June Reporting Roundup

Posted by The Tim on July 8th, 2008 at 8:34 AM · 206 Comments

This month’s theme is “let’s scare fence-sitters by telling them that rising interest rates will eliminate any savings from falling home prices.” Let’s see how well our local papers do at driving this point home.

Read on for the this month’s roundup…

Elizabeth Rhodes, Seattle Times: King County home sales edge up in June as lower prices lure first-time buyers

Last month’s sales also continued a depressed price trend, with houses in the county selling for 4.3 percent less than in June 2007, although they are showing signs of rebounding.
…
Others, apparently, are doing the math and also trying to beat rising mortgage rates, because some agents report increased sales activity from first-time buyers.
…
Agents say that rise [in median prices] still reflects a decrease over sellers’ asking prices.

In some cases, that’s given rise to a new phenomenon: multiple offers below asking price.

Vija Williams, a John L. Scott associate broker, started seeing them a few months ago. One home she sold drew multiple offers around the $495,000 range. It was listed for $509,000.
…
One Ballard seller is dealing with that issue now.

“I definitely expect to get an offer below list,” the seller says.

He says he got one offer “that was laughable.”

“I understand the buyers’ side of things,” he said. “It’s scary to think you could buy, and the house will lose another 10 percent.”

But he thinks many buyers don’t realize “the reduced value is already priced into the list price,” and sellers aren’t asking top dollar from the start.

What can I add to this delightful piece? It’s too perfect.

Aubrey Cohen, Seattle P-I: Local housing market warming up with the weather

The monthly market story is fairly short, probably because Aubrey was busy writing an entire story dedicated to the rising interest rates scare: Home buyers: Don’t forget interest

Like many potential Seattle home buyers, Beth Romano wonders if she could get a better deal if she waits.

Area prices have come down a bit but are still “outrageous,” Romano said outside of a Greenwood open house in late June. “I’ve really started to think I shouldn’t buy (now).”

Romano also is like most in that she isn’t factoring interest rates into when she buys.

“I think more about looking at the price, because you can always refinance,” she said.

But some local real estate professionals say buyers should be mindful of rates, which probably will rise in coming weeks, potentially wiping out any savings from lower home prices along with the chance to lock in historically low rates. Others say interest rates are even harder to predict than home prices so buyers shouldn’t focus too much on short-term fluctuations.
…
Pam Johnson, who is moving to Seattle from the San Francisco area for work, said she has paid attention to mortgage rates.
…
Johnson is forging ahead with her home search now, she said, even though some have advised her to wait six months.

“I feel I need to find the right property rather than find the lowest possible price,” she said. “There’s no possible way to time the market.”

Aubrey’s articles have been fairly balanced lately, but this one seems to be pretty one-sided, pushing the “buy now before interest rates go up” line fairly hard. Oh well.

Mike Benbow, Everett Herald: Inventory increases as home sales slow

In Snohomish County, inventory was up, sales were down and prices were lower than they were a year ago.

While the number of available homes has increased in recent months, the local market is still more balanced than in other parts of the country, the listing service reported. Nationally, the number of homes for sale amounted to a 10.8-month supply based on the June sales pace.

Another fairly short piece. I’m really surprised that the reporters don’t have more to say about the apparent one-month strengthening of the stats.

Devona Wells, Tacoma News Tribune: Pierce County sellers could soon have their market

June’s year-over-year price decrease is the ninth in the last 10 months, though the declines have not been as steep as seen by many other areas around the country. And the price remained essentially flat from May.

Shrinking inventory could indicate a market shift in Pierce County as fewer houses and condos were for sale in June than the same month last year, which, if the listing decline persists, could eventually move the advantage from buyers to sellers. Not only did the overall inventory of listings dip by 5.7 percent, but the number of new listings dropped year-over-year by 20.3 percent.
…
Still, the supply of homes for sale here remains above the region’s. Statistics pulled June 30 showed Pierce County with just below an 11-month supply of homes compared to nearly a seven-month supply for the four Puget Sound-area counties combined, according to Dick Beeson, an MLS director and a Windermere broker.

The industry standard for a market that equally favors buyers and sellers is six month’s supply, meaning it would take six months to sell everything that’s on the market.

Wow, 11-month supply down in Pierce. Even with a slight drop in inventory, they seem to have a ways yet to go before the market works itself out down there.

Rolf Boone, The Olympian: Local home values hang on as sales decline

Thurston County home sales are down, building activity has tapered off and more people have fallen behind on mortgage payments, according to newly compiled data for the first half of the year.

The data raise new questions about the vitality of the county’s real-estate market, but South Sound real-estate experts say the county still has job growth, low unemployment and population growth to stimulate home sales. The housing market also has slowed since 2006, which was a record year for home sales, yet Thurston County homes continue to hold their values.

Also, I noticed this bit in the article, which is somewhat related to other discussions we’ve had here recently:

Lisa Brand, who lives in south Thurston County, said she searched for a house for more than a year until she came across a rarity: a two-story, 1,800-square-foot house built in 1899. It cost her $133,000.

“I consider it a blessing,” she said.

During her search, she noticed that many houses were sitting on the market unsold.

And although she now has a 40-minute commute to work in Olympia, higher gasoline prices don’t concern her, she said.

“I didn’t give it a second thought because it was so nice to have my own place,” Brand said.

Finally, although it has nothing to do with real estate, I have to say that this is my favorite article in today’s papers.

(Elizabeth Rhodes, Seattle Times, 07.07.2008)
(Elizabeth Rhodes, Seattle Times, 07.08.2008)
(Aubrey Cohen, Seattle P-I, 07.08.2008)
(Aubrey Cohen, Seattle P-I, 07.07.2008)
(Mike Benbow, Everett Herald, 07.08.2008)
(Devona Wells, Tacoma News Tribune, 07.08.2008)
(Jim Szymanski, Olympian, 07.06.2008)

Categories: News
Tags: Benbow, Boone, Cohen, Everett_Herald, Naked Loon, Olympian, reporting_roundup, Rhodes, Seattle_PI, Seattle_Times, Tacoma_Tribune, Wells

Related Posts:

Jump to the bottom to add your comment. ↓

206 responses so far ↓

1 jon // Jul 8, 2008 at 8:44 am

Congratulations on the coverage of the Naked Loon. Very nice article.
2 budbrad // Jul 8, 2008 at 9:51 am

What I find really telling is how the headlines for the stories change. Aubrey’s story had 3 different headlines in less than 24 hours. It started off with something like “Homes sales plummet”. and then becomes “Market warming up”.

Editors get cranky calls from their publishers who get cranky calls from their advertisers.
3 Ray Pepper // Jul 8, 2008 at 10:19 am

ABK and MBI insurers up another 40%. Sure they were 100.00 but what a nice bounce for 1.00 and 3.00 stocks. Were forming a nice bottom. WM , WFC, BAC seem to be capitulating as well. I still say we lose NCC and obviously IMB is toast.

Dare I say a bottom is forming? Good Lord!. Time for the Pee Wee Herman Tequila Dance again!

Ray Pepper
http://www.500Realty.net
4 Scotsman // Jul 8, 2008 at 10:57 am

Tequila before noon? The bottom is in? Are you starting to see “gems” everywhere you look? I think I understand you now Ray. Carry on!
5 vboring // Jul 8, 2008 at 11:00 am

if your income is tied to price inflation (many incomes are) and you expect 1970s style price inflation to result from our current debacle, then maybe locking in a historically low interest rate is a good idea.

it should be kept in mind that whatever the end scenario for Freddie and Fannie is could have a very strong impact on interest rates. they are writing most of the loans today. if they go tits up, RE interest rates will be determined by a highly risk averse and undercapitalized market. interest rates could rise faster and higher than most people expect.
6 Ray Pepper // Jul 8, 2008 at 11:03 am

I got in yesterday from my tour of destruction in Sacramento, Stockton, and Reno. I was surprised to see many of the “GEMS” have been gobbled up. An entire street in Reno was sold when RK HOMES went Bankrupt. When I was there 90 days ago they were all available.

Bottom forming? It appears so but then again these homes are nearly 50% off their highs. Wait till all the current home owners find out their homes are worth 100-200k less. They will be a walkin!

What a mess! But, yes there are GEMS! But, I’m not biting yet nor am I focusing on residential. Commercial/Mixed use has always been my passion!

Ray Pepper
http://www.500Realty.net
7 obelus // Jul 8, 2008 at 11:07 am

I can never figure out what Ray is saying. This last post he says everyone is buying GEMS, then the next sentence he says those same folks will see even further price erosion!
8 Ubersalad, Ph.D // Jul 8, 2008 at 11:19 am

Ray has mastered the art of random mumbling. I think he was referencing our latest political stance on Iraq.
9 jon // Jul 8, 2008 at 11:19 am

Seattle has a low rental vacancy rate and King County is already at 5.9 MOS for SFH. If interest rates rise, and people are not able to buy, then all the new growth will go into rentals. Within a few months of an interest rate increase, rental costs would increase sharply. All the talk of a low cost of rent compared to mortgage will seem like stories of $2/gal gas.
10 Ubersalad, Ph.D // Jul 8, 2008 at 11:22 am

Then these mofos need to move out!
11 Ubersalad, Ph.D // Jul 8, 2008 at 11:23 am

Btw Tim, I don’t like how you are only cutting and pasting a small portion of an article…I like the way software engineer does it, cut and paste an entire article so we have to scroll way down or read the stupid article we have already read.
12 Alan // Jul 8, 2008 at 11:31 am

In the future, whenever you fake quote Mayor Baker you should append the quote with “Will this get my name in the paper?”
13 deejayoh // Jul 8, 2008 at 11:32 am

obelus // Jul 8, 2008 at 11:07 am

I can never figure out what Ray is saying. This last post he says everyone is buying GEMS, then the next sentence he says those same folks will see even further price erosion!

Seems to me like you’ve figured it out pretty well.
14 The Tim // Jul 8, 2008 at 11:36 am

RE: Alan @ 12 - That’s hilarious.
15 Ray Pepper // Jul 8, 2008 at 11:50 am

I will make it simpler for all of you Bubblers.

I did not find any GEMS for myself so I’m not buying. The other investors found GEMS. Good for them! I’m buying only mixed use and commercial that are in the GEM status.

It appears a bottom has formed in the areas I toured at about 44% off the highs. Many of the home owners bought much higher. A % of these will now become “walk away homes”. I hope you all spent enough time researching the epidemic of walkaway homes in the country.

I suggest there is no rush to buy in Az, Ca, or Nv due to years of foreclosures ahead. The GEMS will be abundant. But, if you have the cash and you analyze the “cost to build” for labor and materials I can definitely see why many in our group pulled the trigger!

Keep Your powder dry baby! Do your DD and FIND THOSE GEMS!

Hope you get it!

Ray Pepper
http://www.500Realty.net
16 b // Jul 8, 2008 at 11:57 am

jon -

without wage inflation to match, rents can’t rise that much. you can’t squeeze blood out of a turnip…
17 Ubersalad, Ph.D // Jul 8, 2008 at 12:09 pm

Tim, you missed one article in your roundup:
http://seattletimes.nwsource.com/html/localnews/2008038568_nakedloon08m0.html
18 Ubersalad, Ph.D // Jul 8, 2008 at 12:09 pm

Tim, nice article on the naked loon in Seattle times.
19 jon // Jul 8, 2008 at 12:25 pm

b - It is entirely hypothetical, but the most likely reason 15% inflation and interest rates would come about is because of a falling dollar caused the Chinese and others to stop funding the US deficit. In that case, US real estate would seem cheap to them, and they would pay cash. However, the cost of materials would be experiencing inflation, and the only reason they would buy is because properties “penciled out” in terms of the rent that can be earned. So in order for an area like Seatte to grow, the rents would have to rise in order to satisfy the foreign investors. They would simply look to see if the rent was high enough to make sense to build a new building. They would not care if the renters felt like turnips.
20 blueskitten // Jul 8, 2008 at 12:51 pm

Yeah, nice article on the Naked Loon in the Times. Whoever would have thought our little toga party would be newsworthy? The Tim has become such a pop culture icon! :)
21 b // Jul 8, 2008 at 1:30 pm

jon -

who is going to live there in this scenario? supply and demand does not care what these foreign investors want satisfied. in such an event, the US economy would be in shambles and rents would rapidly deflate to match earnings. its better to lose a little money than a lot, even foreign investors know that.
22 jon // Jul 8, 2008 at 1:47 pm

There are trillions of dollars floating around outside the US. Eventually the owners of those dollars will spend those in the US. It will be spread out among services, goods, companies, and worst for us, real estate. So there will be jobs and money here, but the money might have less purchasing power overseas. In that scenario, we would become like a developing country where everyone is very busy producing products that are shipped elsewhere for people to enjoy, like much of the world is currently doing for us.

The only way to maintain our purchasing power is to continue to produce valuable products and improve our efficiency.
23 b // Jul 8, 2008 at 2:10 pm

jon -

You seem to have come around and back to supporting my original argument: rents will not rise that much without corresponding wage inflation. Foreigners can buy up anything they want, but they won’t be able to charge us more for it in dollars without maying us more for work in dollars. Your argument is basically that you could make a ton of money right now by buying cheap property in China with US dollars (which you can) and then renting it out for some huge premium over what rents your tenants can afford. You can try, but you wont have any tenants.
24 Ashamed Lurker // Jul 8, 2008 at 2:33 pm

Why is it when something positive in the market happens (prices go up, sales up, advice about buying closer in because of gas prices, advice about interest rates eroding buying power) then Tim makes snarky sarcastic comments about it not really making an impact? See- the real estate agents are trying to screw you, gas prices don’t impact anything because Tim lives in the sticks - and newspapers all need to prop up the market! When prices go up month over month it’s just a blip! Thank you oh wise sage. How much more money do you want?

I thought this was a neutral site- supposed to be educating people. Right Tim? Right? You’re veneer is wearing off, good luck with the fund raiser. You’re a charlatan. But we all know what P.T. Barnum said - you have your audience.
25 jon // Jul 8, 2008 at 2:36 pm

b - I expect the standard of living to fall as rents rise and salaries do not. That’s why I bought and many others have as well. It was just a month ago that we were talking about the layoffs in the local construction industry. Now we have just seen a sharp drop in inventory. It is difficult to build a new house at today’s prices. That means that if people continue to move here, there won’t be places for them to live unless prices rise. So either people will stop moving here, or prices will rise. Given that floor under prices, people are not going to be buying houses just so they can rent them out at low rates. Seattle commercial rents are rising at one of the fastest rates in the country. I don’t know about residential rates, but I assume the same is happening, or will very soon.
26 NotaBull // Jul 8, 2008 at 3:01 pm

“It is difficult to build a new house at today’s prices. ”

I think it’s more accurate to say that it’s difficult to build a house at today’s *land* prices. Take out the cost of the land and I don’t see any reason why it costs more to build here than it did back in 2000. OK, so maybe lumber is a bit more expensive, but surely that’s about it. I’m betting labor rates in construction will be going down a bit too. Hell, building a house might even get cheaper today if there’s a national glut of lumber and high construction unemployment.
27 deejayoh // Jul 8, 2008 at 3:06 pm

Jon, a couple of observations on your post.
- For sale inventory is at an all time high, sales at a low, yet you are referring to shortages of places to live. What sharp drop in inventory are you seeing?
- commercial rents look more likely to bust than to boom, from what I am reading. Reference this article from just 2 weeks ago: Commercial real estate brokers worry about Seattle buildings

I am not sure I would concur with your conclusions based on observations, but we shall see.
28 Captain Kirkland // Jul 8, 2008 at 3:22 pm

Anyone realize that interest rates increasing will decrease the value of homes. I guess that is too obvious for the homeowners to comprehend.

That aside, interest rates will remain unchanged or go up minimally as a sharp increase would absolutely kill any chance of a Real Estate recovery. Besides, the current spread between Prime and the average 30 fix is off the charts 4+%. Rates for consumers are not that low, and lending standards are tightening.

Another thing buyers need to consider is the debt service on the average home. Say you buy a home for 500k carrying a note for 400k. At 6% interest, you are paying the bank 24,000/year in INTEREST + you are on the hook for taxes, and insurance. Quite simply, you can rent a very nice home for those kinds of numbers, and you won’t be liable when the market sinks.
29 jon // Jul 8, 2008 at 3:24 pm

The sharp drop in inventory is the green line in Tim’s first graph of King County SFH inventory. It came as quite a surprise to me, but the hourly numbers appear to be all over the place right now, so who knows. Maybe that is just seasonal activity, but with sales uncharacteristically up in June, along with prices, I doubt that is all it is.

I think the SeattleTimes article yesterday was whipped out quickly without time for thought. The actual data was very surprisingly strong. Your article about doubts about future commerial rents is good news for everybody except CRE owners. Rising rents locally will be bad for businesses, and make it difficult for everybody.

b - if you are saying that lumber and land would need to drop sharply in order to maintain current rental rates, then we agree on that. I just don’t think it will happen that way.
30 Garth // Jul 8, 2008 at 3:52 pm

Lumber in not cheap currently, a bunch of the local mills are closed, transportation costs are high, and the dollar makes Canadian prices pretty high right now.
31 b // Jul 8, 2008 at 4:03 pm

jon -

First, lumber prices are currently at all time lows. The futures market seems to believe they will also be heading down quite a bit more as well. (link here, preview doesn’t like it embedded: http://www.nahb.org/generic.aspx?genericContentID=527)

Second, land prices experienced the same credit bubble explosion that home prices did. To expect there will be no correction in land prices when new and used home prices, with land, are falling is nonsensical. Who are they going to sell this land to if someone cannot take it, build a structure on it and make a profit?

Finally, the “sharp drop” in inventory was about 500 units. If you look at the next graph, pending sales, it shows only an increase of about 200-250 units. The other dropped inventory, half or more, was probably people pulling their stuff off the market without selling (I know a couple of people who have done this myself). Immigration to Seattle has slowed this year, and bad home sales in California will likely keep it that way for a while. Look at the pipeline of new inventory in Seattle/Bellevue (crane count) that will be online in 2009, then add in all of the people right now who are pulling their stuff off the market to put it back on, also in 2009. Sales are still at an all time low which means that 2009 is likely to see a precipitous drop in prices.
32 b // Jul 8, 2008 at 4:06 pm

Garth - Mills close because prices are /too low/, not because they are high and going higher. See my NAHB link above, prices now are down significantly from 2003/2004.
33 Ubersalad, Ph.D // Jul 8, 2008 at 4:09 pm

Ashamed Lurker,
I wouldn’t consider the news to be “positive” by any means. June’s pending sale number is still the lowest June sales in last 8 years, and also 4th lowest of any Summer months (June - September) in the last 8 years. Summer as we know is the top RE selling season, so as far as the term “positive” to be used for this little bump on the downward trend…I don’t think so.
34 NotaBull // Jul 8, 2008 at 4:11 pm

Garth,

http://www.randomlengths.com/base.asp?s1=In_Depth&s2=Useful_Data&s3=Monthly_Composite_Prices

Prices for lumber have NOT BEEN THIS LOW for over a decade, and that’s in nominal dollars.

B, thanks for the link for lumber prices. I went to the place there the NAHB gets their data - it’s referenced from their website.
35 Ashamed Lurker // Jul 8, 2008 at 4:20 pm

Ubersalad - Do you live here? Did you see what the weather was like? Worst June in at the last SIXTY years.
36 Scotsman // Jul 8, 2008 at 4:25 pm

In the end it’s really all about wages. Neither home prices or rents can move up without an increase in personal income. With unemployment rising, personal income isn’t going up. With increases in productivity flat, wages aren’t going up. And with increasing competition from better capitalized and increasingly educated foreign workers, wages here in the U.S aren’t going up.

That being the case, rents can’t go up, and any increase in interest rates can only be compensated for by a drop in home prices. There is only so much disposable income to go around, and the easy financing that used to make what income is available go further has all but disappeared.

When inventory growth is flat, all the forclosures are out on the table, and/or everyone you know is getting 10%+ raises, home prices will stop falling. They may not head up, but they will stop falling.
37 Ashamed Lurker // Jul 8, 2008 at 4:25 pm

But thanks for making my point. For some reason Tim and his cohorts only get excited and start back slapping when prices continue to go down. Schadenfreude at it’s best. Anything that doesn’t jive with that is ridiculed and put under sarcastic headlines like:

“This month’s theme is “let’s scare fence-sitters by telling them that rising interest rates will eliminate any savings from falling home prices.” Let’s see how well our local papers do at driving this point home.”

This from a guy who professes to be a neutral intermediary just trying to help people understand the market. Anyone else see that there’s a mild disconnect with reality here.
38 softwarengineer // Jul 8, 2008 at 4:26 pm

BUY MORE DEBT NOW FOR LESS, SO ITS WORTH LESS WHEN DEBT GETS WORSE

This is common sense, any highly educated savy home buyer should bite at this clear logic hook line and sinker…..

More common sense:

“Always stay on topic and stop bickering with the bloggers!”
39 The Tim // Jul 8, 2008 at 4:33 pm

Ashamed, I find your perspective to be quite interesting.

How is it a “disconnect with reality” for me to point out what I see as bias/propaganda in the “mainstream” media reporting of the subject?
40 Garth // Jul 8, 2008 at 4:39 pm

b,

The price of lumber futures may be down in the last couple of months, but to date I have not seen an appreciable adjustment in the prices on the market locally. I have a project I would undertake if the labor / lumber costs drop enough, and well priced labor is available, but the lumber costs remain about the same (higher delivery costs and fuel surcharge combined with a slight decrease in unit price) as they were a year ago.
41 Ashamed Lurker // Jul 8, 2008 at 4:40 pm

Hello Pot? This is Kettle!

Hypocrisy anyone? Bias and propaganda? You wrote the book. No ill will or bad wishes on you, if people are dumb enough to think you know what you’re talking about (and then PAY for it) that’s great for you. I find it amusing that you profess to be a neutral party , and then make snide comments about things that don’t fit in with the whole idea behind your website.

Prices up? - Must be a blip.
Gas prices changing attitudes? - Stupid mainstream media
Interest rates eroding buying power? - Quit trying to scare everyone

Like I said - disconnect from reality. These stories all are backed by fact, but since they don’t fit in your neat little sandbox, they’re ridiculed and discounted.

Make sense?
42 b // Jul 8, 2008 at 4:47 pm

Garth -

First, retail lumber costs are going to be higher for someone like you compared to a large builder. Second, take a look at my link. Its not just futures, lumber costs overall for builders have been dropping pretty steadily since 2004. If people were able to build homes and sell them for a profit in 2003, then it isn’t lumber costs which is preventing that from happening in 2008.
43 The Tim // Jul 8, 2008 at 4:51 pm

Ashamed: “These stories all are backed by fact…”

Interesting assertion. Could you point me to the specific facts that support the notion that gas prices will significantly impact people’s purchasing decisions? Or the facts that June’s price bump was not a blip on the way down? Or what about the facts that show that climbing interest rates will not merely drive prices even further down?

I’m all about facts. Please bring them to the table, and let’s talk.
44 TheHulk // Jul 8, 2008 at 5:03 pm

Ashamed…

We all have our feet in the water in some way and yes that produces a “confirmation bias”. To be clear, I am going to buy sometime in the near future (future more likely than near), but what I would like to know is, what’s your interest in looking at this site?

E.g. RAL needs to sell and move. Myself and Tim we wanna buy. What about you? Looks like you wanna sell but can’t (at least not at the price you want to sell)

And yes, Tim may have a bias, but its backed up by facts. You can’t deny the worst sales in June over a decade. Again, cant deny 50% drop in sales and 5% YOY drops from last year. Cant deny that 500 listings were taken off, but only 250 or so were actual recorded sales (drop in inventory != increase in sales). Care to refute me on that?
45 Scotsman // Jul 8, 2008 at 5:06 pm

Ashamed- I think you missed the major shift in the universe that put Tim’s comments in the proper perspective. At this time, just about everyone except for a very few hard core deniers and hold-out Realtors have come to the conclusion that home prices will continue to fall. Yes, even in Seattle. So when the Times and others, who are largely supported by advertising from car dealers and real estate groups, print up articles with a positive spin on what pretty much everyone recognizes as a turd, it’s OK to let a bit of cynicism creep into the analysis and comment.

It’s taken a while, but even Ray, Ardell over at Rain City, RAL, etc. have faced the truth. You can too. Hey, maybe you’re loosing your shirt on that nice home you bought, or maybe now you’ll have to change to a non real estate centered career, but it’ll be OK. It’s only money. And the sooner you stop looking for scapegoats and get on with it, the better. Cheers, ;-)
46 deejayoh // Jul 8, 2008 at 5:06 pm

Ashamed Lurker // Jul 8, 2008 at 4:20 pm

Ubersalad - Do you live here? Did you see what the weather was like? Worst June in at the last SIXTY years.

OK, looks like we can cross out “weatherman” on the list of possible occupations…

1971 still the champ for cold Junes
47 johnnybigspenda // Jul 8, 2008 at 5:10 pm

dear ashamed lurker,

you have to understand that a large % of the commenters here are renters who are more than happy to say ‘i told you so’… you won’t find many that will support you. They didn’t buy a house 5 years ago (when many of their friends did) and they have heard about how much their friend’s houses went up in value ever since. I’m happy for the renters since they are not exposed to the equity losses that owners are now experiencing. It bugs me that they think they predicted this… probably 10% of the renters actually thought housing would crash.. the other 90% just couldn’t afford it (lucky for them as it turns out).

there ARE several owners that post as well, but generally the interest of the group is to agree with eachother that prices are falling and that they may never come back….

Tim chooses to use language that is definitely not ‘neutral’. To be honest, it strikes me as sarcastic (the cheapest form of humor) and leaves me wondering if I need to go back to the raw data to check it myself… (since the author sure seems to have an interest in the bursting of the bubble … i can only ‘trust’ that he is providing us with accurate data… I’m sure many take it as absolute truth.. oh well, I guess…. sucker born every minute).

I’d personally like to start to see more of both sides of the story. Maybe a ’signs-of-seattle-market- recovery.com’ site to balance the propaganda that this site is bordering on.

It is not a coincidence that there has NEVER been a story on seattlebubble that has mentioned the possibility of slowing rates of decline (in the markets that are much further along in the realestate correction). Whats the deal with Charlotte staying postiive ? Can we look at the timeline of events in Florida or Boston and try to predict our own fate based on a premise of us being 12-18 months behind them?
48 mikal // Jul 8, 2008 at 5:14 pm

Johnnybigspenda, Good post.
49 Ira Sacharoff // Jul 8, 2008 at 5:27 pm

Ashamed,
I’m still trying to figure out how The Tim is a charlatan. A charlatan is someone who is fooling people for personal gain. There have been a certain number of mortgage brokers and real estate agents who fit that description, and newspapers are pretty heavily dependent on advertisements from big real estate brokerages, so it’s easy to see why they try to put a positive spin on things….but The Tim?? A charlatan?
What’s he gaining from all this? I don’t always agree with the guy, but I deal with charlatans on a regular basis, and he just doesn’t fit the bill.
50 [troll] // Jul 8, 2008 at 6:17 pm

Jhnnybgspnd, xcllnt pst.

Ys thr s bs t ths st, nd w ll knw wht t s. nfrtntly s mny rntrs tht “lv” hr hv dptd Tm’s srcstc nd ngtv vw tht thy wll ll mss th R bttm n Sttl. s mttr f fct, thnk thy lrdy dd bck n Jnry nd Fbrry f ths yr.

f crs wll gt my sl pnshmnt fr ths pst bng tld ths nd tht bt ntrst rts rsng wll chp hm prcs tc…,

n’t gnn hppn. prdct th S dllr wll strngthn ths n nd t rs rts.
51 mikal // Jul 8, 2008 at 6:21 pm

The only way the dollar will really strengthen is if the tax cuts end or the government stops spending so much. Neither will happen till the stupidest person alive leaves office in January.
52 Pegasus // Jul 8, 2008 at 6:22 pm

Ira…you didn’t look very far. Tim is on the take from the renters community. Unfortunately he has chosen the wrong crowd to promote as is evidenced by his slow…so very slow..climb in his fundraising drive. I think he chose the wrong group to represent and will now have to return to the world of getting a real job and commuting to work.
53 Ashamed Lurker // Jul 8, 2008 at 6:41 pm

Tim -

I understand you need help with facts - glad to help. First off - I didn’t say that they WERE fact, but backed by specific facts that you choose to ignore or ridicule because it helps you.

So - refute these facts:

1) Gas prices are up significantly - since it costs fuel to power an automobile - if you live far away from your job it will cost you more to get there than if you lived close. This negates some of the difference in price. Usually cost is a factor in purchasing a home - I’m pretty sure you understand that.

2) Prices month to month were up - that’s a fact. If it’s a blip - that may be possible but you’re the one that is acting like that’s a fact. It furthers your attitude.

3) Interest rates fluctuate based on several factors in the economy and the Fed’s policy. Since most people have to borrow money to finance a home purchase, if they have to borrow at a higher rate this makes the amount they can afford to borrow less. This has an impact on how much house they can afford.

There you have it. 3 Facts just like I said. Do you understand?
54 Ashamed Lurker // Jul 8, 2008 at 6:44 pm

Scotsman - Thanks, I see you’ve been drinking Tim’s kool-aid. I don’t refute that the market has been going down, it’s obvious. What I do think is going on here is the glee and back slapping that long time renters have at the expense of other families. I hate to disappoint you but I’m not looking to sell the beautiful old home I have in an established in-city neighborhood. See, I did it the right way - I bought a starter home 8 years ago, watched it go up in value and took care of it. Sold it for a nice profit and used that to get where I am today. I know that lots of other people didn’t do that and they are in trouble. I feel bad for them by and large, and for those of you here that enjoy other people’s misery.

That’s the problem with Tim, he proclaims that he’s a neutral just helping people along, but the headlines an attitude refute that.
55 Ashamed Lurker // Jul 8, 2008 at 6:45 pm

jonnybigspenda -

Thanks for the sane and thoughtful reply. I appreciate that. I agree with pretty much everything you said.
56 Ashamed Lurker // Jul 8, 2008 at 6:46 pm

Ira - I’m pretty sure I’ve seen Tim put up a “fundraising drive”, and he professes to be a neutral observer while miking angst and misery for personal gain.

Close enough for ya? It may have been a bit strong of an adjective.
57 johnnybigspenda // Jul 8, 2008 at 6:50 pm

Pegasus… you actually make a good point that Tim should consider. Most likely the only people that will give Tim money are those that STRONGLY agree with his view points.

I wonder if he should consider posting articles and ideas related to possible signs of a turn around … if not here in Seattle, maybe in other cities? And when I say this, I don’t mean an article titled :”Microsoft and Boeing plan to hire 26 employees… our housing market is saved!”.

I’m just saying, if reality was such that ALL the news was bad, there would be no debate and no one would buy a single house until 2015… why bother reading about the seattlebubble in that case?

We need some legitimate buy side fodder for discussion on this site.
58 Ashamed Lurker // Jul 8, 2008 at 6:50 pm

Pegasus - I agree with you as well. I read the intro to the fundraiser - hilarious. I think he wanted to make the $2,500 in a week. That was in mid may right? Lol. Here’s a Seattle Bubble type headline for you on it.

“Tim: Fundraising Drive up Ever So Slightly Since Mid-May - Tops Expectations- I’m doing this all for you!”
59 Greg Perry // Jul 8, 2008 at 6:50 pm

Residential sales for the Eastside (NWMLS areas 500-600) had their largest one month drop in absoprtion in 4 years. May 2008 MOI was 8.2, June 2008 6.5. Pendings were up 22% from May coming in at 635(June) from 522 (May). April had 512 Pendings.

Inventory dropped from 4349 (May) to 4154 (June).

Median prices for the Eastside’s 2nd quarter:
$618k+ (April), $622k+ (May), $632k+ (June)
60 Ashamed Lurker // Jul 8, 2008 at 6:52 pm

Oh and deejayoh - Nope, not a weatherman, but I’ve lived here long enough to know that they’re never right either!

Thanks
61 jon // Jul 8, 2008 at 7:02 pm

I don’t recall an emphasis on this site over the winter that YoY stats were still positive for Seattle. Now that YoY is negative and MoM is positive, its all YoY all the time, as if all MoM is a blip. It wasn’t that way a few months ago. And comparing sales and inventory to a period last year when the boom was still going just isn’t interesting anymore.

The RE industry has their bias, and Tim has his bias, and that’s fine. But if both sides stick to their bias and the market really is turning up, then Tim’s site will be seem a less reliable source of information than RE sites.

Last winter I was expecting a drop of about 10% at this time. Looking at drops of 4%, with positive MoM is surprising, especially since we are past the peak of the subprime resets. Unless there are bigger price drops, there just isn’t going to be the deflationary foreclosure pressure that other areas have seen.
62 EconE // Jul 8, 2008 at 7:07 pm

Funny how all the new trolls keep chiming in about how we are out of the forest WRT the subprime resets.

I wonder how many Alt-A loanowners frequent Seattle Bubble.

They’re the ones that must be "chocolate"ting in their pants right now.

I also love how they give each other the “reach around” with their “good post” posts.
63 pegasus // Jul 8, 2008 at 7:09 pm

Ok Tim should sell his soul and his posts to the highest bidder so he doesn’t have to commute.

Tim I am sure there are plenty in the real estate community…agents, brokers, developers, newspapers, blogs, etc that would happily pay you more to say the right things…like..”its a bottom.. buy now” or “real estate is expected to rise at 10 percent a year” or “you can’t lose if you buy real estate” or “they ain’t making anymore land”. You could pattern your posts after David Lereah or Lawrence Yun. Those guys made or are making some pretty good coin. Course you would have to live with yourself….can you?
64 mikal // Jul 8, 2008 at 7:13 pm

Could Tim be Tim Eyman? Maybe just the first name and attitude are the same.
65 [troll] // Jul 8, 2008 at 7:19 pm

ls lv hw thy gv ch thr th “rch rnd” wth thr “gd pst” psts.
…………………

Y nd t bck p nd tk gd lk t yr fllw Bbblhds.
Y ll hv bn strkng ch thr fr mnths, ll whl mssng th rlty t thr. Y ddn’t gt th drp y wntd vn wth Tm’s SKWD grphs.

Sbprm rsts s ld nws, vry lmtd rnd Sttl prpr. Try t fnd nw shtck wll’y.

My prdctn: Th Sttl Bbbl Blg wll b lghng stck n cpl f mnths nd y rntrs wll b dstnd t rnt frvr!
66 Matthew // Jul 8, 2008 at 7:27 pm

Jon,

You either haven’t been visiting this site for long, or are you are truly ignoring what people are typing. Nearly everyone on this blog has been quoting YOY price changes since the blog was started.
67 Matthew // Jul 8, 2008 at 7:30 pm

RAL,

Amazing how you had SB withdrawals and couldn’t stay away, and yet have the audacity to call others out? Seriously dude, its 80 degrees outside and you don’t even believe in a housing bubble, WTF are you doing on this site all day long?
68 [troll] // Jul 8, 2008 at 7:31 pm

Mthw,

Wh gvs &qt;chclt&qt; bt YY? Wth YY y r cmprng stts wth th bslt tp.

Y mssd th bttm dd.
69 deejayoh // Jul 8, 2008 at 7:32 pm

Could Tim be Tim Eyman? Maybe just the first name and attitude are the same.

hey now, there’s no need for name calling!
70 Lake Hills Renter // Jul 8, 2008 at 7:46 pm

This new crop of bulls/trolls sure makes me miss Meshugy. At least he brought something to table. Compared to the insults thrown around by this bunch, his style of eternal optimism was quite entertaining in retrospect.
71 Captain Kirkland // Jul 8, 2008 at 7:56 pm

RAL- Care to put your money where your mouth is? How about a $1000 bet (I’ll go more if are really are the home equity money bags you claim to be) that the mean price in Seattle will be down in 6 months?
72 b // Jul 8, 2008 at 8:05 pm

Captain Kirkland -

Don’t bother, he has/had his chance to put his money where his mouth is and didn’t take it. He is currently trying to sell his home (and is getting unacceptable lower offers) and claims to have a ton of equity in it. A rational person who really believed it was bottom a and was bullish would buy their new residence now (at a discount price) and pull their current residence off the market until they could sell it next year for a much higher price. Deep down inside he must know the predictions of further declines are true or he would have taken advantage of that situation.
73 mikal // Jul 8, 2008 at 8:23 pm

My favorite is the guy that thinks housing is going to drop 80% around here. He talks about biting his tounge when his coworkers talked about how much their homes have appreciated. How bitter it must have felt and that would explain why alot of you are so bitter. Yes, I know, many of you have money saved for the bottom. I still believe there is to much uncertainty in the market to say we are at the bottom, but the last six months seem to indicate that there is more strength than one would assume.
74 Scotsman // Jul 8, 2008 at 8:24 pm

b- my guess is for all the money RAL has he can’t afford to buy the new place without selling the current home. If that’s true, and he doesn’t/can’t sell, he’ll be….

PRICED OUT FOREVER !!!!
75 mikal // Jul 8, 2008 at 8:28 pm

Most of us that own don’t do stupid things like buy a house before selling our first residence. Maybe someday you will find that out for yourself. Yes, some will be

PRICED OUT FOREVER!!!
76 [troll] // Jul 8, 2008 at 8:33 pm

Thnk y Mkl.
Cmmn sns sn’t Bbblhd trt.
Mst r Lsrs.

Rntrs r LSRS
77 [troll] // Jul 8, 2008 at 8:36 pm

Sctsmn,

Y r drnkng t mch Sctch.
Ys cn by svrl mr hms, by m nt n dt. Sll frst thn by.

Thnks.
78 b // Jul 8, 2008 at 8:43 pm

mikal -

I would never advocate a normal person buy before selling their old place. But you see, RAL has constantly (and does in the post above this) claim that he is exceedingly rich and has a lot of equity in his home. Either his payments are very small since he has lived there a long time, or he makes enough money to pay down the balance very quickly. Whichever it is, he obviously has money to burn. Someone in that situation who was positive that we had just hit bottom would be in a great position to buy their new place low and sell their old place high.
79 b // Jul 8, 2008 at 8:46 pm

RAL -

Why not buy several homes right now then? We are at or just slightly past the bottom, isn’t now the very best time in years to become a Seattle real estate speculator? Won’t this likely be the best entry point for who knows when? With all of your wealth you can really make some serious gains in the next few years with the leverage that real estate financing provides. Probably far far better than any investment out there right now, unless you are trading on margin and also believe that equities have just bottomed. I hope your money is not in some safe investments, that would be really shortsighted right now since this is the best opportunity to make some easy money.
80 50%off // Jul 8, 2008 at 8:49 pm

Tsk. Tsk. Tsk. Boyz, Boyz. You simply MUST be more civil to each other. This is, after all, a Bubble Blog….what? you think The Tim is going to suddenly change his outlook? I’m willing to bet that he will—When the bubble is fully popped.

BTW, have you ever seen a market chart or trend line go in a straight, non-top direction always? Nope, me neither. The Tim (I presume) and most of the rest of us here still see a lot of tragic self denial about the state of real estate. Those who seize upon a slight trend as proof positive that it’s all better now have only our sympathy. At some point the trend will indeed turn around. That point just isn’t here yet in all likelihood. If I’m wrong, well, I’ll have missed out on a buying opportunity but I’m a big boy, not a bitter boy. I believe most here can relate, but obviously not all.

As for facts, well, I own my home outright but would like to buy again when the deal is right, hopefully all cash too. Of course, my home floats and is up here in the Broughton Island group for the summer. It doesn’t/didn’t retainpurchase value either, but then, I knew that too when I bought it.

Still waiting for some really nice vacation property in the San Juans…… they”ll be out there next year.
81 The Tim // Jul 8, 2008 at 8:51 pm

Ashamed @ 52,

You seem to be reading things that I haven’t said.

1) The only fact here is that gas prices are up. I don’t refute that. My problem is that newspapers are taking this fact and jumping to the conclusion that this will significantly affect home purchasing decisions. The second part is not a fact, it’s speculation masquerading as fact, which is what I have a problem with.

2) Again, not arguing that prices were up month to month. In my comments yesterday about the bump, I used language like “we can’t say,” and “I doubt it.” That hardly sounds like I’m “acting like it’s a fact” that it is a blip. That’s my opinion and I am clearly presenting it as such.

3) I’m not arguing with this fact either. I’m merely taking issue with the press that uses this as a sort of scare tactic. Two additional relevant facts get conveniently ignored when the press repeats the cry of agents of “buy now before rates go up!” First, if interest rates go up and affordability drops, home prices will inevitably be forced to adjust downward further. Or do you suppose that affordability can just drop through the floor while home prices continue to the skies forever? Second, if you get stuck with a high rate, over the term of a 30-year loan, interest rates will almost certainly be lower at some point, giving you the opportunity to refinance. You can never refinance how much you paid for the house.
82 mikal // Jul 8, 2008 at 8:54 pm

b, Advising someone to do something dumb……..makes you look dumb.
83 NoMoreWork // Jul 8, 2008 at 8:55 pm

RAL said,
“buy I am not an idiot.”

Perhaps he meant: “Buy?! I am not an idiot.”

If so, then for the first time ever that I agree with RAL, it would be idiotic to buy. But unfortunately he’s back and he is an idiot. Anyone else notice how these trolls only came back with the “uptick”? They’ve been saying housing will rise for a long time now, they called it. Good Job!!! (apparently they enjoy positive reaffirmation) Yet they criticize all the bubblers for predicting declines and then noting when those predictions come true…. Interesting.

The site is called SeattleBubble and it’s not about Gum, what do you think you’re going to get on here? Rosy housing market posts when the housing market isn’t rosy? BTW there is place to find “positive” posts on the housing market: SeattleTimes.com, SeattlePI.com. Go there and piss off.
84 b // Jul 8, 2008 at 8:58 pm

mikal - if you were positive we had hit bottom and could afford it, why would it be dumb? were else would you get such a return on just mortgage payments and minimal maintenance for a year?
85 mikal // Jul 8, 2008 at 9:11 pm

Seattle Bubble is about not wanting to hear a different viewpoint and living in your bubble.
86 [troll] // Jul 8, 2008 at 9:14 pm

b, dvsng smn t d smthng dmb……..mks y lk dmb.
………..
MN

NMrWrk
Y r trll nd dn’t hv th blls t s yr rl hndl n ths st.
BS Pst.
87 [troll] // Jul 8, 2008 at 9:15 pm

STTL BBBL S BS ST FLL F WNNB HMWNRS THT DN’T HV FRGGN PT T PSS N.

PRD.
88 [troll] // Jul 8, 2008 at 9:17 pm

RNTRS R LSRS.

MG DT T SPPRT T.

HV PSTD TH STTS N WNNRS VS LSRS, PS MNT HMWNRS VS RNTRS.
89 jon // Jul 8, 2008 at 9:18 pm

Calling a bottom here is not based on a one month blip.

- new construction inventory stopped growing months ago. There have been layoffs. In most industries there is an inventory build up prior to a layoff so they can postpone rehiring as long as possible. But migration continues into the area.

- Seattle city and the Eastside have shown strength for months.

- High end prices along the whole West coast have been rising for months.

- Seattle is still lower priced that all the other desirable areas on the West coast.

- A simple calculation shows that median purchase prices are affordable to the sector of the population that is in a position to buy.

- When interest rates rise, that is not going to lower the cost per square foot when new construction has already fallen off at the current price. What will happen is that people will move into smaller apartments to find lower rents, as people at the higher end are not able to afford the existing houses and instead settle for the high end apartments.
90 The Tim // Jul 8, 2008 at 9:22 pm

RAL: tone down the temper-tantrum. Seriously, chill out.
91 [troll] // Jul 8, 2008 at 9:23 pm

b,

s b fr “BZ” ?

My hm s my hm, nt stck trd.
lv n my hm.

Y lv n chsy rntl nd hv t pck p nd mv vry cpl f yrs (r lss) N Fxd ddrss.

mk ngh dgh ff th mrkts (ys vn nw) t spprt my lfstyl jst fn.

D wnt 2 r 3 hms? Hll n. n s ngh thnks. lrdy tld y m nt rl stt nvstr nr flppr. njy th frdm f stck trdng, n nvntry, n whny ssd mplyss, n prblms.
92 [troll] // Jul 8, 2008 at 9:26 pm

RL: tn dwn th tmpr-tntrm. Srsly, chll t.
…………….

Tm, dmt tht y hv bn vrly brsh n th Sttl R mrkt.
Yr psts r strtng t b qt cmcl, lng wth th lck f rsng th msly 2500 bcks.

Myb ths pst wll hlp.
93 mikal // Jul 8, 2008 at 9:30 pm

Any more talk like that and you will be banned. This is his livelihood.
94 johnnybigspenda // Jul 8, 2008