By The Tim on August 26, 2009
Here is your open thread for the mid-week on August 26th, 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!
Posted in Open Thread | Tagged open_thread
Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.
“Health chiefs admit a lack of maternity beds is partly to blame for the crisis, with hundreds of women in labour being turned away from hospitals because they are full.”
http://www.dailymail.co.uk/news/article-1209034/The-babies-born-hospital-corridors-Bed-shortage-forces-4-000-mothers-birth-lifts-offices-hospital-toilets.html
Ted Kennedy, dead at 77. The end of Camelot?
Peace to him and his family.
Timmah in the Times!
Typical King County family can again afford median-priced house
I love the assumption that the “typical” family has $77k sitting around to put down on a house.
RE: Scotsman @ 1 –
In 2006, there were 38,568 out-of-hospital births in the US.
I’m always facsinated by your unAmerican claims that the People of the United States are so stupid that they elected a President who is so stupid.
The other tirade is that the People of the United States are so stupid that they will follow a pattern of Health care that was established after World War II in England.
You have never presented any cohesive argument why, with all the tax dollars we currently spend on Helath Care in this country today we refuse to provide better than adequate Health Care to ever man, woman, and child in these great United States.
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
CONSOLIDATED BALANCE SHEET
As of September 30, 2008 and 2007
RE: Acerun @ 3 – Yeah, as I shared with Eric and he pointed out, there are definitely some shortcomings in the affordability index measure. He didn’t mention down payment specifically, but I would say that is part of the whole “financing” thing my quotes alluded to.
RE: Scotsman @ 2 –
The DK’s Rule!
RE: The Tim @ 5 –
The fact that the times runs that article with the title “Typical King Co. family can again afford typical house” is just astounding.
RE: Acerun @ 3 –
The quote from Jill Woods of Windermere looks very bad. Saying this was the first time homes were affordable since whenever indicates that homes were being sold for unaffordable prices. That doesn’t sound good.
RE: The Tim @ 5 – It has shortcomings both ways. I’ve always said it’s meaningless, mainly because not everyone is in the market to buy a house, but they are included in the median income. It might be more meaningful if you excluded students, retired people, etc., but as it is it’s just a meaningless comparison of one number to another.
A house that’s been for sale for several months on Lake Hills Blvd in my neighborhood has a big yellow auction sign on it this morning. I’ll have to look closer after work.
Today’s Everett Herald was huge because of all the NTS they printed.
RE: Scotsman @ 1 –
http://www.independent.co.uk/news/world/americas/the-brutal-truth-about-americarsquos-healthcare-1772580.html
RE: BillE @ 11 – I haven’t looked at the number filed recently. I’ll have to do that tomorrow.
Tim – it would make sense to do a poll maybe – on how many people got onboard of the wave that got Dow Jones to rally so much. Did people take advantage of this big rally and made money? Were fundamentals solid enough for such a rally?
he GDP is declining at ever slower rate, unemployment is inching up slower and looks like the free fall was stopped. If this is a definition of depression – then – hey – we love it. If depression means that GDP will start growing after this – then we welcome depression 2.0 where unemployment finally starts going down, GDP goes up etc. This could become the new definition of depression. Earlier when the Fed did not bail out banks, people lost savings, the global trade was shut down because of some tariff seeking politicians etc. Now we have a depression – that just lasts a couple of quaters, is very nasty and painful but people just get over it and learn a bit.
RE: Trigger @ 14 – Don’t forget that because the term recession is now based on an announcement by some self-appointed group, rather than whether GDP figures are going up or down, we’ve been in a recession for over a year now. And the thought seems to be that we’re already out of it–for the same reason.
RE: BillE @ 11 – Okay, I just checked out King County, and so far this month it’s 430 NOTS filings, which is well off the peak rate. But the rate of filings did seem to jump up on about the 13th, and then again on about the 20th. I’m wondering if they started to comply with the new law before it went into effect, or if maybe they’re getting better at determining which deeds of trust it doesn’t apply to? Or something else?
RE: Kary L. Krismer @ 15 – Kary – but the doom sayers actually still compare this situation to Great Depression and forecast a free fall of American economy.
But nobody mentions that this time around the govts for example did not impose some stupid tariffs on goods. They did not try to shut down free trade. And this time around people did not lose savings etc.
My thinking is that this was one hell of a recession. We might be crawling slowly out of it.
RE: Kary L. Krismer @ 16 – I don’t know what’s behind the foreclosure numbers, but there was 16 pages of them in the Herald yesterday.
It’s really messy out there, at least it has been for us.
We offered what I thought was a very generous offer slightly above asking on a bank owned in Des Moines (with bank paying closing). The listing agent let the listing expire. The property is still unsold. I have no idea what happened.
Looked at a place in Federal Way, liked it well enough. Made an offer, got asked for highest and best with three other people. It seems like the place ended up going for a staggering 233k, which is 2007 pricing. WTH??? It wasn’t even very nice. They can have it.
My problem is I want a 50% discount over 2007-8 prices, just to buffer myself against further depreciation (which I am certain is in the offing). The only properties really at that price range are bank-owned fixers (I don’t have time or the patience for a short, sorry) and there seems to be some stiff competition. I’ve set myself a cap of 200k as well.
Offered on a massive fixer yesterday, asking price, bank pays closing. I’m hoping the myriad cosmetic issues (missing flooring, appliances, rotted deck stringers, etc) drive the first time home buyers I’m competing against away.
But I have no way of knowing. Some other agent will say ‘Oh, this could be a 500k house, easy’ – yes, sure, after 10 years of market correction and 300k in materials and labor.
Buying right now is not fun. I’m sure it was even less fun during the actual bubble.
RE: deprogram @ 19 –
I am closing on a house 9/16, finding a place was quite difficult. I first put an offer on a short sale, which actually took only a month for a counter from the bank, however I walked after they countered at what I felt was an inflated price. I’ve noticed that since I started my search in april, the number of “first time” homes has dried up surprisingly quickly, in large I’m sure due to the homebuyer credit. The place I ended up moving forward on had 3 offers put in on it the same day it was listed, the competition over low priced homes is very surprising.
RE: Trigger @ 17 –
We’re “crawling out of it” in the typical way: by borrowing massively more and largely wasting the money. How long can that go on? What hell will be paid when it can no longer go on? I’m betting we’ll see some hell paid in the next 9 months.
There are distinctly two types of recession claims in the media now: “the recession is ending” accompanied by no evidence other than a short term trend easily explained by the stimulus spending, and “the recession will get worse” with reams of evidence. Really the only question is when things will get worse than before. Will we call it a new recession?
By deprogram @ 19:
Good post, thanks for sharing.
It’s obvious what’s happening now, besides the homebuyer credit. There’s simply pent-up demand for houses people can afford. Once they’re affordable on a monthly basis, buyers pounce and bid each other up, despite that they’re still paying 50% more than general inflation since the mid-1990s would warrant.
That problem will likely get worse for a while, judging by other areas like the Inland Empire in CA and Phoenix, where low-priced houses get scores of offers (including by speculators).
The only solutions for those of us who don’t want to overpay may be to either wait for the overzealous buyers to clear out, or buy a more expensive house. Get a little above the bottom rung and houses are mostly just sitting. Lowball on those, at least 10% off. It’s again like it was during the last days up to the peak: 2 bedroom condos were going for 80% of the price of 3 bedroom SFHs because the condo was all people could afford.
Eventually the higher-end sellers will crack. I doubt the stimulus will let the good times roll again. Sellers with equity who’ve been waiting a year+ will relent or have to accept the fact that they may not sell in their lifetime. That will cram down prices on rungs below, and new waves of foreclosures will do that too, although the multiple bids on the now-lower-end may continue.
RE: Markor @ 22 – RE: Vailripper @ 20 – The competition for first time homes right around the 175-200k mark is very intense, as you’ve also found. You’re getting to the places that are (sort of) affordable, and not complete dumps or out in the boonies.
Since I want to do so much work myself, I think I have the edge, at least on the really serious fixer properties. However, we looked at one place in Kent that was a complete mess, and had a good laugh about how awful it was. I think it went for close to asking price (178k). This is after appliances have been stripped, and a partial renovation where all the remaining materials had been taken at repo.
Who knows. Would have been an OK house for someone with kids. Other than being a complete mess… and zero privacy. We hated it. Couldn’t believe someone bought it. Likewise disbelief at the Federal Way deal.
For us, it’s simple arithmetic. We pay 1550/mo rent (down from a year at 1700/mo) and we just plain need to reduce that. We need room for our dogs. These aren’t Pekinese.
In fact, I’d even be content to pay 1500/mo to own, which puts us up in the 225-250k range. However, I’d much rather pay less! I’m convinced depreciation will continue, and I’m sick of paying for other people’s greed and stupidity.
If we are outbid on this place, I’ll just keep looking. Primary school season has started, and that’s taken a lot of families with kids out of the market. There’s a house out there for us. And when we stop paying rent on this place… good luck finding new tenants at that rate, in this neighborhood.
RE: Markor @ 21 – My thoughts exactly.
Our landlords bought two places right at peak prices. They’re going to have to choose one, because they make TERRIBLE landlords. I still don’t think they get it.
In hock for 750k for a Renton rambler and a farm house in North Bend? Sounds like a great place to be in.
RE: Acerun @ 3 – Typical family has 77k lying around in cash reserves? How the hell is that even possible?
We are childless, highly educated, married, we both gross around or over 60k a year, and we have nothing but student debt and car loans.
I suppose if we had eaten ramen for dinner every night for the past 10 years, we’d have 77k sitting around in cash. Yeah, I guess that’s possible.
Where’s my pink pony? I WANT IT!! Waaaah.
I would say we’re not a ‘typical family’ but most of the highly educated people my age are in the same situation we’re in.
Check out the pricing history in this FSBO. Incredible!
http://www.redfin.com/WA/Seattle/14339-Courtland-Pl-N-98133/home/102743?utm_source=myredfin&utm_medium=email&utm_campaign=listings_update&utm_nooverride=1
RE: deprogram @ 25 – $1550 is a lot to pay for rent when you only have two people…unless you live in downtown Seattle. You guys should make a list for all your expenses. There is always room to cut (eating out, cable tv). Saving that extra $200, $300 a month can really add up over the years. It sucks to have to be cheap but many people just don’t have rich parents or the six-figure jobs to support a nicer lifestyle.
The stock market just keeps going up and up. Day after day, it continues to defy logic. Articles titled “the Market is broken” and the likes are appearing left and right. I know I have not bought a stock in 4 months now… who the heck IS chasing stocks at these prices?
I have a fear. I worry that my nice little down payment is going to get smoked by some crazy double digit inflation. I’m worried that by living within my means, saving money and being conservative on what I WANT to afford that somehow I’m going to be penalized, while the dipstick down the street with his 2 car loans and 95% LTV is going to be laughing again while my money gets eaten away by inflation.
It makes me mad just to write this post.
Why the heck can’t we actually fix the things that are broken? Mark to market is allowing banks to declare ‘record profits’… those same bankers that got bailed out are now getting paid 7 figure bonuses. WTF? Can this utter ridiculousness continue?
Based on these fantasy profits, will Bernake actually declare that things are improving and eventually hit the brakes by raising rates? Am I going to end up paying 7.5% interest on a mortgage next year?
I know, I know… we need wage inflation to support ‘affordability’… but these crazy sellers are still hopeful that things will turn around and haven’t been willing to move their price to something within the realm of reality. All these stories about the NYSE going up 7 days in a row and banks making record earnings will continue to give these sellers hope.
You can almost see the next housing bubble coming… while we all sit here in disbelief, dumbfounded. Many won’t believe it for a long time. At some point, some will crack and buy in… just in time for the really big bubble burst.
Why can’t things just make sense?
I truly hope that Case Shiller goes negative again come September and that inventory levels continue to rise… after a couple of months in a row, I’m beginning to question my intestinal fortitude to NOT buy.
Help!
If you’re waiting for wall street to make sense, you’re probably going to be waiting for a long time.
Similarly, by waiting for the “really big bubble burst” you’re going to miss a lot of opportunities while armageddon will not likely happen.
(Although short term, I think the market will correct, but I don’t think it’ll take out the March lows).
In the first and second quarters of 2009, Goldman Sachs earned $5.3 billion net.
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The recession is just a figment.
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The recession is just a figment, if you are a big well-connected investment bank, that is.