Posted by: Timothy Ellis (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.

99 responses to “Is “The Bottom” Always a Good Time to Buy?”

  1. David S

    ROTFLMAO, sounds like Trevor probably needs to repay those loans for the economics degree or an MBA that they earned. ;-)

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  2. softwarengineer

    Convenient Monthly Payments

    Seem to fog out reasons to add them all up and subtract it from your net pay….what net pay after that? LOL

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  3. ray pepper

    I found this far more interesting since its what I get questioned nearly 3x a week:

    Another email from Nicole(ph) from Suzanne(ph) in Baltimore: I’m listening to you while I pack up my house due to foreclosure. After struggling to pay the mortgage and having no luck in refinancing with the mortgage company, I had to make the decision to give up the home.

    What helped me make this decision is the fact that the home is $100,000 less valuable than it was when I bought it. I only paid a little over $200,000 for it that’s quite a drop and the decline in the home’s value in the neighborhood has changed the demographic and level of safety in the neighborhood.

    I can give up the home, declare bankruptcy, and with the money I’m saving will be able to more prudently purchase another home in a few years.

    This caller is dead on target and will find after her foreclosure/bankruptcy she can immediately buy if she begins to look at other ways of purchasing including owner contracts. Or she can simply wait and save as much as she can. In the new Era its Cash that talks anyway. For every confused caller there is always one lurking who knows the answer.

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  4. Kary L. Krismer

    The Tim wrote: “some realtor-esque nonsense about buying at the bottom.”

    I’m sorry, but that is more bubblehead-esque nonsense. Realtors don’t focus on buying at the bottom, as if that’s even possible except through pure luck. Not everyone is willing to put their lives on hold just because the market has been declining and might decline further.

    As to the main piece, it always amazes me how people ignore getting turned down for financing as being a sign of anything. That’s often when family gets involved, which IMHO is also when things take a turn for the worse (e.g. family guarantees, etc.).

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  5. softwarengineer

    RE: ray pepper @ 3

    The Ethics Conundrum

    Should one make decisions based on pure dollar and cents, or let your conscience be your guide? IMO, considering the fiasco of both greedy buyers and sellers pumping up the Seattle Housing Bubble to the point of insanity….I have no pity of the upside down loan home owners today. They made their own bed.

    Now, if they want to destroy the American banking system to default on their greed, I have one request….don’t ask those of us that didn’t cause their mess to pick up the cleanup tab. It’s like blaming the American Middle Class for causing the undocumented immigration cost problems, when we all know the root cause was the slavelord organised crime American employers magnet.

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  6. softwarengineer

    RE: Kary L. Krismer @ 4

    I Agree Kary

    Never trust family supports, unless everyone else in the family equally got the same leg up; or the bad feelings later will haunt you.

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  7. Ira Sacharoff

    NPR listeners tend to be an educated lot, and Trevor from Tacoma probably acquired at least one degree while amassing all that student debt. So how come he’s so stupid?
    Buying a house is a perfectly fine thing to want, but it’s also not something that you should or shouldn’t want. Some people aren’t really happy until they’re homeowners ( and then become miserable when things break), others feel freer and happier as renters. If you have a secure source of income and know that you won’t want to move for many years to come, then “buying at the bottom” shouldn’t necessarily be your goal, provided you have ample income to handle the mortgage payments.
    It’s going to cost more to make mortgage payments than it is to pay rent, so you have to weigh whether the extra expense is worth it.
    And fergawdsakes, if even one lender turns you down for a mortgage, pay off that debt and sock your money away.
    Smart people do stupid things, and all the advanced degrees in the world won’t give you common sense.

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  8. Jason

    I am particularly surprised by how many friends/colleagues simply don’t understand the downside risk related to purchasing something with leverage. I guess it’s probably that everyone is still programmed from years of ‘your home is a great investment’ and the American Dream commentary.

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  9. softwarengineer

    RE: Ira Sacharoff @ 8

    So True Ira

    A blue collar retired cement worker once told me this: many of the over educated have no common sense, he called them “over-educated” idiots.

    I was offended at his comment at first, but as I got older I totally agree with him.

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  10. Kary L. Krismer

    RE: Ira Sacharoff @ 8 – If you’re primary reason for buying a house is that we’re at the bottom, you probably should be investing in something else.

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  11. Herman

    What’s extra perplexing to me is that Trevor says that he’s saved up a big down payment. Rather than use it to pay down his debt, he has it parked in the bank (I assume) at 0.5% interest.

    If he puts that down payment into the house, then he has a fair chance of losing it if he is wrong about the bottom. Prices can fall farther; and with 60% of his income going toward debt it’s easy to imagine a scenario where he misses payments and loses both the house and his nest egg.

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  12. Kary L. Krismer

    By softwarengineer @ 7:

    RE: Kary L. Krismer @ 4

    I Agree Kary

    Never trust family supports, unless everyone else in the family equally got the same leg up; or the bad feelings later will haunt you.

    While I appreciate the agreement, I would go even further than that, because it’s not just everyone being treated equally. It’s also about not dragging other family members into what becomes your future financial problems.

    In my years of bankruptcy practice I often saw parents drug down by having done things to guarantee their children’s debts, or start the children in business, etc.

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  13. wreckingbull

    RE: Kary L. Krismer @ 4 – Bottom-calling has been the preferred form of FUD I have gotten from seller’s agents in my last six months of house-hunting. I’d say 70% of the agents used this tactic.

    Another interesting tactic, although unrelated, was a purchase gurantee. The seller was willing to write up an agreement that they would purchase the home back if I was not completely satisfied. I wasn’t quite sure how to respond to that one.

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  14. Hugh Dominic

    RE: Herman @ 12 – this might be a young couple, with an idea that they have a lot of raises in their future.

    They have to pay for housing anyway, and comparing owning a mortgage vs. lower rent might seem like a wash. I agree with Herman that their biggest concern should be whether to put their down payment at risk.

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  15. Maybemove

    By softwarengineer @ 5:

    RE: ray pepper @ 3

    The Ethics Conundrum

    Should one make decisions based on pure dollar and cents, or let your conscience be your guide? IMO, considering the fiasco of both greedy buyers and sellers pumping up the Seattle Housing Bubble to the point of insanity….I have no pity of the upside down loan home owners today. They made their own bed.

    Now, if they want to destroy the American banking system to default on their greed, I have one request….don’t ask those of us that didn’t cause their mess to pick up the cleanup tab. It’s like blaming the American Middle Class for causing the undocumented immigration cost problems, when we all know the root cause was the slavelord organised crime American employers magnet.

    Amen! I live in California but planning on relocating to Washington via a job transfer. Several of my neighbors who are squatting in their overimproved homes while their “loan mods” come through, complain about illegals mucking up their schools and neighborhoods. In the meantime, they have them detailing their leased cars and working for their contracting businesses. I’m sick.

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  16. B&W Nikes

    While the Trevors of the market make good Pinatas, why is a student loan 30% of anybody’s income?

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  17. Geek

    Their houseowning friends are most likely telling them to buy. That’s what the people I know who own houses (and still owe mortgage) say to me. Strangely enough, the people with paid-off houses don’t seem to care if I buy. It’s as if some people have hundreds of thousands of dollars in this game that’s a huge lie, and they’re afraid that I’ve seen through it….

    Don’t Buy Things You Cannot Afford. If you need a loan, you cannot afford it.

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  18. Lurker

    RE: wreckingbull @ 14

    I’ll call and raise you three years. I don’t believe I’ve met an agent over the years that hasn’t told me prices were about to go back up. I’ll throw them a bone though and say that they probably really believed it.

    Geek, it’s the opposite w/ me. Many people I know that own wish their places would just burn down.

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  19. HappyRenter

    By Geek @ 17:

    Don’t Buy Things You Cannot Afford. If you need a loan, you cannot afford it.

    Are you saying that one should buy a home only if it can be paid cash? It’s a night thought, but in that case I would never be able to buy a home in Seattle.

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  20. Ira Sacharoff

    By Lurker @ 19:

    RE: wreckingbull @ 14

    I’ll call and raise you three years. I don’t believe I’ve met an agent over the years that hasn’t told me prices were about to go back up. I’ll throw them a bone though and say that they probably really believed it.

    Geek, it’s the opposite w/ me. Many people I know that own wish their places would just burn down.

    Now you have. I’m an agent. Prices are not about to go back up.

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  21. Lurker

    RE: Ira Sacharoff @ 21

    You are a special one, Ira. ;)

    I was referring more specifically to agents I’ve actually gone to seen houses with but I do have to retract my comment because I’ve toured homes with Redfin agents and I don’t think the subject has ever come up.

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  22. Daniel

    By Geek @ 18:

    Don’t Buy Things You Cannot Afford. If you need a loan, you cannot afford it.

    The nice thing about that is that the scare of a bad credit rating becomes entirely irrelevant. But Too bad people do not realize that all credit ratings measure is how much interest can potentially be squeezed out of you.

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  23. TheHulk

    RE: Kary L. Krismer @ 4

    “Not everyone is willing to put their lives on hold just because the market has been declining and might decline further.”

    This is another thing I resent. Why does renting imply you are putting your life on hold? I am perfectly happy with the place I currently rent. Putting down a significant amount of money as a down payment on a highly leveraged asset scares me – and it should scare a lot of people.

    I dont think many people understand that when they get a loan of 300K @ 5% or whatever superlow interest rates are prevalent, you almost end up paying an additional 300K over the life of the loan, assuming you dont make additional payments etc. Think about that for a moment. How many people would buy that 40,000$ convertible if they knew it would cost an additional 40,000?

    The focus is completely on monthly payments and that is okay only if the debt servicing accounts for a small portion of your take home pay. Read up about the four-square car salesman trick with its objective of getting the customer to focus on the monthly payments and you will know what I am talking about.

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  24. softwarengineer

    RE: Kary L. Krismer @ 13

    I Agree With You Again Too

    Don’t co-sign student loans as a parent….this 30% mess is a good reason why not.

    Without going into a lot of detail, I bought a sweetheart home loan from an ex in-law….granny bar the door, the ex in-law brother and sister turned against me like Hitler himself. I had to fight the subsequent horrifying divorce battle against not only my ex, but jealous rage in-law witnesses too [later proven falsely allegating too, although unfounded is the lawyer term]…LOL

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  25. masaba

    @17

    This is exactly what I was thinking! How in the world is his college debt 30% of his income? That’s insane. If it is, then he should have the entire loan payed off in 2-3 years.

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  26. S. Marty Pantz

    By Kary L. Krismer @ 4:

    …Not everyone is willing to put their lives on hold just because the market has been declining and might decline further….

    I am so tired of hearing this tired cliche that not owning a home is putting one’s “life on hold.” I am living a rather blessed life, thank you, and I have ALWAYS rented.

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  27. Urban Artist

    Rents in Seattle are still super high and I think many people figure if they are going to pay that much they might as well buy. Also renting is pretty risky now. I have heard of people signing leases only to have the houses go up for sale or get foreclosed. Maybe if I was single but I do not want to put my kids through that especially since it was not my financial folly. I don’t care if it is still cheaper to rent than buy, 2,000 or more a month to rent is still crazy.

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  28. LA Relo

    I guess we’ll know when we get to the bottom.

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  29. softwarengineer

    RE: masaba @ 26

    I’d Add

    Any college graduate without $30-50K cash in the bank is not ready to live on their own. I know it’s a class thing, but if tuition and room isn’t pay as you go with no debt….you can’t afford college.

    Ask the intern with a degree making no pay.

    Bad college loans are adding to the banking turmoil too.

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  30. Fran Tarkenton

    RE: Urban Artist @ 28

    “Also renting is pretty risky now. I have heard of people signing leases only to have the houses go up for sale or get foreclosed.”

    This is getting into a concern troll gray area. A real estate sale carries with it prevailing encumbrances on the property, like leases. Kary previously wrote about the protections provided to tenants under foreclosure, and I’ll defer to him if he wants to chime in with details, but in Washington a foreclosure does not terminate a lease.

    “Rents in Seattle are still super high and I think many people figure if they are going to pay that much they might as well buy…I don’t care if it is still cheaper to rent than buy, 2,000 or more a month to rent is still crazy.”

    These sentences makes no sense. You’re comparing substitute goods by considering only the price of one. To be fair, I think this reasoning has been commonly used in practice, including among my friends.

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  31. Kary L. Krismer

    By TheHulk @ 24:

    RE: Kary L. Krismer @ 4

    “Not everyone is willing to put their lives on hold just because the market has been declining and might decline further.”

    This is another thing I resent. Why does renting imply you are putting your life on hold? I am perfectly happy with the place I currently rent.

    If you don’t mind renting then you’re not putting your life on hold. Scotsman, however, was critical of my selling and then purchasing back in 2007 because prices declined since then. That possibility was someone obvious since it was after the “mortgage crisis” and post peak. Anyway, I don’t want to rent, so doing whatever Scotsman was suggesting would have been putting my life on hold. I would have either been living in a house I didn’t want to continue living in, or renting.

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  32. Kary L. Krismer

    By masaba @ 26:

    @17

    This is exactly what I was thinking! How in the world is his college debt 30% of his income? That’s insane. If it is, then he should have the entire loan payed off in 2-3 years.

    Depending on the profession you go into, the student loans can be a large percentage of income. Not every college degree entitles you to a large paycheck. For example, there is a College of Social Work at the UW. People who go into that area don’t tend to do it for the pay.

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  33. Kary L. Krismer

    RE: Fran Tarkenton @ 31 – The protection of tenants in foreclosure situations is rather complicated because of differing state and federal laws. Also, I’m not sure either provides protection for foreclosure of very old deeds of trust. But yes, in general there is some protection allowing tenants to stay, and even some possibility that will be rent free for a period!

    In my mind the bigger risk is simply having the landlord decide to sell, and your having to allow access to potential buyers on 24 hours notice. That would be very annoying to me. Less of a concern with multi-family housing (as is the foreclosure risk since there the new owner isn’t likely to want to kick anyone out).

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  34. Dirty_Renter

    RE: ray pepper @ 3
    “I can give up the home, declare bankruptcy, and with the money I’m saving will be able to more prudently purchase another home in a few years.”

    …did that candy-crapping pink pony just fly buy?

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  35. S. Marty Pantz

    RE: TheHulk @ 24 – Sometimes I am glad that I have my “life on hold”–whatever that means–when I read current stories like these:
    1) http://seattletimes.nwsource.com/html/localnews/2012845701_riverwalk09m.html
    2) http://articles.courant.com/2010-01-10/classified/10010712531286_1_house-west-hartford-real-estate

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  36. Ahau

    RE: Kary L. Krismer @ 34
    Also, if you’re on a month to month lease, there would be no protection from eviction after a 20 day notice, even if the lease survived foreclosure. Some leases automatically convert to a month to month after the initial period expires (if your lease is not renewed, I believe it converts to a month to month automatically by law). Tenants are willing to take this risk when it benefits them with flexibility in leaving, but don’t often think about the down side of this–when they aren’t the ones who want to leave.

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  37. David Losh

    I’ll just say it again, just cuz, there is no top, or bottom to the Real Estate market. Any, and all, property has a value. That value can be determined by a buyer, and seller, or by financial analysis. What is the economic viability of a property? What’s it worth to you?

    There are no magic numbers set to a desire to purchase, but it helps to have your number in mind, then stick to it.

    You can offer whatever is comfortable for you, for any property in the world. All they can say is no.

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  38. Urban Artist

    Well Fran Tarkenton, I can for sure say I am not a troll. Yes that is the logic many people use to buy. If rents are so high why not but. Yes I am sure someone here has had a post relating to rent or own etc…It also crazy for someone with that much in student loans to think about buying. However, everything about the housing bubble and why people buy above their means does not make sense. At what point was logic ever in play?

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  39. Urban Artist

    Sorry I hit submit before I checked the post. Working some late hours and I am a little low on sleep.

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  40. Sniglet

    I had a conversation with a young co-worker today who told me could could NEVER rent because it was just “throwing money away”. She wanted to be smart, and build a nest egg through ownership.

    I didn’t even try to argue… It just gets old trying to explain to people that owning a home is NOT some guaranteed way to wealth generation. It’s just amazing how pervasive this kind of thinking is despite what’s happened in the last few years.

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  41. Ira Sacharoff

    By Ahau @ 37:

    RE: Kary L. Krismer @ 34
    Also, if you’re on a month to month lease, there would be no protection from eviction after a 20 day notice, even if the lease survived foreclosure. Some leases automatically convert to a month to month after the initial period expires (if your lease is not renewed, I believe it converts to a month to month automatically by law). Tenants are willing to take this risk when it benefits them with flexibility in leaving, but don’t often think about the down side of this–when they aren’t the ones who want to leave.

    I am not an attorney, however it appears to me that even if you are on a month to month tenancy and your rental home gets foreclosed on, you now are required to be given ninety days notice in most cases:
    http://www.rentalforeclosure.com/foreclosure-information/rentalforeclosure-article-national.htm?id=109177524929

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  42. Aaron Smothers

    > my point that you should buy a home when the timing is right for you, not just because
    > you think we’ve “hit bottom” or because rates are low or because homes are a good deal.

    When I try to define when the timing is right for me, I come to the conclusion that “When the timing is right for you” is not an axis orthogonal to other axes of decision such as rates being low, price being low, earning capacity being right, price trend being in the right direction, etc etc. The rightness of the timing is a composite of all other factors, some of which bear more weight than others.

    AS

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  43. David Losh

    RE: Sniglet @ 41

    I’ll take that, because everything you have ever heard, or seen on late night TV is true. All the infomercials are absolutely true, and if you kept your head in the past twelve years you would be extremely wealthy.

    The trick is to stick to your formula no matter what happens.

    Here’s exactly what happened. The internet made everybody an over night expert in Real Estate. The hype, and buzz of a can’t lose housing market had people paying two or three times the price for a property.

    You can’t judge an investment strategy because a few million people didn’t know the formula.

    Renting is a suckers bet. Any one who thinks they are coming out ahead by renting is wrong. You are paying a fixed cost without return.

    A bigger problem is that people buy the picket fence, the idea of owning a home, rather than seeing owning a property as an investment. The only way to look at your property is as an investment. It is all return on investment.

    If you have a strategy, if you follow it, if you are willing to sacrifice, and work the strategy, because it is a second, or third job, then you can create wealth.

    I will admit that for the past year we have been in a dead market place. All you could do is sell. There is nothing to buy. We are a few months, two,or three away from being able to make a deal, but more wealth will be created in these next five years than in than past thirty.

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  44. Macro Investor

    RE: masaba @ 26

    “How in the world is his college debt 30% of his income?”

    I’ll tell you how. Many, if not most, college grads are sales clerks at department store or even starbucks — if they can even find jobs. Unless they are in a high demand field, it can take a few years to find something that requires a college background.

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  45. Macro Investor

    RE: Sniglet @ 41

    “I didn’t even try to argue… It just gets old trying to explain…”

    What really seems to get them thinking is an alternative slogan that’s just as catchy. Try telling them they don’t own anything, they’re just RENTING MONEY. Many of my cohorts now realize they’re not so different from the renter, who they once felt were so below them. After that sinks in a bit you can add how banks love getting everyone hooked on debt because then you’re basically working for them.

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  46. Chris

    RE: Macro Investor @ 45
    And for all that debt increasingly students are getting a diploma and little else. Even mainstream schools are taking over functions that used to be reserved for two year trade schools. A college education today is worth less than ever but much more expensive. And I’m not even talking about all those online schools that are set up just to get government money.

    http://www.nypost.com/p/news/opinion/opedcolumnists/the_higher_ed_bubble_ready_to_burst_1efhfqNRJpZIGBei0hq0iO?source=patrick.net#story

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  47. The Kid

    I keep trying to !@^%$!@ tell you people! This is the @!%&^!@ problem! In your late 20′s early 30′s? Have a college education? 30% of your income towards student loans is relatively normal! Not everyone had rich !$@%#^@ parents to pay their way through college. Working your way through college is impossible now. No job pays well enough. Good paying jobs out of college are a thing of the past for us. Raises are a thing of the past. Promotions are a thing of the past.

    There are no jobs for anyone, much less recent grads. Average income for a recent college grad with a bachelors degree is $28k a year. At current prices that won’t buy you a shack! The nominal unemployment rate for under 35′s is FORTY !@$%!$@ PERCENT. Add in underemployed and it pushes up to TWO !@$%$! THIRDS. Even the people WITH jobs are making joke wages!

    THIS IS THE MOTHER!@#*(@% DEMOGRAPHIC YOU ARE RELYING ON TO GET THE HOUSING MARKET MOVING? HOW EXACTLY DID YOU THINK THAT WAS GOING TO WORK!?!?

    ~pant pant pant~

    I feel better.

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  48. Kary L. Krismer

    By The Kid @ 48:

    Working your way through college is impossible now. No job pays well enough.

    Why back in my day kid (1980), UPS paid students up to $12.64 an hour, plus benefits, to sort boxes part-time. I suspect it’s less now, because they had a union contract after I left that screwed the new hire part-timers. Does anyone know?

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  49. The Kid

    By Kary L. Krismer @ 49:

    By The Kid @ 48:
    Working your way through college is impossible now. No job pays well enough.

    Why back in my day kid (1980), UPS paid students up to $12.64 an hour, plus benefits, to sort boxes part-time. I suspect it’s less now, because they had a union contract after I left that screwed the new hire part-timers. Does anyone know?

    It’s about the same now. Maybe a buck more. I applied for a job doing that a while ago. I think it may have paid as much as $14, I forget whether or not they offered benefits. But I would like to remind you that A) That was 30 years ago. and B) The price of food, gas, rent, books, tuition, and every other darn thing has skyrocketed since then. If you want to read a few good books on the subject of the economic situation of the youth, check out ‘Strapped’ and ‘Generation Debt’.

    Oh, and running that $12.64 through an inflation calculator gets you $24.87 an hour in today dollars (I assumed “in the 80′s’” meant 85′). That’s past the top of the wage scale in a current union grocery position. You had it golly good. Let’s not forget the things that were left out of the CPI that that was calculated based on.

    I’m really sorry, and honest to god I know it’s hard to accept for some people, but things just don’t work that way anymore. $14.00 an hour part time is about $225 a week. That barely covers books and tuition much less living expenses and transportation for a community college. It’s flat out less than the cost of books and tuition for a university.

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  50. BillE

    By The Kid @ 48:

    I keep trying to !@^%$!@ tell you people! This is the @!%&^!@ problem! In your late 20′s early 30′s? Have a college education? 30% of your income towards student loans is relatively normal! Not everyone had rich !$@%#^@ parents to pay their way through college. Working your way through college is impossible now. No job pays well enough.

    It ain’t cheap, but the cost depends on where a person chooses to attend.

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  51. BillE

    By Geek @ 18:

    Their houseowning friends are most likely telling them to buy. That’s what the people I know who own houses (and still owe mortgage) say to me.

    I hear it a lot too. I’ve even heard, “You haven’t bought a house yet? They’re practically giving them away!”

    I have yet to find the magical neighborhood where houses are being given away.

    Many of the people who told me to buy over the last few years were also buying homes themselves. They’re still telling me to buy even though they’ve been burned.

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  52. wreckingbull

    RE: The Kid @ 50 – Yep – All the toxic debt available to students has created a system where the cost of an education is now completely detached from reality. I really feel bad for recent grads with this sort of debt load. Why should a public or private university worry about efficiency when they know the federal government will just throw more money at the problem? The private university I attended has been raising tuition 5-7% per year for the last several decades. It now is approaching a quarter million dollars to attend, all costs considered.

    I actually had a meeting this year with the Alumni Fundraising Chair and brought this up. She seemed completely unaware of the gravity of the situation.

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  53. D. in Ballard

    Renting can suck, there’s no question. I’ve moved more times in the last three years than I care to mention, but that’s largely by choice. I wanted flexible leases just in case I found my dream house. So I rented from people who were taking their houses off the market. Twice, the landlords decided to sell later. And shockingly they both did rather well. You lose some deposit and moving costs each time and it’s a pain.

    On the other hand, I cannot bring myself to buy a house given the market of the last three years and the inventory I have seen. Sure it would be less hassle, but this is a big purchase and one that I’m not going to rush on.

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  54. D. in Ballard

    I think the problem with our education system is that it is primarily a coming-of-age experience. It doesn’t prepare graduates for the work force because it’s too general. I’ve met computer science graduates that didn’t know even the most basic concepts of computer programming. I point out computer science because you would think that that course would be geared more toward preparing the work force than say Political Science.

    Talk to people from other countries like UK, India and China and you’ll see that their secondary education was geared directly toward preparing them for a particular job. Sure it sucks if you end up not liking that job, or if you aren’t smart enough to get into college for that particular job, but the ones who graduate are more likely to find work right away than our sorry graduates who haven’t a clue.

    I have clawed my way up to my not-unreasonable salary through hard work and determination, all because my degree did nothing for me. Not all my colleagues have been able to.

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  55. Kary L. Krismer

    RE: The Kid @ 50 – Thanks, I was actually expecting the current pay to be lower than $12.64 an hour, and expecting the inflation adjusted number to be higher than your $24.00 number. That seems low since it’s only doubled in 30 years. So I’m not disagreeing with your assertion that pay is lower today than in the past for some basic jobs.

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  56. Kary L. Krismer

    By D. in Ballard @ 55:

    I think the problem with our education system is that it is primarily a coming-of-age experience. It doesn’t prepare graduates for the work force because it’s too general. .

    I think that’s always been true. They teach you about things, not how to do things.

    My favorite example of that was when I first started doing bankruptcy law, and the partner I was working for walked up to me and wanted me to prepare an “Order Shortening Time.” My first thought was: “I don’t think the bankruptcy court is that powerful.” In any case, I don’t think Orders Shortening Time are ever even mentioned in law school.

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  57. Ahau

    RE: Ira Sacharoff @ 42 – I stand corrected, thank you for the link!

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  58. Macro Investor

    I’m beginning to think all this easy credit is an intentional trap. Young people used to protest and try to change things that were wrong or unjust. How do they do that when they are one paycheck away from being homeless? Not only that, you can’t walk way from a student loan like you can with a house. IRS will pursue you for life.

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  59. Augusta Directory RE

    Perhaps he might understand the risk here if were asked questions like: If you bought this house and property taxes went up 10% would you still be able to afford it? How about if a major appliance broke like a central air unit? What would you do if you lost your job and had to go on unemployment?

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  60. Hugh Dominic

    RE: The Kid @ 48 – back in my day, you didn’t see people buying their first home until they were 30-35 or so. Right after college, renting was a certainty.

    I remember a couple years ago talking to a 23 year old kid who had purchased a starter house. That was one of the signs that something was wrong.

    (He lost his job and his house, btw)

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  61. sleepwalker

    RE: Hugh Dominic @ 61

    I don’t know how old you are, but I totally disagree. My dad and some other relatives bought houses in Redwood City back in the 1940-60′s for $2k-20k. They all had blue collar jobs. In today’s money, they would be making 30-60k a year. Houses used to be affordable. They’re not anymore.

    I guess my point is that a 19yo mexican american man with 3 babies could buy a house in a great area for an affordable price at one point.

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  62. The Kid

    By Macro Investor @ 59:

    I’m beginning to think all this easy credit is an intentional trap. Young people used to protest and try to change things that were wrong or unjust. How do they do that when they are one paycheck away from being homeless? Not only that, you can’t walk way from a student loan like you can with a house. IRS will pursue you for life.

    Indentured servitude. Some companies are even skipping the middleman entirely and paying for educations in return for a period of mandatory employment. Leave early you have to pay back your entire education cost.

    However, I would like to address a point you just made there “Young people used to protest and try to change things that were wrong or unjust.”. Lemmie clue you in a little. When you say “young people used to” you’re talking about baby boomers. Not any of the generations before, and not any of the generations after. The baby boomers could get away with it because they were demographically huge, and economically powerful. Someone to be pandered to. The youth of today are such a small generation in comparison that they are easily ignored. Point two is that we are talking about protesting an injustice that doesn’t even become clear until you are in your late 20′s and trying to live like an adult, and find out the world no longer permits you to, after you’re been fed the lie your whole life of “just work hard and it will come”.

    RE: Hugh Dominic @ 61
    That’s still the case Hugh, the average age of purchasing your first home is, I believe still, 33. Not much has changed there, if anything it’s gone up. The problem is, both rent and owning have gotten so un-affordable that spending 50% of your income on rent doesn’t seem unreasonable anymore. What other choice do you have? Most people are going to be paying their student loans, with no hope of income increases, until their 40′s. Or longer.

    But I digress. The important point I was trying to make, have been trying to make, will continue trying to make, is that the demograpic that is being relied upon in order to prop up the housing markets, that is the only market for starter homes, that is being crowed as the savior or real estate (anyone else get the “Here come the Echo Boomers!” ad?), that everyone dreams of selling their home to (How many times have you heard, “Well I’ll just sell my home to some cute young couple with a new baby, because it’s so nice and in a good neighborhood” from someone trying to offload a $300k+ house or condo?).

    IS FLAT ASS BROKE.

    So, someone explain to me how housing is going to stop declining before the prices of the entry level homes are in line with people who are largely making less than $30k a year, and already have to spend 20-30% of their income servicing the debt they accrued trying to get an education.

    That guy on the radio program? He’s normal. Not irresponsible, not delusional. Normal of your market. Let that sink in for a moment. Now tell me how overpriced homes are. Now tell me how overpriced rents are. If you can’t sell a home to “Trevor”, there’s no one left to sell a home to.

    Think about it.

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  63. patient

    By Macro Investor @ 59:

    I’m beginning to think all this easy credit is an intentional trap. Young people used to protest and try to change things that were wrong or unjust. How do they do that when they are one paycheck away from being homeless? Not only that, you can’t walk way from a student loan like you can with a house. IRS will pursue you for life.

    A free man is the most difficult to control. Free people is not in the interrest of the elite. Since the constitution grants us many freedoms, debt slavery is the easiest to impose on people, especially since the majority seems more than willing to jump in head first.

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  64. S. Marty Pantz

    By Hugh Dominic @ 61:

    RE: …I remember a couple years ago talking to a 23 year old kid who had purchased a starter house. That was one of the signs that something was wrong. (He lost his job and his house, btw)

    I remember reading in the USA Today newspaper, in June of the summer that Nate McMillan went to coach for Portland (using Google, I see that was the summer of 2005), an article about people buying Miami condos sight-unseen; condos that hadn’t even been built yet. That’s when I suspected there was a RE bubble. Then, a year later, the summer of 2006, I was sharing a lunch-time table with recent law school graduates who mentioned they had just bought a home. (They had just been hired by the King County Prosecutor’s Office, and could not have been making huge bucks as District Court Prosecutor newbies.) When I asked how much they had put down, I was told they had gotten an interest-only loan for the “20% down.” That was when I was convinced we were in a bubble.

    As your post suggests, Hugh, and as they have been saying since at least the 1920s, when the shoeshine boy is buying, that’s when it’s time to get out ’cause we are near the top of the bubble.

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  65. Urban Artist

    I have more in common with the KID and his comments. However, I know I am much older than he is and I was on the tail end of the so called Boomers. I have never owned a house it took me awhile to find a place I wanted to stay. Plus I got my degree in commercial art needless to say not always well paid. When I was in my 20′s and 30′s nobody was even thinking of buying a house. Just when we felt ready to buy then came the dot com bubble burst, that was my layoff. Never quite recovered from that. I would be one of those underemployed no one likes to talk about I had to work my way through school to get my degree and I was flat broke for many years after that. I have never regretted getting my degree. I think getting a degree now is even more expensive and I can see the loans getting out of hand because grants are harder to come by and students are forced to get loans at higher interest. I think the pressure to buy a house is even greater. It is like people see renters as one step above homeless. I have had comments like if you were responsible you would buy a house etc…At my age people really think it is crazy that I have never owned a house. For a long time rents were reasonable and it worked out better to rent we used our money to buy a little land and other investments, which is not a lot. But rents are now so high it has crossed that line that i consider reasonable.

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  66. Willy Nilly

    RE: patient @ 64

    Many years ago I worked for a company in which the management made it a point to make sure that salaried employees were leveraged to the hilt so they were locked in and thus could be exploited. Boats, cars, motorcycles, RV’s, the COO led by example and at one point had 24 registered vehicles (cars, boats, trailers, etc.). I was the only one who refused to over commit and use every small pay increase to take on yet another payment. They hated me for my freedom posture, and outright told me so. I was passed over on several promotions due to my ability to have options. Debt slavery is awesome for the masters, for the minions not so much. I personally see this economic crisis as a necessary interrupt to the lifestyle mentality of over consumption, as well as an opportunity.

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  67. Daniel

    By D. in Ballard @ 55:

    I think the problem with our education system is that it is primarily a coming-of-age experience. It doesn’t prepare graduates for the work force because it’s too general.

    I have to disagree here. In fact quite often the education is too specific starting already in mid-school. Children memorize things instead of learning to understand the world around them. As a result reading comprehension is at an all time low and for math and physics many high school grads think the goal is to remember as many formulas as possible, without any understanding for their meaning.

    Gearing a university education towards jobs is idiotic. In the relevant fields the jobs change so quick it would be much better for people to learn concepts rather than useless knowledge.

    To stay with your programming example: Once you understood all concepts and one programming language you can learn all others within days. Part of this is some practice in one language.

    Go and look at job ads which demand all kind of nonsense specific requirements that any moron can pick up in a few weeks. Is that what we should gear our education to?

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  68. HappyRenter

    Sorry, pasted into the wrong blog.

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  69. Kary L. Krismer

    RE: The Tim @ 70 – The state raising public school tuition is allowing the private schools to go up too.

    What bothers me is that the state is still allowing people to buy GET credits. IMHO, that’s just a subsidy for more wealthy people which will cause tuition to go up more in the future (or education funding to suffer).

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  70. Kary L. Krismer

    One more thing on tuition. I mentioned my college era pay of $12.64 an hour. I think a quarter at the UW was $180 when I started, and then it went up to $210. I don’t remember for certain, but I think law school at the UW started at about $600 a quarter. I’m not certain, but isn’t the UW undergrad tuition well over $1,000 a quarter? $2000?

    So, in addition to pay having gone down since then, the tuition has gone up significantly.

    Oh, and another thing on private tuition. My guess is they offer more student aid now than before.

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  71. BrianCGreer

    I’m sorry but Trevor is not so crazy, neither is the Kid.

    “That guy on the radio program? He’s normal. Not irresponsible, not delusional. Normal of your market. Let that sink in for a moment. Now tell me how overpriced homes are. Now tell me how overpriced rents are. If you can’t sell a home to “Trevor”, there’s no one left to sell a home to.”
    -The Kid

    In 2003, I watched as the housing market stumbled post 9/11, many told me to stay away with the uncertainty of the times. I had a job and was able, so I bought my first house at 23, it was a good portion of my income and I had to make some personal sacrifices to make it work for me. In 2007 I was ready to sell as the market looked to be peaking, after costs I walked away with a buck60 and parlayed that into a college education and now another house as the market is at a low again and money rates are favorable. I will not make an argument that owning/buying a home is for everybody but it’s silly to argue that there is no merit in it or not any money to be made, because there is. Even today there is money to be made, perhaps more so now than any other period in our lifetimes. Are we “at the bottom”? Maybe, or maybe not and it does yet look uncertain, but if you aren’t willing to take risks, don’t expect to be rewarded.

    Trevor, with his down payment, could be spending roughly the same in monthly costs to live in his own home as he would pay to rent a two bedroom house in Tacoma. There are many houses in the nice N Tacoma area to be had for under 200K, with a conventional buying scenario that would leave Trevor with an approximately 1,000 monthly mortgage payment. Not such a bad idea and he could be heavily rewarded for making such a decision down the road. Not to mention that his student loans are probably mostly of the low interest rate variety and he presumably will be able to increase his salary after he gets out of the entry level status he probably occupies now.

    Again, I’m NOT saying he should do this, nor am I saying anyone should, I simply think it’s important to acknowledge that it’s not a dumb idea and it certainly doesn’t warrant the knock it’s been given here.

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  72. Chuck Ponzi

    To answer the question:

    If you’re leadership at the NAR, it’s always the bottom, so it’s always a good time to buy (or sell) a home.

    Double plus good.

    Chuck

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  73. Chuck Ponzi

    By Willy Nilly @ 67:

    RE: patient @ 64

    Many years ago I worked for a company in which the management made it a point to make sure that salaried employees were leveraged to the hilt so they were locked in and thus could be exploited. Boats, cars, motorcycles, RV’s, the COO led by example and at one point had 24 registered vehicles (cars, boats, trailers, etc.). I was the only one who refused to over commit and use every small pay increase to take on yet another payment. They hated me for my freedom posture, and outright told me so. I was passed over on several promotions due to my ability to have options. Debt slavery is awesome for the masters, for the minions not so much. I personally see this economic crisis as a necessary interrupt to the lifestyle mentality of over consumption, as well as an opportunity.

    Remember Hanlon’s Razor:

    Never attribute to malice that which can be adequately explained by stupidity, but don’t rule out malice.

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  74. EconE

    Let me put my shill cap on…

    3
    2
    1

    First time poster here!

    I TOO was looking to buy a house back in (insert year here) but prices were just CRAZY!

    Thank GOD I found this blog! It SAVED my life/marriage.

    Of course I never posted anything before, but now that I’m a homeOWNER, I just had to come here and share my story.

    Aren’t I great!

    I have a GREAT job, and now that we’re at the bottom I’m absolutely SURE that I made the best decision and I just HAD TO HAD TO HAD TO come here to Seattle Bubble and post about my wonderful decision to become a homeowner.

    I got such a GREAT deal.

    Big wet kiss to ya Tim!

    Yay Seattle Bubble!

    There has never been a better time to buy!

    Houses are cheaper than they have ever been! (from my 20 something year old perspective)

    How could you NOT take advantage of the low rates!

    gush gush gush

    too funny.

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  75. tomtom

    It’s *always* a good time to transact (w/ commission).

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  76. BrianCGreer

    Nice try #77. I’m not looking for your approval or sarcasm, let alone your business, if I was hiding anything I would have given myself some super clever persona like RealEstateB.

    It seems as though most posts here are not referencing a real or personal experience, just banter about something that happened to so and so or what they heard on the evening news about this or that and how they can justify their presuppositions. That’s all fine and well, but I thought it would be relevant to add a real life personal experience how one can use their resources to work for them and be able to fully enjoy their investment through that process. Home ownership is unique and carries plenty of value for the right person. Others may prefer to lock their nest egg up in the marketplace (ouch), choose what suits you.

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  77. wreckingbull

    RE: BrianCGreer @ 79 – Since I am choosing not to buy yet, I had no choice but to put my entire nest egg in Hummel figurines. No other choice. Home or Hummels. I sure hope I don’t get kicked out, since my life is on hold, and I would then have to bubble wrap the entire Uhaul in order to move my collection to the next tenement.

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  78. D. in Ballard

    RE: Daniel @ 68 – What you say makes a lot of sense, but in my real world observation Europeans, Chinese and Indians are out-competing Americans in several high-earning categories. I have no facts, but it’s an impression I get. We had interviews at my company a few months ago. Of the 6 candidates I saw, the two most impressive were Asians (not Asian American). Coincidence? Possibly. Maybe all the fantastic Americans workers have jobs and thus aren’t interviewing. And I’m not predisposed to thinking Asians are any smarter than anyone else.

    As for college teaching people how to think, I think it absolutely should. But in this job market being a smart person who can think isn’t enough to get a job. Many companies want proven success or proven experience with something. I just don’t think the American higher education system provides that.

    Finally, the basic concept this Computer Science graduate I met didn’t know was that code is stored in text files with various extensions. Maybe he was a stoner.

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  79. Racket

    “Of the 6 candidates I saw, the two most impressive were Asians ”

    I would imagine that Americans in other countries might be more impressive people, than the average person as well.

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  80. The Kid

    RE: The Tim @ 73 – Totally reasonable. And once you have that shiny new degree, and after a few years of unpaid internships, your income will SKYROCKET up… another 5k a year.

    Simple thought experiment here:

    We all know wages have remained stagnant since 1975.
    We all know the cost of a college education has increased some %2000 since 1975.
    How valuable is a degree now?

    We have reached the point where the cost of a degree is no longer offset by the likely increase in income from having one. From a financial perspective, a degree is a net loss.

    Not every degree, and not for everyone, but speaking strictly as averages.

    When we cease compensating people for education, this is what happens. If we do not correct this situation, and soon, people will just stop getting educated. Then we’re really screwed.

    Of course, the flip side of this is that the miracle of the internet and public libraries means we have all the information you used to have to pay a premium for available for free at our fingertips. The world, she is a changin’.

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  81. D. in Ballard

    RE: Racket @ 82 – There’s something really annoying about these threads where people try to read your mind. Look the interview was a test. What do you know about these 10 concepts and how have you used them in your work. It’s not because they were foreigners that we liked them. Maybe in your line of work you can hire people based on personality, but at my work, people have to know what they’re doing.

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  82. Kary L. Krismer

    By The Tim @ 73:

    By Kary L. Krismer @ 72:
    One more thing on tuition. I mentioned my college era pay of $12.64 an hour. I think a quarter at the UW was $180 when I started, and then it went up to $210. I don’t remember for certain, but I think law school at the UW started at about $600 a quarter. I’m not certain, but isn’t the UW undergrad tuition well over $1,000 a quarter? $2000?

    They certainly don’t make it easy to find, but assuming I clicked on the right pdf from this enormous list, it looks like it’s $2,900.

    1,280% increase in cost for school, 50% decrease in student-job pay. Seems perfectly reasonable, right?

    Wow. That’s crazy. Almost $9,000 a year just for tuition?

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  83. Kary L. Krismer

    RE: BrianCGreer @ 79 – I think you had a good point about prices in Tacoma. They are much lower than in the Seattle area.

    Even still though, my point about Travor ignoring the bank turning him down has merit no matter what the price of the house, or how good of a deal it might be (unless maybe it’s such a screaming deal that he can turn around and sell it for 20% more than what he paid).

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  84. Racket

    By D. in Ballard @ 84:

    RE: Racket @ 82 – There’s something really annoying about these threads where people try to read your mind. Look the interview was a test. What do you know about these 10 concepts and how have you used them in your work. It’s not because they were foreigners that we liked them. Maybe in your line of work you can hire people Pbased on personality, but at my work, people have to know what they’re doing.

    Who’s trying to read anyones mind? who is talking about 10 concepts. I feel like i need to be a mindreader to reply to your response.

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  85. deprogram

    By Urban Artist @ 28:

    Rents in Seattle are still super high and I think many people figure if they are going to pay that much they might as well buy. Also renting is pretty risky now. I have heard of people signing leases only to have the houses go up for sale or get foreclosed. Maybe if I was single but I do not want to put my kids through that especially since it was not my financial folly. I don’t care if it is still cheaper to rent than buy, 2,000 or more a month to rent is still crazy.

    $2000 a month should get you a pretty nice place these days. You can pay substantially more than that, as you could in other markets, Boston, SF, etc. Places with geographic constraints and relatively high incomes will have high rental rates per sq/ft. That’s just economic reality. Besides, why is there a high end luxury rental market here? Because there’s demand for it. You can’t compare a $2500 Seattle rental with a $2500 rental in Columbus because there’s simply no high-end rental market there – or very little. Actually, comparing them now, the rentals here at that price point are a lot nicer. Unless your thing is an enormous mcMansion.

    As far as renting being risky: I love how people think there’s all this legal protection for renters. We were given 20 days to have our stuff out of our rental ($1550/month, had been renting for 1.5 years) when our landlords decided to put their house on the market. Then they changed their mind after a week. They were totally within their legal rights.

    Maybe they were getting back at me for being unwilling to commit to a second year-length lease. Maybe I was just tired of being harassed about paying rent 2-3 days after the end of the month. ‘We are late on our mortgage’ is a stupid thing to tell me. Like I care!

    I’m much happier renting from a bank, now. My down payment was less than double what I’ve put down for a rental before, and the bank isn’t going to make up flimsy excuses in order to keep it. They don’t harass me about my pets. I’m not paying a monthly penalty for having ‘large’ dogs anymore. My monthly payment is $120 less than I was paying in rent. I have a bigger house with more privacy.

    Trevor: I fail to understand you. Yes, the Tacoma market has been falling for quite a while, and has seen huge corrections. So, if you’re primed to buy, why didn’t you take advantage of the first time buyer’s tax credit, huh? Waiting until you’re married? Come on. On the kind of property I hope you’re looking at, that would have been a 4+% discount. Oh, and why are you putting so much money down? The market here is still falling. I personally expect to take 30% depreciation over the next five to ten years, and I’ll be happy if that’s all it is. I don’t really care. According to my insurance policy, it would be impossible to replace my house in equivalent materials for less than $340k. That’s a cruel joke, though – nobody is building new construction like this, anywhere.

    I don’t know why he’s complaining about being unable to get financing either. Think of all the money they’re saving you, Trevor! You’ll be grateful later.

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  86. Kary L. Krismer

    RE: deprogram @ 88 – The tenant protections mentioned here have been the new protections that only apply to (certain?) foreclosures. Seattle I believe has some protections against a landlord simply terminating a tenancy, unless they or a family member want to live there, but otherwise I think in most (all?) the rest of the state the landlord can simply refuse to renew a lease, or terminate a month to month.

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  87. deprogram

    RE: Kary L. Krismer @ 89 – You are correct. Seattle adds some additional protection to the admirably uncomplicated state statutes. It’s definitely preferable to rent in Seattle, but getting a house with a big yard within the Seattle city limits is, well, expensive, even in the scariest parts of the city.

    I honestly don’t think the laws are as much of a problem as the reluctant landlords who are completely unprepared and are unqualified to be renting to anyone. The people we were renting from should never have bought the property, and I guess the family member that put up the down payment wanted it back. Huh. That’s a nice anecdotal example of what you were mentioning earlier, Kary. Three years after 2006 the market was supposed to be up, right? Ha.

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  88. Urban Artist

    Deprogram, I agree 2,000 to rent would be expected in SF or Boston but as much as I like Seattle it is not even close to SF and Boston. I also agree I’m now at the point if I have to pay that much for rent I would rather have it be to the bank and they wont care what color I paint the place etc..Anyone who thinks we have good rental protections has not rented for awhile or are very lucky with landlords.

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  89. corncob

    By Urban Artist @ 91:

    Anyone who thinks we have good rental protections has not rented for awhile or are very lucky with landlords.

    Or they are stupid and either don’t get a lease, or just sign whatever lease is put in front of them. I am amazed at how otherwise smart people are so non-chalant about signing a lease that has all sorts of terrible-for-you clauses embedded within it. Renting is a two way street, get a lease you agree with or don’t lease, and if you go month to month remember that you also get to give 20 days notice as much as they do.

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  90. corncob

    By D. in Ballard @ 84:

    RE: Racket @ 82 – There’s something really annoying about these threads where people try to read your mind. Look the interview was a test. What do you know about these 10 concepts and how have you used them in your work. It’s not because they were foreigners that we liked them. Maybe in your line of work you can hire people based on personality, but at my work, people have to know what they’re doing.

    I have been doing a lot of hiring of CS people recently and the one thing I have come out of most phone interviews and in persons is that many people in the field, regardless of their national origin, suck at it. They manage to get hired by lazy or incompetent managers at other companies so it just looks like they actually might know what they are doing.

    People from India and China are just as likely to have “degree mill” I-can’t-code CS education as Americans, it is just much easier to screen Americans at the resume level because you know that “Alabama School of Automotive and Computers” is a joke, but a 4.0 with honors at “Shangzhu Polytechnical Institute” (almost always paired with an MSCS from an unknown-American “university”) sounds like it might be better.

    The simple fact is that in our line of business it is extremely hard to get to the good people based on just their resume. Way too many people somehow scrape out a CS degree at your run of the mill college (which are usually more technical focused and less fundamental focused) and then sit at a white board not knowing what a linked list is except how to consume it. As far as I can tell there are only a handful of good schools anywhere in the world which teach CS fundamentals well. All of the others are pretty much chocolate, so if the person is not extremely intelligent, good at self-teaching and working on outside projects they are doomed to clog the system.

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  91. Tim McB

    RE: The Tim @ 70

    Holy Cow, I didn’t realize SPU had gotten so bad. It looks like I graduated the same year as you Tim (’02). I’d never pay those prices now. I guess they have to pay handsomely to have Robert Shiller speak there.

    http://seattlebubble.com/blog/2009/04/27/robert-shiller-at-spu%E2%80%94psychology-and-the-housing-market/

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  92. Astro Kermit

    By Kary L. Krismer @ 4:

    Realtors don’t focus on buying at the bottom, as if that’s even possible except through pure luck.

    You are also generalizing Kary.

    All realtors focus on making a living which isn’t at the “bottom” or “top”, It’s “now”, which isn’t in the best interest of their client.

    By Kary L. Krismer @ 4:

    Not everyone is willing to put their lives on hold just because the market has been declining and might decline further.

    They may not be willing, but they will all learn to accept that “renting” does not mean that they have to put their “lives on hold”.

    I have a number of homeowner friends trapped from relocating to different jobs due to undervalue values. I would say that would be putting their “lives on hold”.

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  93. Kary L. Krismer

    RE: Astro Kermit @ 95 – As to the first point, it’s my position that real estate agents should not be advising their clients to buy or sell, or when to buy or sell, except minor timing changes (e.g. perhaps don’t start a listing between Thanksgiving and Xmas.) Agents should help clients do what they’ve already decided to do.

    As to the second point, I addressed that days ago. If you’re happy renting, then by definition you’re not putting your life on hold. By analogy, I don’t want to go to San Fransisco right now, so I’m not putting my life on hold by not going anywhere today.

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  94. RoflCatDown

    My only concern with buying at or near “the bottom” is this: There’s a difference between buying a home and buying a home while it is still actively depreciating. I don’t want to make money selling my house, I just don’t want to be in a hole financially less than 1 month after purchase.

    I can assume this risk when buying a car. It’s a couple of thousand dollars at most. When you assume this risk when buying a house you’re talking tens if not hundreds of thousands of dollars.

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  95. Ira Sacharoff

    By RoflCatDown @ 97:

    My only concern with buying at or near “the bottom” is this: There’s a difference between buying a home and buying a home while it is still actively depreciating. I don’t want to make money selling my house, I just don’t want to be in a hole financially less than 1 month after purchase.

    I can assume this risk when buying a car. It’s a couple of thousand dollars at most. When you assume this risk when buying a house you’re talking tens if not hundreds of thousands of dollars.

    How would you be in a hole financially less than a month after purchasing? Because you could only sell the house for less than you paid at that point? Why would you want to own a house for only a month?
    One shouldn’t own a depreciating asset. Isn’t that a reason to avoid buying altogether, no matter the market? Should you only buy a house if you know that house values are going up? If you’re the kind of person who is going to check the Zillow value of your home on a weekly or monthly basis, it might be a lot better for your sense of sanity to just keep renting. There were a lot of people who looked at Zillow regularly when prices were going up, counting the money they’d “made”. Strikes me that’s not all that different than buying a place and focusing on how much it’s dropped in value.
    Isn’t it more important to only buy a house that you can afford, no matter what the market is like, or at least seeing that historical home price to rent or home price to income ratios are not totally out of whack?

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  96. Michael

    I’m closing on a condo that was sold on 1983 for $68000. It sold 8 years ago for $125000, I’m paying $ 76000.I don’t care about the market conditions ….this is a great piece of property for the money…so affordable, and with minimal work, a nice home..

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