciation

    It therefore does not make sense to claim that you can buy a house during a time when housing prices have deviated enormously in a positive direction from the above-mentioned historical norm and expect historical appreciation from the point of your purchase. What you are really saying, if cite historical trends, is for the price to correct over time, in an inflation adjusted manner, so that it once again reaches that historical line.

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  67. Rhonda Porter

    What’s the point of who has the most readers or comments between RCG and Seattle Bubble? I don’t get it. I also don’t feel that when I post at RCG, that I’m advertising (as someone mentioned above). Of course I would love to help local people with their mortgages–but you won’t see me posting “contact me-me-ME”. The biggest factor in what I write at RCG and my other blog is to try to help the masses with information on mortgages. I’ve seen a few posts (less than 5 in the 15 or so months I’ve been a contributor) where they did seem a bit self-promoting/self-serving…but on the whole, I’d say we veer away from that. (Sorry, The Tim, I know this is off topic from your original post).

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  68. bitterowner

    “What’s the point of who has the most readers or comments between RCG and Seattle Bubble?”

    Rhonda – there is no point, which I think was DJO’s (and your) point.

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  69. Rhonda Porter

    thanks, bitterowner. Sometimes when I’m trying to catch up on posts…I skim them too fast. My bad.

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  70. BubbleBuyer

    “I have mentioned this before and might be sounding like a broken record (I know, what’s a record?) but I’m not sure that referencing historical or traditional norms in appreciation does much to reinforce the argument for buying a house during the current unprecedented positive deviation from these norms.”

    Bitterowner, that’s a valid point and one that only the future will validate or not. Purchasing is a personal decision with personal circumstance sometimes outwaying caution. I was lucky enough to find close to my dream home in my dream location that was priced right and then negotiate a 6% discount off that. I was also fortunate enough to have sufficient cash flow to cover my mortgage and then some. I put 20% down and in the past 10 or so months have accumulated a cash balance of 20% of the outstanding loan principal which, when I choose to partially pre-pay my loan, will give me 40% equity in my home within 12 months of purchasing it. Not bad for a first time homebuyer. So to me, the cost of my home is a sunk cost and there is nothing I can do about it other than to pay off my mortgage, which is what I am doing. Price perturbations do not bother me, unless I am forced to sell due to something untoward occurrring. Once again, there are opportunities to make a smart buy even in this uncertain environment. There is no certainty in life and I chose to take the next step even though I had doubts about the market. It feels good not to have to agonize over this decision any more. That was my only point.

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  71. Sniglet

    If 10 years from now my neighbors can buy an equivalent home in my neighborhood for less than I paid, I would be upset.

    Why would you be upset? If the purpose of buying a home is to have a place that you like living in why does it matter if the place depreciates substantially or not? As I’ve said on this blog many times if a 50% price drop on a home you buy wouldn’t substantially cause you economic hardship or problems, then you should go right out and buy now. Why wait and try to time the market? You aren’t buying to get financial security, so don’t worry about it.

    Now, I feel for anyone who wants to delude themselves into thinking that homes in good Seattle neighbourhoods won’t ever see substantial price declines. Real estate can be just as, if not more, risky than stocks or other investment classes and people need to remember that. The only difference of real-estate is that it is not as immediately volatile, taking MUCH longer for price trends to play themselves out.

    There are plenty of examples where real estate prices have dropped 50% or more (e.g. Japan, Hong Kong in the ’90s, etc), so to think that homes can’t drop much is wishful thinking. Mind you, even in these cases where real-estate dropped 70% or more it wasn’t as if it was the end of the universe. Life still goes on in Japan and Hong Kong despite the fact there are plenty of people who have been stuck for a decade in homes worth less than the mortgage.

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  72. BubbleBuyer

    “Why would you be upset? If the purpose of buying a home is to have a place that you like living in why does it matter if the place depreciates substantially or not?”

    Sniglet, I would be upset because over a 10 year time span, I anticipate there being a reasonable chance I would have to sell and realize a loss. While I do not expect to retire off the equity in my home, I have an expectation of at least breaking even when I exit given inflation, financing cost, maintenance etc. If I do not, I would be a little upset because it implies I paid more for the roof over my head for the 10 years than a newer neighbor did and like everyone else, I like a deal. But as you say, if I take a loss it is not the end of the world and life will go on. It’s not as if I have never taken a large loss in the stock market although I do prefer a portfolio with positive gains. The key is to not plow all your income into housing but to diversify over a portfolio of investments.

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  73. Sniglet

    I anticipate there being a reasonable chance I would have to sell and realize a loss

    There may indeed be a chance that you will be able to sell without seeing a loss in 10 years, but there is an equally, and likely even larger, chance that any Seattle home purchased in the last 3 years won’t be able to fetch it’s original purchase price a decade from now. Like I said, I don’t think anyone should be buying a home today with the expectation of any appreciation whatsoever (even over a 10 year time span). If they are, they are very likely setting themselves up for a lot of disappointment.

    I am not against buying a home, I am just against the expectation that homes will inevitably appreciate (even over a 10 year time frame).

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  74. Lake Hills Landlord

    I am a new landlord who used to live in my house. My reasons for not selling are:

    1) I actually believed the hype. I thought we would go from 10% appreciation to 6% appreciation without a hiccup. Plugging those numbers into my rental projection spreadsheet last year made it look like a no-brainer.

    2) I have always liked the idea of having one or more rental properties as a side business, so this seemed like a chance to give it a try considering that I already own the house and mortgage (under more favorable terms than a purchase for rental use mortgage).

    Only time will tell if this works out for me. I decided to stick with my plan because I think I have already missed the top of the bubble, I have good tenants with a one year lease in place, and I think that in 10-15 years this could turn into a good business decision. In the short term though it is a horrible choice. I am underwater every month on the rental (-$700) and am certain my equity will completely evaporate within two years ($80,000 loss from peak…break even from original purchase price, but not considering money put into the house).

    If I could go back and do it over again, would I make a different choice? Hell yes. I would sell last summer and be sitting on cash in the bank and a more flexible monthly budget by not having to cover the shortfall between rent and mortgage payment.

    I can appreciate the experience as being part of a bigger education on real estate economics. That, combined with all that I have learned here on SB, should serve me well in the future.

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  75. Jackson Wallace

    The market is steadying in that delusional, greedy aholes who want to sell their non-lakefront properties in neighborhoods like Rainier Beach and Montlake for 800k-1mil are finding that noone wants to buy their jacked-up trash. The weather this last six months should reeducate newcomers to what this area is really like. There is still a demand here, probably because CA and FL are so distatesful, but its starting to be that you really dont get anything for your money in Seattle except a tech job and a heavy house nut.
    This town is totally overblown. Its not worth what people are paying. The outskirts are already in a full-bore downturn, although cheaper properties in the city are still selling. We’ll see how long til cheaper becomes the norm.

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  76. Buceri

    I don’t think “this town is totally overblown”; but Real Estate is.

    Seattle is going through the denial phase. “I can’t be the one that needs to reduce the price; Joe next door sold for $XXX last summer and his kitchen was outdated, and he has one less bathroom”, blah, blah.

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  77. Civil Servant

    HousingTracker.net shows Seattle (i.e., Seattle-Tacoma-Bellevue) inventory increasing 1.9% for the week ending yesterday, for what it’s worth. Tied for third highest increase among metro areas they track.

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  78. Evening Magazine on Tim Ellis & Seattle Bubble | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.

    [...] Puget Sound Counties March NWMLS Update [...]

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