Posted by: The Tim

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.

60 responses to “Redfin: Sales Stalling in Seattle, Climbing on Eastside”

  1. David Losh

    I was wondering yesterday what a post like this would do to the credibility of the Seattle Bubble brand. We’ll see.

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  2. Kary L. Krismer

    I always complain about C-S and even the King County median covering too large of an area, but I think you run into different issues when you’re looking at only a month’s worth of data on a small area. When you’re dealing with such small areas it would probably be best to use 3 or 6 month periods of time.

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  3. softwarengineer

    RE: Kary L. Krismer @ 2

    Pending Sales or Real Sales?

    As Tim’s clarified many times, pending sales are all mostly wait and see, if/when they’re not accepted.

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  4. Kary L. Krismer

    RE: softwarengineer @ 3 – Real sales. For one thing, you don’t know price until the sale closes.

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  5. deejayoh

    By Kary L. Krismer @ 2:

    I always complain about C-S and even the King County median covering too large of an area, but I think you run into different issues when you’re looking at only a month’s worth of data on a small area. When you’re dealing with such small areas it would probably be best to use 3 or 6 month periods of time.

    I agree. I like the rolling 90 day view for smaller areas

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  6. Blurtman

    Gaaaakk!!! Patty Murray’s website claims that she votes to end Wall Street bailouts. She was for the bailouts before she was against them, I guess. Still under Patty’s “leadership?” Goldman Sachs masquerades as a bank holding company to borrow our money at 0% interest and to invest in our treasuries at 2-3% interest. That is a taxpayer financed money machine. How would you all like a piece of that action?

    Murray has got to go. Sorry for the off topic rant.

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  7. Pegasus

    RE: Blurtman @ 8 – Patty will claim anything now that she is up for re-election. She has “forgotten” how she could not help but vote for a pork laden bailout that did almost nothing but blow needed money and create very few jobs. I do like that ad that is being run with her tennis shoes walking all over the backs of her constituents.

    As to Goldman’s and the other bankers’ racket designed to fleece Americans and not provide needed capital for recovery I think Lloyd Blankfein put it best. He told a reporter for the Sunday Times of London that he’s just a banker “doing God’s work”.

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  8. Blurtman

    RE: Pegasus @ 9
    Pegasus,
    The problem as I see it is that both political parties are corrupt. Goldman Sachs was granted bank holding company status by their former CEO, Hank Paulson, when he was Treasury Secretary under George W. Bush. Hank Paulson headed up Goldman Sachs when they engaged in massive fraud. And he had the taxpayers pay for their fraud by bailing out AIG. The USA resembles the stereotypical banana republic with crooks installed in executive cabinet positions.

    I wish there were a credible thrid party Reform candidate.

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  9. Pegasus

    RE: Blurtman @ 10 – I agree. The last third party candidate that even had a slight chance was the quirky Ross Perot. The problem with third party candidates is that they normally get just enough votes to destroy chances of removing the crooked incumbents. Speaking of Perot I still wonder what really made him pull out at the last minute in 1992. He was sure right about NAFTA though.

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  10. HappyRenter

    I like it. I wished I could zoom in, but it might not be necessary. I’m not too familiar with Seattle’s zip codes. I guess I will need to pull up a map of the zip codes next to it. Or maybe, the little pop up window could show also the name of the neighbourhood next to the zip code? It does give me a feeling however where to look for a home based on what I can afford. Thanks!

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  11. Willy Nilly

    RE: HappyRenter @ 12

    You can zoom in, and pan as well. Go to the arrowhead icon at the bottom of the map.
    I was disappointed as well until I found it.

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  12. David Losh

    RE: The Tim @ 4

    Have you considered your brand? You are now a part of the Wal Mart family of Real Estate with redfin.

    I did read Glenn’s words of wisdom about coming back to the redfin site often to be educated by statistics, because really, that’s all you need to know about building a Real Estate.

    No, my friend, your position on the internet has changed dramatically. Where before you were a lone voice of reason; you are now speaking for corporate brokerages everywhere.

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  13. Augmentor

    Tim,
    Thanks for this visualization of the data. Looking at my corner of Seattle, I am eager to see the trends for a longer period.

    PS Sorry to see you are getting unwarranted flack on the Redfin job. Suggest you ignore it and carry on.

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  14. corncob

    RE: David Losh @ 14 – Even hookers can give you some interesting information. Just remember when it comes from.

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  15. JChristoph

    RE: David Losh @ 14

    Dude. You are pretty out of touch with things. I support Tim, before and after his job-change, just as much as I always have supported Redfin, for eliminating the need for those useless, seedy, glorified car salesmen that suck waaaaay more than they’re worth from you.

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  16. wreckingbull

    RE: JChristoph @ 17 – Well said. The reaction from some people on this blog is rather telling. I imagine elevator operators felt the same way at some point in history.

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  17. One Eyed Man

    RE: wreckingbull @ 18RE: JChristoph @ 17

    While I agree with both of you, in fairness to the Losh and others who share his view, Redfin’s profits are dependent upon their transaction volume and there is the potential that at some future time Redfin may look to spin the statistics to help generate additional demand for their services just as the investment brokerage houses had their analysts spin their stock ratings to help win investment banking business. The point is that there is a risk that Redfin will at some point pollute the purity of The Tim’s statistical information for the purpose of improving their transaction volume and bottom line. We’ve all seen NAR cherry pick the most positive stats and leave out the ugly truth.

    Hopefully Redfin will always recognize the value of unbias statistics to its business. I think a very significant part of Redfin’s value as a brand is its association with unbias statistical information and I hope that they don’t compromise that brand. But it is a risk none the less.

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  18. wreckingbull

    RE: One Eyed Man @ 19 – Of course there is always a risk, which is why we must all think for ourselves. Looking at most of the comments here, I don’t think that will be a problem. My take? Redfin’s business model does not require the pathetic pumping and FUD we get from the ilk of the NAR. Time will tell.

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  19. Kary L. Krismer

    By wreckingbull @ 20:

    RE: One Eyed Man @ 19 -Redfin’s business model does not require the pathetic pumping and FUD we get from the ilk of the NAR. Time will tell.

    I don’t know why you think that. Redfin needs volume more than the traditional brokerage needs volume. Salaries vs. commission.

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  20. David Losh

    It’s a rebate brokerage. What if redfin offered to give you a “free” patio set if you bought your home through them?

    That was the gimmick in Arizona, in the 1980s, that gave rebate brokerage a bad name.

    It’s always been around, but was protected against by Congress, that’s how Glenn, and many others, ended up pleading their case to Congress.

    The larger fear is if redfin rebated escrow, mortgages, and title with a home purchase. How about a new Discover Card with a limit of $1200 like Sears wanted to offer, again in the 1980s. Sears owned Coldwell Banker, and again could, or wanted to rebate you with home furnishings.

    My biggest objection is comparing a home purchase to E*Trade or Expedia. Millions of people have lost billions of dollars in equity, maybe trillions globally. You are correct by comparing redfin to Real Estate sales people because that is exactly who they are. These are sales people, long, short, and all together.

    The Real Estate business is a pretty closed shop that many people want a piece of. It is a billion dollar industry. The fact is that very few people ever, I mean ever, get good at the system.

    But I digress, the real reason for a redfin or Zillow is to tap the online mortgage market. That is what Congress is working on today. The Wall Street Reform includes a Loan Originators compensation provision. It will make large corporate lenders the only ones who can do mortgages. By limiting compensation there will need to be volume. The internet will help with that.

    In my opinion these are corporate thugs looking for a buyer. redfin, if smart, will sell quickly. This next round of disappointed home owners may turn on the industry as a whole, and refin is a part, a small part, of the Real Estate Industrial Complex.

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  21. David Losh

    RE: One Eyed Man @ 19

    Exactly, as Ardell called the “bottom” of the market. Are we at the “bottom?”

    Because according to most of the people here it’s looking like prices may stabalize. Maybe down another 10%, Sara saved $105K, and don’t forget those low mortgage interest rates.

    The fact of life is home ownership is hardwork, and the term sweat equity is real sweat. Even if you are a player you take risks with real dollars.

    People are making huge profits today on all of the information people think they are getting from the internet. Home sales are brisk when there are very few deals to make. Why is that?

    How can Forbes, the Wall Street Journal, or CNBC keep hyping the Real Estate market? We know prices are declining, we know the tax credit pushed up pricing, it’s all over the news, and statistics, but redfin is pumping out sales volume.

    How can all of these internet educated people be making huge mistakes today? I mean today before the market has corrected from the tax credit. How did so many internet educated people buy into the tax credit? Why did refin stop taking offers less than 15% of list price?

    It’s a game. redfin is hoping to be a player in the game. It’s not Real Estate, it’s just the sales. It’s all about volume because it has to be.

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  22. Kary L. Krismer

    By David Losh @ 22:

    You are correct by comparing redfin to Real Estate sales people because that is exactly who they are. These are sales people, long, short, and all together..

    As to your point that their agents are not all that different, it would be interesting to know what performance Redfin requires of its sales people. I’m fairly certain that they have some standard, and that the standard puts pressure on the agents to perform.

    BTW, thanks for clearing up the Sears/1980s comment. When you made the comment yesterday I had no idea what you were talking about.

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  23. wreckingbull

    RE: Kary L. Krismer @ 21 – Better cost structure.

    I don’t know why you guys are getting so testy. You always tell me there will always be a place for a full service six-percenter. If anything, that should be a positive thing for you since most of the slick willies will get flushed.

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  24. Kary L. Krismer

    By wreckingbull @ 25:

    RE: Kary L. Krismer @ 21 – Better cost structure..

    Now that’s funny! Surviving only on venture capital is evidence of a better cost structure?

    I don’t know why you think I’m getting testy. I’d say you’re getting defensive or desperate to make a point when you point to Redfin having a better cost structure. But just out of curiosity, to get to one of Ray’s main complaints about Redfin, why do you think they raised their rates if their cost structure is so fantastic?

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  25. ivan

    Tim,

    I really appreciate the 98110 data.

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  26. wsuengineer

    Tim,

    I really like this kind of presentation. Glad to see what’s happening in my neck of the woods. However, I would love to see a heatmap if you can geolocate the sales data by neighborhood. It would be a cool redfin feature as well.

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  27. TM

    Tim,
    An unusual favor to ask: On your charts, can you make the Tableau color spectrum vary from blue to yellow instead of red to green? Over 10% of men have some degree of red-green color blindness, and we cannot use your cool R-G Tableau charts (this one was particularly frustrating). Less than 0.1% have blue-yellow, blue-red, blue-green, so any color spectrum transitioning from blue would work much better for the majority of us. It’s a Y-chromosome thing; women are rarely colorblind.
    -A hopeful thanks.

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  28. ARDELL

    I have a request. Can you put some definer besides zip code? Maybe Zip Code and City?

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  29. ray pepper

    RE: One Eyed Man @ 19

    Red Fin will survive if they can capture a significant portion of their income from Lead Generation. Sales Volume will NOT keep Red Fin afloat. You will see a merger of Red Fin at some point in the coming years……

    Watch and Learn!

    The big G is lurking and is always LOOKING!

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  30. wreckingbull

    RE: Kary L. Krismer @ 26 – Surviving only on venture capital? Did you really mean to say that? I don’t think you get to count “venture capital” on your P&L statement. C’mon Kary, I think you can do better than that.

    What does it cost a traditional brokerage, like Windermere, to move to a new city? My guess? A lot more than it costs Redfin, especially as Redfin’s startup costs get amortized. I don’t really care much about Redfin the company, but I am quite interested in Redfin the business model. I hope we have 5 Redfins in 10 years.

    Like I said, this should be a good thing for decent real estate agents. As the used-car-style agents throw in the towel, more full-service customers for the remaining ones. Even so, everyone will fighting for a smaller pool of commission dollars.

    My own agent has already adapted in his own way. He refunds 100% of the seller’s commission, assuming you buy your new home through him with a traditional fee structure. He is 100% full service, and arguable the best agent I have ever worked with. Not quite as cheap as Redfin, but I get full service. He was forced to do this as discount brokerages started popping up, and has found a great niche.

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  31. Kary L. Krismer

    By wreckingbull @ 33:

    RE: Kary L. Krismer @ 26 – Surviving only on venture capital? Did you really mean to say that? I don’t think you get to count “venture capital” on your P&L statement..

    I don’t think Redfin has ever released financials. I do recall that about a year ago they said they turned a profit.

    But in any case, they raised $8M in 2006.

    http://www.redfin.com/about/press/releases/pr-funding

    And then $12M ($20M?) right at the peak in 2007. Probably good timing on their part (sort of like Ford).

    http://www.seattlepi.com/venture/funding.asp?company=Redfin

    Oh, but wait, in 2009 they raised $10M more.

    http://www.redfin.com/about/press/releases/redfin-raises-10-million-venture-round-led-by-greylock

    So perhaps you’re right. They aren’t surviving “only” on venture capital, because they do have some other revenues, and allegedly have turned a profit at least once. I’m sorry for exaggerating. ;-)

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  32. wreckingbull

    Let me guess, you were on the “Amazon is doomed” wagon too, in 2000, when they got into a debt pinch? I worked for a dot-bomb who really did only survive form venture funding. No revenue stream or even plausible business model whatsoever. I sure see a difference here. Apparently others do too, given the 2009 round of funding you conveniently pointed out.

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  33. Pegasus

    RE: wreckingbull @ 35 – Don’t forget the odds for venture capital. You get a good ride in one out of ten to twenty investments and the rest trickle down to minor wins to total losses. Getting funding in 2009 does says the most about the confidence factor…either that or someone is protecting their prior investments until they can go public and recoup their losses.

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  34. Kary L. Krismer

    By wreckingbull @ 35:

    Let me guess, you were on the “Amazon is doomed” wagon too, in 2000, when they got into a debt pinch? I worked for a dot-bomb who really did only survive form venture funding. No revenue stream or even plausible business model whatsoever. I sure see a difference here. Apparently others do too, given the 2009 round of funding you conveniently pointed out.

    Do I need to find stories about WAMU getting new capital? ;-)

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  35. Kary L. Krismer

    RE: Pegasus @ 36 – Here’s a story on some of Paul Allen’s successes and failures.

    http://news.cnet.com/8301-10805_3-10167010-75.html

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  36. Blurtman

    Twitter has about 250 employees, Facebook has about 1,200. How’s about Redfin?

    source:http://www.oftwominds.com/blogjuly10/supply-demand-ideas07-10.html

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  37. Ron Nelson

    I Believe the Real Estate on the Eastside Especially Bellevue is largely stable at the Moment because of Foreigners.

    Example I was at 24 Hour Fitness- I swear 1/2 the People on a Friday night was Middle Eastern, India, Russian.. was at trader joes and noticed that so many of the people Had foreign accents- I currently live in Renton and used to live in Bellevue, after visiting Friday and working out shopping it dawned on me that Bellevue Redmond sure has a Large Foreign Population.

    Microsoft largely is the Employer that brings the foreigners into the United States. Microsoft it seems to me doesn’t do a very good job of employing the people that are not foreigners.

    Culturally foreigners are probably just not as in tune with whats happened the Last several years? I’ve noticed or it also appears there largely the buyers on the eastside the last couple of years- they tend to have a lot larger savings than the typical american.

    Just my 2 Cents..

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  38. Scotsman

    RE: Ron Nelson @ 40

    “they tend to have a lot larger savings than the typical american.”

    Interesting point- I may look into that.

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  39. Blurtman

    RE: Ron Nelson @ 40
    Ron,
    That’s generally the consensus from chums in Toronto and Vancouver – immigrants with money but also dough from related investors who are still living in the “old countries.”

    And the H1B visa has been criticized by some as a scheme to import cheaper foreign labor and lower the wages of US citizens.

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  40. deejayoh

    By Kary L. Krismer @ 38:

    RE: Pegasus @ 36 – Here’s a story on some of Paul Allen’s successes and failures.

    http://news.cnet.com/8301-10805_3-10167010-75.html

    they don’t call him the “accidental billionaire” for nothing…

    As for Redfin, Kelman was interviewed a couple months ago and said they have doubled their run rate and are still profitable.

    http://techcrunch.com/2010/04/25/redfin-hits-30-million-in-revenue-in-quest-to-rip-apart-real-estate-industry/

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  41. David Losh

    RE: wreckingbull @ 33RE: wreckingbull @ 25

    Well, let’s be clear about the business model of Real Estate. There are four different areas of Real Estate; Commercial, residential, Property Management, and Business Opportunity.

    You would be right, Windermere proved that the cost of moving into an area for residential sales is a dismal failure. Windermere, Coldwell Banker, Prudential, RE Max, survive by diversity.

    redfin, and Zillow, are set up to sell residential mortgages. Think about the stats, charts, and data. The zestimate could be used, and I have to be careful how I phrase this because it gets these techy, selly, companies in a twitter, pun intended, to sell mortgages.

    You are here on the internet hoping to get some insight into a complex industry. Without the input of the four components, Commercial, residential, Property Management, and Business Opportunity, you have nothing but a sales job.

    When I started in the 1970s residential Real Estate sales was an after thought to Commercial Brokerage. People moved, in the new mobile society, to be close to jobs. Better jobs meant better schools.

    Anyway, I could go on for a long time about Real Estate, the industry, and the people who make things happen, but Glenn is an outsider. Once the company is sold he will move on to the next thing. Right now some one would have to be brain dead to pay for the web site.

    BTW selling a quarter to half million dollar debt instrument should take a little more thought than buying books, or groceries, on line.

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  42. Elizabeth

    Oh Tim…..what a tangled web we weave – even if we don’t practice to deceive. Face it Bubble Boy, you are now part of the real estate industry. In fact, your very livelihood now relies upon it. It doesn’t mean that you’re not an excellent cruncher and interpreter of numbers, but this very posting from Redfin is just confirmation that you are no longer who you used to be. And HEY TIM – that’s OK! Just OWN IT and stop trying to pretend that you’re still the same old ankle biting, seal clubbing, ambulance chasing, real estate bandit that you’ve always been. In other words, you’re no longer impartial. If you think you are, your’re fooling yourself – and today’s posting from Redfin proves it.

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  43. Elizabeth

    Because Tim @46 – the other items you refer to were written BEFORE you were employed by Redfin, a company whose very success (i.e. your job) relies on the sale of homes. If you think for a New York minute that people aren’t going to take ANY reference you make to Redfin as biased now that you’re working for them – you are not NEARLY as smart as I thought. Welcome to the jungle, honey.

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  44. Elizabeth

    Well Tim @ 48 – we’ll see how that works out for you – you’re on the other side of the field now, my friend. Good luck to you.

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  45. Ira Sacharoff

    RE: deejayoh @ 43
    It’s like the old joke ” How do you become a millionaire?” ” Start with ten million.”
    I think at one point Allen was the 3rd richest American and worth 40 billion dollars. Last I read he was worth 12ish billion.
    When he dies he’s giving most of his money to charity, provided there’s anything left by then.

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  46. Scotsman

    RE: The Tim @ 46

    ” the characterization of me as an “old ankle biting, seal clubbing, ambulance chasing, real estate bandit,”

    Hmmmm. Agreed. Sounds more like Ray or. . .Ira! ;-)

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  47. Scotsman

    RE: Elizabeth @ 47

    I don’t know. Numbers are numbers. There are enough competent folks here to adequately peer review any wild new assertions The Tim may make regarding big market moves. And if he ever utters “buy now, or be priced out forever” (without full statistical substantiation) this site will empty out like Safeco Field after the 5th inning of a Mariners’ home game.

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  48. Elizabeth

    Well, if that isn’t the pot calling the kettle black! Aren’t you the pro at “lobbing cheap drive by ad hominem arguments”? Tim, you are in a whole other world now. I’m taking bets on how long you survive. At the same time, I wish you well because maybe your success will help support our local enconomy long term (as opposed to just writing a silly blog, regardless of how many readers/haters you have).

    All the best,
    Elizabeth

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  49. Elizabeth

    Oh Tim – as much as I love this banter, I’m just going to leave this conversation by saying that you have taken a job with an incredibly innovative company. I think it’s a great fit for you – kind of like the Barefoot Bandit working for Boeing. I look forward to hearing how it all works out for you – hopefully well! Good luck!

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  50. ray pepper

    Is Elizabeth new Tim? I love the fire…the banter…..Is it an old poster with a new name????? Dig Tim…Dig…..

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  51. Ira Sacharoff

    By Scotsman @ 51:

    RE: The Tim @ 46

    ” the characterization of me as an â��old ankle biting, seal clubbing, ambulance chasing, real estate bandit,â��

    Hmmmm. Agreed. Sounds more like Ray or. . .Ira! ;-)

    Hey now! I don’t club seals.

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  52. David Losh

    RE: The Tim @ 55

    Glenn should get on his knees and kiss the ground you walk on. He owes you, a lot, for giving his site credibility. Without your support he would still be kicking the shins of Real Estate agents.

    You’ve been a cheer leader, who brought the whole statistical reasoning of buying now, to the table.

    The story of Sara is a case on point. Sara paid I forget but I think $100K for a property in Tacoma. It had sold before for I forget, $210K. Without batting an eye that looks like a $110K savings. Wow, what a great deal that was!!!!

    The truth is you brought the stats, charts, graphs, and Case Schiller to the table for Glenn. That was a year or even two ago. These charts, graphs, and statistics, based on sales data, are making a feel good presentation of the market place we have today.

    You were saying a year ago you expected residential Real Estate prices to drop by about 10% which is in line with Real Estate Industry hype.

    No, you now work, or have been working, for the Real Estate Industry.

    What I’m saying is that you may have over looked your Seattle Bubble brand. You bring much more to Glenn than Glenn provides to any body. He owes you at least the $250K as a signing bonus. Without you Glenn is just another ankle biter, seal clubber.

    My fear is, that in this process you may lose your brand.

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  53. Bryon Ziegler Said Something Really Smart | Redfin Corporate Blog

    [...] on local blogs in Maple Leaf and Wallingford here in Seattle, as well as the big sites like Seattle Bubble and SocketSite. As always there’s plenty of discussion on Redfin Forums, some of it more [...]

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