The advice and responses I have read on this blog have been interesting, valuable, and deeply informed. The best part of the blog is the variety of responses, allowing the casual lurker to make their own informed composite idea or notion about the state of things. I’m glad I started reading SB, or I’d likely have bought two years ago and be upside down now…just like a few people who didn’t listen to the facts I would share that I got from this blog.

I’m sure a good percentage of folks here will think I’m nuts for buying this year at all, but we all have our reasons for things. I’ll probably be a less frequent lurker, for obvious reasons (self-doubt is something I do naturally).

Best of luck to all you crazy Bubble-Heads in your living arrangements!

One article says the market is tanking, the next quotes predicted double-digit home price increases three years from now (at a time when most financial experts can’t predict what will happen in three days).

The PI should know this is not a political campaign — they don’t have to report “both sides” of the story. They can actually reach a point of view, and write stories about what they think is going to happen. What a public service that would be, for a change…

Here’s a NYT article concerning Seattle commercial real estate that is full of interesting facts and figures — much more enjoyable reading. –I don’t think you have to be a registered user to read it…

http://www.nytimes.com/2008/10/22/business/22seattle.html?_r=1&ref=business&oref=slogin

2306 Viewmont Way W, $1,650 on Craigs list, Zillow has this house valued at $521,000. That is just amazing. If you assume a 6% interest rate, that would put the house value around $300K. There are hundreds of houses in Magnolia like this house valued at the same amount… (Contrary to popular belief, Magnolia is not all mansions.)

Pull the investment aspect out of that house, and it you just lost $200K in value.

That is amazing.

You call 191 properties posted for rent in Magnolia on craigslist a tight rental market? Last year that number averaged 40- 50.”

“LUC,

You need to direct your comments to the analysts who determined that Seattle is now seeing some of the lowest vacancy rates in 20 years. http://seattlepi.nwsource.com/local/333464_apartment28.html

I am sure they will be interested in your “craigslist analysis”.”

LOL! Who are you going to believe, an unbiased source like the P-I, or your lying eyes?

Whatever happen to journalism. It seems like everything on the news is tabloid reporting. It’s either the sky is falling or shoot to the moon. How about some realistic thoughtful journalism. Heck, if The Tim can give thoughtful journalism, why can’t the “professionals”?

The government is scrambling for ways to keep homeowners in their home. Great, trying to keep an overinflated housing sector overinflated. My bet is that won’t end well. The invisible hand of the market will sort things out if it is allowed to do so. Keeping an underwater homeowner in their home won’t do any good. If the government tries to keep real estate values high it only makes real estate prices unaffordable for potential new buyers. The only way to bring new people into the market in that case is to keep up with the crazy loans that created the mess in the first place.

The market does work. On the way up the market responded to cheap risk free credit. Buy a house with nothing down, no proof of income, and a not so good credit score. If the market goes up the buyer keeps the profit. If the market goes down the buyer can just walk away and let the bank take the loss. Those loans that drove the market higher are now pretty much gone.

Credit is money and the amount of credit injected into the economy over the past several years drove real estate up. The cheap easy credit was inflationary to the real estate market. Credit is now going away, not completely, but people need down payments, proof of income, and decent credit scores. When credit is withdrawn from the economy, that is deflationary.

I grabbed the wrong link.

Here are some others:
http://www.bizjournals.com/seattle/stories/2008/06/02/daily32.html
http://seattlepi.nwsource.com/local/359900_apartment21.html
http://seattletimes.nwsource.com/html/realestate/2008280231_renters19.html

You need to direct your comments to the analysts who determined that Seattle is now seeing some of the lowest vacancy rates in 20 years. http://seattlepi.nwsource.com/local/333464_apartment28.html

I am sure they will be interested in your “craigslist analysis”.

You call 191 properties posted for rent in Magnolia on craigslist a tight rental market? Last year that number averaged 40- 50.

http://seattle.craigslist.org/search/apa/see?query=Magnolia&minAsk=min&maxAsk=max&bedrooms=

Fence Sitters Will Be Sorry

I am simply contemplating how you could see double digit gains.

Once again you miss the entire point… do you know what the post is about?

I have not compare Cali to any thing. I simply stated that a 65% increase in sales YOY is astounding considering our current circumstances. I have always said that Cali hitting a bottom would have a psychological benefit for the entire Nation considering that California was the poster child for the rise and the fall of the market. If California shows signs of a bottom, the rest of the country will begin to anticipate a bottom in their markets.

If you go back to the post about the San Diego comparison you will see that I was simply stating that San Diego and Seattle are a terrible comparison and I listed half a dozen reasons why… with facts to back up what I said. That reminds me where are yours?

I think we should remind everyone about your great insight regarding how the housing boom in the 1980’s caused Boeing’s business to grow.

I would ask that you reread the entire post, take some notes, study it a little more, and then once you think that you have grasped what I was really saying, come back and comment.

Harley Lever // Oct 20, 2008 at 10:31 pm

I guess before you start beating Todd up I would look a your little ticker on the right hand side of the page. The King County houses and condos for sale have been going down steadily. Why it has is speculation. However The Tim and Deejayoh were commenting on this phenomenon a couple of weeks ago.

Harley, if you are going to quote me, please get it right.

My question to Tim was “is that thing stuck?”

It sat at 11,854 for KingCo SFH at the end of last month. Right now it sits at 11,734. That’s 120 houses net off the market in the last almost 3 weeks. In a period when the inventory NORMALLY drops like a rock

I would not say it has been going down steadily. We are still stuck, unlike SoCal where both inventory and prices are dropping like a rock.

It is amazing you pick cali for comparison or to bolster your argument but months ago when people talked about Seattle following Cali you berated them, funny how things change.

I was about to show another clip of how I feel about predictors but I stopped myself. I think I made Mr. Tytler mad.

BTW I saw the show “W”. 2 thumbs up! Whats up with Condoleeza Rice? Is she really that bad?

Todd did say “a strong economy will keep housing prices going up”. I do not think anyone here would say this is a strong economy.

We certainly are not seeing a flood of foreclosure hitting the market as predicted for months now. Based on the way this blog talks about the foreclosures these numbers should be going up, and up. In addition, you can expect more extreme measures to be taken to mitigate further effects of foreclosures. So betting on a tsunami of foreclosures might not come to fruition. The government is scrambling for ways to keep people in their homes.

The rental market remains extremely tight in Seattle and rates are predicted to rise. There are multiple offers on rentals right now, with one featured home having more than 20 potential tenants showing up. “Analysts predict a 17 percent increase in area rents from April 2008 to December 2010.” http://seattletimes.nwsource.com/html/realestate/2008280231_renters19.html

I have personally seen several real estate listings that I have photographed taken off the market and were rented immediately for surprisingly high rates. Admittedly for some this might be slowing the bleed, but for others it is enough to keep them closer to black and make their debt manageable. Some owners have re-listed the homes after as investment property.

California sales were up 65% over last September, half of which were from foreclosures. You can nay say all you want, but that is a huge jump considering the current situation. Has California reached a bottom? Maybe. If California reaches a bottom that would be a huge psychological boost for the Nation and could help entice more buyers to jump in. http://www.latimes.com/news/local/la-fi-homes21-2008oct21,0,1412933.story

The biggest determinant is going to be the economy. If the economy stabilizes we could see a bottom for housing and stocks. If it falters you can expect both to fall. Every government on planet Earth is doing everything they can to get in front of this.

I think builders will be overly gun shy about taking on any new large-scale projects until it becomes painfully obvious that there is an absolute need to do so. It is very feasible that new housing starts will remain in the tank for years.

Right now we are seeing tight rental market, falling inventories, builders scared to build, a credit market with the entire world trying to revive it, a government scrambling to address foreclosures, and the heartland of the real estate bubble with a 65% increase in sales YOY. Let’s not forget about the potential for an end to the Iraq War. Based on all of the above you could see an over correction in prices and double digit gains…. would they last, DOUBTFUL!

The Tim, I am surprised that you have not made mention of the 65% increase in California sales YOY in September. Did you not see this?

Home price in Seattle still needs to go down another 37% to come back to the historical affordability.

Make your own conclusion.

Am not in the area right now and quite curious about this amazing statement on Bidens’ part.

The only thing that will increase median house prices is increased median household income! The days of borrowing thru NINJA loans are gone – just ask Iceland, Norway, among others…

Sure. He could be right. But based on the two predictions I’ve seen him make (one listed by Tim in the article, the other for 2008 from his website). He seems to be 0 for 2.

Also based on statements from from a variety of economist, as well as Fed Chairmen Ben.. I don’t know of anyone who’s expecting 2009 to be a banner year.. the most optimistic I’ve heard is that 2009 will be flat (for stocks / Real Estate / etc).

my bad

I mean.. I guess they probably REALLY want to hear that it’ll pick up by mid-next year.. not 2010… soo.. yea.. guess I missed that

/sarcasm

It sounds like his group is just tells builders what they want to hear…

No, that’s not possible. It says right on their website:

The New Home Trends team has earned a reputation as “the people who know what’s going on in the industry.” We have also earned the respect of our clients and peers for our honesty and integrity. We don’t always tell them what they want to hear – but we always tell them what they need to hear.

It’s hard to find up to date, accurate information regarding migration trends, but anecdotal evidence such as U-haul, etc. would suggest you’re right. Personally, I’ve heard/read of many people moving, and even know a few. There certainly are many relocating to Seattle as well, but I’m not sure they outnumber those exiting. High housing prices drive people away, as well do many other things.

http://www.newhometrends.com/MainPresentations.aspx
from the 2008 Presentation: (page 23) – Dated 11/01/2007

2008, 2009, and 2010
2008
o National regions will no longer be slashing home prices
o as the markets level off through out the year
o Boise will experience the same leveling process
2009
o California, Florida, Las Vegas and area’s like Phoenix will see sales climbing
o Appreciation of homes will again be a topic source for the media
o Boise will see sales increase but no real price appreciation UNTIL!!!!!
2010
o THE BOOM IS BACK…
o California residents will begin to migrate north for a greater quality of life
o Home values will appreciate at a high double digit number
o Investors will flood the market

It sounds like his group is just tells builders what they want to hear, and they pay large sums for the reports (”insiders advantage” report is only $1,000.00 a year.. for some PDFs….)..

Because Glenn Crellin and J Lennox Scott were unavailable to comment?

I do see how they could come to the conclusion that the downward trend in permits means that there “might” be a shortage of new construction homes in the future, however, he is partially basing his predictions on an economic rebound in 2009.

What would have helped this story is a phone call to any decent economist to get their read on an “economic rebound” in 2009. The only one I could imagine this point is a stimulus package.

Other economists have said that we’ll have a new home backlog of inventory for a long time.

We have jumbo and conforming loan limits expiring at the end of 2008, underwriting guidelines continue to tighten, and downpayment requirements are growing. All this will effect inventory next year which means prices will continue to drop.

The builders are afraid. It’s too bad the media didn’t probe deeper.

Or did they really drink so much kool aid that they believed they were the worlds best salesmen?

Why anyone would publish his opinions is the more interesting question. Who does he know at the P.I., and what is their relationship?