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McCain / Obama: Does it really matter vis-à-vis the housing meltdown?
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Wait a minute… I thought only California had lots of people that took out dangerous loans, and are now at risk of foreclosure.
Counselors overwhelmed with calls from desperate homeowners
Housing advocates and lending counselors say they’re being overwhelmed with calls for help from desperate Seattle-area homeowners, many on the brink of foreclosure.
…
As interest rates reset, thousands of Seattle-area homeowners are facing skyrocketing mortgage payments – payments many people just can’t afford.
Hmm…
(Linda Byron, KING 5 News, 08.28.2008)
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Tags: foreclosures, King5
Jon Talton wrote a great article for the Times a few days ago that goes deeper than the usual “Boeing! Microsoft! Pink Ponies!” type articles and explores all the ways the Seattle region is exposed to the slowing economy: For local economy, it’ll be a long slog.
…the national slowdown is finally hitting the Puget Sound region, slowing job creation as well as pressuring would-be home-sellers, the construction industry and credit-strapped homeowners.
As recently as last year, employment growth here was more than twice the national average, according to Dick Conway, a Seattle economist and co-publisher of the Puget Sound Economic Forecaster. Now, he forecasts it will decelerate from a peak of 3.2 percent in the first quarter of 2007 to less than 2 percent this year. On a quarter-to-quarter basis, job creation could be essentially flat, something backed up by recent state job numbers.
It’s nice to read a somewhat realistic article once in a while, instead of constantly being fed the feel-good fluff stories about how special and different we are in Seattle.
What are the chances of a state like Washington… avoiding a recession?
…the economic model of Pacific Northwest economies maintained by Jeremy Piger, associate professor of economics at the University of Oregon, showed a 99.4 percent chance of recession for Washington in its latest reading. The model is based on data from the Federal Reserve Bank of Philadelphia.
So you’re telling me there’s a chance… Yeah!
My one problem is that Talton quotes Dick Conway as some sort of expert on the local economy and housing.
“The picture did change substantially with housing,” Conway said. “Ours held up pretty well for a while. We’ve finally succumbed.” Price appreciation has stalled and inventory is swelling as potential buyers try to time the bottom of the already favorable market.
…
Conway compares today’s climate to 2001’s and uses the term “rubber-band effect.” The faster you drop into recession, the faster you bounce out. This has been a slow slide. He said the Puget Sound region may touch bottom in the next few months and begin growing again.
I’m not sure why he would be quoting Dick Conway as any sort of expert, considering how off base he has been with his 2008 real estate predictions so far this year.
Conway anticipates average Puget Sound-region home prices will decline less than 1 percent next year, and sales will be down about 5 percent, before rebounding in 2008.
Let’s see… According to NWMLS July data, “Puget Sound-region” (King, Pierce, Snohomish, Kitsap, & Thurston Counties) average prices are already down nearly 5 percent, while sales are down over 35 percent. Even if you just look at King/Pierce/Snohomish, prices are down over 3 percent and sales have dropped 37 percent.
The bottom line seems to be that the local economy is not bulletproof, despite what the papers and real estate agents have been saying for the last few years.
(Jon Talton, Seattle Times, 08.26.2008)
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Tags: Conway, economy, job_growth, Local Economy, predictions, recession, Talton
Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.
First up is the straight graph of the index from January 2000 through June 2008.
You can see that all three tiers basically flattened out through the spring. The medium and high tiers had that slight bump from March to April, but have since given back the slight gain, while the low tier has been nearly flat.
Here’s a chart of the year-over-year change in the index from June 2002 through June 2008.
Despite being flat for four months, the low tier continues to perform worst in terms of year-over-year price changes, coming with a nearly 9% drop from June 2007. Here’s where the tiers sit YOY as of June – Low: -8.8%, Med: -7.6%, Hi: -6.2%.
Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.
It’s almost as if the low tier is waiting for the other two tiers to catch up after dropping so severely between months 8 and 9. Looks like another month or so and the mid and high tiers should be pretty close in terms of total decline from peak.
So has the low tier bottomed out, or is the flatness of March-June just the best “spring bounce” that could be mustered? We’ll find out soon enough as we crawl into the summer and fall.
(Home Price Indices, Standard & Poor’s, 08.26.2008)
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Tags: Case-Shiller, Statistics, tiers
It’s got unnecessarily crude language and site design that’s still pretty rough around the edges, but Cheap$#!& Condos is still pretty funny. I hope whoever is behind it keeps updating.
Hat tips: Marlow Harris @ 360Digest & Matt Goyer @ Urbnlivn.
→ 14 CommentsCategories: Humor
Tags: condos
According to the latest data from the Case-Shiller Home Price Index, the home price bust in Seattle is gaining steam again.
Down 0.2% May to June.
Down 7.1% YOY.
Last year prices rose 0.65% from May to June, and year-over-year prices were up 7.9%.
Here’s the usual graph, with L.A. & San Diego offset from Seattle & Portland by 17 months. With a drop of “just” 5.8%, Portland’s year-over-year numbers have been out-performing Seattle for seven months now.
This graph is not intended to be predictive. It’s just an interesting exercise to see how closely the Pacific Northwest is tracking the ground already covered by Southern California.
Here’s the graph of all twenty Case-Shiller-tracked cities:
Six of twenty cities experienced smaller year-over-year drops than Seattle in June. Charlotte at -1.0%, Dallas at -3.3%, Denver at -4.7%, Boston at -5.2%, Portland at -5.8%, and New York at -6.9%. The largest year-over-year drop was in Miami, where prices plummeted over 28% from June 2007. Ouch.
Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve cities whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.
Eleven months off our peak, the drop in Seattle has improved slightly, and is now only worse than ten of the twelve “bubble cities” were at this same amount of time from their respective peaks. Only Miami and Tampa had dropped more than Seattle’s 7.3%.
Here’s the “rewind” chart. The horizontal range is selected to go back just far enough to find the last time that Seattle’s HPI was as low as it is now. This gives us a clean visual of just how far back prices have retreated in terms of months.
Well, we can definitely say that March wasn’t the bottom. The index for Seattle dropped to a new post-peak low in June at 178.28, just a hair below March’s value of 178.29. Prices have been holding somewhat steady at June 2006 levels for four months now. Will the summer and fall bring a continued drop, or is early summer 2006 as far as Seattle will “rewind”?
Check back tomorrow for a post on the Case-Shiller data for Seattle’s price tiers.
(Home Price Indices, Standard & Poor’s, 08.26.2008)
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Tags: behind the cycle, California, Case-Shiller, graphs, Statistics
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