Sorry, but I’m seeing an algorithm problem, too (see Greg K’s post). I entered “395000″ and 2005 and got $393243. Unlikely that price dropped based on your assumptions. I’m on MacOSX.4 and Firefox 2.0.0.16. Tried and got same result in Safari. I’m sure you enjoyed programming this, but I bet you hate us pesky software testers by now! Hope this helps, and best wishes for the next release.

I was following this house on redfin and it got relisted with a reset days on market. What does your direct MLS history show for days on market and asking price changes?

17705 NE 156th St
Woodinville, WA 98072

This is in the Fremont neighborhood. Are priced holding up better in the city?

Check your math.

1. Downward Pressure for how long? Our Inventory is beginning to show signs of flattening out. We have low interest rates. An $8500 tax incentive for first time buyers. Lastly, real estate is local, there are deals in any market.

2. Ending the Iraq War stops the government from bleeding massive amounts of money and provides for a better looking balance sheet. A fraction of what we are spending on the war can then be used to stimulate jobs, repair infrastructure, and other programs that will put Americans to work while making our roadways safer. It will stop the upward pressure on oil, providing relief to all American families across everything they purchase.

3. Access to credit is still easy for people with good verifiable income. You need to put 3.5% down… not that painful!!!

4. Again real estate is local. Do I think Seattle, the city will come down as much as Marysville? Absolutely not. Can you find a house at a bargain rate that will increase in value or have instant equity, sure you can.

5. Yes, Shell and Exxon have huge lobbies, but just about every American and politician is sick of their crap. Politicians have more pressure than they ever have had to develop a Green Energy Policy. Solar will put tens of thousands of contractors, plumbers, and electricians back to work.

6. The Dollar is showing more strength and there are predictions that it will increase by 15% against the Euro and the Yen in the next 9 months. Remember, we are the largest consumers in the world, if we slow down the entire world has a whole lot of sales it has to make up for. Another good sign is that gold is down to $890 form $1000.

7. Yes, Nissan cut jobs, but how many are still here.. My point was offer more companies incentives to build plants and hire American workers.

8. 78 million people will be retiring in the next 20 years many (in numbers, not percentage) of which are high paying executive jobs. Look around Boeing, how many grey-haired upper managers are walking around? We are going to have a hard time filling jobs in the US and the only way we will be able to meet those demands is through immigration which will increase our population and demand for housing. http://www.bls.gov/opub/mlr/2000/07/art2full.pdf .

9. Most boomer do not retire and immediately drain their house for money. Yes, you can have a reverse mortgage, but that is generally used for end of life scenarios. 401k, Pensions, savings, and social security support their needs long before it becomes necessary to tap the house.

10. “that is why most of the grad students today are from foreign countries β€” Ouch.” YOU ARE FLAT WRONG! Foreign born students make up about 15% of students enrolled in grad school. http://www.insidehighered.com/news/2006/11/01/foreigngrads

11. We will need top talent form foreign born students at grad schools to fill the jobs of the 78 million retirees. We will need to change our immigration policies to allow for this to happen and we will need a lot more houses. You are just seeing the beginning of what needs to be a huge population growth to meet the job demands.

12. I never said how much I thought the housing market will fall. In Washington we have foreclosure rate of 1 in 400. While Stockton has a rate of 1 in 25. Quite a big difference. Right now you have low interest rates, an $8500 tax credit to buy a house, higher limits for what was traditionally a jumbo loan before, and most importantly many sellers willing to make a deal. Leverage all of the above and you could be extremely happy in a few years.

13. Buy a house you can afford in good times or bad. If you live from pay check to pay check as a renter or an home owner, you will be homeless if you have no income either way.

To speak to your points,
1. Which “Many Posts” are you talking about — or you have “Proven” nothing.

2. I am a structural engineer, MSME

3. Downward price pressure? NO doubt, isn’t that what this blog is all about discussing “WHY” this is occurring. For instance as many, many people have pointed out no doc loans, no job verification, etc.. — the overly easy credit environment — maybe that is one reason Freddie Mac had a lose 3x greater than people assumed it would be.

4. If the IRAQ war is the key to solving the housing problem than I think you have a complete new theory going. I guess it wasn’t the easy credit but the war.

5. High Oil no doubt creates inflation but oil prices can change drastically access to credit won’t, lenders will be writing off losses for many more quarters.

6. If you believe that commodities are bubbling along than I guess you can understand that home prices are also and just as you state for commodities housing will come down in price because it went so far off the historical trend.

7. Green energy policy — I hope it happens but I wouldn’t bet on it — Exxon, Shell, etc… have strong lobbies.

8. It is the stated goal of our Treasury dept. not to have a weak dollar. If the dollar is too weak for too long you may just end up damaging the economy more than helping it, for instance if the Chinese who hold a significant amount of our debt start dumping green backs.

9. Nissan just cut some heads in the U.S.

10. How many of those boomers can retire if their main asset — housing is in the toilet?

11. No doubt we do have some of the best schools in the world — that is why most of the grad students today are from foreign countries — Ouch.

12. “Will housing prices fall more? Yes. Will they be in the gutter for ever, absolutely not. Will my condo be worth less in three years, maybe, but why does that matter? I plan on renting this home when I am done living in it. If in three years the housing prices crash, that just means I can buy a lot more house for a lot less” — SEE that is the whole point of the discussion — why would I buy today if as you agree prices WILL fall, why not wait one, two, or three years until housing is closer to the historical trend line — WASN’T that the whole point of the CALCULATOR????

13. Do I think I am immune to a job loss — certainly not — in fact that is why I am very careful when it comes to making purchases, I like looking at DATA, not gut feel etc… If one may lose a job doesn’t it make more sense to ensure you don’t lose the job and than have a house you can’t pay the mortgage on that is worth less today than the day you bought it???

In 2001-2008 homes were 2%-30% overpriced.

So it doesn’t just add 5% each year to the 2004 purchase price. It factors in how overpriced homes in the Seattle area were in 2004 before adding the 5% per year.

2004 purchase at $270K

$270K x 1.05 = $284K (+1yr appreciation = 2005)
$284K x 1.05 = $298K (+2yr appreciation = 2006)
$298K x 1.05 = $313K (+3yr appreciation = 2007)
$313K x 1.05 = $328K (+4yr appreciation = 2008)

—Historically housing appreciates with inflation. Gains are almost non-existant dating back to 1890.

I was simply defending RALs right to comment. My point was that there are lots of offensive people here in this blog that immediately bring things to the gutter. I am sorry to inform you that you have proven to be one of those people with many of your past posts.

You still not have answered my previous questions about your degrees and what you “job title” is? This cannot be so one-sided.

With regard to prices, my short answer is there is a lot of downward pressure right now and prices will likely fall, with a lot of possible upward pressure in the future. Much of which hinges on the election.

Ending the Iraq war is key. This war puts a premium on oil prices which has proven to drive all of our costs up. Bush leaving office will also have an effect on Oil prices… there seems to be an oil premium associated with his existence. Americans have already begun changing their demand and hopefully will continue. Although if you look back to the 70’s it is hard not to think Amnesia will set in.

We are in the middle of a commodities bubble as well. We are starting to see indicators of that bubble deflating. Oil prices are dropping and if they continue, it will put more disposable income in the hands of Americans who so desperately need it. It will also reduce the costs of everything else from the fertilizers that produce our food, to the plastics for packaging it, to the cost of shipping.

Our new presidents energy policy (if there ever is one that gets put in place) will be another key factor. If we fund renewable, especially solar, we have an opportunity to put many electricians, plumbers, and carpenters back to work. This would do a lot for those who are out of work because of the home building industry. I think we should take the 15 Billion in tax incentives from Big Oil and give it to solar and green energy projects. The biggest reason for this is the end game. We will greatly limit our dependence on any anti-American regime, which in turn reduces our long-term exposure to war and other costly conflicts.

As the largest consumers in the world we are a major cog in the engine that drives the world economy. If we stop spending and stop consuming, the rest of the world feels it and is effected. Look to the current global economic downturn and this starts to become apparent. The world does have some incentive to make sure the United States, at least for now, becomes more stable, their livelihoods depend on it too. Our weak dollar does make American prices more competitive, especially that of Boeing. We can further strengthen the US by providing pro-business incentives to companies who invest in the United States and employ American workers. Much like we do with the auto industry. That is why Toyota and Nissan have plants here.

We also have many baby boomers (78 Million) coming up for retirement. I think this might have some benefit of easing the effects of jobs lost… how many were getting ready to retire anyway. In addition, we are just seeing the beginning of a huge boom in health care jobs. Someone needs to take care of those aging boomers.

Lastly, never discount innovation and technology. The speed at which we can create, adapt, and recover in unprecedented in the generations before us. The United States has some of best schools in the world which are the epicenters of technology innovation and drive business creation and job creation.

Will housing prices fall more? Yes. Will they be in the gutter for ever, absolutely not. Will my condo be worth less in three years, maybe, but why does that matter? I plan on renting this home when I am done living in it. If in three years the housing prices crash, that just means I can buy a lot more house for a lot less.

Many here cheer the economic downturn because you think prices of housing will drop. I just want to know why you think you are immune to job loss and other effects of a devastated economy? If jobs vanish and you are forced to work for less pay that does not make you any more closer to home ownership even if prices do drop. Be careful what you wish for!

Thanks!

Keep up the good work.

My only moderation request would be a yelling / length filter on posts by the softwareengineer. Nothing tim can do about this, but every time I click on his blog (I know I like train wrecks sometimes) I can’t help but feel sorry for the children and teachers who are subjected to those essays.

This is an example of what I was speaking about.

Nothing is perfect my friend. Its called a blog and by nature consists of 95% garbage. Some opinions are solid. Others are idiotic. Either way, its not a reason to boycott the site. Tim does a great job with the general articles. If the blog bothers you, DON’T READ IT!

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Tim brings his own prespective into his site and that is great.

It is great that people can have debates over their different views on things such as real estate and the economy.

The hard part for me is when someone offers a prespective that is different then others on this site people are quick to get into a naming calling match.

I have read posts over and over again where someone gives their opinion just to have about 5 other people come out and say some unneeded comments.

Just for that reason I have not been on this site as much.

Why are folks personal sensitivities so easily aroused when someone calls you a name? Ask yourself that question. The language used by the name caller is much more reflective of them, so let it stand and say what you want. Unless deep down you are what they’re calling you, and then perhaps a little counseling will help you out.

The Tim, I understand censure since you are trying to build a business model, and some advertisers and visitors will be offended when someone uses “abusive” language. But your model was far better when it was open.

So long as folks don’t take it into the real world, why not just let the online stuff stand as a testament to honest and open debate?

http://www.nytimes.com/2008/08/03/magazine/03trolls-t.html

I came to this site because it did offer interesting insights and analysis that you couldn’t find anywhere else (and still can’t I might add). It has helped me make my own decisions by considering all sides of buying a house, something I was woefully ignorant of before I began searching for a house.

This calculator is just one more example of what the site provides. Warts and all, it provides SOME utility for people trying to get a grasp of the current situation. The Tim certainly can improve upon its capabilities, but at least he’s trying to provide value for the general house-hunting community.

As a frequent lurker who learns much from the analysis here, I put my vote in to remove censure. In fact, I would donate money to keep it that way.

The local correspondent Martin Kaste discussed the lay-offs and finished the short piece saying something like: “these lay-offs come after disappointing announcements from Starbucks and WAMU. The pacific NW has started to feel the full force of the national economic slow down.”

– but that’s right Federal Way isn’t Seattle proper so this won’t matter.

So you praise someone – RAL – who purposely callers alot of people here losers and then have the balls to "female dog" about someone flipping you crap — what a joke.

Answer me this do you think in the short term — next three years — RE in Seattle ( I will limit it to Seattle proper since you don’t seem to think outside that box) will go up or down. I mean this from today will the median price decline or increase. Do you believe three years from today the value of your condo will be greater or less than today.

If you do not have access spend some money and become a member. It will keep you from searching through the Red Fin and John L Scott crapola.

Lastly, please don’t bash our site. Just concentrate on what the woman is telling you and doing with her hands. Watch her hands. Listen to her. Then watch her hands again. Turn off the volume, and continue to watch her hands. Then slowly turn up the volume. After you do this about ten times you may see the hidden message. After realizing what she is saying then ZOOM down to the CNBC headknocker video on the bottom right. Watch it at least 5x. Then remember our spokeswoman’s hands. Get it? I hope so.

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

In other earth shattering news the U.S. Federal Debt is now almost three times as large as the estimated number of stars in the known universe. Holy crap. A trillion here, a trillion there, pretty soon you owe some real money. Carry on!

Thanks and I appreciate you saying that. I do love the debates here. Admittedly, I do sometimes get in head-butting matches with the bullies and ignorant people who sometimes post here.

I too contemplate the other side of the opinions and believe it or not, actually agree with some of what is said. I completely appreciate the analysis The Tim does. I can say wholeheartedly that I walk away with a better understanding of what is going on and use the information to help make decisions and contemplate strategies.

I try to give good feedback to make this blog a better and more informative resource and hope that it helps.

I will try to ignore the character assassins, verbal abusers, and outright ignorant people… but the Bostonian in me soooo wants to give it right back!!!!!

Thank you for proving my point….

You have been calling people idiots and swearing at people ever since I stumbled across this site.

Can you bring anything else to the conversation?

I would much prefer to have healthy intelligent debates with people like The Tim, TJ, and the many others here.

If you don’t like it when some one gives it back as hard as you give it then don’t come here. You have done nothing good for this blog and you are a complete distraction. You take the conversation to the gutter and have yet to articulate anything beyond a generalization.

All in favor of censoring “What Goes Up Must Come” say “Yeah”

YEAH!!!!!!!

I am not sure why you’d want to censor RAL, if I ran this site I would just add extra banners and other ads to posts he goes nuts in. the post count usually goes ballistic when he is off his meds.

Let’s clean up both sides of the debate!

I agree wholeheartedly, and I intend to “lay down the law for everyone” first thing in the morning.

So your name calling is not offensive?

I disagree with alot of what you post, but most of the time you present your perspective as a civil, articulate, and logical person. I actually read your postings and contemplate the points you make. Don’t get distracted by others who do not want to be civil and make no meaningful contribution to the discussion. I would really like to see RAL say something other than some variation of “all renters are stupid”. I fully understood his opinion sometime before the first fifteen times he said it.

The Tim just conceded that he has censored RAL.

If your goal is to clean up shop I am all for it.

I would like to see some even-handedness. RAL is certainly not the only Jackass here and you have a lot of house keeping on the pro-bubble side of the debate.

Why not censor “what goes up must go down”? Here is a quote from him “Harley you are a complete A**HOLE.” I put the asterisks in.

Let’s clean up both sides of the debate!

Many years ago, on a forum where I had previously been an admin, I got accused of deleting someone’s post. There was this huge firestorm about it, with people practically calling for my head… until I mentioned that my admin powers had been gone for almost 2 years. A lot of people ended up looking VERY stupid over that.

It’s wiser to ask than to assume.