Here is your open thread for the weekend beginning Friday May 8th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Kary L. Krismer » May 8, 2009 at 7:26 am
Aubrey has an interesting piece on how Seattle is rising on the list of most expensive cities to buy.
http://www.seattlepi.com/local/405978_affordability07.html
David Losh » May 8, 2009 at 7:54 am
This Spring bounce is very disturbing to me. Looking at the prices, the properties, and the amount of activity it seems like all caution or concern went out the window.
People are talking about lower priced homes leading the increase in sales. Many lower priced homes are worth the building lot they sit on. Builders bought “Spot Lots’ or people held onto these lots with houses on them because the price of dirt was going up.
In other words I looked at a lot of crap that was over priced, and sold.
It looks like banks are out of the woods, the Census has started early hiring, and the government has already alocated the money to float a new direction in the economy. None of which changes the price of Real Estate any more than low interest rates.
Wages, if anything are going to be stagnant or be heading in a downward trend. Every one will be effected by less dollars trading hands.
My point would be, and it’s something I’ve been discussing with other agents and Brokers, that people should be looking at the value of the property they are buying rather than hype. Some properties are GEMS, many are dogs.
It’s the same, but new question: When a buyer comes to you and tells you they want to buy that house what do you do? I had the same thing two weeks ago from a Seattle Bubble reader.
What I would need to do is research the house, do a CMA, look at other houses in the neighborhood, form an opinion, then give a response. If I’m out of the loop in the search how can I just write it up without making clear it’s not my fault when things go bad? Do I walk away, which I did, or play along?
Tim McB » May 8, 2009 at 7:55 am
Interesting discussion I had with a coworker yesterday on the bank stress tests. I asked him if he thought we were near the end of most of this mess (bank losses, stock market crash, foreclosures, etc.) as the media is portraying that we are. His response was that most of this is simply an act to playcate the market. When I asked what he HOPED would happen I got a really interesting response. He had said for his sake he hoped we have passed through the worst of it (401k, home value, short term job outlook), but for his children’s sake he hoped we haven’t. He’s a gentleman in his mid to late fifties with 3 kids, mid-twenties (about my age) to 12. I find it interesting that many bubble bloggers are younger (mid twenties to mid thirties) and many critics are older (sorry Kary). Generalization I know but some truth to it; a battle between generations. I particularly am interested in parents since ideally they have skin (literally) in the game. My friend’s answer is telling he doesn’t want to throw his kids under a bus for his (our?) greed. In regards to housing specifically I think what gets lost too is that once the bubble resets to wherever it does it sets a new price standard not only those like me looking to buy in the next year or so but those like my friend’s 12 year-old who if the bubble had continued at 10% a year tried to buy even a condo would be waiting until she’s 60 to afford it. This reset isn’t just about those trying to score a good deal soon but future buyers as well. Thoughts?
The Other Ben » May 8, 2009 at 8:53 am
Does anyone know why zillow stopped posting foreclosure stats on their quarterly reports?
Kary L. Krismer » May 8, 2009 at 9:00 am
RE: Tim McB @ 3 – Tim, what you need is a relatively stable real estate market. Extreme ups and downs are not good for the system as a whole, but given crowd mentalities, that’s what you get. It’s really human nature more than anything. More people want to buy at the worst possible times than the best possible times. Ironic, but the reality is the market’s problems are largely buyer driven.
The age comment is interesting. One thing I always bring up on the walking away issue is that I lived through this before, never considered walking away, and in the end profited greatly. Someone in their 20s or 30s wouldn’t have gone through that, and they might also me more likely to think that less than 20% down is some recent invention.
cheepseats » May 8, 2009 at 9:22 am
Kary referenced the PI story above, it is an interesting read, or at least to look at where Seattle sits relative to other cities median home price…
Wa has 5 of the top fifty most expensive home ownership markets?
http://www.nhc.org/chp/p2p_2008_q4/HOship_Rankings.pdf
patient » May 8, 2009 at 9:58 am
RE: Tim McB @ 3 –
I absolutely agree Tim McB. Expensive housing is killer for future generations. It’s insane when you think about how we not only price out our own children but also kills our global competetivness with redicoulous cost of living. People are very quick about complaining of tax hikes and high taxes in general but high housing costs have the same impact, it drains your cash flow and it forces salaries up since workers compare salary and cost of living making high cost of living areas less competetive. High salaries is a competetive disadvantage to companies who competes with companies at low cost sites. If housing/land resets to a much lower level and stays there it’s going to be great for future generationms and american companies alike in the long term. We need to drop this idea of making money on our homes, it’s crazy.
Joel » May 8, 2009 at 10:06 am
RE: Kary L. Krismer @ 5 – We’re experiencing the largest and fastest home price declines since the great depression, so no, you haven’t lived through this before. Unless you’re 100 years old.
deejayoh » May 8, 2009 at 10:09 am
RE: The Other Ben @ 4 – they had the stats in there for both FC and SS
patient » May 8, 2009 at 10:41 am
Fannie Mae reports a $23b loss in Q1, a quarter where a foreclosure moratorium was active for most of it, is it the bottom? Hardly.
Joel » May 8, 2009 at 10:54 am
Seattle: At least we’re not Cleveland!
Cleveland: At least we’re not Detroit!
The Other Ben » May 8, 2009 at 11:11 am
RE: deejayoh @ 9 – I hate sounding helpless and stupid, but where? I don’t see it either here or on the spreadsheet.
Kary L. Krismer » May 8, 2009 at 11:13 am
RE: Joel @ 8 – Actually, I’m not so sure what happened to the condo market back in the late 70s, early 80s was all that much different than what’s happening to the SFR market now. Back then our SFR market held up, so you won’t see that period referenced as a period of being bad locally, but we had rapidly declining values and auctions of condo complexes back then, just like now. I don’t remember for certain, but it was probably at least five years before that market recovered.
The Tim » May 8, 2009 at 11:21 am
RE: The Other Ben @ 12 – The “Summary” tab of the Seattle spreadsheet includes the % of transactions that were foreclosures under the section “Distress Signals.” For some reason the Short Sale % isn’t in there though, for that you have to pull up the national spreadsheet, which lists foreclosure and short sale percentages for every market in the “Summary” tab.
cheepseats » May 8, 2009 at 11:33 am
For any iPhone users, Zillow now has an iPhone app that looks fairly useful,
http://www.zillow.com/iphone/, just need to get the wife to load it since I dont have one.
Joel » May 8, 2009 at 12:14 pm
RE: Kary L. Krismer @ 13 – The symptoms may look similar (at this point) but the underlying disease is much different this time.
The Other Ben » May 8, 2009 at 12:23 pm
RE: The Tim @ 14 – I see, thanks – I was actually looking for the quarter-to-quarter graph they used to have…but I guess they just decided they didn’t want to include those.
Kary L. Krismer » May 8, 2009 at 1:03 pm
RE: Joel @ 16 – I’d agree. The earlier was more of your typical cyclical recession. Although I’m not so sure when the S&L crisis began in relation to that. It’s possible there was that similarity too.
Kary L. Krismer » May 8, 2009 at 1:10 pm
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
Wikipedia on the S&L crisis. Per it, the genesis of the crisis was the early 80s, but it’s not clear when the fallout began.
Hugh Dominic » May 8, 2009 at 1:39 pm
RE: Joel @ 11 –
LOL! God that was funny. But seriously, you can get a really in nice house in Cleveland for $50K. Something to think about.
One Eyed Man » May 8, 2009 at 1:55 pm
The Tim,
NWMLS responded to my question as to how Pendings are calculated for the month end summaries with the following email:
“Our pending stats are based on the pending date received, so we count only the listings that went to pending during the month. In addition, all pending statuses count as pending. When a listing moves from pending inspection to pending, we do not count it again.”
The email is from the NWMLS Director of Business Development and Member Relations
It appears from the email that “Pending Inspection” is counted as Pending contrary to prior reports. Assuming this is accurate, failed inspections would then account for some of the increase in the difference between between Pendings and Closed Sales.
Tim McB » May 8, 2009 at 2:54 pm
Kary @ 5:
I appreciate you comment, real estate would be better served it if were a stable investment. What will be interesting to see is whether people do walk en masse as the market continues to decline. This current generation of homeowner is a different breed than when my parents first owned in West Seattle. My parents never saw their purchase as a financial investment other than a shield from inflation. Those who bought (out of fear or greed) did. Time will tell.
Patient @ 7:
This may well be one reason why we see Boeing leaving the area gradually over the next decade; taking jobs away in the process (and kill real estate as well). I think its a balance, but going forward I think the stronger more vibrant areas of the nation will be ones that don’t feed the next generation of workers to the wolves. San Fran where my in-laws live is seeing some of this now.
The Tim » May 8, 2009 at 2:59 pm
By One Eyed Man @ 21:
If this is true, then comparing YOY pending stats right now is totally useless, since “pending inspection,” “pending backup,” and “pending feasibility” are all new “pending” categories that were added in late June of last year.
Scotsman » May 8, 2009 at 3:11 pm
A picture is, again, worth a thousand words. This time is not like the past…
http://www.tickerforum.org/cgi-ticker/akcs-www?getimagenr=28872
Or, this includes ALL recessions post WWII…
http://flowingdata.com/wp-content/uploads/2009/02/job-losses-post-ww2
The Tim » May 8, 2009 at 3:15 pm
RE: Scotsman @ 24 – I prefer the one where it scales job losses as a percentage, as seen here: http://www.calculatedriskblog.com/2009/05/employment-comparing-recessions-and.html
DrShort » May 8, 2009 at 3:18 pm
By The Tim @ 23:
Yup. That pretty much means there should be a giant red asterisk next to all the YOY pending numbers. The 30 – 40% difference between closed and pending makes perfect sense if this is true and we should probably divide all prior year pending numbers by .7 to make a more reasonable comparison.
I wonder if this change was part of the new pending categories introduced last June, or did they make a separate change to include all pendings sometime later and not announce it (to quietly prop up the numbers)?
TheHulk » May 8, 2009 at 3:28 pm
RE: The Tim @ 23 –
Hey Tim, given all the categories you mention above, it seems to me that in the NWMLS these days, a listing is either active, pending or sold / inactive. I am sure there is also “pending contingent offer” to add to that category. Given this status change from last year comparing Pendings YOY is completely broken. So, infact is comparing pendings from month to month (since as mentioned by Kary it can be counted multiple times).
The only thing we can rely on is how many listings actually switched from active to pending in that month and cut it down by a certain factor (seems like 33%) to get to a number that will actually be sold.
No wonder then that they are touting the pendings which is the only number that seems to be looking rosy (when actually it isnt when you get down in the dirt). It is nothing but more FUD that runs parallel to the old mantra “get in now at these amazing low once-in-a-generation rates and prices or be priced out forever”…. no thanks.
Scotsman » May 8, 2009 at 3:36 pm
I like this too- it shows what the projections were last year for unemployment with and without the stimulus plan. As you can see from the actual data points that have been added, the stimulus doesn’t appear to have had the intended effect. Maybe if they tax-and-spend even more…
http://michaelscomments.files.wordpress.com/2009/05/stimulus-vs-unemployment-april.gif
One Eyed Man » May 8, 2009 at 3:46 pm
RE: Joel @ 16 –
Joel, I’ve got to agree that the residential real estate crisis we face now is clearly worse than in 1990. And if you are looking at all of the pending economic issues in front of us, this is more of a perfect storm. But don’t hammer Kary quite so hard. He has seen a lot of aspects of the current crisis before, including a real estate bubble in 1989 and 1990 that eventually collapsed. And although I don’t have any statistics, I think the local real estate crisis in the late 1960’s and early 1970’s was pretty bad when Boeing cut it’s work force in half and they put up the bill board that said will the last person leaving Seattle turn out the lights.
This time we’ve got looming peak oil production, a continuing decreases in the US manufacturing base, economic costs of dealing with “climate change”, a failing auto industry, global economic down turn, terrible balance of trade deficit, huge private sector and public sector debt loads, residential real estate market collapse, looming commercial real estate market collapse, corresponding financial crisis, etc.
In the late 1980’s and early 1990’s, we had some of these issues. Reagan and Bush approximately tripled the national debt, 30 yr mortgage rates were 8% or more, the first gulf war started with its effect on the economy and gas prices, and other issues.
If you just look at the residential real estate problems of the S & L crisis, the real estate “bubble” then clearly didn’t get quite as big so the back up in prices wasn’t as great. (CS shows the decline in Seattle real estate in 1990 being from 68.61 to 64.47 over a period of about 8 months. I think that’s about a 7% decline vs. the 20% and falling we have now. The early nineties housing market took over 3 more years to get back to the level of 1990 after having had average prices go up 20% per year in 1988 and 1999. I didn’t pull the California numbers on CS but my recollection was that it was quite a bit worse there, just like it appears to be this time.
The S & L crisis was more a problem in real estate development and commercial real estate and was generally caused by deregulation, bad loan underwriting and some fraud thrown in. I was there and saw some of it including some of the fraud. I was working as a lawyer in Orange County and later in Beverly Hills. I rented apartments for 7 years down there for as much as 1100/mo because I thought the BUBBLE I saw then might burst and I would be stuck unable to sell a chocolate condo (which was all I could afford) when I moved back to Seattle. A cousin of mine who’s an architect (his father was Pres of the AIA) moved to LA from Virginia and bought a house in the San Fernando Valley in 1989. In 1990 he lost his job in LA and had to move back to Virginia. It took him 4 years to sell his house in the Valley, but at least he was able to rent it out and make the mortgage payments til it sold.
Yes it’s different this time, but there are a lot of similarities too. Is it a differnce of Kind or a difference of Degree? I don’t know. I know Scotsman will kick my butt if I don’t acknowledge that we are farther down the toilet this time than we were in 1990. That time we didn’t have quite the same systemic risk issues and not as many general economic issues. We didn’t have all of the same issues I listed in the first paragraph. We were able to work through the problem by having the FDIC take over about 750 financial institutions and drop their commercial foreclosure portfolio’s into the RTC to be managed and sold off as the market could absorb the properties. But just like this time, there was plenty of greed and fraud and ironically California seemed to be ground zero then too with entities like Lincoln Savings and Loan.
I don’t think the current bubble will reinflate. But I do think the real estate market will stabilize and that we’ll slowly revert to the norm as to affordability. The good news is that means the current and next generation can probably afford to own houses (or condo’s). The bad news is that it doesn’t cure all the other economic and political problems that may mean a lower relative standard of living in the United States.
Kary L. Krismer » May 8, 2009 at 4:13 pm
I find that pending information very questionable, despite the source. In the future I’ll have to take a closer look at the end of the month, but typically I find that my spot searches of the existing pendings (excluding STI) are very close to the reported figures. I’ll have to see how close.
Kary L. Krismer » May 8, 2009 at 4:22 pm
Okay, right now I’m showing the following:
2223 pending of any age
275 pending since 5/1/09
197 sales since 5/1/09
The pendings reported for April were 2114.
2114
+275 May pendings
-197 May Solds
_____
2192
That’s a discrepancy of 31 (2223-2192), which isn’t that significant, and not something I necessarily would have noticed but for doing the math. Also, it just doesn’t seem right that the new pendings each month would be so close to the existing pendings at the end of the month.
Finally, as usual, data from NWMLS but not guaranteed.
Kary L. Krismer » May 8, 2009 at 4:29 pm
RE: One Eyed Man @ 29 – Thanks for the defense, but just to be clear I was talking of the condo market in the early 80s. Unfortunately the NWMLS stats only go back to about 1990. Also I’d point out that during that time interest rates went up above 12% on 30 year mortgages.
Joel » May 8, 2009 at 4:33 pm
By One Eyed Man @ 29:
I totally agree which is why I objected to implying that one could just wait 5 years for values to recover.
DrShort » May 8, 2009 at 4:34 pm
By Kary L. Krismer @ 31:
The 197/275 = 71%. That’s in line with the close to pending ratio we’ve been seeing lately.
Also, if it takes about 30 days on average for a pending to turn into something other than pending, the similarity in the numbers between currently pending and new pendings for a month makes sense. I know closings are taking longer than 30 days, but if many pendings turn back to active (failed inspection) in less than 30 days, it might balance out.
Kary L. Krismer » May 8, 2009 at 4:35 pm
RE: The Tim @ 23 – I’m pretty sure Pending BU is not new, or at least before there was a way to indicate that you would accept a backup offer. Not so sure about Pending Feasibility, but that’s a very tiny category.
Anyway, from memory I think the Pending just showed a BU behind it if you selected a box when taking the property pending.
Edit: If you look at my first comment in that Rain City thread, I discussed the BU issue. So it did exist before, it just wasn’t a separate category.
Kary L. Krismer » May 8, 2009 at 4:38 pm
RE: DrShort @ 34 – BTW, I was excluding Pending Inspection in my numbers since I don’t believe they’re counted (the number that is close to the published number is the one that excludes Pending Inspection).
DrShort » May 8, 2009 at 4:41 pm
By Kary L. Krismer @ 36:
Is the 275 for all SFH in King County? If so, that seems like a much slower rate than we saw in April.
One Eyed Man » May 8, 2009 at 4:48 pm
RE: Joel @ 33 –
Point taken Joel. But don’t forget, if they print enough money, we’ll all be living in million dollar houses again.
Kary L. Krismer » May 8, 2009 at 5:00 pm
RE: DrShort @ 37 – Yes it is, excluding Pending Inspection, and I couldn’t really tell you if it’s more or less than last month at this time. It does seem like the number of pendings are not rising as fast, but again those are not numbers I record, nor can I go back and figure it out.
Scotsman » May 8, 2009 at 5:16 pm
RE: The Tim @ 25 -
Agreed, but it’s accuracy verses impact, engineering verses sales… ;-)
One Eyed Man » May 8, 2009 at 5:57 pm
RE: Scotsman @ 40 –
So you admit you’re just selling that economic catastrophe stuff so you can convince all of us to sell our assets cheap. I’ll bet then you’ll take advantage of the situation by purchasing near the bottom won’t you. Have you ever considered going into real estate? I think you’ve got the business plan down.;-)
And as any good agent knows, it doesn’t matter where prices go as long as sales volume stays up. Is the lesson hear that the NAR is stupid and their current slogan should be “There’s never been a better time to sell?” That way they could say they were telling the truth rather than misleading the public. Honesty in advertising. Maybe it’s not as hard as it sounds.
Scotsman » May 8, 2009 at 6:37 pm
OMG!! Attack of the “Pink Ponies!”
http://www.youtube.com/watch?v=sXoYK4b_q24&feature=channel_page
Scotsman » May 8, 2009 at 6:40 pm
RE: One Eyed Man @ 41 –
Sure…. it’s sales. But I’m successful because, like all the best, I believe in the product 100%, and have the data to show you why you’d be a fool to believe anyone else.
And yes, I’m sitting here, with my cash, waiting, waiting, waiting… for the collapse, and the bargins to come. Can’t help myself. ;-)
David Losh » May 8, 2009 at 7:08 pm
RE: Tim McB @ 3 –
I was thinking about this all day. We are in a short term profit economy. I’m as guilty as anyone.
Today our children have more opportunity than I can ever remember. Technology is a part of it. My son bought a pair of skate boarding shoes on the internet for $100 and sold them for $160.
National Debt is a complete illusion. In forty years with the way things are going. particularly in population growth, food will be the top commodity, followed by water.
It’s my opinion today’s children will figure out tomorrow’s economic crisis. They just seem much smarter than I remember being. That coupled with the urgencies the future makes me think they will figure it out, quickly, and think we are a bunch of idiots.
deejayoh » May 8, 2009 at 8:44 pm
this just in…
Jillayne » May 8, 2009 at 10:03 pm
deejayoh I was just coming here to post that story. At least they found a buyer.
Kary L. Krismer » May 9, 2009 at 6:57 am
RE: deejayoh @ 45 – It will be interesting to see what comes out of that story. Kitsap County isn’t exactly the place you expect a bank to fail because it’s economy is largely driven by the federal government. I’m wondering it it’s just incompetent bank management (somewhat a redundant phrase) or something more?
Kary L. Krismer » May 9, 2009 at 7:09 am
Here’s a story from about a week ago that goes into the history of their problems. Apparently largely construction loan related.
http://kpbj.com/report/articles/2009-05-02-RPT-03.html
David Losh » May 9, 2009 at 7:55 am
RE: Kary L. Krismer @ 47 – RE: deejayoh @ 45 –
Bremerton was a beautiful place until the speculators started. The hype with the passenger ferry was that Bremerton was now a bedroom community to Seattle as well as Tacoma.
Prices there doubled and as Kary says its a military driven economy.
Kary L. Krismer » May 9, 2009 at 8:53 am
By David Losh @ 49:
I was born in Bremerton and I don’t think I’ve ever heard of it described as beautiful. ;-)
Places outside Bremerton are beautiful, but the town itself not so much. I think it is perhaps on the upswing–it was really bad downtown about 10-15 years ago, but I don’t remember it being so bad the last time through.
Silverdale has gone through some pretty amazing changes. What was cow pasture and forest when I was in high school is now Costco and shopping malls, and East Bremerton now almost stretches to Silverdale. I think that’s part of the reason downtown Bremerton has done so badly.
Ira Sacharoff » May 9, 2009 at 9:22 am
RE: Kary L. Krismer @ 50 –
I was in Bremerton a few months ago and was surprised at how nice it was. The downtown area has seen lot of renovation, and the Manette area has always been nice.
There’s no doubt that Bremerton still has some nasty parts, but I was really shocked at how much better downtown Bremerton had become since the last time I was there.
TJ_98370 » May 9, 2009 at 11:31 am
Other recent developments over in Kitsap land –
Kingston’s White Horse Development in Foreclosure
TJ_98370 » May 9, 2009 at 11:42 am
video at time of Westsound closure
David Losh » May 9, 2009 at 11:47 am
RE: Ira Sacharoff @ 51 – RE: Kary L. Krismer @ 50 –
A lot of money has been spent on the Silverdale, Bremerton area. The mayor was or is the same mayor who brought down town Bellevue into the new century.
The question is if it is sustainable. Many people didn’t like down town Bremerton. It was seedy, but that was a part of what kept housing prices down.
A place I looked at in Manette was $50K then $125K. An apartment system close to down town was $125K and cash flowed. It was bought then torn down by some one else for a project.
Please define nice for me. Costco, strip mall, and condo nice or charming?
Seattle and Tacoma have a ton of dirt to develop. The spread to Bremerton never made any sense. Silverdale is another mystery to me as much as South Everett is. The I5 corridor between Seattle and Tacoma has probably the most potential for growth yet gets ignored.
Seattle is the only major city I can think of that has this hate relationship with the air port and we build planes here. Most cities have development close in to airport and warehouse districts.
What’s the job base for Silverdale?
Ira Sacharoff » May 9, 2009 at 1:03 pm
“Please define nice for me. Costco, strip mall, and condo nice or charming?”
When I was in downtown Bremerton, it struck me that they had renovated a lot of older buildings.
I wouldn’t go so far as to call to charming, nobody talks about “quaint, charming” Bremerton, but no townhomes surrounded by strip malls and a Costco. I don’t mind Costco, but townhomes surrounded by a Costco and strip malls is my definition of hell.
deejayoh » May 9, 2009 at 1:36 pm
By Jillayne @ 46:
Yeah, “found” is a relative term. Sounds like it was a bit of a shotgun wedding to me!
TJ_98370 » May 9, 2009 at 1:50 pm
Bremerton Mayor Cary Bozeman was formerly mayor of Bellvue for 3 terms and yes he initiated a major renovation of downtown Bremerton. I don’t think you can call downtown Bremerton seedy anymore. If you want Costco and strip malls you go to Silverdale. What mostly makes Silverdale and Bremerton go is the local presence of the U.S. Navy. I actually know people who commute from Seattle / Tacoma to work at Bangor, Keyport, or PSNS.
Ira Sacharoff » May 9, 2009 at 1:56 pm
…..and some artists have moved to downtown Bremerton from places like Pioneer Square. That’s usually a good sign. Housing is insanely cheap in Bremerton for these parts.
David Losh » May 9, 2009 at 2:34 pm
RE: Ira Sacharoff @ 58 –
Please define insanely cheap. That House for $50K that went to $125K may be cheap for Seattle, but it’s in Bremerton.
It seems that economic sustainabilty is a problem.
Ira Sacharoff » May 9, 2009 at 2:49 pm
RE: David Losh @ 59 –
That’s why I qualified it “for these parts.” You can get a very nice house in Mannette(Bremerton), a nice neighborhood, and a house comparable to a 600,000 Wallingford house, for about 225,000.
You might be right David about economic sustainability, but people commute to Seattle from places further than Bremerton.
Ira Sacharoff » May 9, 2009 at 2:51 pm
On an entirely different note, there’s an in depth and interesting look at the mortgage industry in ” The Nation”
http://www.thenation.com/doc/20090518/wright/
TJ_98370 » May 9, 2009 at 3:09 pm
RE: David Losh @ 59 –
The last time I checked, the Navy wasn’t shutting down anytime soon. I see more stability with DoD employment than with what – say maybe banking, real estate, aerospace, IT, construction, sales……..
Kary L. Krismer » May 9, 2009 at 4:23 pm
RE: David Losh @ 54 – The job base for Silverdale is PSNS, Bangor, etc. That’s also the job base for Belfair and Port Orchard.
Over the years the government has closed a lot of other facilities, so the chance of those closing is pretty nil at this point in time.
David Losh » May 9, 2009 at 5:47 pm
The government is a stable employer, but notoriously cheap. Housing in the area reflected wages set by government pay scale. The fact housing prices went up so much so fast never made sense to me.
The commute to Seattle and Tacoma made some sense when in city housing prices were up so dramatically. I know agents said the commute would be worth it. North Bend is another good example, but as the economy contracts These areas will be hard pressed to pay for all the development that was started.
Bank closures are a very small part of the problem for the communities that are left with empty lots, failing businesses, and infrastructure built with future tax dollars.
cheepseats » May 9, 2009 at 7:38 pm
Dave Losh,
I think the government has brought federal salaries up to par with peer commercial salaries. A mid-tier gvt salary – GS-13 is (range) $80,510 – $104,910 base, plus locality pay depending where you are. In SEATTLE-TACOMA-OLYMPIA it is an additional 20%.
I think that is fairly decent pay with the benefits you get…
David Losh » May 9, 2009 at 8:05 pm
RE: cheepseats @ 65 –
I’m going to leave this to people who get a GS 13 in Bangor. I don’t think that’s a majority of the wages or salary. Like i said the government is notoriously cheap with a buck. Lots of over sight.
Actually if that were the case with salaries the property values would have always been higher.
cheepseats » May 9, 2009 at 8:32 pm
I was not making a statement about any locale, just stating federal wages are not that bad.
Scotsman » May 9, 2009 at 10:17 pm
Everything considered, federal wages can make the private sector look frugal. Especially when you factor in the retirement benefits- nothing in the private sector comes close.
TJ_98370 » May 10, 2009 at 12:02 am
Maybe I missed something along the line, but my point was that I believe that Kitsap County probably has one of the most sustainable / stable economies in the region. This is mostly due to the fact that the DoD is the major employer for the county and the DoD is largely immune to economic oscillations. Granted, it is debatable that wages may be better in the Seattle private sector, but maintaining a lifestyle is relative to the local. You don’t have to make Seattle wages to live well in Kitsap.
I know of a 21 year old, well maintained, 2 bed / 2 bath, 2000 square foot house (unfinished basement) on ½ acre and with an unobstructed water view. This house doesn’t have granite countertops or a built-in stainless steel refrigerator, but it is located in a “respectable†neighborhood which includes the likes of a heart surgeon, the originator of a very successful local mortgage company (since retired), a major owner of the AM / PM mini market chain and a marina is only ½ mile away. The resident of this house lives approx 3 miles from his work at Keyport and can be at his desk within 15 minutes of leaving home. This house was recently professionally appraised as having a market value of $317,000. That price is within the realm of being affordable to a GS-12 line engineer who typically makes a little less than a 6 figure annual salary.
What would you have to pay for a similar house in Seattle with the same amenities? How much would you have to earn to afford a similar house in Seattle?
Kary L. Krismer » May 10, 2009 at 8:06 am
RE: TJ_98370 @ 69 – I’d agree with almost all of that, but I think David’s point was those values are much higher than what they would have been only a few years ago. That relative to Seattle they ran up more. The values are much closer now than what they were.
TJ_98370 » May 10, 2009 at 10:22 am
RE: Kary L. Krismer @ 70 –
Kary,
If you (and David) are saying that real estate prices are “unsustainable†and have further to fall in Kitsap, I would agree. According to the MWMLS, the disparity between the median priced closed sale in King and Kitsap was approx $140K one year ago. Now that disparity is about $90K. The data suggests that prices are falling faster in King than in Kitsap right now.
David Losh » May 10, 2009 at 10:46 am
RE: TJ_98370 @ 71 –
That is the point. Retirees, heart surgeon, and an area specific job base can buy more for less, as it should be for out lying areas. It was when these bed room communities began selling for in city property prices that the problems began.
Your buyer pool is smaller for the distance. The buyer pool expanded when in city prices sky rocketed. The commute became palatable. The same thing happened in California and Nevada. Now these communities are having a flight of people who would prefer to live closer in and now the prices for in city properties are becoming more affordable.
In terms of government wages, I agree they are, or can be excellent. It is however a very small buyer pool. They need to live close to a facility and have very little patience, as a group, for being gouged. Government facilities have a way of establishing their own culture that effects the buyer pool. Everett is another example.
I’ll make the bold statement that the government hires and keeps strange bed fellows. It’s hard to get fired from a government job. The government throws together a wide variety of people each of which has a skill level that is usually a source of personal pride. It’s almost cloistered. You’re either in or out.
cheepseats » May 10, 2009 at 11:41 am
Largest one day price drop ever!
http://www.redfin.com/WA/Seattle/2413-E-Aloha-St-98112/home/147110
OK so it was a fat finger, but it still is way over 50% off the last sale..
Kary L. Krismer » May 11, 2009 at 7:06 am
RE: TJ_98370 @ 71 – No, I’m not suggesting that at all. Perhaps it was underpriced before, or perhaps the changes to the community are such that it’s now seen as more valuable. Of course, large drops are also a possibility, but there are other possibilities too.
Racket » May 11, 2009 at 7:19 am
By David Losh @ 64:
Most people in areas like north bend do not want to live in the city regardless or pricing.
David Losh » May 11, 2009 at 7:57 am
I picked North Bend specifically because there are people who can afford the commute. Lake Samamish and Issaquah have nice neighborhoods where children play in cul de sacs. The SUV crowd skis in the winter and goes to Lake Chelan in the summer. It’s a perfect blend of being between wilderness and city. There are people who can afford the luxury of that location.
Now there are thousands of housing units in the area. The second home pricing is gone as far as Cle Elum. Prices rose to match the allure of the life style. In my opinion we have thousands of people who bought at premium prices without the where with all to follow through.
It was when they started building town houses in Issaquah that I started thinking something was wrong out there.
Recent Spike in “Pending” Sales Due to Change in Definition? | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area. » May 11, 2009 at 8:08 am
[...] last week reader “One Eyed Man” reported receiving the following in an email from the NWMLS Director of Business Development and Member Relations: Our pending stats [...]