Here’s an open thread to talk about whatever tickles your fancy. Be safe out there, and if you don’t know how to drive in the snow, just stay home.
Snow Day Open Thread
By The Tim on December 18th, 2008 at 11:11 AM · 54 Comments
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The Tim » Dec 18, 2008 at 11:13 am
I’ll kick things off…
I predict that sales will be abysmal this month (worst December on record), and that the real estate mouthpieces quoted in the NWMLS press release (and subsequently in the local papers) will blame the low numbers on the weather. As if we never have inclement weather in December.
TheHulk » Dec 18, 2008 at 11:42 am
Allow me to extend that logic… We have “gloomy, dark depressing” weather for 9 months. So, they can blame the horrible sales on the weather for at least another 5 months :)
TheHulk » Dec 18, 2008 at 12:06 pm
I would like to know where are the bubbleheads parking money these days. Thankfully, I have saved up enough money for 10% down on a mortgage so I don’t have to contribute money towards that.
Having reached that goal, my investment strategy was as follows (which I have been following for the past 2 years or so): After taxes, IRA contributions, rent and budgeting for monthly expenses, I would put about 30% of what was left into the bank (emergency you never know what you need funds).
Another 30% would go into value long term stocks (hoping that DCA will help me come out ahead here after 20-30 years. All dividends go straight back into the same stocks). The stocks, sure they are down right now but for DCA I must not think about that and will not think about that.
5% is strictly being the nutty “greedy” daytrader type dealings. Needless to say, I have lost a lot of money from those 5%. (Some valuable lessons here though). The remaining 35% I was putting into index funds. Needless to say the index funds have performed pretty badly this year. From October, I diverted that 35% to go straight into the bank account.
My question for now is, where should those 35% go? Thoughts? comments? Suggestions? Note that it need not be just investment money. It could go into an account for college education for the kids etc.
Bellevue Renter » Dec 18, 2008 at 12:32 pm
Who Saw 60 Minutes last Sunday? There was this guy on there saying that Subprimes were only the tip of the iceberg. Startring in 2009 is when the bulk of the ARM mortgages are due to reset. He said we potentially wont be out of this until at least 2011.
Also will housing ever come down enough here so I could buy a house(i.e. Year 2000 prices)? I mean I have credit over 700 but can’t even afford a shack.
The Tim » Dec 18, 2008 at 12:35 pm
Bellevue Renter @ 4,
I believe that would be this story: A Second Mortgage Disaster On The Horizon?
…which I linked in at the very end of Monday’s post.
DavidB » Dec 18, 2008 at 12:41 pm
Until today in Seattle, this has been one of the nicest winters I can remember in Seattle. The past days were cold but sunny! That’s rare in Seattle this time of year!
Buceri » Dec 18, 2008 at 12:52 pm
From the current edition of Money magazine
Former real estate bull admits, “I spun”
Working for realtors, David Lereah was famously optimistic. Not anymore.
It’s a short interview where he says what we all know here. Basically, that he had to say what he had to, based on who he worked for.
Same stuff we hear from the experts every month.
The Tim » Dec 18, 2008 at 12:56 pm
Yeah I’m so sure. I bet they forced him to write his famously-hilarious book, too:
Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade – And How to Profit From Them.
David McManus » Dec 18, 2008 at 1:17 pm
How does a guy from the South who never saw snow for the first twenty years of his life drive better in the snow than people who have lived here all their lives?
Ben » Dec 18, 2008 at 1:28 pm
I advise that everybody stay home if you can. The people who don’t know how to drive in this will end up hitting you.
We have had a whole bunch here in Redmond just underneath Ed Hill.
Aaron » Dec 18, 2008 at 1:28 pm
David,
People from Seattle never bother to learn how to drive. Especially in snow. It’s rare enough that they all just hide inside until it goes away whenever it comes.
anony » Dec 18, 2008 at 1:36 pm
If you don’t know how to drive in the snow, now would be a good time to find an empty parking lot and learn. The area shopping mall lots would be perfect.
David McManus » Dec 18, 2008 at 1:52 pm
Ben,
I was watching King5 this morning and they were broadcasting from an on ramp that was blocked off on 520. The idiots were going through the cones that the State Patrol set up and ended up getting stuck. The newsguy back at the desk just remarked at how stupid that was. Classic TV folks!
Ben » Dec 18, 2008 at 2:14 pm
David,
Yeah that is a bit crazy that people ignore clear signs that they should stay inside.
Mind you, most people around here don’t have the luxury of being able to walk somewhere to get food or the luxury to work from home. So they go driving in this kind of weather.
Lake Hills Renter » Dec 18, 2008 at 2:20 pm
It didn’t start snowing in Bellevue until 6am today, after two full days of imminent snow forecasts. When it finally hit, we got 6+ inches in just a handful of hours. It just stopped snowing for the first time today and the sun is peaking out a little. I guess that’s the end of it. More this weekend, they say.
Lake Hills Renter » Dec 18, 2008 at 2:22 pm
Spoke too soon. Sun’s gone and it’s snowing again.
Bob » Dec 18, 2008 at 2:23 pm
The Tim, I read the USA Today piece which said housing prices have typically increased along with wages and inflation (I don’t know what Prof Schiller’s methodology is for historical house prices). Considering greed works both ways… HELOC Jimmy’s panting when prices were going up and Seattle Bubbleites soiling themselves as prices dissolve…do you have a handy graph of what Seattle SFH prices historically should be?
Alan » Dec 18, 2008 at 2:42 pm
I predict that local real estate press will predict snow today.
AndySeattle » Dec 18, 2008 at 2:47 pm
Reformatted the laptop due to slow keyboard… Turns out it was due to an errant service running from the ATI Catalyst suite of products. Thank God for snow days to get weird projects done!
Bellevue Renter » Dec 18, 2008 at 2:51 pm
Did anybody hear Thunder this morning at around 5:30am?
Also? Are we ever gonna take the “big hit” in real estate like the rest of the country?
Joel » Dec 18, 2008 at 2:58 pm
I predict a lot of babies will be born 9 months from now.
Roy » Dec 18, 2008 at 3:08 pm
I just bought a place, but I’m still bearish on RE as a whole for the next few years. What’s the best strategy to short the RE market to hedge our risks? I don’t see an ETFs that are inverse to housing.
anony » Dec 18, 2008 at 3:13 pm
Roy, United States Federal Reserve Notes.
anony » Dec 18, 2008 at 3:15 pm
I’m not sure I’d invest in those either right now though.
Ray Pepper » Dec 18, 2008 at 4:25 pm
OPEN THREAD?? My favorite!! Hmmmm. Well there was this Seattle Bubble head blogger (I dont know who it is) who refuses to provide our Agent with a Pre-Approval from his Lender or ours. My agent called me to describe the conversation. The Bubblehead then called me and went onto say :
“your obviously a volume business”
“you do not cater to million dollar Buyers”
“you have no concept of customer service and how showing homes to Buyers to develop a relationship first is crucial in developing trust”
It went on and on and I felt I was being staged as a joke. I was intrigued by the incompetence. I asked again…How did you hear about us? He swore The Bubble. I did my usual and forwarded him to Findwell and Handspring for he did not fit our “new client parameters” .
So who the heck here goes by the name of Magilla. I have his signed Buyer agency agreement with a name of Magilla. All I can think of is Gorilla. Mike “Magilla” Anderson. Please “out” yourself so I can thank you for the comedy routine.
You earned a 500 T shirt! Just in time for Xmas…….
Ardell DellaLoggia » Dec 18, 2008 at 5:15 pm
Here’s a link to the King 5 video along the lines of what David was saying in comment #9
http://www.king5.com/video/?z=y&
Ardell DellaLoggia » Dec 18, 2008 at 5:28 pm
The Tim #1 some stats for you.
Residential plus condo closed month to date 580 (posted as of now)
Closed in November 1,034
Went Pending since Dec 1st (& not closed) – 822
Looks like December could beat November…or will be close.
Jbeans » Dec 18, 2008 at 6:00 pm
Yup, there was thunder. Two whole claps of it. Weird time of year for thunder.
After five years in Wisconsin, driving in the snow is a piece of cake. I still wouldn’t go out in this though, because the other drivers are idiots. I remember driving in the snowstorm of 1990, that was nuts. Cars abandoned in the middle of streets everywhere. And I seem to remember the roof of Northgate mall falling in from the weight of the snow.
Oh, and in all those five years in WI, not one snow day, not even when we got a foot of snow overnight. Suck it up, Seattle, ya bunch of wusses!
Ira Sacharoff » Dec 18, 2008 at 6:21 pm
I’m so heartbroken that I’m missing the snow.
Slowly driving back to Seattle from New Jersey, taking the long way around. Spent the morning walking on the beach in Ocean Springs, Mississippi, where it was 72 degrees, and had gumbo, fried green tomatoes, and muffaletta for lunch….But I guess this is suffering, nobody is calling this place “world class”.
Mike2 » Dec 18, 2008 at 6:41 pm
Waking up with snow on the ground, my commute to work would be a breeze. Most people stay home. No traffic to deal with, just take it easy and avoid sliding too much at stop signs.
I’d kill to be up in the mountains boarding right now.
redmondjp » Dec 18, 2008 at 8:02 pm
At least 8-9″ here in the Grasslawn neighborhood in Redmond, just up the hill from that 520 onramp that was on the news all day long. The streets are darn slippery.
I recommend chains if you plan on going anywhere safely. Even on 148th Ave NE it is compact snow & ice, even at the major intersection near my house.
Now get this–the mail DID NOT GET DELIVERED in our neighborhood today! In ten years, I have never seen that happen.
Ben » Dec 18, 2008 at 8:16 pm
Ira – sounds like a cool trip! I hope that the roads are more clear here for your drive home when you get closer.
Jbeans – after seeing the chaos with people driving, I think that a snow day is warranted. Even if the locals learn to drive, the hills and infrastructure are not up to this weather. And nobody wants to pay for the once every 20 years event.
I just hope that things reach normality so that I can travel to Seattle from Redmond on the 23rd. If not I will have problems – I already booked a Clipper ticket!
Scotsman » Dec 18, 2008 at 8:19 pm
This coming weekend sounds like fun- sustained winds to 70 mph and gusts to 90?! All happening in the Cascade foothills- North Bend, Eastern Issaquah, etc. Yikes!
Ray Pepper » Dec 18, 2008 at 8:24 pm
Anyone else here find this too hard to turn off? I’m just captivated by it. It makes me wanna go to the mini mall! As, I’m waiting here at Sea Tac for my flight I think I have to watch it just one more time.
http://www.youtube.com/watch?v=VOSShCa5fOk
jonness » Dec 18, 2008 at 9:35 pm
It took 3 hours to get home from work. I-5 was crazy! When I finally got to my driveway, I got stuck and had to ask the neighbor to pull me out. I was shocked to learn his house is about to get foreclosed. He and his family are the nicest people you’ve ever met. My GF and I have always considered ourselves a bunch of lazy arses because every time we drive by their house, they are working their tails off.
My neighbor is a hardworking and honest builder, but there is pretty much nothing out there right now. Things are really tough and getting worse. This was really an eye-opener to me because I have so often admired his generosity, integrity, and work ethic.
Hunker down and ride out the storm because it is already terrible out there, and we haven’t seen nothing yet. I got a little scared tonight. Deflation is a savage force.
Ben » Dec 18, 2008 at 9:36 pm
You have a strange taste in humor Ray.
johnnybigspenda » Dec 18, 2008 at 10:56 pm
roy at 22: take a look at “SRS” on the NYSE.. moves 2:1 vs. real-estate negatively … could be a hedge for anyone interested in buying real-estate today?
dailyt » Dec 19, 2008 at 4:57 am
First off… drive safe. And stock up on food, considering the projected weekend storm.
Secondly… I know Tim put up several posts regarding the correlation between Seattle’s home price index and Japan’s RE price index.
IF Japan (lots of differences between the two countries financial structures & systems) is a good indicator of where home prices will be, the outlook can certainly be ominous. (If I recall, prices finally started to rise in Japan in 2005. 17 years after the peak of the bubble. Prices in 2005 were at ~1975 levels. Being a new bubblehead.. has there been a poll conducted on this site as to how much further prices will fall? 2001 levels? 1991 levels?
Another Tim » Dec 19, 2008 at 5:44 am
From the Polls Archive
Where is the bottom for Seattle-area SFH Prices?
* 20% off peak (now). (22%, 84 Votes)
* 20% to 30% off peak. (26%, 99 Votes)
* 30% to 40% off peak. (28%, 107 Votes)
* 40% to 50% off peak. (11%, 43 Votes)
* 50% or more off peak. (13%, 49 Votes)
Total Voters: 382
Start Date: November 9, 2008 @ 12:01 am
End Date: November 16, 2008 @ 12:00 am
SeattleMoose » Dec 19, 2008 at 6:48 am
Here in Magnolia the steep hills are impassable except to 4WD vehicles with chains/studs….and that was yesterday. It will be really challenging today as the layer of what was snow yesterday is now layers of ice.
We have a lot of elderly people here in the area and I hope that they have enough food and liquids to get thru the next 3 or 4 days or until taxi/bus service resumes.
You would think more big businesses (Boeing/MS/etc.) would announce closures so their employees don’t have to risk vehicle/body to get to work. But I guess if they did that….they would have to pay for days when zero work gets done.
Back in the 1970’s Boeing actually closed for a day. During that storm Seattle got over a foot of snow.
Stay warm and safe……
Jbeans » Dec 19, 2008 at 8:20 am
Ben @32 — I know, it’s a fully justified snow day for Seattle, I was just joking! You wouldn’t have caught me on any of the hills around here, even with years of snow driving experience.
In Wisconsin, there’s like one snow plow per street it seems — the roads are cleared (and salted) constantly. Just a fact of life there. Seattle has what, two snow plows for the whole city? ;)
deejayoh » Dec 19, 2008 at 8:31 am
DailyT –
I did a post on this a while ago. The US bubble looks very similar to Japan’s when you account for relative levels of inflation
http://seattlebubble.com/blog/wp-content/uploads/2008/11/image002-600×436.png
Ganner » Dec 19, 2008 at 2:08 pm
Bellevue Renter @20:
“Thundersnow” is what we heard yesterday morning. The first crack woke me up here in Kirkland. The second lightening flash was so bright I still saw it with my eyes closed again, and the second thunder crack rolled on for 15-20 seconds… Pretty cool!
http://en.wikipedia.org/wiki/Thundersnow
WestSideBilly » Dec 19, 2008 at 3:09 pm
JBeans –
The hills here are the killer. The flatlands of the midwest are comparably easy. I miss having a beater car to take out on snow days. 4 lane roads with no other cars = fuuuuuuuuuuuuuuuun!
I learned to drive in a 2wd pickup with crappy tires. The past couple days would be a good time to learn a bit about driving in the snow… once more people are on the road, it’s not.
economist » Dec 19, 2008 at 11:07 pm
Hm… where did I read that before. Oh right – on Calculated Risk over a year ago!
http://www.calculatedriskblog.com/2007/10/imf-mortgage-reset-chart.html
Glad to see the MSM are catching up.
Mkkby » Dec 20, 2008 at 12:09 am
Snow removal in Minnesota is the coolest thing. They have these huge snow blowers, the size of large trucks. They drive through the snow at fast speeds and it all gets tossed high in the air and off to the side. By the end of the season, some roads look like you’re driving through a tunnel, from all the snow piled up on the sides.
Mkkby » Dec 20, 2008 at 12:30 am
johnnybigspenda @37 and roy @22
In a bear market nothing is a hedge. All the correlations go out the window as everyone sells everything to meet margin calls and pay back leverage. Just ask all the hedge funds that have gone out of business this year.
SRS is interesting. If you look at a chart, it has days where is goes up or down 10-30%. Something very wrong there. One day in November it went as high as 230, and closed at 140 — ouch! One month ago it was 295, today 58. I couldn’t hold that overnight and get any sleep.
IMHO, preserve capital in a bear market (both stocks and houses). There will be a new bull market some day. Anyone who has cash then will be one of the winners.
johnnybigspenda » Dec 20, 2008 at 5:26 am
Yahoo Finance’s front page has an article titled: “America’s Best Long-Term Real Estate Bets” written and published Dec 19.
Seattle was ranked #1.
America’s Best Long-Term Housing Bets
1. Seattle, Wash.
Job-growth projections 2008-2017: 1.5%
Seattle’s peak building period in the 1980s run-up was in the second quarter of 1986. The Savings & Loan crisis didn’t fully halt building activity until the fourth quarter of 1992. What lands it in the first position on this list is the combination of strong job growth with a building cycle that hasn’t run in high excess of demand and, in part, its constrained geography. Especially compared to cities on the West Coast, Seattle has historically not overheated in boom times.
I’m sure the SB has something to say about this?
garth » Dec 20, 2008 at 8:32 am
I guess it is similar if you consider going 100% higher at the peak similar.
deejayoh » Dec 20, 2008 at 11:04 am
you are focusing on the 6-city/10-city comparison. The nation wide numbers are almost identical. As is the length of the rise and the rate of the fall. So yes, I would call it similar.
The Tim » Dec 20, 2008 at 1:33 pm
JBS @ 48,
Forbes whips out so many of these nonsense top ten lists that sometimes I get tired of taking the bait. Feel free to refer back to any of the other posts about one of Forbes’ many lists for comments that would certainly apply to this latest entry.
johnnybigspenda » Dec 21, 2008 at 7:31 pm
I’m not saying I agree with it… actually quite the contrary. I think we have to expect that Seattle will fall just like the rest of the country, in which case its the *worst* place to buy… unless you have a generous time horizon.
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