Last week the Puget Sound Business Journal ran a piece comparing King County to San Diego County. It was behind a subscriber-only wall, but now it’s fully available on their website: How King County dodged mortgage mess compared to San Diego. Unfortunately, the article doesn’t really have any new material that regular readers here haven’t seen before.
While the housing market’s downturn has certainly struck the Puget Sound region, it hasn’t wrought the widespread havoc that hit cities like Miami, Las Vegas and San Diego.
On the surface, there appear to be few reasons why the Puget Sound area has been able to escape the worst of the mess. Housing markets in both cities saw companies, jobs and people pour in during the first half of the decade. Both are desirable places to live. Home prices rose. And subprime mortgages were widely available.
But a detailed comparison of the two regions shows why King County’s economy is heralded as a bright spot across the country while San Diego County has come to represent everything that went wrong.
First off, I agree 100% with what appears to be the basic premise of this article: that the housing bust won’t be as bad here as it will be in San Diego, Phoenix, Florida, etc. I don’t think anybody has ever tried to argue that things will be as bad or worse here.
Unfortunately, while the article promises a “detailed comparison,” it doesn’t really deliver.
Builders in San Diego raced to build homes to keep up with demand, pushing farther into the previously undesirable areas of southeastern San Diego County, far away from the ocean.
In contrast, Seattle builders were restricted in part by the state’s growth management law and weren’t able to build at nearly the same pace.
In addition, mortgage companies and banks in San Diego — including Seattle-based Washington Mutual — wrote thousands of subprime loans. Their counterparts in Seattle wrote far fewer.
Ok, those are some interesting assertions, but where’s the data? What were the per capita rates of new construction and subprime lending in the two counties? The article doesn’t say. In fact, the only data I’ve been able to find that compares lending in San Diego to the Seattle area shows suprisingly similar amounts in both areas.
Later in the article, they do cite some raw data on homebuilding:
In San Diego, developers got 9,749 permits for single family homes in 2002, up about 6 percent from 2000, according to the Building Industry Association of San Diego County. That pace held steady through 2004 and then started to fall. By 2007, building permits for single family homes had plummeted 64 percent to 3,508 from the heyday of 2002.
By comparison, King County’s single family building permit activity remained flat between 2003 and 2005, with about 1,300 permits filed each year, according to the Washington Center for Real Estate Research. In 2007, permits dropped slightly to 1,239.
So, San Diego permits went up in 2002, leveled off for two years, then fell. In King County they leveled off for two years, then fell— the same pattern as San Diego, but offset by a year.
Of course comparing raw data like this is rather deceiving since the population of San Diego County is 2.8 million, versus King County’s 1.7 million. A better comparison would be King, Snohomish, and Pierce combined, with a population of 3.0 million. And as anyone that’s spent much time driving around outside King County knows, there was a heck of a lot more development in Snohomish and Pierce than there was in King. (And there are a lot more foreclosures out there, too.)
Another big reason: It took Seattle longer to recover from the economic aftershocks of 9/11 and the dot-com bust. As a result, the city entered the housing boom late and “although it got heated, it wasn’t as seriously overheated as some of the other parts of the country,” said Glenn Crellin, director of the Washington Center for Real Estate Research, Washington State University’s real estate research arm.
“Our economy has done very well compared with many other parts of the country,” said Crellin.
Does it occur to folks like Mr. Crellin that perhaps the only sectors of San Diego’s economy that are suffering are those related real-estate, and that perhaps the reason our economy looks so great is because the housing bust here is only just getting started?
I also don’t understand how someone can say “we entered the housing boom late” then when we likewise exit the boom late, say “look how unique and strong we are!” How does that make any sense?
What lies ahead? Chad Ruyle, an estate planning attorney and co-founder of You Walk Away, a foreclosure advice firm, thinks San Diego is not near the end of its housing market downturn.
…
“No one can predict when the market will bottom out and return to normal,” said Ruyle. “But I think we’re only a third of the way through it.”Seattle, on the other hand, has likely made it through the worst of its downturn and will slowly start recovering, said [University of San Diego professor Norm] Miller.
I’d be curious to know exactly what Mr. Miller is basing his theory on. Unfortunately, the article doesn’t say.
No offense to Ms. Grind, as I realize there’s only so much you can fit into an article of this nature. But I have to say that this article came across to me as light on details and high on wishful thinking.
(Kirsten Grind, Puget Sound Business Journal, 06.06.2008)
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137 responses so far ↓
1
Marc
// Jun 13, 2008 at 2:15 pm
“First off, I agree 100% with what appears to be the basic premise of this article: that the housing bust won’t be as bad here as it will be in San Diego, Phoenix, Florida, etc. I don’t think anybody has ever tried to argue that things will be as bad or worse here.”
Tim, you’ve got to be kidding. To say that none of the people posting on this blog have been exhorting a percentage decrease in Seattle prices that would rival SoCal is disingenuous at best.
2
The Tim
// Jun 13, 2008 at 2:16 pm
Marc, have you asked those people how far they think SD will fall? Maybe the people calling for 50% off in Seattle think SD will fall 75%.
3
Marc
// Jun 13, 2008 at 2:21 pm
Regarding permits issued in San Diego County and King County, I’d love to see a comparison of the total number of permits issued this decade in those two counties (plus Tim’s King/Snoho/Pierce combo). This article seems to suggest that the total number isued in San Diego would smoke our numbers up here. If that were true that would be a very significant factor in where overall prices are headed here vis a vis San Diego.
4
Brian
// Jun 13, 2008 at 2:24 pm
I know I could do this myself, but I haven’t got around to it.
I’d really like to see actual house prices indexed to specific points in time. IE, take the Case-Shiller data, and just chart out a few cities (so it’s not too hard to read), indexing their values to several points in time over the last few years. It seems like that would be a good way to see what’s overpriced and what’s not. Almost every RE chart I ever see is % change based. I want to see actual prices over longer periods of time.
If we put SD and Seattle on the same chart, and index them to the same starting point a few years back, it’d be interesting to see the difference. Actually, with SD and Seattle, you wouldn’t even have to index. :)
5
Garth
// Jun 13, 2008 at 2:32 pm
The census has all the data
http://www.census.gov/const/www/C40/table3.html#annual
I think a per 1000 housing units would be a more useful number, I have no interest in Pierce and Snohomish counties.
6
The Tim
// Jun 13, 2008 at 2:33 pm
I agree Marc. If someone knows where to find that kind of information I’d love to do a post on it. Of course, I also think population growth over the same time period is an important factor to consider in a comparison like that. A cursory search shows that San Diego has grown just a bit faster than King/Pierce/Snohomish since 2000:
I bet when Pierce and Snohomish are thrown into the mix the building booms between the two would be similar as well.
7
biliruben
// Jun 13, 2008 at 2:48 pm
I don’t know about SD, but WSRER has permit data, and even lets you download it to a spreadsheet. Kinda crappy interface, however.
http://www.wcrer.wsu.edu/WSHM/buildOwnReport.aspx
I messed around with it when the article first came out, and have no idea where they got their numbers.
8
softwarengineer
// Jun 13, 2008 at 2:55 pm
WHAT GOES DOWN, MUST KEEP GOING DOWN
Its that simple. We trend the same as SD and we’re going down just like that city too.
9
The Tim
// Jun 13, 2008 at 3:03 pm
Ok, the tables Garth linked to show “New Privately Owned Housing Units Authorized” by Metropolitan Statistical Area, which conveniently happens to be King/Pierce/Snohomish for Seattle, and San Diego County for San Diego.
If the Census data is truly showing the amount of building activity, then Seattle has actually been building more than San Diego.
Here’s a yearly comparison of “new housing units authorized” per new person. In other words, I took the Census data and divided it by the population growth over the previous year.
Am I reading something wrong here, because that shows the Seattle MSA as having quite a bit more overbuilding than San Diego.
10
Marc
// Jun 13, 2008 at 3:03 pm
Tim,
Regarding your query at #2, thanks to Softwarengineer it looks like I won’t need to ask “those people how far they think SD will fall.” I’m sure you’ll agree that he’s reasonably representive of the chicken little fringe vote. No disrespect SE.
11
Marc
// Jun 13, 2008 at 3:05 pm
Tim,
I think you should look at absolute numbers in terms of permits issued and population. I think existing housing stock is also a relevant factor to adequately compare betwen these geographic regions.
12
The Tim
// Jun 13, 2008 at 3:05 pm
Marc, I don’t see a claim in SE’s comment that Seattle’s percentage decrease will “rival SoCal,” just that they’re both going down.
13
The Tim
// Jun 13, 2008 at 3:10 pm
Ok Marc, here you go:
Where can I find information about “existing housing stock”?
14
Marc
// Jun 13, 2008 at 3:12 pm
Alright Tim, if that’s how it is.
Softwarengineer, in your opinion, will the percentage decrease in Seattle prices rival that in Southern California or will Seattle be spared the massacre awaiting our fellow Americans just north of the border? How about San Diego county alone?
15
Marc
// Jun 13, 2008 at 3:15 pm
Thanks for the stats Tim. How about just King County’s stats since the original article referred to KC alone? As for existing housing stock stats, your guess is probably bettern than mine.
16
The Tim
// Jun 13, 2008 at 3:17 pm
Unfortunately the census data Garth linked to only provides new construction authorization stats broken down into MSAs.
17
Garth
// Jun 13, 2008 at 3:55 pm
Tim,
The Census also has the number of housing units:
http://factfinder.census.gov/home/saff/main.html?_lang=en
Click the housing tab in the left menu and then you can get reports for states counties and zips.
The raw data can be had too, but you need a database to put it all in.
There are a lot of free datasets available here as well
http://infochimps.org/
18
Marc
// Jun 13, 2008 at 4:01 pm
Here’s some info I found on the counties’ websites on existing housing stock and population:
King County total housing units in 2006 = 803,543
King County population = 1,826,732 (2.27 persons per household)
King County Square miles = 2,126
San Diego County total housing units on Jan. 1, 2007 = 1,131,749
San Diego County population = 3,098,269 (2.74 persons per household).
San Diego County Square Miles = 4,261
http://quickfacts.census.gov/qfd/states/53/53033.html
http://www.sandag.org/uploads/publicationid/publicationid_485_637.pdf
http://www.sandag.org/resources/demographics_and_other_data/demographics/fastfacts/regi.htm
19
The Tim
// Jun 13, 2008 at 4:08 pm
That data falls fairly closely in line with the “average household size” data from the Census Bureau, too:
San Diego County: 2.72
King County: 2.38
20
Garth
// Jun 13, 2008 at 4:19 pm
There is county permit data here too:
http://censtats.census.gov/bldg/bldgprmt.shtml
21
Marc
// Jun 13, 2008 at 4:22 pm
As an aside, I just had one of those moments of sheer awe thinking about the power of the internet. I mean it took me about two minutes to find the population, total housing stock, and size of San Diego County and another thirty seconds to find out San Diego is 58.4 miles south of Temecula and I didn’t even get out of my chair.
Thank God for nerds.
22
Sniglet
// Jun 13, 2008 at 4:23 pm
I, for one, am unwilling to say whether Seattle will face a deeper real-estate decline than San Diego. There are many factors that can come into play, and I just don’t know how much a severe recession (which I predict is coming) will impact each locality.
I do feel confident, however, in predicting a greater than 50% price decline (from peak) in both Seattle and San Diego. I would also tend to the notion that prices in both regions will revert to mid ’90s prices. So, whichever city had a greater price appreciation since ‘95 would be the one I would expect to see a greater depreciation.
That said, there certainly can be regional variations as to the impacts of a global recession, and we will just have to see how that plays out in the economy of both cities.
23
Yaoyao
// Jun 13, 2008 at 4:44 pm
Does the data above about “King County total housing units” include apartments and condos?
Very interesting discussion
24
James
// Jun 13, 2008 at 4:46 pm
Softwarengineer,
I simply must ask. Are you the guy that has been living in a hotel since August waiting for the deal of the century? If so, you are infamous in the real estate world.
25
Marc
// Jun 13, 2008 at 5:20 pm
Yaoyao,
Apartments are included in King County’s definition and I’m fairly certain they’re also included in the San Diego numbers. Condos are less certain but I’d guess they’re included.
Sniglet,
That’s a pretty strong prediction and, while I have a different opinion, I believe you’re genuine and did not make it lightly. I would guess that a 50% decline in Seattle prices would result in a median price in the neighborhood of $220,000. You didn’t indicate the time frame for your prediction and I’m curious how long you think it will take to reach bottom.
If it were to happen by this time next year or sooner I would predict that it was part of a nationwide and/or global meltdown far beyond what we’ve seen so far. I would also predict that some of the concordant ramifications of such a decrease would be wide spread rioting and virtual anarchy. If it were to be strung out over 4 or 5 years I doubt all hell would break loose but many a politician will be voted out and God only knows what new social programs and governmental debt our grandkids will be saddled with.
What do suppose the state of affairs will be over the course of the decline you predict?
26
magnolia44
// Jun 13, 2008 at 5:52 pm
lol 50% decline…lmfao keep going with that.
27
wreckingbull
// Jun 13, 2008 at 6:09 pm
To me, focusing on ‘decline from peak’ is interesting, but not that relevant. I don’t know if Sniglet is right, but I do know one thing…we are not even close to hitting a to the historical norm where our prices are supported by income and current lending practices.
Based on this, I don’t find Sniglet’s prediction to be that unreasonable. It certainly won’t happen in one year Marc, I think your four-year scenario is far more likely.
28
James
// Jun 13, 2008 at 6:46 pm
Did anyone catch King 5 news tonight? King County property values are up 6%-13%….Hmmmm. Now those sellers are REALLY going to be patient.
Hard to imagine a decline of 50% with news like that. People that are selling are not desperate, but the deals are outside the city. Most of the current sellers I’ve encountered are planning a move closer to Seattle from the burbs.
29
Garth
// Jun 13, 2008 at 7:18 pm
I think wreckingbull is right, the YOY numbers are where the focus of the general population is going to be.
There has clearly been a repricing of risk, and the prices on as-is properties reflect the fact that the buyer probably needs cash to purchase it. I would bet money that the house in Ballard billreuben posted yesterday is a wet mold factory. One thing I learned from looking at houses is that one picture of the exterior only in the listing = wet as hell inside.
30
jonness
// Jun 13, 2008 at 7:36 pm
“I’d really like to see actual house prices indexed to specific points in time.”
Here are quarterly housing prices going back to 1985. Open the 1Q 2008 Dataset.
https://www.nationalcity.com/main/micro-site/economics/commentary-analysis/pages/housing-valuation-analysis.asp
31
jonness
// Jun 13, 2008 at 7:50 pm
Hopefully I don’t break a length requirement rule for posts here or something.
San Diego, CA vs. Seattle house prices by quarter
SD Seattle
1985Q1 $97.9 $77.8
1985Q2 $99.6 $78.2
1985Q3 $101.7 $79.0
1985Q4 $101.7 $79.4
1986Q1 $104.1 $80.1
1986Q2 $105.5 $80.4
1986Q3 $108.0 $81.4
1986Q4 $109.7 $82.3
1987Q1 $112.4 $83.7
1987Q2 $114.7 $84.4
1987Q3 $117.6 $85.5
1987Q4 $120.2 $86.6
1988Q1 $123.7 $88.4
1988Q2 $127.5 $90.1
1988Q3 $132.9 $91.9
1988Q4 $141.3 $93.7
1989Q1 $148.4 $97.4
1989Q2 $156.0 $102.7
1989Q3 $163.6 $107.9
1989Q4 $168.2 $115.4
1990Q1 $170.2 $126.1
1990Q2 $170.6 $136.0
1990Q3 $172.6 $138.5
1990Q4 $171.0 $137.3
1991Q1 $171.1 $137.7
1991Q2 $170.4 $139.6
1991Q3 $169.9 $139.5
1991Q4 $169.9 $140.7
1992Q1 $169.4 $140.5
1992Q2 $167.9 $141.8
1992Q3 $167.3 $144.2
1992Q4 $164.6 $144.0
1993Q1 $161.2 $143.6
1993Q2 $160.0 $145.9
1993Q3 $157.5 $147.9
1993Q4 $156.1 $149.0
1994Q1 $153.6 $149.9
1994Q2 $153.9 $152.4
1994Q3 $154.3 $153.1
1994Q4 $152.7 $153.2
1995Q1 $151.8 $153.6
1995Q2 $151.2 $153.7
1995Q3 $151.1 $154.0
1995Q4 $149.4 $153.2
1996Q1 $149.4 $154.1
1996Q2 $149.1 $157.9
1996Q3 $149.9 $158.5
1996Q4 $150.0 $157.8
1997Q1 $148.6 $160.5
1997Q2 $152.4 $166.0
1997Q3 $154.2 $170.0
1997Q4 $155.2 $171.6
1998Q1 $159.1 $175.1
1998Q2 $166.2 $183.1
1998Q3 $170.8 $186.8
1998Q4 $174.1 $188.4
1999Q1 $178.9 $192.4
1999Q2 $185.4 $199.6
1999Q3 $191.6 $204.2
1999Q4 $196.7 $206.9
2000Q1 $204.0 $212.3
2000Q2 $212.0 $216.4
2000Q3 $219.0 $218.4
2000Q4 $225.8 $220.8
2001Q1 $232.1 $223.9
2001Q2 $239.9 $228.3
2001Q3 $247.4 $232.0
2001Q4 $253.9 $231.4
2002Q1 $264.7 $236.5
2002Q2 $281.0 $241.6
2002Q3 $296.4 $243.7
2002Q4 $306.7 $246.1
2003Q1 $320.0 $249.5
2003Q2 $335.1 $254.8
2003Q3 $351.0 $259.6
2003Q4 $369.0 $263.5
2004Q1 $389.3 $271.2
2004Q2 $416.7 $281.5
2004Q3 $450.6 $288.2
2004Q4 $463.7 $295.4
2005Q1 $480.8 $302.6
2005Q2 $495.0 $320.1
2005Q3 $505.9 $334.1
2005Q4 $500.5 $342.1
2006Q1 $496.5 $354.6
2006Q2 $496.4 $372.4
2006Q3 $482.5 $381.7
2006Q4 $469.3 $385.0
2007Q1 $462.6 $392.9
2007Q2 $457.6 $404.0
2007Q3 $438.4 $409.0
2007Q4 $409.5 $400.2
2008Q1 $376.6 $393.2
32
deepcgi
// Jun 13, 2008 at 7:52 pm
I think it is interesting that the rising inventory numbers in the worst hit areas (including San Diego) have leveled off to a great extent, compared to last year - but have not stopped the prices from dropping. Apparently, people still believe the market will turn in their favor within the next year or so. The inflation pressure on consumers, however is equally painful everywhere. I think the disparity between Seattle and these other areas will soon diminish. It may be fair to say that the percentage drops in Seattle will not match the magnitude in San Diego, but I also believe the motion of this train wreck is even slower than the greatest pessimist had predicted. I don’t think we are even halfway to the bottom of this crash. I think San Diego is going to see median home sale prices at 55% below peak (if they are lucky). They are already at 28%. I wouldn’t be surprised to see median prices in Seattle at 40% below peak.
33
b
// Jun 13, 2008 at 8:48 pm
This crash is going to be 4+ years in the making. Real estate cycles are very slow and it seems that the last hope of the RE bulls is that things are happening slow and therefore they won’t happen. This was created by a global credit bubble that blew up home prices from Seattle to San Diego to Spain to Ireland. It is a slow motion contraction in the making and might only have the bottom drop out if a precipitating event, like the near crash of Bear Sterns, plays out fully instead of being averted. San Diego and similar areas will drop to the bottom quickly and stay there, Seattle and similar areas will just drop drop drop until they hit the bottom. Mortgage rates are currently rising, shaving $10k+ off affordability of homes everywhere by the week. For those that believe 50%+ price declines will mean the end of civilization and blood thirty vampire zombies roaming the suburbs, please take a look at California in the 90’s, Texas in the 80’s and of course Japan in the 90’s and 00’s. It hurts like hell but life will go on fine.
34
jonness
// Jun 13, 2008 at 9:18 pm
Notice in the above post that in 1985 SD was way higher than Seattle. In Q4 1994, Seattle overtook SD. In Q2 2000 SD reclaimed the lead. SD then began to explode until Q1 2006 when it began to come apart. Seattle peaked in Q3 2007 with almost $100K less appreciation than SD at its peak.
It is quite relevant that SD peaked much higher than Seattle. However, let’s take a look at SD’s drop vs. San Diego’s drop.
San Diego
Quarter………$……% Drop
2005Q3…..505.9
2005Q4…..500.5……..1.1
2006Q1…..496.5……..0.8
2006Q2…..496.4……..0.0
2006Q3…..482.5……..2.8
2006Q4…..469.3……..2.7
2007Q1…..462.6……..1.4
2007Q2…..457.6……..1.1
2007Q3…..438.4……..4.2
2007Q4…..409.5……..6.6
2008Q1…..376.6……..8.0
———————————-
Seattle
Quarter……….$…….% Drop
2007Q3…..$409.0
2007Q4…..$400.2……2.1
2008Q1…..$393.2……1.8
Wow, both markets started coming apart in Q3, but Seattle is dropping much faster than San Diego. I would expect this because market fundamentals are not the same during the 2 years that separate the cities.
What I take away from this is that we probably won’t see a huge drop in Seattle all at once. In fact, San Diego stabilized 4 quarters into its drop. I expect it will take a few years of drops before the people who are buying now in Seattle truly realize what a dismal investment they have made.
However, if the economy picks up and interest rates remain low, Seattle could hold. More than likely the opposite will be the case, so Seattle could drop much faster than San Diego. At any rate, I’m waiting before I buy.
35
Garth
// Jun 13, 2008 at 9:19 pm
It is all about how many investors there are and how many ot them get foreclosed on. For several months in San Diego and Vegas 40% of sales were foreclosures, that number has dropped into the mid to high thirties in the last 60 days or so. I have not seen that number reported anywhere for seattle, so I have no comparison, but I imagine if it was anywhere close to 40% we would know.
The hotpads foreclosure heat maps show what is going on in both markets pretty well, if you look at san diego, you will see the only good area is owned by the military, while in king county parts of the eastside and seattle proper are still green, this is also after the San Diego map was bright red a few months ago.
36
mikal
// Jun 13, 2008 at 9:31 pm
Since financing dried up for all at the same time, our market is stronger. We still aren’t at the bottom yet.
37
deejayoh
// Jun 13, 2008 at 9:31 pm
You mean the article talking about property tax assessments?!?!? Are you going to sell your house for it’s property tax assessment? Does the County offer you a put back to them for the assessment? Actual property values and tax values are two completely different things, and offering that up in this conversation provides little insight or value. . It’s a made up number based on which they charge you taxes. Probably tracks actual sales values at <80% correlation.
If you’re going to make a claim, provide a link - and make it relevant.
38
b
// Jun 13, 2008 at 9:41 pm
Garth -
Seattle and San Diego had similar levels of investment purchases during the height of the bubble, and also similar levels of high leveraged loans. See figures 6 and 7 in the flash segment at the bottom of the Fed’s datasheet. Other Fed analysis has shown that foreclosures are led by price declines and not vice versa. Since Seattle is just beginning its shift to price declines I think we can expect Seattle foreclosure activity to be really going rampant in a year or so from now, similar to other cities which started earlier than us and are getting slammed today.
39
b
// Jun 13, 2008 at 9:47 pm
mikal -
San Diego had already burst before the credit contraction took force last August. Seattle’s burst was premature and caused by the credit contraction itself. The reason is not that Seattle is stronger per se, but that San Diego reached the point of “no more buyers” before Seattle as it started rapid appreciation earlier. In any market at some point, even with baloney loans, the prices cannot be sustained. SD reached this level and the declines started piling on. Seattle was probably another 6-12 months from reaching this level naturally, but the credit contraction caused the top of that curve to come down due to financing restrictions.
40
mikal
// Jun 13, 2008 at 10:46 pm
We will see. Places like Spanaway, Covington, Lake Stevens will be the hardest hit. The people that can barely afford to buy can only afford there. That 25% energy inflation will certainly push them out of it since many are paycheck to paycheck. That said, inner city Seattle won’t drop much.
41
economist
// Jun 13, 2008 at 11:03 pm
Did anyone catch King 5 news tonight? King County property values are up 6%-13%
Assessments are an estimate of market price as of Jan 1, 2008. So what you are saying is that the estimated market price as of Jan 1, 2008 was up 6-13% from Jan 1, 2007. Which is probably pretty accurate, since the Seattle market peaked in summer 2007.
Now just what does that have to do with the change in market price since that time?
42
jonness
// Jun 13, 2008 at 11:15 pm
b, I agree.
It seems to me the housing bubble keeps spiraling up until the point where homes become unaffordable. San Diego reached max affordability at $500k in its market conditions in its time. Seattle reached max affordability at $400k in its market conditions in its time (based on National City data) .
Once house prices start to go down, a new mindset takes place. Buyers are hesitant to buy knowing that they could lose money, and sellers are hesitant to drop prices because it makes them feel like they are losing money. No one wants to lose money. Thus, a game of cat an mouse ensues where prices drop a little bit each quarter until the market finally realigns with the new fundamentals, which currently are rising interest rates, loan resets, tightening credit, supply outstripping demand, rising unemployment rate, etc.
Is there anybody out there that truly believes that Seattle house prices are going to hold the same value as when we had liar loans, zero down loans, rabid speculation fueled by greed, etc.? Peak prices were a reflection of those market conditions, which no longer exist. Thus, the price must adjust accordingly.
At a minimum I believe buyers should be hesitant to buy in a quarter where prices dropped the previous quarter or remained flat for less than 2 consecutive quarters. Look at how San Diego has dropped from it’s peak in 2005Q3. That’s what 2 and a half years can do to you. What’s more, it doesn’t appear the San Diego market has hit bottom yet. In fact, it set a new record price drop last quarter.
43![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 7:24 am
Zllw Z-stmts fr SFH hv bn crpng bck p n th Sttl mrkt vr th pst mnth.
Whl mny Bbblhds hr wll crtcz th mthds zllw ss th fct rmns thy r jst s rlvnt r rrlvnt s th mthds Tm fnds nd psts n ths blg.
ls nt tht mny hr prdct mny yrs f dclnng prcs nd f y hnstly blv ths, why th hck d y wst yr tm pstng hr mltpl tms dy? s ths yr pln fr th nxt svrl yrs? D y hnstly blv tht yr trshng th R mrkt n Sttl wll nflnc th mrkt?
Rntrs hr hv thr nss pshd p n th hm wnrshp wndw, thy jst dn’t hv th cjns r th mny t gt n, prbbly nvr wll.
BTW ptfl rspns t th fndrsng drv, shm n y Bbblhds! Whr s yr pprctn f Tm’s Spn?
44
SeattleMoose
// Jun 14, 2008 at 9:10 am
About 18 months ago I predicted Seattle area prices would fall from 20 to 50 percent depending on the “bubbliciousness” of the run-up in any given area. I also stated the “average” drop would be about 33% for Seattle and vicinity.
18 months later I see no evidence that I may have been too bearish. In fact, if anything, I feel I may have understated the drop because I did not count on the unprecedented run-up in gas/food which further erodes the amount left out of the “budget” for a mortgage payment. And with “actual inflation” (not to be confused with “reported inflation”) running rampant the FED will start raising rates (along with other world central bankers) which will raise mortgage rates putting yet more downward pressure on RE prices.
These forces will work at a national level and it just means that ALL cities may fall further than predicted due to the “perfect storm” that appears to be gathering steam.
In the end the number one factor for housing prices is personal income. And consequently, how how much lenders will allow one to borrow based on actual/verified income….not “stated income” or any of the other nonsense that fueled the run-up.
Just a side-note (using Zillow data):
In 1992 I sold a condo in Huntington Beach for 172K. By 1998 it was down to 159K. At the peak (2006) it hit 569K. It is now at 400K. I am estimating that between 2011 and 2013 it will have finally intersected the “normal appreciation curve” and will bottom out about 250K. The person who bought in 92 still lives there and will be fine and will still have over 100K in equity.
We will return to sanity/reality from insanity…..dragged kicking and screaming all the way.
45
David McManus
// Jun 14, 2008 at 9:26 am
RAL, I’ll post this on the PI Blog:
I also note that many here predict many years of increasing prices and if you honestly believe this, why the heck do you waste your time posting here multiple times a day? Is this your plan for the next several years? Do you honestly believe that your pumping the RE market in Seattle will influence the market?
46![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 9:58 am
bt 18 mnths g prdctd Sttl r prcs wld fll frm 20 t 50 prcnt dpndng n th “bbblcsnss” f th rn-p n ny gvn r. ls sttd th “vrg” drp wld b bt 33% fr Sttl nd vcnty.
………………
FRM TH STTS PSTD BV:
18 mnths g 2007Q1 $392.9
Ltst Dt 2008Q1.$393.2
33% Drp prdctd 18 mnths g?
SLLYMS!
47![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 10:05 am
LT M CRRCT THT, ND BCK T P QRTR
18 MNTHS G 2006Q4 $469.3 $385.0
TDYS DT 2008Q1.$393.2
CNGRTS N YR CLL!
48![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 10:08 am
FRM $ 385 T $ 393 N TH PST 18 MNTHS
WHR’S D CRSH?
49
shawn
// Jun 14, 2008 at 10:31 am
RAL,
http://en.wikipedia.org/wiki/Troll_%28Internet%29
50![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 10:35 am
Shwn,
m sng th dt pstd HR.
f y Bbblhds dn’t lk yr wn dt, tgh.
51
shawn
// Jun 14, 2008 at 10:35 am
http://en.wikipedia.org/wiki/Zillow
Zillow.com is a Seattle-based online real estate service company … the site has received repeated criticism from real estate agents who believe that the values given on some homes are overvalued or undervalued and not a true reflection of the value of the home.
52
shawn
// Jun 14, 2008 at 10:45 am
I have been on the internet since ‘90. One constant: people want to argue who have neither studied “argument” nor “persuasion.” First I give them the benefit of the doubt. I try to educate them, to encourage them to learn about arguing, for them to study the art that they are engaging in.
But if they persist in pushing their mean spirited ways, then I just ignore them. That is what most people do, ignore them. Or just post links to sites that refute them, but no longer are they engaged as they will only continue to attempt to bait others into their fallacious ad hominem diatribe.
http://en.wikipedia.org/wiki/Argument
53![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 10:56 am
Zllw.cm s Sttl-bsd nln rl stt srvc cmpny … th st hs rcvd rptd crtcsm frm rl stt gnts wh blv tht th vls gvn n sm hms r vrvld r ndrvld nd nt tr rflctn f th vl f th hm.
…………………………….
Y r crrct, nd th sm gs fr th Cs Shllr dt nd thr frms f dt. Thr r mny fctrs tht mst b cnsdrd whn rvwng th dt. Hwvr, y r wtchng trnds nd s m . Zllw cn shw trnd jst lk Cs Shllr.
dd stt whn mntnd Zllw. “Whl mny Bbblhds hr wll crtcz th mthds zllw ss th fct rmns thy r jst s rlvnt r rrlvnt s th mthds Tm fnds nd psts n ths blg”
Hwvr, Th mssv Sttl Rl stt crsh y ll hv bn prdctng s nt mtrlzng, nd f Sttl cntns t hld frly frm, whch t s, whn ths cnmy strts mvng gn n cpl f mnths d t pnt p dmnd n ll rs f cnsmr spndng, prdct rsng prcs n r lcl Sttl R mrkt.
Yp y hrd t hr frst! Sttl Rl stt prcs strt hdng p n Sptmbr 2008.
Srry t dsppnt y’ll.
54
jonness
// Jun 14, 2008 at 11:32 am
IMO, the only thing that is supporting many micro markets in the Seattle area is cheap and easy to get FHA loans and other devices the government has put in place to artificially prop up house prices like unrealistically low short term lending rates that help to keep mortgage rates unrealistically low at the cost of rampant weakening of the dollar and price inflation. Once these gimmicks are no longer viable, Seattle is going to drop like a rock. The problem is that many people buy with their emotions instead of with their logic. RE agents, like used car salesmen, rely on this fact to make a living. Logic is an RE agent’s biggest enemy in a falling market. Thus, bubbleheads are the bane of RE agents’ existence.
IMO, buying a house in the Puget Sound area is currently financially dangerous, and I encourage people to not buy in a quarter that follows a quarter with a drop or follows less than 2 quarters of flat or increasing prices.
55![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 11:42 am
Y ncrg ppl t nt by wht y prsnlly cn’t ffrd?
RFLM!!!!!!!
56
TJ_98370
// Jun 14, 2008 at 11:42 am
jonness said
…..Is there anybody out there that truly believes that Seattle house prices are going to hold the same value as when we had liar loans, zero down loans, rabid speculation fueled by greed, etc.?….
Apparently, yes. RAL and other controlled substance abusers come to mind.
For the record, SeattleMoose said that he predicted a 20% to 50% drop would occur dependent on run-up (which apparently ended 3rd quarter 2007). He did not say that he predicted prices would fall in the18 months subsequent to his prediction, but rather he made his prediction 18 months ago. A subtle distinction that is beyond your comprehension, RAL?
57
Garth
// Jun 14, 2008 at 12:03 pm
b,
Having a home equity loan is not always a highly leveraged situation. Yes, foreclosures start when values are flat or dropping and those with highly leveraged short term loans are not able to refinance. Big price drops in every market so far have been related to the density of foreclosures. From what I have seen density of distress is vital if you want big declines.
Several bubbleheads have posted emperical data that filppers living nearby were selling and taking losses, and the credit crunch and declines happening here at the same time means that there are no options other than selling when the arm comes up, while other markets were experiencing declines while exotic financing was still available. I don’t have a ton of faith in the soundness of the decision making of the small real estate investor, but you would think all the news over the last 18 months or so would cause some percentage of those people to get out before they get foreclosed on.
Is there any way to see if homes are a person’s primary residence vs a second / investment property in any of the data? Where is the info coming from when you read the estimates that 20% of the activity in seattle has been investors.
58![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 12:06 pm
pprntly, ys. RL nd thr cntrlld sbstnc bsrs cm t mnd.
…………………..
Th nly wy t dscrdt m s t TRGHT L?
F2 HL.
59![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 12:08 pm
18 MNTHS G 2006Q4 $385.0
TDYS DT 2008Q1.$393.2
FRM $ 385 T $ 393 N TH PST 18 MNTHS
WHR’S D CRSH?
m sng th dt pstd HR.
f y Bbblhds dn’t lk yr wn dt, tgh.
60
magnolia44
// Jun 14, 2008 at 12:47 pm
in other news a 600k house in the hood just went STI in 5 days, yes the sky is falling people its falling. Price it right it sells, for those with unrealistic prices they join the inventory levels.
Here is a rule i realized when i was looking
Rule #1 : There is always somebody with more money than you, willing to pay a higher price than you.
Good luck let me know when we have reached full on market collapse.
61
TJ_98370
// Jun 14, 2008 at 12:51 pm
Never argue with an idiot, onlookers may not be able to tell the difference – Mark Twain
62
what goes up comes down
// Jun 14, 2008 at 12:53 pm
RAL,
what a fing joke you are. you critize people for multiple post and you have over five in this thread alone, you are one serious loser. you are so stupid to get on people about something and then do the same thing. you need some serious help go to the doctor.
63
NoMoreWork
// Jun 14, 2008 at 12:53 pm
Please read what other people write RAL. At least give us “bubbleheads” that courtesy…
………………….
TJ_98370 wrote:
For the record, SeattleMoose said that he predicted a 20% to 50% drop would occur dependent on run-up (which apparently ended 3rd quarter 2007). He did not say that he predicted prices would fall in the18 months subsequent to his prediction, but rather he made his prediction 18 months ago. A subtle distinction that is beyond your comprehension, RAL?
……………………
So RAL, your data is referenced wrong, irrelevant to this discussion and serves no purpose in supporting any argument you are trying to make. He stated 18 months ago that the drop would happen. He did not give a time zone for the drop. You are trying to distort his point. Don’t post on here if you don’t understand what others are posting. READ, then THINK, then post.
64
what goes up comes down
// Jun 14, 2008 at 12:55 pm
oh, btw RAL are prices now going down or up. oh I think you will take it deep and hard — ha, ha, ha, ha, ha, ha
RAL = FABO
65
b
// Jun 14, 2008 at 12:56 pm
Garth -
Follow the link I posted. Figure 6 shows that “non-owner occupied” purchases during the height of the bubble (05/06) was similar in King County compared to San Diego, Bay Area and other bubbly metro areas. Surrounding counties to King were actually in the same category as the worst investor locations, like the outskirts of LA, Vegas, Arizona, etc.
The Fed has shown through several studies that the lack of equity when combined with price declines causes foreclosures to pile up. This creates a cycle, which is what you see going on in places like Stockton and Riverside in Cali, etc. If you read in the same link Bernanke’s speech he makes this very clear, price declines are not caused by foreclosures, foreclosures are caused by price declines and no equity. The King County area having similar amounts of low/no equity and investor purchases as places now experiencing rapid declines should be taken as a warning. I am not sure why people seem to think we are magically exempt from market forces, one look at those Fed graphs of the entire country should cure that.
66
faster
// Jun 14, 2008 at 12:58 pm
Here’s all you need to know about Zillow:
http://www.redfin.com/WA/Bellevue/17172-SE-40th-Pl-98008/home/429125
For Sale: $648,000
Zestimate: $704,000
Days on Market: 73
http://www.redfin.com/WA/Seattle/4019-Ashworth-Ave-N-98103/home/118499
For Sale: $699,950
Zestimate: $532,000
Days on Market: 113
If the Zillow’s Zestimate was even remotely accurate these people would have buyers lining up to buy their houses. There are many, many examples just like this.
Or if you really think the Zestimate is accurate, than our local Real Estate market is in a world of hurt when people can discount their houses $50,000 plus and still can’t sell it.
And once again, it’s not just these two houses, there are scores of examples like them.
67
b
// Jun 14, 2008 at 1:02 pm
magnolia44 -
And a similar house will sell 3 months from now in 5 days for $575k. Then three months later another will sell in 5 days for $550k. This is a slow moving process, claiming an anecdote about one sale is idiocy. Go look at the worst markets in the country experiencing serious declines, there are still a lot of sales. It means nothing if inventory is up, volume is way down and the vector of prices is headed into the toilet. I am sure there was still a lot of buying volume on Pets.com in 5/2000 as well, never underestimate the stupidity of your fellow man.
68
deepcgi
// Jun 14, 2008 at 1:16 pm
I think there is a limited number of optimistic home buyers left in the world. One thing about sticky prices not dropping as fast as renters may hope is that once a speculator finally buys a place, he finds he is stuck. The only way this could be further protracted is if the dollar’s value versus one particular currency falls precipitously and creates artificial demand from some foreign investors. It’s highly unlikely to affect common residences. My only question for all of you is how long will stable inventory numbers continue in San Diego - or Seattle, for that matter?
69
harbored
// Jun 14, 2008 at 2:11 pm
More supply + less demand = lower prices
Inasmuch as I think the great commentary here doesn’t effect the market negatively, most of what the vested bulls say doesn’t either. The smart money has walked, the dumb money has been left holding the bag.
Everyone wants to pimp, nobody wants to ho. Who the f do you think bought all those Escalades and Plasmas? Why is there a check cashing place and latte stand every other block?
Too many sellers in denial, not enough buyers who qualify. I’m certainly not saying activity will come to a grinding halt. You will always have the 5 D’s of the real estate market. Death, Divorce, Destitution, Deportation, and Desperation.
Tim: YATM. I love this site. I promise to make a modest donation if you would start tracking foreclosures of agents and mortgage brokers.
70
local Realitor
// Jun 14, 2008 at 2:56 pm
RAL….give it up. You and Ray Pepper would make a great team.
Tired of reading your condescending crappola.
71
mikal
// Jun 14, 2008 at 3:53 pm
RAL and Ray Pepper, I like the condescending crap. More sarcasm PLEASE! BLAH BLAG BLAH. The market is going to drop fifty percent. And Solyent Green is PEOPLE. PEOPLE.
72
TJ_98370
// Jun 14, 2008 at 6:49 pm
NoMoreWork said -
So RAL ..….He (SeattleMoose) stated 18 months ago that the drop would happen. He did not give a time zone for the drop. You are trying to distort his point…..
You said it alot better than I did. Good job.
73
jonness
// Jun 14, 2008 at 7:50 pm
“You encourage people to not buy what you personally can’t afford?”
You might as well save your breath. All of the personal insults in the world are not going to magically make house prices go up. At first I thought you were an RE agent. But I couldn’t get past the fact that you were just too uninformed and unprofessional to work in that industry. Then it struck me–you bought at the peak! Thus you have a vested interest in seeing house prices remain artificially high.
In truth, I don’t think anything you or I say on this website is going to make even a slight bit of difference to the price of houses in the Seattle area. Economic fundamentals are trillions of times more influential than our minuscule contribution. Think about it, not even the Fed has the power to artificially inflate house prices forever. And that’s exactly why we are seeing prices fall at record levels that were not even approached during the great depression.
We are witnessing something amazing!
74
Ray Pepper
// Jun 14, 2008 at 8:27 pm
RAL and Ray Pepper? Condecending crapola? What have I done? I just say the following:
1. Don’t buy from anyone that is influenced by a Commission.
2. Don’t buy anything unless its a GEM.
3. Eat Lil Caesar’s and save BIG $$.
4. Be nice, request a free 500 Realty T shirt, and IMPRESS YOUR FRIENDS!
5. Come to our 1 year anniversary on Aug 10 and get a Free Costco Hotdog.
6. Rent the French Love Story ” High Tension” and you will forget about all this Real Estate Mumbo Jumbo.
Ray Pepper
Broker
http://www.500Realty.net
75![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 9:21 pm
S RL ..….H (SttlMs) sttd 18 mnths g tht th drp wld hppn. H dd nt gv tm zn fr th drp. Y r tryng t dstrt hs pnt…..
…………………
1) GV M LNK FR THT 18 MNTH LD PRDCTN R STF.
2) HW LNG D W HV T WT FR THT PRDCTN T CM TR?
S FR TH MRKT HS RSN N TH PST 18 MNTHS SNC SLLYMS MD HS PRDCTN S PRVN WTH YR WN DT.
76
Alan
// Jun 14, 2008 at 9:47 pm
8.2 increase on 385 over 18 months comes out to a stunning 1.4% rate or return. Even leveraged 4:1 that only comes out to 5.6% and you can’t even realize that gain because transaction costs will put you into the hole. Anyone who bought 18 months ago and got average returns is the real loser.
77
Mark
// Jun 14, 2008 at 9:54 pm
RAL, People come here for many different reasons - we’re not all frustrated renters that won’t ever be able to by. You claim to be in this camp yourself - a homeowner with less than a 6 figure mortgage. Good for you. Myself, I own my own home outright, and have two rental properties that are paid for also. I do enjoy reading others thoughts here on what the local RE market is going to do. Some I agree with and other I don’t.
The only thing I come away with after reading what you have to say is that you are nothing more than a horses ass. How many times have you been divorced?
78![[troll]'s avatar](http://www.gravatar.com/avatar.php?gravatar_id=53faab72e8e5ccd40442f1fc00c033a0&default=http://seattlebubble.com/blog/wp-content/uploads/default_gravatar.jpg&size=50 "[troll]'s avatar")
[troll]
// Jun 14, 2008 at 9:54 pm
ln,Lsr,
Scrll p t lk t th 10 yr rtrn, thn tll m hw mch y thrw t th wndw vry mnth fr th 3 bdrm rtrp y lv n.
Thnks n dvnc.
79
jonness
// Jun 14, 2008 at 9:57 pm
“SO FAR THE MARKET HAS RISEN IN THE PAST 18 MONTHS SINCE SILLYMOOSE MADE HIS PREDICTION AS PROVEN WITH YOUR OWN DATA.”
What my data shows is that Seattle is dropping at roughly 2x the rate San Diego was dropping during the same point (2 quarters into) the drop zone. It also demonstrates how dangerous it is to buy a house during a quarter that precedes a quarter with falling prices (i.e. right now).
House prices take years to reach their peaks and valleys. The data I posted bears that out. Seattle has just starting to move downward. It will take years to hit bottom, but a slumping economy and rapidly rising interest rates will help accelerate the correction. Keep in mind that house price means a lot less than monthly payment. Interest rates go up, house prices go down. That’s the game.
In April, rates were at about 5.6%. Today, rates are at about 6.3% (30 year fixed). On a 500k mortgage, that’s $225 mo. extra that you have to pay today than if you had bought in April. IOW, borrowing 500k at 5.6% is the same payment as borrowing 465K at 6.3%. That means $35,000 will be lost on the day buyer’s sign on the dotted line. Add to that the depreciation we will see over the next 2 years, and buying a house in Seattle today does not appear to be a wise investment. You claim you are wealthy and can afford to lose hundreds of thousands of dollars in a few years time. That’s good for you, but unfortunately most of the rest of us must treat buying homes as an investment.
Source for 30-year fixed = http://www.bankrate.com/brm/graphs/graph_trend.asp
Seattle is just starting to get a taste of what it’s like to do battle with a collapsing market. When it gets to the point where people start going upside down on their mortgages, the real storm will begin.
80
b
// Jun 14, 2008 at 10:18 pm
jonness -
You are close, RAL actually has a house on the market likely bought for too much. He claims to have lowered the price several times and is rejecting offers still, so obviously he is doing something wrong.
81
b
// Jun 14, 2008 at 10:26 pm
I am curious how much you are throwing out the window by not lowering your price and actually selling your place. Have you actually run the numbers on what you are burning carrying costs and opportunity costs? Is it worth that much to you out of spite for the people you want to buy it? I can understand why you are angry, I would be angry too if I continually made poor decisions and my rage did not allow me to change them for the better. Pretty awful cycle you have right now, isn’t it?
82
TJ_98370
// Jun 14, 2008 at 10:40 pm
harbored -
You’re new, or I missed a previous post?
Okay, here are the rules. You are either a bubblehead or not. If you are an anti-bubblehead I have it by good authority that you must attend secret meetings, convened by Lawrence Yun or one of his minions at mid-night of the first full moon of the month at a location only disclosed a day before the actual meeting. There will be the standard rituals, such as dancing naked around burning symbolic effigies representing common sense and logic and you must chant “real estate always appreciates” many, many times or you will be suspect as one of the “non-believers”. You do not want to be identified as “one who does not believe” as it will have catastrophic consequences. I got this info from a guy stumbling around in the parking lot at the local seven-eleven who said he was a real estate agent (he thought he was in Memphis).
Fortunately, there is an alternative, you can be a celebrated member of the new order of Seattle Bubbleheads, or if you are not ready, you can be a closet bubblehead. It’s okay. There are many amongst us who understand how coming out on the side of logic and reality can be a traumatic experience (I hear RAL is secretly going thru a rehabilitation program. Withdrawls from fantasies of untold riches by ways of real estate appreciation can be severe.) Are you willing to undertake take the risk of reality encountered, brother “harbored”? :-)
83
economist
// Jun 14, 2008 at 10:42 pm
1) GIVE ME A LINK FOR THAT 18 MONTH OLD PREDICTION OR STFU.
RAL, you are the one who has accused someone of making an inaccurate prediction, so the burden is on you to back up your accusation with evidence.
84
Roger
// Jun 14, 2008 at 10:54 pm
(Tim, get that apartments.com ad out of the tab order for fields in this form. Bah.)
We’re getting ready to build right now, and all I can say is how much more eager everyone is to work with us now as opposed to two years ago, and at much more favorable margins. I guess that’s one benefit of a housing crash, assuming you’re in position to do so.
85
Ira Sacharoff
// Jun 14, 2008 at 11:36 pm
There is a difference between RAL and Ray Pepper. RAL will call renters losers, and call them stupid and berate them for living in rat and bug infested filthy apartments, and when called on it will shrug his shoulders and say ” aw shucks, who, me? I Love everybody.”
Ray, on the other hand, hasn’t really expressed opinions that very many people here strongly disagree with. He believes that Seattle area home prices are too high for the most part, but that there are some deals out there. Some have been offended by his self promotion,and he has toned it down some, and unlike RAL I’ve never sensed any hostility coming from the guy.
86
Eleua
// Jun 14, 2008 at 11:54 pm
I’ve been away too long. Apparently, we have a new “Meshugy” (RAL) and he has an attitude. Sweet!
My goodness! That’s cluelessness on parade.
What “pent up” consumer demand? Seriously. Your benevolant government has had to resort to sending out checks to all the sheep to keep what is left of consumer activity from folding into a singularity. The consumer is in full retreat.
What is left of any demand is being spent on carbohydrates, proteins and hydrocarbons. The consumer demand we had over the past 5 years was nothing more than HELOC money being sucked out of the biggest credit bubble in world history.
You missed that? Wow, simply….WOW!
The HELOC money is gone. The consumer has a garage full of stuff he doesn’t use, and enough personal debt to last two or three lifetimes.
The consumer is checkmated. Housing can’t outstrip peoples’ ability to pay for it.
Good luck selling your house.
87
Matthew
// Jun 15, 2008 at 12:02 am
E-
At least Meshugy had his