Wait, wasn’t that the reason we could never fall in the first place? Oh well. Time to move to plan “B”[/i]

What Runstad was likely referring to was the GMA limited the amount of land and density that is available to residential RURAL deveopment, in RURAL areas, so they did not have as much to lose to begin with. Greenbelts and all, ya know. However, that is OUTSIDE of Seattle and the other cities in the county proper. It really was a empty statement, IMO.

And yes, I have heard many-a-ranter complain about the GMA being the root of all housing evil, and the limitations it puts on the frontier mentality, but they never seem to get that the GMA was designed to keep development sustainable. Unregulated and unlimited expansion implodes and eats itself. This ain’t the Wild West anymore. There are limits to what can be sustained.

What is not like other areas, is the fact that developers are not required to kick in for the new infrastructure needed to support the developments that are approved, unlike in most of the rest of the country.

you need to be close in to generate more billable hours.

at $270 per hour, getting in an hour earlier, or leaving several hours later, then walking from work to home; it adds up fast.

You are right, DJO. But utilities are the closest thing I could think of that might be a similar investment to housing

I think it’s a great comparison. That should have been an “and actually” in my post. I was riding on your coattails.

When or if the Seattle down town core gets built no self respecting yuppie is going to live in Fremont or Ballard. All those town houses will be rentals until they are torn down to make way for real development. Let’s see, if i were a lawyer looking to make partner, as the saying goes, am i living in Ballard, Belltown, or down town.

The rentals are built waiting for interurban.

I like the utilities analogy comared to housing prices. It really is a mystery to me why the entire world population started paying two or three times the value of property. Mortgage rates aren’t making it for me.

Just because mortgage money is 5% rather than 10% i don’t see how that raises the price of housing. You can pay more because the payments are less? I don’t get that logic.

We really are at the barn door after the horses have gone, but it is global.

I mean, am I right that Growth Management Act or no Growth Management Act, months of inventory is a meaningful statistic whether the units of same are McMansions in a far-flung development in Phoenix or McTownhouses in Green Lake? In this context the GMA seems like a red herring. Also potentially of interest here: as part of the discussion about peak oil and energy policy, Runstad said that sooner or later the city was going to have to realize that we need more, not less, urban density, more units created close in. I don’t necessarily disagree with this, as long as those units are well constructed and have some character — but even the ugly particleboard ones, even were we to see a real downturn, would not be affordable for most people in Seattle. (So, yeah, the real estate developer’s perspective.)

Disclaimer: I’m not slagging on the lady. She may be biased, but she is smart, articulate, extremely well read, and concerned about US health-care policy. I’m just a skeptic and a regular visitor to this site, is all.

That sounds more like our clogged city since 1990.

Runstad posits that Seattle has a bit further to fall but not that much because our Growth Management Act has insulated the area from the vast outlying new developments that she sees as problematic in other cities

Wait, wasn’t that the reason we could never fall in the first place? Oh well. Time to move to plan “B”

Build an index of companies that meet that criteria (think regulated power companies) and I bet you will find long term similarities to the housing market.

Good argument Alan – but actually, I think the return on housing would be slightly less than for the utility. The utility has growth in demand – both in terms of population served and consumption per person – so they get a fixed return, but on a growing asset base. The utility of the house never changes (unless you cut it up into apartments, I guess)

One can argue that housing does produce value in the form of continuing shelter and I agree. However, that shelter “production” does not create more shelter that can be used to create even more shelter. In fact, the value of that shelter production can be estimated by looking at what someone is willing to pay for one month of supply. We call this rent. When comparing housing to the stock market, you should think of housing as a no-growth company that pays a monthly dividend. Build an index of companies that meet that criteria (think regulated power companies) and I bet you will find long term similarities to the housing market.

we saw the stock market hit an unsustainable heighth above all reasonable expectation. then there was the microsoft lawsuit and the stock market collapsed but only down to where it made sense again then started it’s climb again.

the stock market was 4000 in 1995, it’s 12000 today. same with housing prices. my bet is that housing prices across the board in all parts of the country will return to 2004 or 2005 levels and stay there.

my question is why doesn’t the stock market go back to 4000 or 6000? why don’t housing prices return to 1995 prices? it just doesn’t seem like they will.

But wait! Is that the real inflation rate or just the reported inflation rate?

“Don’t Believe the Hype”

Question: If the derivatives market is bigger than the stock market then how the hell can anyone possibly write a report about state of our economy? Their are no metrics that can describe the state of wall street.

my experience is that prices fluctuate then settle for more than they were before. the stock market has turned out to be the same way. why?

Gee, maybe it’s because for prices to change (up or down) they must ‘fluctuate’? If they aren’t fluctuating, they are by definition remaining constant. E.g. every day, stock prices fluctuate, and then at around 4pm EST they settle until 8am the next morning.

Or are you asking why stock prices ‘always go up’? The answer to that is simply that stock prices should mirror the overall future of the economy. If economic growth stopped and then rolled backwards for a sustained period of time, the stock market would fluctuate and then settle at a lower price.

Based on this, I’d like to coin a new phrase – “Dead-Cat Slide”. A dead-cat slide is what happens when you throw a cat off a hill that is so steep that when it does eventually hit the hillside it just starts sliding and rolling down the side. It’s still essentially in free fall, but it’s got just a little friction slowing it down.

Next stop….poor house.

just so many options out there.

Sure SBUX has tanked but people love the Mom and Pop shops in trendy areas. Its an ANTI SBUX regime out there. Maybe you can give up all the rehab and make sandwiches and drinks all day and live upstairs. You will love Fallon.

I used to do the fixer/rehab game. Its exhausting. There is a far better way. It just takes effort. Cost of materials. Battling the Home Depot and Lowes return lane lines. Forget it. Simplify your life.

Off to Reno and Sacramento for round 4 our investor tour closures. Just so much opportunity and so little time. Forget the residential homes. Its the commercial tgts we hit.

Dig David. Find your Gems! Trust me they are out there!

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

just kidding. i was thinking this morning why prices on houses don’t go down, or for that matter why they go up. supply and demand isn’t working for me.

financing options aren’t working for me. the credit market imploding isn’t working for me; credit is more than mortgages.

my experience is that prices fluctuate then settle for more than they were before. the stock market has turned out to be the same way. why?

The local news downplays the 15-20% national home price collapse, because Seattle is like 1/5th the rate degragation. LOL

This city and surrounding subarbs are sitting on a powder keg to implode in price. Its clear. Simply put, the zero down jumbo arm and leg refinance scheme doesn’t have the 5-10% price increase net to save owners and the banks anymore. Seattle is full of these types of loans the last 5 years and it isn’t just subprime, its like cancer its eating into approximately half the recent sales.

How do you refinance your ARM without an equity down payment? I know, use that magic wand GW Bush talked about yesterday to fix the economy. Or dig into the 10s of thousands of dollars, all the new owners have saved in bank cash. LOL