There IS pent-up demand at the moment. Our brokerage has a database of over 50 customers at the moment who we’ve been working with but are “on the fence” about actually buying. There is a segment of the population who is ready, willing and able to buy a home, but are simply waiting for the bad economic news to subside.

Maybe Kevin, but I would argue that there is also a segment of the homeowner population who is ready, willing, and able to sell, but are waiting for the bad economic news to subside. One thing we never really see reported is this “pent-up supply.”

While I won’t cheerlead for now being “the right time to buy”, I will disagree with your comment about pent-up demand. There IS pent-up demand at the moment. Our brokerage has a database of over 50 customers at the moment who we’ve been working with but are “on the fence” about actually buying. There is a segment of the population who is ready, willing and able to buy a home, but are simply waiting for the bad economic news to subside. I can’t say that the current pent-up demand is sufficient to turn the market around, but it is significant and we are seeing it every single day with the customers we are working with.

Kevin

The whole thing has to be better for every one. Any individual, or family, is only as good as the community.

You can live apart. You can take care of your own business. It’s important for your business to be a direct benefit to your community.

When you talk about government those are broad strokes. In Afghanistan there is tribal law. Many countries in Africa are governed by tribal laws. Then you have the government that is for the benefit of the greater good.

Last but not least is good and evil. You should be doing good. If your are doing evil it’s my responsibility to fight that.

Life is full of choices.

So when I rape your wife in front of you, behead your children, and then slit your throat, it’s your and your family’s fault?

Actually, I agree with you. But there is a catch. I think you should be free to do whatever you want as long as you don’t harm others. If you do harm others, then you are not just responsible for the actions you partook in, you are fully responsible for all future consequences of those actions. It is certainly your fault if I break into your home and sabatoge your family, but the flip side is, I’m responsible for my actions as well; therefore, it’s an eye for an eye, and I have to make fitting restitution. Let the punishment fit the crime, and the crime is harming others–whether purposeful or not.

What did I tell you. Your ignorance serves the earthlings well ! ! ! !

Africa and Afghanistan are home to some of the most oppressive governments on earth. Personal freedom there is least. Minorities are slaughtered by the thousands in Rwanda by government troops and women are kept from schools and forced to wear burkhas in Afghanistan. That is not lawlessness. That is someone else’s version of a utopian society with plenty of law to create it.

Personally I love sidewalks and so do you. I would pay more to live in a neighborhood that has them.

Apparently they only impinge on the liberty of a man named Jesus Barajas, a 61 year old janitor who must pay $15,000 to build one on his property even though it will not connect to sidewalks on either side of his lot. Oops.

Careful, the next thing you know you’ll be purging Jews from this great country.

As a Midwest transplant who wants to walk on the sidewalk and see the water rush past the curb on its way to a storm drain, the Pacific Northwest is deficient. A million dollar home with a crumbling road and no curb or sidewalks in front? It just seems so ghetto – except that is an insult to actual ghettos. All the big city ghetto’s Ive seen have sidewalks.

If having a sidewalk impinges on your liberty, I can live with that. It improves our community.

Democratic, Libertarian or Republican – there is definitely a mix of opinions here on the role of individuals and government. As a parent, I worry that the sense of personal responsibility my grandparents had is almost absent from our society today but the government-haters leave me cold. If you hate government so much, move to Afghanistan or one of the many choice countries in Africa… Lawlessness is not a better place to live.

What can I say.

You’ve totally outed me.

I’m clearly the most dangerous human live.

You should kill me while you still have the chance!

You did a really good job at telling us who you are (the Jews?)

I’m never really sure what to say to this sort of thinking.

Except good luck!

P.S. my brother Tralfamadorians will be landing in their flying saucers to force side walks on all you innocent earthlings.

For example, I would think that most Libertarians agree that it should not be legal to construct a nuclear bomb in the basement of your Seattle home. You could take an extremist Libertarian view and argue that it doesn’t hurt anyone if it doesn’t go off. But rational L’s would say that the risk to the society outweighs the individual right in that case.

The same is true of the individual right to construct a marketplace of trillions of dollars of unregulated CDO’s and CDS’s. It doesn’t hurt anyone if it doesn’t collapse. But the risk to society makes this the financial/moral equivalent of a nuclear bomb in your basement.

Where Old Ballard-types tend to go too far is when they want to use government force to shape society. He assumes that everyone shares his opinion of the ideal society, and so everyone can be compelled at gunpoint to be a part of producing his Utopia. This results in uneven and unfair impositions on certain individuals (the minority). And unintended consequences.

Case in point, this poor guy has to spend $15,000 to build a sidewalk that nobody wants (http://seattletimes.nwsource.com/html/localnews/2008924424_websidewalk25.html). That’s a case where someone’s plan to compel individuals to build an Old Ballardian Utopia has an unintended consequence at the margin.

This is a quaint illustration, but problems can happen on a massive scale with massive consequences when individual freedoms are not protected.

Don’t forget that the biggest source of non-natural human death over history is your government. Today Old Ballard wants sidewalks for society, and tomorrow he’ll make the case that all Jews should be purged for society’s benefit.

Well said!

Personal responsibility has to be more than personal selfishness, or some sociopathic justification for social irresponsibility.

My problem with Libertarianism is that it turns the issue of personal responsibility inward. Libertarians make it an issue internal to the individual as apposed to an outwardly social issue of community interaction. In the Libertarian worldview, it is always the “other” that is not taking responsibility. You never hear from Libertarians that society as a whole is failing in taking responsibility.

Why this is I am not sure, but it could be that Libertarians have a fear of their responsibility to society so they turn the issue inward.

When I hear people say,

“True personal responsibility means you don’t blame anyone else, for anything and most people cannot handle that concept,”

I believe that their using the word “blame” to define human actions incorrectly. People do not “blame” others for their personal mistakes, or personal shortcomings, in as much as they demand that everyone acknowledge the causal effects that all human action has on society, and we as a society work together to correct the negative outcomes.

I understand that this works both ways, and that all people at some point will have a negative impact, but that is the point. External definitions of responsibility demand action in a societal context where as internal ones do not.

RE: Slumlord @ 29 – I want to start a new political party: the Responsibility Party. My party would emphasize personal responsibility, corporate responsibility, and government responsibility. Make a bad decision? Dang, that sucks for you. Now how about you be an adult about it and take responsibility for your own decisions, good or bad?

RE: The Tim @ 31 –

Ahh, but how far are you truly willing to accept the idea of personal responsibility?

I am an advocate of extreme personal responsibility, where you, and you alone, are responsible for ANYTHING that happens to you, good or bad.

Someone runs a red light and hits your car, landing you in the hospital.

Who is responsible?

I would tell you that YOU are responsible because you elected to be at that intersection at that time, on that day.

If you weren’t there, it would not have happened to you.

How about if you are home and a plane crashes into your home, killing you in the process?

Who is responsible?

YOU are, you were the one who bought the home and elected to be there at that moment.

The problem is, most people only want to take personal responsibility so far.

True personal responsibility means you don’t blame anyone else, for anything and most people cannot handle that concept.

Wait, not this time. This time she’s correcting your flawed assumption that we live in a black and white world where all Democrats are generous saviors, all Republicans are evil oppressors, and all Libertarians are fanatical extremists.

The Libertarian Party has some good principles, but with phrases such as “the cult of the omnipotent state” in their official platform it is hard to take them very seriously.

Yes, well, the members of the party have almost no chance of being elected so they are pretty eccentric. If they were more mainstream, had a real shot, I think they’d attract more serious candidates and grow up. But it’s a vicious circle.

By Slumlord @ 38:

With local issues, especially land use, they would allow individuals to destroy the very things that make living in a community worthwhile.

I hear you on that. I’m a Green Libertarian, if there is such a thing.

The flip side of the pro-regulation coin is having poor people subsidize the losses of wealthy gamblers who made insanely risky bets due to regulatory-induced moral hazard. I think the solution is to overhaul the entire system and get the corporations out of the business of politics. Bush, Obama, Clinton, et al. They’re all on the payroll of the wealthy. In the case of Bush, foregiving taxpayers needed a red neck to convince them to give up their future. Once that ploy became obvious, the powers that be switched to an eloquent mouthpiece with the ability of stealing much more than they ever could have stolen using Bush as their puppet.

I like your idea of responsibility. But IMO, if people are held fully responsible for their actions, it annihilates the need for regulation. The real problem is, foregiving taxpayers have been brainwashed to believe that it’s not ethical to hold wealthy people fully responsible for their actions. We easily execute the retarded guy who kills his neighbor. We easily confiscate all the wealth of the drug dealer next door and put him in prison for 20 years. But we cringe at the thought of holding wealthy people to the same level of responsibility for their actions–despite the fact that their actions do much more overall damage to our system.

He he, with such radical viewpoints it’s difficult for me to understand why people refer to me as a communist lefty. I’m liberal all right. But the catch is, if you mess up, you take full responsibility for that action.

The project was opposed and the original owner sold to Simon Properties. A lot of good came out of the opposition. We have the Thornton Creek Water Shed protection and national awareness of this blight in our city.

This was all done with lies, coercion, threats, feet dragging, and finally Lorig fell into the trap.

The entire Northgate process was derailed by personal interest activism whining it’s way to the city council and on to the mayor, chuckles the clown.

Like many people in neighborhoods with dreams of increased property values dancing in their heads they trade short sighted developer promises for what’s good for the community at large.

Can someone remind me how to calculate the rent vs. buy multiple? And what the historical ratio is?

I’m seeing a lot of high end homes listed for sale on the MLS and also for rent on craigslist. $850k buy vs. $3200/mo rent. $1.25M buy, $3600/mo rent.

RE: Herman @ 36 –

The rule of thumb I’ve always heard is 120 times monthly rent (or 10 times annual rent). This is actually a price at which someone could purchase a home, rent it out, and have a cash flow business. But it is also a bit simplistic, doesn’t take into account interest rates, opportunity cost of capital, etc… See the NY times page for a more sophisticated calculator.

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=2&oref=slogin

I agree that the stream should have had the same consideration. The question is what did the regulations require? I believe that the regulations allowed a narrower buffer in exchange for partial restoration. If this is the case, then the problem is really with flaws in the regulations, not with a developer who followed those flaws.

I know the above is a legalistic response. If people want to improve development in their neighborhood, they need to work with the local jurisdiction before a developer proposes a project. As you point out, change happens at the local comprehensive plan level. Waiting to challenge a specific project is usually too late.

I’d vote for you, Tim.

RE: Herman @ 35 – The Libertarian Party has some good principles, but with phrases such as “the cult of the omnipotent state” in their official platform it is hard to take them very seriously. Also, they seem to be in favor of almost zero regulation of financial markets. I think we have seen that this theory doesn’t work so well in practice.

More precisely, I think they’d point out that regulations that distort risk are worse than no regulations at all.

It’s awfully hard to argue with that.

Unfortunately, there are enough dumb people in Seattle to buy into the hype.

Agree, but how many are there that both are being tricked by the propaganda and qualify for a mortgage without crazy financing that is no longer available? My guess, not many.

I’m seeing a lot of high end homes listed for sale on the MLS and also for rent on craigslist.

I am seeing this also. The craigslist listings sometimes seem to hide the fact the property is also for sale. Moving in to a house that the owner may prefer to sell sounds a bit unsettling. What are the odds that the lease can be renewed in 12 months or can be continued on a month-to-month basis?

I wonder what some of the strategy is for these. Maybe some of it is people who are recently and expecting to be temporarily out of work, but who think that they will be able to resume the mortgage payments in a year? Can some be folks who are about to be foreclosed upon but who can collect rent in the meantime as some foreclosures are taking like a year from when payments to the bank stops? How much is folks who think prices will recover in only 12 or 24 months? Other motivations?

On the blog topic: Aubrey Cohen has a skeptical tone as he discusses the Thornton Place prospects:
http://blog.seattlepi.com/realestatenews/archives/165043.asp

1. Where is this money coming from and where will it be held (if a borrower loses his/her job?)
2. Is this a seller concession and if so, are the values being propped up for no reason? If so, then an FHA underwriter would have the power to reduce the appraised value, leading to a re-negotiation of the price.
3………Maybe this is obvious…….an underwriter with half a brain would see that any homeowner stupid enough to buy one of these units because of the promotion is giving the bank a big red flag that says: “I might lose my job!” Ha! I’d be extra cautious about signing my name to that approval.

Yes it was culverted and yes the developer circumvented the Army Corps of Engineers recommendations. The State had culverted for the freeway, but private land ownership has stewardship responsibilities. Once the creek was day lighted it should have been given the same consideration it has on the other side of 5th Avenue.

A park would have been a better use of the property, the city could have made that happen. The problem is as varied as the reasons brought up here today. It’s a mish mash of mixed use without proper infrastructure. How’s the traffic flow going to work? What about pedestrian passage? all questions brought up in meetings until everybody got tired of talking about it.

This was the first Comprehensive Plan and in my opinion a failure.

Herman,

I sometimes vote for Libertarians out of spite for our political duopoly. On foreign policy, the L’s are usually spot on. With local issues, especially land use, they would allow individuals to destroy the very things that make living in a community worthwhile. I could never be an enthusiastic supporter of the L’s. In my opinion, we need a party that emphasizes both personal responsibility and responsibility to society. Libertarians only seem to get the first part.

David,

I’m speaking from memory here, so I could be wrong. Thornton Creek was previously in a culvert under the parking lot. In cases where there is severe existing damage to the habitat — which was certainly the situation at Northgate — it is possible to negotiate smaller than normal buffers in exchange for improving the habitat. It is a common practice in urban areas and I think that the developer of Thornton Place did this.

I’m seeing a lot of high end homes listed for sale on the MLS and also for rent on craigslist. $850k buy vs. $3200/mo rent. $1.25M buy, $3600/mo rent.

Tim,

I like your idea. When do you plan to run for office?

Speaking of location the Northgate development was the last set of community meeting I went to. Of all the things that could have been done with the South Parking lot they chose what would do the most damage to the area and environment. That set of buildings is a monument to greed.

Simon Properties purchased from a greedy old man then promised they could push the project through city permitting. They did it with threats. What we got was a few facades and over priced housing units.

The developers are blaming the delay in permitting on the creek, which they should. There should be a 200 foot buffer from the creek, there is not.

Our city council will kill anybody any time if they can get a campaign contribution.

It’s just shocking what people will do to one another. Responsibility? How about morals. How about one person doing what is right for another?

In the Seattle/Bellevue/Everett area, the post 1998 halfsize unemployment rate rose from 6.7 percent to 7.8 percent. But this is totally deceptive and doesn’t capture the true pre-1998 method of unemployment calculation that the 17% Great Depression unemployment in our history books references [or that we current compare to]. We’re clearly kidding ourselves. See the proof in part from the BLS data base:

Feb. Jan. Feb. Feb. Oct. Nov. Dec. Jan. Feb.
2008 2009 2009 2008 2008 2008 2008 2009 2009

U-6 Total unemployed, plus all marginally attached
workers, plus total employed part time for
economic reasons, as a percent of the civilian
labor force plus all marginally attached workers.. 9.5 15.4 16.0 9.0 12.0 12.6 13.5 13.9 14.8

The rest of the BLS URL:

http://www.bls.gov/news.release/empsit.t12.htm

Home values shoot up: I’m a terribly smart investor.
Home values fall: I’m unlucky.

A very common lack of symmetry.

A lot of the complaining comes across to me as whining from a society that conditions individuals to see themselves as victims. Perhaps adjusting to a more constrained economy will teach some personal responsibility. As an investor, I too have taken a beating recently. It is a hard pill to swallow, but no one is responsible for this other than me.

Hopefully, the housing bust will help people see themselves as citizens and not just consumers. Maybe then, our society can mature enough to deal with the disruptions to our lives that the next oil price spike will bring. Declining house prices are just the beginnings of our future problems.

By Groundhogday @ 19:

Really, down 10% after prices doubled over 4 years is a crash?

That’s what gets me. The house I rent in Lake Hills literally doubled in value (according to Zillow anyway) in 4 years, and now that prices are down ~15% everyone freaks out. My heart f-ing breaks.

That’s beacuse with zero down a 15% decline is crushing many of these owners. So with the logic that it can’t possible be that they made a bad investment they instead make the conclusion that we must be at the bottom of this unfair and unfounded “crash” driven be evil doers on blogs that wishes harm to come to others.

Really, down 10% after prices doubled over 4 years is a crash?

That’s what gets me. The house I rent in Lake Hills literally doubled in value (according to Zillow anyway) in 4 years, and now that prices are down ~15% everyone freaks out. My heart f-ing breaks.

During the bubble years, the industry borrowed demand from the future by offering ridiculous dangerous financing.

This sentence says so much.

But wait; now is backfiring in 2 ways. Foreclosures are putting yesterday’s units back in the market and those ex-owners will be forced out of the game for 7 years (cutting today’s demand).

I agree, the pent-up demand will come from foreclosed ex-owners and with foreclosures just starting to build around here it is years out before we’ll see any significant release of that. And these people will be very,very careful with what they pay.

There is however a large potential demand to unleash and that is current renters which is about 40% of the US population. But for sellers and agents to dip into that pot of gold prices needs to come down a lot from todays levels. I think California and Florida is starting to get their feet wet in this pool with their foreclosure prices.

One thing I like about this blog is that most people here rely on multiple sources of information. Anyone suckered by the bias of a single newspaper deserves what they get.

I’d love to cram down the principle (we bought in December ‘07 in Phinney with the intent of living there for 15+ years) but I have to suck it up and accept the prospect of 10 years of negative equity. Love our house though, so I can’t say I regret it at all. Buy the ticket, take the ride.