deejayoh: No, unemployment has almost no direct relationship to home price changes whatsoever.

That could be because other factors are at play, like easy money for mortgages. If people en masse can’t pay their mortgage, it’s a safe bet that home prices will drop.

patient: I was at WaMu today to limit our exposure. There was surprisingly enough no queue at all. The masses are srill clueless or savings above $100k are extremely rare.

I limited my exposure yesterday by depositing a WaMu check at another bank.

deejayoh,

so let me get this straight low unemployment helps housing but high unemployment doesn’t hurt housing? I mean really not everything has to have twelve charts somethings are common sense if people are unemployed they don’t buy houses, in fact if people become unemployed a lot of time they sell the house because they can’t afford it, relocate, etc…

No, unemployment has almost no direct relationship to home price changes whatsoever. I tried to post a chart showing the comparison but I think it got caught in the spam filter.

Tim, DJ –

The recent (last 20 years) unemployment slumps in the region have been relatively short. I can see how a 2 income family household with kids in school that suffered a layoff could have “managed” by cutting daycare and discretionary spending. But this worked with home prices about 30 to 40% lower than today.

Fast forward to today and that family’s income is about the same as 8 years ago but the mortgage payment is about 50-80% higher (buyer in the last 3 years) . I am not sure they can hold on for as long a during the last slumps.

As economists have kept reminding us during the last week: “we are truly in uncharted territory”.

Yesler Hill said : “I know that a lot of attention is paid to the areas major employers; but it would seem to me that as credit is tighter, and the big companies are less able to move software and airplanes overseas, the real trickle down is the impact on the small businesses that I still think produce the most jobs, even here in MS/Amazon Seattle-area? And if the smaller employers can not maintain current employment levels, I think this will really be the hit that hurts the Seattle area.”

Excellent point; even though compared to most other regions of the country, Seattle is indeed dominated by impressive corporate names, the small business still employs a significant percentage of the population. And that small employer needs credit to weather a crisis like the one we are having right now.

Maybe the people with a clue use Internet transfers?

so let me get this straight low unemployment helps housing but high unemployment doesn’t hurt housing? I mean really not everything has to have twelve charts somethings are common sense if people are unemployed they don’t buy houses, in fact if people become unemployed a lot of time they sell the house because they can’t afford it, relocate, etc…

Unemployment rising will hurt housing which was already out of whack with incomes — no doubt.

Nobody wants to buy WaMu because no one knows the exact amount of contigent liabilities. WaMu’s executives still keep lying. I beleive that it will take over by FDIC this weekend and a buyer like JPM will buy the prime assets from FDIC at deep discount. Everybody wants to follow the model of Barclay not Bank of America.

the unemployment rate for seattle-metro is *4.8%* not 4.6% according to the quoted article.

More likely, it was too much time playing Foosball and video games in the office.

Shhh… don’t say that too loud. I want to start up a tech company so I can buy a foosball table and an old pacman machine with venture capital money.

Dave

http://img229.imageshack.us/my.php?image=unempratesvshomepricesgs6.png

BTW 2000 was the federal ruling against Microsoft as a monopoly.

Hey, I’m with you (as I’m sure you know). It’s just a general indicator of the local economy, and it seems you can’t discuss housing without the conversation crossing over into the economy, no matter how little direct correlation can be shown between a specific indicator like unemployment and home prices.

In any case, with the latest drop in the Dow it’s now obvious that Seattle area unemployment is going to continue to rise, a lot. Sniglet could end up accurate on that 80%-off prediction.

http://www.marketwatch.com/news/story/wamu-puts-itself-up-sale/story.aspx?guid={95475577-D0E8-407B-9B28-D302430FE9BB}

Wow, there must’ve been some big computer-related event on November 7, 2000. The S&P 500 hit 1431 that day, then promptly plummeted, and didn’t hit 1431 again until 2007–six years and $3 trillion borrowed later! What was special about Tuesday, 11/7/2000? Can anyone help?

We get it, you hate Bush. A lot. He’s the incarnation of pure evil, etc. etc.

It should be noted that the S&P peaked in early September 2000 at over 1,500, and had therefore been falling for over two months prior to the election. Also, the election wasn’t even really decided until December, after the S&P had already fallen over 13% from its September peak.

Washington Mutual, the struggling savings and loan, has put itself up for auction, people briefed on the matter said Wednesday.

singliac: People started buying these little grey boxes called computers. As much as we downplay the effect of MS bolstering our economy around here, the mid-nineties were HUGE for them.

Wow, there must’ve been some big computer-related event on November 7, 2000. The S&P 500 hit 1431 that day, then promptly plummeted, and didn’t hit 1431 again until 2007–six years and $3 trillion borrowed later! What was special about Tuesday, 11/7/2000? Can anyone help?

People started buying these little grey boxes called computers. As much as we downplay the effect of MS bolstering our economy around here, the mid-nineties were HUGE for them. As unsexy as MS is nowadays, I was still blown away by windows 95 back in the day. Computers became mainstream in the 90’s and we bought lots of expensive software from MS. Then the internet startups came (and then died).

The nouveau riche slow down their dining and shopping, this directly hits the small business employees. And those are the people that are already pinched by high rents, so as their jobs go away, they will be under even greater economic/social pressures; downward pressures.