Here’s a brief article from the Wall Street Journal that might be of interest: Weathering the Rain, And the Property Storm
The troubles facing most Seattle-area landlords are more like a Puget Sound drizzle than the stormy skies swirling around markets such as Phoenix or Orange County, Calif.
Certainly the economic turmoil buffeting the nation’s property markets has touched Seattle. The area’s median home prices are falling, and average commercial rent gains are slowing. The volume of large office, retail and warehouse sales has dropped dramatically this year, according to Real Capital Analytics. The area’s job growth slipped to 2.3% in July, down from 3% in the year-earlier month, according to the Bureau of Labor Statistics.
Moreover, tighter economic times are hurting some large employers and real-estate consumers in the region, home to about 3.4 million people. As Starbucks Corp. pulls back from an expansion and closes hundreds of stores nationwide, it is considering selling a downtown office building it is developing and an existing one it owns, both in Seattle’s Pioneer Square neighborhood
…
But amid these pressures, the Seattle region’s office-, retail- and apartment-leasing markets still have outshined most major U.S. metropolitan areas by some key measures. While retail rents in most markets are falling, average Seattle-area retail rents are expected to rise 3% this year, the highest gain of 54 major markets tracked by Property & Portfolio Research, a real-estate research firm.
…
“I wouldn’t say it’s recession-proof, but Seattle’s going to weather the recession a lot better than most markets,” said Stephanie Hession, a real-estate economist with PPR. Still, even with Seattle’s rents largely in positive territory, Ms. Hession says inflation will leave most landlords losing ground.
Sadly, the article is long on rosy talk and short on actual quantifiable facts. Why is Seattle “going to weather the recession a lot better than most markets”? Ms. Hession doesn’t say, and neither does the article. All we read is that Seattle has held up better so far, which is true thanks to our lagging housing market. If Seattle’s economy is based largely on software and airplanes, what specific arguments can be made that those two industries will hold up better than average in a recession?
It seems to me that when money gets tight, individuals and businesses will forego software upgrades, making do with what they’ve got, and cut back on travel. I have read quite a few articles that claim that somehow Seattle’s economy is poised to continue performing well through a recession, but I have yet to see a reasonable argument as to why this will allegedly be the case. If anyone here has a better argument than… well, better than nothing—then let’s hear it.
(Maura Webber Sadovi, Wall Street Journal, 09.10.2008)
Jump to the bottom to add your comment. ↓
105 responses so far ↓
1
softwarengineer
// Sep 16, 2008 at 8:23 am
TIM, YOU CROSSED ALL THE “T”‘S AND DOTTED ALL THE “I”S
I would say any city that hinges its economic hopes on VISTA and optional vacation travel is walking on thin ice, especially in a recession.
2
Mark
// Sep 16, 2008 at 8:36 am
Don’t forget, we haven’t been building airplanes for about two weeks now. That doesn’t look like it is going to end soon.
My take is that the first month of the strike should be fine, but that for a lot of families, the second month is going to start cutting into savings very quickly. I’d be interested in what other people think.
3
Colin
// Sep 16, 2008 at 8:50 am
Well, rising rents are a fact, at least where I’m renting. You can’t ask for facts about the future because the future doesn’t exist yet. The obvious difference from AZ or CA is that we’re much more space-constrained and didn’t have building booms on the same scale, so (a) the bubble was less inflated and (b) given topography and high gas prices a lot of us can’t easily substitute between neighborhoods, so foreclosures in one place may not bring prices down as much elsewhere.
Employment and output are hard to generalize across, and we need to distinguish between Seattle and the larger Puget Sound region. But if the comparison is to Phoenix or Orange county, this region has in relative terms more health care and biotech, and certainly more software monopolists, so you would expect it to be *relatively* more resilient.
http://www.seattle.gov/oir/datasheet/economy.htm
4
k2000k
// Sep 16, 2008 at 8:50 am
In regards to the strike the cards are in Boeings hands and the machinists know it. Look, whether or not the machinists strike there was something happening out of Boeings control, their suppliers. Boeing was already behind in its deliveries and was going to loose some money anyways, tat money is already gone, this just gives the suppliers time to catch up. If Boeing was really going to be seriously hurt by this strike, given the economic conditions we are in, which would mean a lack of credit which boeing has to rely on given the nature of its indsutry, then they would try to settle the strike as quickly as possible, much in the same way they settled quickly after the last strike.
5
Sniglet
// Sep 16, 2008 at 8:59 am
The software and aircraft industries are HIGHLY vulnerable to a global economic downturn. Aircraft orders have already been hammered this year, as airlines around the world struggle to avoid bankruptcy. This is only going to get worse.
As far as software goes, the only thing keeping the industry afloat so far has been the relatively supperior growth abroad. However, that is now changing fast. Europe is reporting slower sales and the Asian economies are fast slipping into recession. By this time next year we will most likely be seeing every major tech-employer in the region implementing hiring freezes if not outright lay-offs. Everyone will be laying off in 2010.
6
Thomas B.
// Sep 16, 2008 at 9:01 am
Seattle is not going to weather it very well if WAMU goes under. That’s a lot of unemployed people walking around the streets of Seattle; high paying and well paid jobs.
7
Ray Pepper
// Sep 16, 2008 at 9:02 am
Deejoya : Ardells 50k price drop! Ouch. Is this a Gem! 900k? Good Lord! I hear someone singing !
8
Ira Sacharoff
// Sep 16, 2008 at 9:05 am
Could it simply be that commercial real estate is simply trailing residential locally, the same way that Seattle has trailed other markets?
18 months ago, people were saying that the Seattle was “immune” because prices were still going up, but there was this big disconnect going on, as if Seattle wasn’t part of the United States.
9
Markor
// Sep 16, 2008 at 9:12 am
Software can hold up better in a recession, when it is used to make business more efficient, saving more money in the long run than it cost to buy it.
Airplanes can hold up better in a recession, when they are used to make business more efficient, saving more money in the long run than it cost to buy it.
10
LUC
// Sep 16, 2008 at 9:17 am
Colin,
You are wrong about biotech in the Puget Sound region. There have been 4 companies that have so far delisted this year. California (SF, San Diego) dwarfs us in the number of biotechs. This region is not considered biotech hub by any stretch of the imagination.
11
Sniglet
// Sep 16, 2008 at 9:27 am
The important point to remember about corporate spending during recessions is this: companies become MUCH more short-term focussed, concerned about conserving capital in the hear and now rather than improving efficiency and reducing costs in the long term. Few companies will embark on major IT projects, or upgrades, when they see their business contracting.
Further, keep in mind that labour costs are falling during recessions as well, which reduces the need for greater efficiency.
We are already seeing PC sales slow in Europe and the US as consumers and corporations slow down the upgrade cycle (i.e. both Dell and HP have noted this in their recent earnings announcements). Software sales are CLOSELY tied to hardware sales. People get most of their new software when the first buy a new PC, not later on (e.g. only an extremely small percentage of users upgrade the OS of an existing PC). If PC sales slow down, so do software sales.
The same forces will be at play with the aircraft market in recessions. Over-all travel volume will slow (which we are already seeing), which leads to a glut of existing aircraft (parked in the Arizona deserts). Further, a recession will lead to drops in fuel and labour costs (look how oil has been plummeting in price recently). So, as the labour and fuel costs fall, and masses of unused aircraft glut the market there becomes little incentive to place orders for pricey new “efficient” planes.
12
Agent
// Sep 16, 2008 at 9:37 am
Sniglet,
I think you had more credibility when you were talking about the cost of lending increasing/skyrocketing due to the gov’t takeover of Fred/Fan and the utter/complete destruction of private lending.
This obviously isn’t your area of expertise.
13
Colin
// Sep 16, 2008 at 9:38 am
Luc, my explicit comparison was to Orange County and to Phoenix, and if you look up total medical, health, and biotech as a proportion of employment you’ll find Seattle surpasses those places as a proportion of total employment. I did not claim that Seattle led the nation or was a “hub,” whatever that means. I would also look for slightly more robust data than “number of biotechs” since firm size varies, no?
San Diego does raise an interesting contrast, though, because it surely has a lot of high tech employment, software as well as biotech, and lots of real estate distress.
14
Sniglet
// Sep 16, 2008 at 9:39 am
I am always eager to learn from my mistakes. Could you explain where you think I am going amiss?
Do you believe that labour and material costs rise during recessions, which put pressure on companies to want to invest in greater efficiencies? Was I wrong in believing that a lot of software sales are tied to PC sales?
I would love to understand where I am going off the rails.
15
LUC
// Sep 16, 2008 at 10:00 am
Colin,
Biotech Hub = an active site of R&D, job and investment opportunities in the life sciences or agricultural biotech.
There are less than 20 biotech companies in Seattle with the majority having less than 100 employees. Many of which have had recent layoffs. The largest biotech firm in this area is Amgen with ~1000 locally. Amgen also has had recent layoffs, deep cuts in capital expenditures and travel.
16
softwarengineer
// Sep 16, 2008 at 10:22 am
LUC AND SNIGLET ARE BOTH RIGHT ON BIOTECH IN MY OPINION
About half of all American medical employment totally relies on federal supports, like Medicare and Medicaid. If the rest of the non-federal economy tanks [which it is]; how do we pay for government funded medical [teachers too]?
And don’t tell me we tax all the hoards of lower income in-sourcing we let in mitigating and competing with American Lunchbox Joe’s household income pay….the lower the household income, the lower the tax revenues.
How about the “Robinhood Plan”, tax the rich and give to the poor? Even Obama knows that will kill Biotech jobs.
17
Markor
// Sep 16, 2008 at 10:30 am
I agree. It’s a matter of how much they are focused on the short-term to the exclusion of the long-term, including what their competition is doing. Even if you think that buying some piece of software can pay for itself 20X over, you might not do it if the cost of buying the software will sink you in the short term. But things that have long-term benefits, like software and airplanes that save money, still can do better in a recession than, say, Coach handbags. The few companies that can afford to embark on major IT projects during a recession can come out rosy. Also, many IT projects can pay off in a relatively short time. Looking back historically, it seems that Boeing has more to lose than Microsoft.
18
alex
// Sep 16, 2008 at 10:46 am
Yesterday, I spent some time reading recent posts/comments on raincityguide, and I noticed one interesting recurring theme: realtors commenting on how hard it is to convince their sellers to face reality and drop their price.
Quite a departure from “it’s a great time to buy”, eh?
19
Ray Pepper
// Sep 16, 2008 at 11:03 am
Alex why waste your time overthere? Its just a harbor of Realtors and Mtg Reps stroking each others egos. How can any Mtg Rep do whats in the best interest of their client without talking about different ways to Buy? When I blog there I’m considered a troll for finger pointing and telling the truth.
God forbid the Mtg Porter and her groupies start supporting Red Fin, or Shop Prop, or 500, or…..
What does a group of Realtors and Mtg Reps really bring to the table at RCG?
20
denismurf
// Sep 16, 2008 at 11:38 am
Sure, there’s a certain amount of puffery among the posts on Rain City Guide, but it’s far outweighed by straight info about the practicalities of the real estate and mortgage industries in the Seattle area. RCG and this Bubble forum have contributed equally to our knowledge base in our quest for a house, which has now lasted 10 months.
21
Jillayne Schlicke
// Sep 16, 2008 at 11:45 am
Hi Ray,
The reason you’ve been banished to the Bermuda Triangle over at RCG is because we have an extremely low tolerance level for trolls blatantly self-promoting in the comment box. Go leave pee stains on somebody else’s carpet to leave your mark.
When you’re ready to be house trained, let me know and I’ll be happy to offer some suggestions. Such as stop promoting yourself, like you’re doing up there in comment 19 in a very sneaky way, like how a cat might hid behind the big chair in the corner to spray:
“How can a Mtg Rep do whats in the best interest of their client without talking about different ways to Buy?”
It’s generally not a mortgage loan originator’s responsibility to educate his or her client on different real estate business models. This would not be considered “lying” in any stretch of anyone’s imagination.
Before you take a swipe at me, please do your homework. I’ve been teaching alternative business models for real estate continuing ed for over six years now.
22
Jillayne Schlicke
// Sep 16, 2008 at 11:47 am
Thomas B in comment 6 reminds us about WaMu.
How many thousands of jobs does WaMu carry here in the Northwest? Surely not all jobs will be lost but we have to admit that this will be a severe blow. Did the WSJ article mention this at ALL?
23
Jillayne Schlicke
// Sep 16, 2008 at 11:55 am
@alex:
“one interesting recurring theme: realtors commenting on how hard it is to convince their sellers to face reality and drop their price. Quite a departure from “it’s a great time to buy”, eh?”
Absolutely. I hear this in the classroom as well. I get a wide variety of agents from all across the Puget Sound region, but generally from greater King County. This is a re-occuring theme everywhere.
Sellers read and hear about our “great economy” in the mainstream media and how our area has not been effected by foreclosures as much as other areas. Sellers have been very slow to drop their prices.
Now I’m hearing that sellers wish they would have taken that low offer 4 months ago…
24
Markor
// Sep 16, 2008 at 11:58 am
Said the pot, calling the kettle black.
25
rose-colored-coolaid
// Sep 16, 2008 at 12:10 pm
This recession couldn’t come at a worst time for MSFT. The key number here is 80%. If you control 80% of any market, you get to dictate it. Control less than that, and the market suddenly becomes plural. Control less than 60% and the market becomes open.
MSFT has built their business on dictating the OS, Office Apps, and Internet Browser markets.
IE now has less than 80% share. XP/Vista have less than 90% share (is it about 85%? Anyone?). I don’t really know on Office, which I suspect is stronger but may be getting chipped away at.
So, what’s at stake is, if the recession encourages business to upgrade to Linux as a cost cutting step, it could be quite harmful for MSFT. Business is where they make their best money, and XP/Vista is always packaged with Office and IE in those environments. So, if Windows usage falls into the mid 70’s, it could be irreparable damage to a vital local business.
26
Thomas B.
// Sep 16, 2008 at 12:22 pm
Let’s see. You know that big building downtown above the SAM? All those people without jobs. You know those signs all over town on buildings, strip malls, etc, that say WAMU? All those people. I wouldn’t doubt that the number is easily 20,000 people in the region. It’s not “all the jobs”, but it would crush this region. Not all those people can go into “bio-tech” or software if they get laid off. I doubt any of them can.
Finally, just because a newspaper doesn’t say it, doesn’t me it doesn’t exist.
27
Ron
// Sep 16, 2008 at 12:23 pm
From What Ive been told by someone and engineer in Spea at Boeing..
Boeing supposidily has a Clause in the plane contracts that if the Machinists strike for a month or longer it negates the Late charges… if this is true then I could see Boeing Wanting this Strike to last a month or longer- those 787 Dreamliners are all going to be late- all roughly 500+ orders, think of the maginitude of money they could save if all you need is a Machinists long strike to potentially save huge dollars..
Boeing isn’t really losing any money on this strike, Just Delaying Revenue.. The union leadership, I saw a short clip on Tv, were making some Gunslinger remarks, reminded me of the comments Bush made…. BRING THEM ON..
Boeing Union Membership is about 90% Broke… that is Betcha 90% have some real struggles and will take just about anything if this goes into 90 days- many are already taking out loans going into 2 weeks, I know this for a fact.. From what I understand almost all the Members were only counting on 2 weeks Maximum, there thinking they have all this Leverage because of the Backlog..
This was nicely put together by the Union… getting all the Member to gather together beat there Drums and March Down to the Union Hall and VOTE NO..
I Call It Peer Pressure… and Manipulation..
Meanwhile the Banking Financial System could really put a Damper, then Again the IAM Union Membership, is very financially- I will stop here..hahaaha
28
Jillayne Schlicke
// Sep 16, 2008 at 12:27 pm
Hi Thomas B,
If WaMu goes down, I’m not so sure that all those jobs would be lost. If the FDIC takes over, they’ll still need employees to run operations. If they’re bought by another entity, they’ll still retain “some” of the WaMu employees, If WaMu decides to split themselves up into smaller companies and sell off parts of itself, still more job cuts would come.
Maybe we’ll be looking at a gradual decline instead of an “all at once” in WaMu job numbers.
29
Alan
// Sep 16, 2008 at 12:47 pm
Also MS stops being a monopoly and might get all of the restrictions on them lifted. You have no idea how much those restrictions are slowing MS down.
30
deejayoh
// Sep 16, 2008 at 12:56 pm
Fixed that for you. Ten years of nattering and Linux has what share of desktop? While MS focused on that, Apple took off.
Server is another issue.
31
Thomas B.
// Sep 16, 2008 at 1:18 pm
There is a difference between the FDIC taking over, and WAMU getting bought. If the FDIC takes over, then WAMU is going into chap 7. Everyone loses their job. If WAMU gets bought out, a lot of people still lose their jobs because it’s too costly for the acquiring bank to pay people for duplicate functions and to run bank branches when you already have one a block away. Even if it is a slow decline, it’s going to happen in less than a year and everyone will still be without a job.
32
Garth
// Sep 16, 2008 at 1:21 pm
Nobody gets that if everybody switches to Mac Microsoft makes even more money.
If you buy a dell with vista MSFT gets less than $100, if you buy a mac and Vista or XP so you can use boot camp for $150-400 and office 2008 for $500 they make 4-10X as much money.
33
Raj C.
// Sep 16, 2008 at 1:30 pm
Maybe Seattle’s bubble busting is will be less dramatic for the simple reason that it never reached O.C./LV levels.I don’t have the stats to back this up with fact but if you took housing price increases and inventory supplies over the last 5 years you should get an idea as to how much further the Emerald City has to fall.
34
slug
// Sep 16, 2008 at 1:40 pm
Nice to see people here are still arguing about whether or not Seattle is “special”, only now it’s in relation to the economy, rather than RE.
A poster above asked if it was true that Commercial RE bust is coming after the Residential. Yup. That’s what’s been happening everywhere else.
RRE first, then CRE.
Of course, maybe Seattle will be special in that regard and our CRE will hold up A-Ok.
35
david losh
// Sep 16, 2008 at 1:57 pm
Before you take a swipe at me, please do your homework. I’ve been teaching alternative business models for real estate continuing ed for over six years now.
Absolutely. I hear this in the classroom as well. I get a wide variety of agents from all across the Puget Sound region, but generally from greater King County. This is a re-occuring theme everywhere.
To me this sounds a little self promoting. Not that it’s a bad thing, but I’ve grown to respect Ray for being honest.
Over at the other blog I keep hearing discount brokerage, and why pay retail when we can offer you a sliding scale. The best is the lawyer guy. He promises to cross you Ts and dot your Is for a fee, and yet he claims representation.
I know this is a topic for another time and place, but please, calling the kettle black seems unfair given the comment.
36
EconE
// Sep 16, 2008 at 2:01 pm
Seattle Housing Bulls…
this one’s for you…
http://www.youtube.com/watch?v=A37yJQftZ7A
37
TJ_98370
// Sep 16, 2008 at 2:02 pm
The Dow is up 141 today. The crisis is over. I think I will buy some shares of WM.
38
El Pollo Poco
// Sep 16, 2008 at 2:05 pm
@25: “So, if Windows usage falls into the mid 70’s, it could be irreparable damage to a vital local business.”
It’s also important to consider what “Windows” is, at this point. Microsoft under Steve Ballmer has deliberately butchered their cash cow (Windows XP). Post-SP1 Vista may be a perfectly fine product, but no matter how much, um, lipstick they apply, it will never be seen as a productivity/efficiency enhancer, because it simply doesn’t do anything that XP didn’t, and in many cases did better. Because Microsoft focused on pleasing large media companies with its DRM support, Vista is arguably the first Windows release that does less than its predecessor did.
Absolutely the only reason a business would purchase licenses for Vista over XP is because the latter has been pulled from the shelf.
And yes, this OS rant is on-topic because it speaks to customers’ reluctance to buy new PCs or upgrade packages. Because of Ballmer’s literally-howling incompetence with the OS product line, Office will have to carry the company forward… and like Windows itself, Office has long since reached a point of diminishing productivity returns.
So, to the extent that Seattle-area economics depend on people upgrading their PCs and buying Windows Vista for its intrinsic productivity benefits, we’re boned. If you want a car analogy, let’s just say we’re all Cubans now. I fully expect to be running my current XP systems in another ten years.
39
obelus
// Sep 16, 2008 at 2:25 pm
Large PC sellers now offer systems without Windows! By the truckload. You can install whatever you like from the get-go. Bought some myself. The latest (free) Linux is very nice and comes with (free) OpenOffice and (free) Firefox pre-installed.
MS should be very concerned.
Also, bio techs have never been a profit making business and probably won’t be for a long time.
40
Markor
// Sep 16, 2008 at 2:34 pm
People said the same about lots of previous MS operating systems. Didn’t happen. The only way to avoid the upgrade train is to stay off the net.
41
deejayoh
// Sep 16, 2008 at 3:00 pm
I haven’t tried iWork yet, but I have heard it is pretty good. Much better presentation software I am told.
42
Is the Rain as Bad as They Say in Seattle? | Redfin Seattle Sweet Digs
// Sep 16, 2008 at 3:13 pm
[...] In response, Seattle Bubble asks: Sadly, the article is long on rosy talk and short on actual quantifiable facts. Why is Seattle “going to weather the recession a lot better than most markets”? Ms. Hession doesn’t say, and neither does the article. All we read is that Seattle has held up better so far, which is true thanks to our lagging housing market. If Seattle’s economy is based largely on software and airplanes, what specific arguments can be made that those two industries will hold up better than average in a recession? [Read more here.] [...]
43
El Pollo Poco
// Sep 16, 2008 at 3:30 pm
“People said the same about lots of previous MS operating systems. Didn’t happen. The only way to avoid the upgrade train is to stay off the net.”
The difference is, it wasn’t true then. There were reasons to buy Windows 2000 over Windows 98SE/Me, all concerned with improvements in performance, compatibility, and stability.
There were fewer reasons to move from Windows 2000 to Windows XP, but also fewer disincentives, and the transition went smoothly since they’re essentially the same product under the hood.
Vista is another matter entirely. Not only is there no added value over XP SP2/SP3, there are compatibility problems for which Microsoft has taken little responsibility, even where its own products are concerned. There is no stability premium, and there are few compelling Vista-only applications. And Vista’s performance speaks for itself.
If you want to “stay on the net,” the only products you’re definitely going to need are Google’s.
This is all extremely off-topic for the thread, and I won’t say anything more on the subject, except to say that it’s a really, really bad time to pin the fortunes of the company on a new OS product that doesn’t make life easier or cheaper for businesses.
44
Joel
// Sep 16, 2008 at 3:41 pm
I’m not sure whether a recession will prompt corporations to move to linux or not. Sure it’s “free” but switching your entire computer infrstructure isn’t. Weren’t we just arguing that during a recession companies become very short sighted? Is it possible that fewer companies will switch to linux (or macs for that matter) during a recession because it require new software (not all software that companies use have perfect open source equivalents), lots of training, lots of manpower during the switch, and a fair amount of down-time?
45
Ray Pepper
// Sep 16, 2008 at 3:50 pm
Oh my Oh My. Jill…Hmmmm so many ways to go with this. 6 years of teaching alternative business models ? Is that supposed to get me to sign up for a class? Sounds like your pitching to me. Are you pitching me? We are trolls Jill, but YOU are far more attractive!
However, I give back to the consumer while you and your RCG gang continue to extract. I could care less about the promotion of 500 Realty. Good God! Advise everyone to use Red Fin. We will get our fair share anyway. But, to continue to promote any 4-6% Realtor activites demonstrates a pure lack of education and integrity.
As Tim said everyone should even question the use of a Realtor. If one is needed then at the very least find one that is going to compensate you for assistance. Skyline even has a load of Realtors who will give you back 50% but the consumer must be educated to ask. You bring none of that to the Community.
We are working on the ability to give back 100% to the Buyer without having to force a client to use one of our “suggested Lenders” but unfortunately the banks are crippled and Lead Generation that can offer 100% back is still a few years off.
Do you know about the $$ value of Lead Generation? Do you realize that Real Estate models can easily survive and be profitable while giving all the money back? Maybe I should step in on one of your classes so your students can take notes that will provide real value to the future of real estate models.
You let me know when you need me. I will bring the usual 500 Realty T shirt and of course you will be the envy of the neighborhood like everyone who wears it. Until then see you at the Tacoma/Seattle Home Show next month.. I know i know..a trolling statement!
46
Interloper
// Sep 16, 2008 at 4:08 pm
Seattle’s economy will continue growing via the manufacturing of… pink pony figurines!!
47
Everett_Tom
// Sep 16, 2008 at 4:09 pm
I like open office . (runs on Windows / Linux / Mac). Free, and (so far) easy to use.. I’m surprised it hasn’t taken off more since it doesn’t require a full move to some totally new OS.
48
Demersus
// Sep 16, 2008 at 4:56 pm
I still use a virtual machine instance of Windows 98 SE because I find it useful to use a less bloated OS for this and that. And, VMWare kicks glutes over MS’s Virtual Server and Hypervisor lines.
49
mukoh
// Sep 16, 2008 at 5:24 pm
RCC you are quite off on the number of OS installs that M controls. Taking account of one of my sites that does 80k unique hits a day, I am seeing 96.4% Windows 2.8% MacOs and the rest is Linux/Sony which is the same now. This is 90%+ regular desktop users.
That is taking into account regular users. IE is at actually 78% out of that same amount of hits. IE however doesn’t make money for MS.
If you look at server installs however Linux is ahead of MS.
50
Mikal
// Sep 16, 2008 at 5:29 pm
Ray, you are right, Jill is definately better looking.
51
Thomas B.
// Sep 16, 2008 at 6:13 pm
Apparently, the Seattle area isn’t “weathering” the very well. Washington State, King county, Pierce county, and Snohomish county all have hiring freezes; all are cutting back spending; and all are facing budget shortfalls. Why? Because people are not spending money and the sales tax is not bring in revenue.
52
TheHulk
// Sep 16, 2008 at 6:38 pm
Thomas,
People are certainly cutting back on spending. All the 4$ gas in between didn’t help either. More significantly all the real estate turnover madness of the past 4 years has shrunk and will continue shrinking for the next 3 years or so, AT lower prices. I hope all the counties were wise enough to set money aside for a rainy day. But then if you listen to the realtors, Seattle is so special, it will never have a “rainy day”… lol
OMG AIG was bailed out as well (most likely it was necessary). The hole only gets deeper and deeper. I think I should go shopping for a mattress or two.
53
david losh
// Sep 16, 2008 at 6:48 pm
Oh I get it now, Jilliayne (sp?) is here trolling after making a full pitch in a comment, connected to her post, about cutting out the selling agent.
It was a plug for the lawyer guy.
My, my, my, and then dragging Ray into it.
It’s a shame.
OK you got your plug for the rain rag.
Have a nice day!
54
Jillayne Schlicke
// Sep 16, 2008 at 7:19 pm
I was fairly certain that the majority of commenters here on SB were NOT real estate agents. Am I mistaken? Are all these anonymous handles really pseudonyms for Realtors?
I think not. The readers of this blog buy very little of what I have to offer the world. David Losh and Ira are the only two agents that come to mind perhaps there are others. I’m not here to sell.
If my reference to supporting all business models by offering evidence of my experience doing so was seen as a sales pitch, I offer my full apologies.
Back to Microsoft. I’ve used their products since DOS and 5 1/4 inch floppies. There are plenty of people in the northwest who also own Microsoft stock, including me. We’ll continue to buy Microsoft products even if Mac products are better. We’re loyal.
I loved XP but had to give it up when my laptop crashed. I have three laptops, one for each member of my family, all running Win Vista, even though the girls asked for Macs; won’t happen.
Windows or die.
On to Christmas. Xbox and Guitar Hero.
55
Ray Pepper
// Sep 16, 2008 at 7:28 pm
No no no… Not so easy Jill. You indeed made a “pee” on Tim’s carpet. At least offer him compensation for your troll-like actions.
I strongly disagree about your opinion of a Mtg Rep’s responsibility to their client. A good Mtg rep, who is educated in their practice, should advise all their clients that there are alternatives and ways to earn money when buying a home that is listed on the MLS. I would venture to say 95% of the clients woul;d thank them for their educational advice. The mtg reps in the field who do not educate their clients are as useless as your 6 years of ‘educating people” about alternatives in business models. Why hold classes if the educators keep the education to themselves.
Now clean up your pee stain!
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Jillayne Schlicke
// Sep 16, 2008 at 7:48 pm
Hi Ray,
A mortgage loan originators responsibilities are outlined by federal law and the laws of each state. We can start with the state of Washington. LOs who work for a broker are licensed under the Mortgage Broker Practices Act. Their duties are outlined here:
http://dfi.wa.gov/cs/mortgage.htm#laws
See RCW 19.146 and
WAC 208.660
It is my opinion that LOs have a duty to first learn their state and federal laws that govern the practice of loan origination before educating consumers on real estate business models.
Anytime we use the words “should” or “ought” we’re talking the language of ethics and not law.
There is no mandatory code of ethics for lending workers in the United States. What codes exist for their national trade groups are vague and not very prescriptive or helpful.
I agree with you that a highly educated loan originator may know about various real estate business models and could, when asked, recommend different companies as examples of those who offer homebuyers different options.
However, it’s not a duty or a law but merely a subjective choice for each LO, and then it would be just your or my opinion whether or not this “should” happen. We are all entitled to our own opinion.
LOs must also be mindful of any state or federal law violations concerning the practice of “advising” their clients of “alternative ways of earning money when buying a home that is listed on the MLS.”
Maybe a good way to pitch this is for the homebuyer to learn how to “save” money.
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Herman
// Sep 16, 2008 at 7:56 pm
@alex 18
I always thought it made more sense for the agents to advise sellers to lower their prices. Instead they had been exhorting buyers that it was a good time to buy. Because the agents make their money on transaction VOLUME, not VALUE.
It’s in their interests to have sellers who price their homes correctly.
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The Tim
// Sep 16, 2008 at 8:09 pm
FYI, I’m this close to deleting the little off-topic, mudslinging spat of comments above.
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b
// Sep 16, 2008 at 8:13 pm
I think only on a Seattle or Silicon Valley RE blog would you end up having an OS religious flamewar in a thread about the recession.
/emacs
//os x
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Mikal
// Sep 16, 2008 at 8:24 pm
Tim, Don’t. It is actually more interesting than the same old of 90% of the comments above.
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Ray Pepper
// Sep 16, 2008 at 8:35 pm
Oh Jill…Good Lord…….I’m all about what is best for the public. Even today, to stay current, I work 1 night a week (Friday Night) with Vent patients at a sub acute care center. Not for the money but because I want to and because they need me.
If I was a Mtg Rep my website would be plastered with 500 Realty , Red Fin, and an assorted variance of other major Brokerages. On that site would be a full explanation of what the Brokerages do and what to expect. It would educate every buyer and seller!
EVERY CLIENT would know the TRUTH behind Real Estate. This sham is coming to an END with or without me. Soon everyone will be asking their agent “How much will you give me for helping you find my home?” Nobody would pay more then 500 or 1% to LIST their property based on needs……….
A group of friends pushing each others practices in hoping to get a few nibbles is my analysis of RCG. . Throw some companies up on the site that will actually give back to the consumer and educate.. Imagine that..What a concept.
Jill there are nurses around who could care less and just draw a paycheck. In they come, and out they go. No compassion. Nothing. The public needs this money more then ever. To even argue this is futile. When was the last time you truly educated someone?
I know I know everyday in class.
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Ray Pepper
// Sep 16, 2008 at 8:39 pm
Sorry Tim..I can go on and on but I won’t. Gotta play with the kids and prepare for my 11pm Family Guy!….Its how I prepare for the next day!
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Mikal
// Sep 16, 2008 at 8:48 pm
Ray, you could be the next republican president. You forgot to mention the flag. Jill, you should be embarrassed that you are being compared to this in even a remote fashion. I am at a cabin in northern Minnesota for the last two weeks and we finally fixed the computer. Imagine being offline for almost two weeks. Thank god the beer flows here as well.
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david losh
// Sep 16, 2008 at 9:01 pm
Off Topic? We’re talking about operating systems on a recession post.
Tim, you’re in the blog business. You should know there is a little back lash to the other blog site. The other site has taken to attacking the real estate world in general.
Now they are here, kind of like the bubble heads were over there. Ever so nice, ever so engratiating, so helpful. That’s the promotion game. We all do it.
Ray has a style I’ve grown to appreciate, I appreciate that you have had, Ray, RAL, up until recently, Sniglet, Software Engineer, Econ E, and me for this amount of time.
It’s all fair, I hope it continues.
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Chris
// Sep 16, 2008 at 9:14 pm
Speaking of being off-topic, the Fed now has an $80% stake in AIG! Good times!
Here’s the link:
http://online.wsj.com/article/SB122156561931242905.html
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Jillayne Schlicke
// Sep 16, 2008 at 9:32 pm
Hi Chris. Amazing story.
601 comments and counting over on the CR blog. I’m ready for the analysis as to what the fallout would have been if the fed had not arranged for this backstop.
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Peckhammer
// Sep 16, 2008 at 9:45 pm
“Off Topic? We’re talking about operating systems on a recession post.
Tim, you’re in the blog business. You should know there is a little back lash to the other blog site. The other site has taken to attacking the real estate world in general.”
word. never thought I’d agree with anything losh said, but he’s right. First amendment and all that.
Now that that’s out f the way, please take a moment to visit http://peckhammer.blip.tv
We don’t pretend to know a "golly" thing about real estate. You’ll only be treated to a couple of new media millionaires travelling about the country teasing out the stories that every motorcycle racer and rider holds close to their hearts.
Next Time…. The Final Chapter….
Paul Friebus gambles with his life…
Families will do battle…
Paul and his father race on the same salt, millions of years old…
Life-Altering changes will take place…
Pauls Visa card will be used…
A surprise run…. A shocking revelation… And, lines drawn in NaCl crystals.
Lives will be changed… Forever.
It’s all next time…. In the final episode of “The Bonneville Salt Flats.”
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John
// Sep 16, 2008 at 9:52 pm
Now that Merrill Lynch and AIG are saved, there are still WaMu, Wachovia, Citibank. FDIC is running low. I don’t know how they are going to handle hundreds of bank failures. A big one like WaMu is going to destroy whatever FDIC has.
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Markor
// Sep 16, 2008 at 9:52 pm
Republicans continue to privatize the gains and socialize the losses. Love the quote from the article: “And if AIG rebounds, taxpayers could reap a big profit through the government’s equity stake”. Suuure they’ll rebound, that explains why no one else would take them over. Make no mistake, most of us will be delaying retirement to keep the rich fat on this one. Yet 50% of the voters will still want Palin for prez.
Seattle might weather the recession better than most, but it’s all relative. Bush/Cheney still have time to put us all on the hook for a couple $trillion more of their buddies’ losses.
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Markor
// Sep 16, 2008 at 9:57 pm
Simple: just borrow more. What’s another $4 trillion in debt on top of $4 trillion borrowed in the last 7 years? As long as the rich don’t have to cancel their Gulfstream orders, it’s all good.
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shawn
// Sep 16, 2008 at 10:29 pm
The day MS has to worry about Linux is the day my mom and sisters can use it as easily as Vista. Okay mom now log in as root and open your XF86Config file with vi, okay now get your monitor manual and lets right you up a modeline, right, yes that’s going to happen.
MS is going to be fine, just fine.
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Jonny
// Sep 16, 2008 at 10:44 pm
i’m more concerned with how seattle might fare in a 5-10 year depression than in a recession.
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Jonny
// Sep 16, 2008 at 10:48 pm
i am no alarmist, but i now think a financial failure sufficient to spark mass social unrest and possible revolution is no longer impossible.
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Markor
// Sep 16, 2008 at 11:33 pm
Unlikely. 50% of the population is currently amped up to vote for making the tax cuts for the rich permanent, and borrowing more $trillions to expand needless war. They blame Bill Clinton for any consequences.
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Ira Sacharoff
// Sep 16, 2008 at 11:57 pm
” Jonny: i am no alarmist, but i now think a financial failure sufficient to spark mass social unrest and possible revolution is no longer impossible.
Unlikely. 50% of the population is currently amped up to vote for making the tax cuts for the rich permanent, and borrowing more $trillions to expand needless war. They blame Bill Clinton for any consequences.”
…But it doesn’t take a majority of the population to have a successful revolution. Just ask V.I Lenin.
Certainly we’re not there yet, but if the government is only going to bail out big corporations while letting the people suffer, well, things could start a percolatin’.
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jonness
// Sep 17, 2008 at 12:24 am
When I was 16-years-old, I received one of the highest scores on an economics test given to all 16-year-old kids in the state of Arizona. I was extremely surprised because I literally didn’t know what the word “economics” meant. I simply cycled all the questions through a lemonade stand I invented in my head and thought about it in terms of supply and demand, which was a concept a history teacher had mentioned a few weeks earlier. Somehow all of the answers to macro-economic questions about our nation’s finances turned out to be the same as they would be for a micro-economic model.
Many years went by, and I didn’t think about economics again until last December when I became hooked on the amazing situation currently unfolding with our country’s financial system. On my way back into the game, the only thing I clearly understood was supply and demand have an affect on price and you can understand a whole lot about macro economics by reducing all problems to the micro level.
So nobody should be surprised that I believe the average citizen doesn’t need more than a 5 minute prep on economics to understand the implications of electing officials to manage the finances of the country. But IMHO, that 5-minute lecture is a guarded secret in America. Because if the people were ever taught about the simple 5-minute concept, the corporations would lose control of America’s tax dollars. Thus, the people are brainwashed to believe that macro-economics is so difficult to understand, they need to close their eyes and let the government do as it sees fit with their money.
Much the way a myth began in housing that “house prices always go up,” there is currently a political myth that “the govt. can always borrow more money, and that borrowing money is good for the health of the nation.” Unfortunately, this myth makes for a very dangerous situation.
Politicians are in the game of life to fulfill one goal , and only one goal–to get elected–which furthers their careers and brings them much fame and validation. In order to get elected, they have to get the money to finance their campaigns. This requires becoming a pawn for the corporations and special interests that pay for their campaigns. So once the politicians are elected their focus shifts primarily to servicing corporate sponsors; thus, the average citizen hasn’t much skin left in the game.
Average citizens are also pawns. Our role is to pay taxes and vote for the politicians who service the corporations and special interest groups. To get our votes the politicians appeal to our spiritual beliefs, morals, sense of values, and our emotions. In truth, politicians are nothing more than corporate salesmen selling us their best vision of what they think we want to hear. Behind the scenes their campaign officials develop a game-strategy by studying human nature in an attempt to gain the majority support from the tax slaves. In exchange for the tax slave’s votes, the politicians get to control something very important to them–all of the money in the tax pawn pool!
But the situation is messy, because politicians’ toolkits contain the tools to get them elected and little more. Although they are experts at brainwashing and manipulating tax pawns for votes, they are clueless about managing finances and efficiently running super-power economies. So, once elected, they do their best to serve the interests of their corporate sponsors. This is accomplished by spending tax pawn money on things that fulfill corporate agendas.
In contrast, the politicians serve the tax pawns’ best interests by issuing propaganda sound bytes to sooth the tax pawns’ fragile emotions. On top of this, they give a small portion of the massive loan they borrowed in the tax pawns’ name back to the tax pawns so they can feel like they saved a lot of money that year (please forgive me, but I find that last line very humorous).
It’s all a very fragile choreographed system. The tax pawns need to stay emotionally distracted and have their spiritual beliefs tickled so they’ll continue to pay taxes without questioning authority and demanding political accountability. The corporations need to stay far enough in the background to remain mostly subliminal in the tax pawns’ minds. The politicians need to sell the tax pawns emotional support in exchange for political fame, power, wealth, and validation. The foreign investors need to retain enough belief in the fragile system as to keep lending money they might not ever get back. And the tax pawns have to have enough faith in the system to believe a $50 billion I.O.U. that is nothing more than a piece of paper with a number written on it can cover a national bank run by fear-stricken tax pawns whose eyes got opened up to a tiny piece of the truth.
But other than that, Seattle is in great shape!
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greenthum
// Sep 17, 2008 at 12:37 am
Markor:
Do you actually think the Republicans are solely responsible for this financial mess? Unbelievable!!!!!!!!
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Markor
// Sep 17, 2008 at 12:47 am
You had me until this point. I don’t believe that all politicians are in it merely for those reasons. You think Carter, who has worked his post-presidency butt off in relative obscurity for the downtrodden, was president just for fame & validation? Clinton fought an epic battle to create budget surpluses, and then had to fight even harder to keep at bay the Republicans who were furious that he wouldn’t spend the “found money” (with $6 trillion in debt outstanding!) on their pork projects.
Now we have Obama, whose record to date looks just like another tireless public servant. Yet people summarily lump him in the same boat with those who sold their souls. Disgusting. Rent No End in Sight and watch the true liberals in Congress, one by one making their stand against the impending Iraq war–watched by only a few hardy souls on C-Span–angrily cut off after a few seconds by a gavel-wielding Republican whose ill-gotten campaign loot is threatened.
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Markor
// Sep 17, 2008 at 12:55 am
No, maybe only 80% responsible, enough to focus the blame on them. I support preferential voting so liberals can work to oust the other 20%.
80
gortnerp
// Sep 17, 2008 at 1:26 am
The Democrats and Republican politicans are not to blame for this financial mess. They are merely being played as scapegoats. The real blame rests with the CEOs and Advisory Boards of the financial companies who are now draining our resources with their bailouts. These executives failed, as so they deserve our blame, not the Politicans. Where was the gov’t oversight, you ask? The oversight is not government’s job. It is with the shareholder. Unfortunately, shareholders have been enjoying the financial fruits of the lending game in the rising RE market, and now that the table is turned they have scattered like rats from a sinking boat, all while pointing their fingers at Washington. Isn’t it so easy to blame someone else?
If CEO/shareholders had reinvested profits during the boom years rather than distribute thier earnings, these banks would have a nice emergency reserve cushion to help out now.
But what do I know? I just stumbled upon this blog 2 weeks ago, and I’m now posting my first comment.
Tim, I love this blog, and I admire the regular posters that I’ve been reading over the last two weeks. I am sure, as a wannabe buyer, that you all have raised my RE IQ and that you have already saved me money before I get in the RE game as a buyer.
81
Buceri
// Sep 17, 2008 at 6:24 am
________________________________________
State’s jobless rate 6%, a 4-year high
200,000 find no work; number likely to grow
By ANDREA JAMES AND HECTOR CASTRO
P-I REPORTERS
Washington’s unemployment rate last month reached its highest level in nearly four years, and the number of people looking for jobs is only expected to grow.
More than 200,000 people unsuccessfully sought work in August, as the jobless rate reached 6 percent. The last time Washington’s unemployment rate was this high was in October 2004, according to figures released Tuesday by the state Employment Security Department.
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Sniglet
// Sep 17, 2008 at 7:25 am
Trade on the Russian stock market has been closed for the second day in a row, after massive selling. Other hot foreign markets are also tanking. Chinese and Indian markets are down huge amounts for the year. The market is down well over 50% for the year. So much for the de-coupling theory.
But Seattle is “special”. So what if China, India, Japan, Australia, Canada, Russia, Brazil, Europe, and the US slip into recession? Everyone will still need to buy more airplanes and software than ever!
http://calculatedrisk.blogspot.com/2008/09/russian-stock-market-crash-continues.html
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david losh
// Sep 17, 2008 at 7:30 am
I’ll interject again about Seattle’s proximity to Asia. Aside from Shangai most of China is based on a cash economy. The factories may shut down, but China has exported capitalism to every corner of the world.
Wars of the future aren’t fought with guns, they’ll be fought with money.
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Markor
// Sep 17, 2008 at 7:35 am
From Home prices to fall on liquidity concerns: analyst:
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Sniglet
// Sep 17, 2008 at 7:42 am
Trading has been halted for the second day in a row on the Russian stock market after heavy losses. The market is down well over 50% for the year. Other hot foreign markets are also tanking. Chinese and Indian markets are down huge amounts for the year.
So much for the de-coupling theory (i.e. that foreign markets will do well even as the US economy suffers). I wonder how Peter Schiff is feeling these days?
Of course, Seattle is “special”. Foreigners will want to buy lots of software and airplanes even if their economies are facing major recessions.
http://calculatedrisk.blogspot.com/2008/09/russian-stock-market-crash-continues.html