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.

34 responses to “Monday Open Thread (2012-02-13)”

  1. softwarengineer

    The Coastal Areas of America, Like Seattle Have Chronic Population Density Increase With No End in Sight

    http://oceanservice.noaa.gov/websites/retiredsites/sotc_pdf/POP.PDF

    This clearly means lower wages and lower real estate prices.

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  2. softwarengineer

    RE: softwarengineer @ 1

    The Article I referenced doesn’t admit to lower wages and lower real estate prices with increased population density in Seattle, they also never predicted the real estate bubble in Seattle either.

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  3. softwarengineer

    Marine Biologists Tell Me the Orcas Have too Much Heavy Elements in Their Blood from Overpopulation/Pollution Around Puget Sound

    “…LONG BEACH, Wash. —
    A dead killer whale washed ashore over the weekend near Long Beach….”

    http://seattletimes.nwsource.com/html/localnews/2017495433_apwadeadorca.html?syndication=rss

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  4. Kary L. Krismer

    By softwarengineer @ 2:

    RE: softwarengineer @ 1

    The Article I referenced doesn’t admit to lower wages and lower real estate prices with increased population density in Seattle, they also never predicted the real estate bubble in Seattle either.

    How do you get to lower prices with higher demand?

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  5. No Name Guy

    RE: softwarengineer @ 2

    Yes, because of those high densities, both New York and Tokyo have low wages and low RE prices.

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  6. deejayoh

    By Kary L. Krismer @ 4:

    By softwarengineer @ 2:
    RE: softwarengineer @ 1

    The Article I referenced doesn’t admit to lower wages and lower real estate prices with increased population density in Seattle, they also never predicted the real estate bubble in Seattle either.

    How do you get to lower prices with higher demand?

    By being SWE

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  7. Scotsman

    Vegas rental market collapsing.

    http://patrick.net/forum/?p=1208481

    “I’ve had to reduce my asking price by almost $200 with the hope of getting a tenant and am still waiting for one as I go out of pocket to cover my mortgage and other costs for the second month in a row. In less than one year, my property has been on the market three times.”

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  8. Kary L. Krismer

    RE: Scotsman @ 7 – I haven’t been to Vegas for years, but I’ve never understood what would cause a boom in their condo market, unless perhaps a timeshare scam. The same issue would exist for their rental market. Where would the demand come from?

    What would there possibly be in the Vegas economy that would support more expensive housing? Maybe there’s an industry there I don’t know about, besides entertainment and gambling????? Is it a retirement destination? What would drive it, besides bubble momentum and hype? I can see how Vegas would generate hype.

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  9. Blurtman

    Dare I say, that those who have some free time Google the definition of “santorum.”

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  10. ChrisM

    An article listing settlement details by state. Not sure how accurate this could be, given that the judge hasn’t approved…

    I was surprised to see Maryland how fared. I wasn’t aware they had bubble problems.
    http://www.snl.com/InteractiveX/Article.aspx?cdid=A-14188372-11823

    And doesn’t everyone on this blog read Dan Savage? :-)

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  11. Blurtman

    RE: ChrisM @ 10 – Who knows what the rationale is/was for deciding what hypothetical monies go where? Perhaps Maryland had significant robosigning “abuses.”

    And continuing the descent into juvenile humor….

    “Congressman Boehner was alarmed to find fresh santorum on the seat of his rental car.”

    And in the vein of re-defining “crimes” as “abuses”:

    “The gunman settled a civil suit for past cash withdrawal abuses.”

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  12. softwarengineer

    RE: deejayoh @ 6

    Homes Down 19% in Covington the Last Year By Seattle Times

    Ohhhh…that’s right, I secretly work at the times to lie to you….LOL

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  13. Kary L. Krismer

    RE: softwarengineer @ 12

    I’m showing 204 houses sold with a Covington address in 2010, with an average price of about $246k.

    I’m showing 252 houses sold with a Covington address in 2011, with an average price of about $210k.

    It’s possible that article is using the Covington city limits, and excluding tax free Fannie and Freddie type transactions, but for the larger area total sales and dollar volume are both up.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

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  14. ChrisM

    Keep Portland Weird!

    http://www.oregonlive.com/portland/index.ssf/2012/02/portland_police_arrest_five_sq.html

    “After officers arrested five people accused of “squatting” in two Portland homes, police said they are investigating what could be a “larger, organized effort” to take advantage of vulnerable property owners.”

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  15. Kary L. Krismer

    Here’s what a settlement looks like if your wrongful foreclosure claim isn’t just a bunch of nonsense. ;-)

    http://www.housingwire.com/article/military-members-may-get-six-figure-payday-wrongful-foreclosures

    “Wells, Citi and Ally will pay a military family a minimum $116,785 plus any lost equity in a home wrongfully foreclosed upon.”

    This has been the issue I’ve been hitting on as being real and significant, and the difference in settlement amount demonstrates my assessment was correct. $1,500 to $2,000 compared to six figures!

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  16. Kary L. Krismer

    I have an idea for a piece for Tim. A caption contest for the photo in this article:

    http://money.cnn.com/2012/02/14/real_estate/dating_homeownership/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

    http://i2.cdn.turner.com/money/2012/02/14/real_estate/dating_homeownership/hot-tub.ju.top.jpg

    (The article claims home owners are more likely to get a date, but the photo is far funnier.)

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  17. deejayoh

    RE: softwarengineer @ 12
    Covington, center of the universe

    you got me there

    I am sure that population density is going through the roof in Covington.

    Or maybe 4 or 5 developers there lost their entire holdings to the bank? Skewing the statisitics for a small community? Do you think?

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  18. Blurtman

    Geithner (gaaaak!) speaks: George W took us from a projected trillion dollars surplus to trillion dollar deficits – two unfunded wars, tax cuts, expansion of Medicare.

    http://finance.yahoo.com/video/companynews-18928726/geithner-deficit-largely-from-bush-admin-28307717.html

    Dave, please take the “W” sticker off the bumper of your Escalade pick-up.

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  19. Blurtman

    RE: Kary L. Krismer @ 16 – “It’s been over three minutes. Perhaps we should let the realtors come up for air.”

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  20. Kary L. Krismer

    RE: Blurtman @ 19 – Mine would be:

    My agent said I’d get dates, but he didn’t mention the swim suit.

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  21. Scotsman

    RE: Blurtman @ 18

    One picture to refute Mr. G:

    http://si.wsj.net/public/resources/images/ED-AO904_1obama_G_20120213173908.jpg

    Even if revenues had held, the spending is all Obama’s. The Timmy G. probably isn’t even man enough to have his own children, let alone take responibility for the current mess.

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  22. Scotsman

    RE: Kary L. Krismer @ 20

    He just wants that suit off. She knows it. Let the games begin.

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  23. Blurtman

    RE: Scotsman @ 21 – It was George W who began the bailouts – saving capitalism by abandoning its principles or some such bourbon and cocaine feuled gibberish.

    http://www.businessinsider.com/government-spending-2011-7
    http://articles.businessinsider.com/2011-07-26/news/30010325_1_bush-tax-spending-bills-fiscal-responsibility

    “Federal government spending has risen under President Obama, mostly because of the $800 billion stimulus designed to offset the massive recession he inherited from President Bush. But the increase in federal spending under Obama is dwarfed by the colossal increase under President Bush.

    As you can see, from 2000 to 2008, under President Bush, Federal spending rose by $1.3 trillion, from $1.9 trillion a year to $3.2 trillion a year.

    From 2009 to 2011, meanwhile, under President Obama, federal spending has risen by $600 billion, from $3.2 trillion a year to $3.8 trillion a year. It has also now begun to decline.

    In other words, federal government spending under President Bush increased 2X as much as it has under President Obama.

    So, who’s responsible for the explosion in federal spending?”

    Tsk, tsk, Scotsman. Rather shallow analysis, by design. Shame on you.

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  24. Scotsman

    RE: Blurtman @ 23

    Go slap yourself silly o brilliant one. Comparing 8 years to 3 years for cumulative increases and totals must be part of the new democrat math. For your analysis to have any validity we’ll need to wait another 5 years, and by then it will be a total blow-out in the big O’s favor.

    Last I checked $800B of stimulus is a whole lot less than the $5T increase in the debt we’ll have by the time the democrat’s “Big O” is over. (Sorry, no multiples for you)

    Finally, the only thing that’s decreasing is the rate of increase. If you think the federal budget will total less next year than it did this year you are challenged beyond hope.

    Over to you, Bucky-

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  25. Kary L. Krismer

    RE: Blurtman @ 23 – Yes spending increased under Bush, but the stimulus passed in 2008 was done in consultation with then President-elect Obama. All the Bush era did was prove that the Republicans are no better than Democrats when it comes to spending other peoples’ money.

    Anyone care to find the record of his vote in the Senate?

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  26. ChrisM

    I voted for Perot…

    https://www.youtube.com/watch?v=HfvvYuO6zHM

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  27. Scotsman

    RE: Kary L. Krismer @ 25

    Obama voted for the initial 2008 bill, but was sworn in by the time the much larger 2009 bill came up for a vote:

    http://www.votesmart.org/candidate/key-votes/9490/

    http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

    Overall, it’s striking how little he voted on anything. Big leader, that O.

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  28. Scotsman

    http://www.thefiscaltimes.com/Columns/2012/02/14/The-One-Percent-Workforce-Threatens-US-Growth.aspx#page1

    “The failure of our schools to educate our children may reflect the quality of our teachers. But it surely reflects the quality of America’s parents. Parents have off-loaded the responsibility for educating their children onto the schools. In so doing, they have sent a message to their kids that striving for excellence is not important, that being diligent is useless. The Michigan Department of Education lays it out clearly:

    “The most consistent predictors of children’s academic achievement and social adjustment are parent expectations of the child’s academic attainment and satisfaction with their child’s education at school. Parents of high-achieving students set higher standards for their children’s educational activities than parents of low-achieving students.”

    Government institutions can’t solve all our problems, and they can’t absolve us of our responsibility. One parent who is not a “tiger mom” told me, “I hope that school doesn’t ruin my children’s education.”

    As we pore over President Obama’s $3.8 billion budget proposal, it’s clear that our national debt will increase to a troubling $18.7 trillion by 2021. We don’t know whether cutting government spending, raising taxes, stimulating the economy or all of the above can help reduce our debt. But one thing is clear: America is producing an undereducated and underperforming workforce that will not be able to drive economic growth.

    RELATED: Why America’s College Students Don’t Graduate

    As of right now, with the unemployment rate at an improved but not impressive 8.3 percent, 3.4 million jobs remain unfilled, according to the latest BLS data. One reason is that underwater homes prevent some job seekers from moving to where the jobs are. But another reason is Americans don’t have the skills required in today’s job market. Manpower surveys of more than 1,300 U.S. employees find the jobs most difficult to fill include skilled trades, sales representative and engineers. And let’s not kid ourselves: Those skills are not just math and science related. They are language skills and proficiency in everything from history and geography to literature and philosophy.

    Top companies like Google and Apple are looking for the best and the brightest – people who can “think different,” as Steve Jobs said. If tech companies aren’t the litmus test, try the television industry, which on the surface does not seem to hire high IQ candidates. It is, however, loaded with above-average, smart and dedicated people. One reason – if producers, directors, editors, or on-camera talent do not perform, they’re out. Plain and simple. Or try manufacturing. Caterpillar has hundreds of unfilled job openings for sales representatives, machine operators, et al, but can’t find qualified people to fill them.

    Jobs for the less educated are going away. The knowledge economy has officially kicked in, and we’re woefully behind the curve. Clerical workers are being replaced by cloud-based software programs; store clerks are being replaced by self checkout systems; and most dramatic, manufacturers are creating assembly lines that are 100 percent robotic. Cisco’s Superbowl ad, showing “assembly lines that fix themselves,” is fair warning that when possible, companies will hire a robot that doesn’t need salary, a union, health care or a pension before they’ll hire a human being.

    The result is that we’re heading for a ‘one percent’ workforce. A workforce not of rich people, but of an educated elite that cannot be replaced as easily by technology. Former Secretary of Labor Robert Reich predicted this conundrum in his prophetic 1991 book, The Work of Nations: Preparing Ourselves for the 21st Century. He said, “Each nation’s primary assets will be its citizens’ skills and insights. Each nation’s primary political task will be to cope with the centrifugal forces of the global economy, which tear at the ties binding citizens together – bestowing ever greater wealth on the most skilled and insightful, while consigning the less skilled to a declining standard of living.” Closing the income gap will be impossible if we don’t close the skill gap, but the burden for closing that gap should not be placed on the shoulders of teachers alone.

    Parents as Teachers
    Twenty-six years ago, when the millennial generation was in its infancy, I co-founded a parenting magazine called CHILD. We published a number of articles on education and learned about experimental programs that were designed to help disadvantaged children who needed remedial help, and programs for privileged children who benefitted from accelerated learning. The educators and pediatricians we spoke with – Ed Zigler at Yale, who founded Schools of the 21st Century, T. Berry Brazelton, known as America’s pediatrician, and Jim Levine, then VP of the Bank Street College of Education and founder of The Fatherhood Project, to name just three – may have had different approaches to educating America’s children, but they all agreed on one thing: Without a parent or parents who set a child’s expectation for achievement, and who understand and foster the learning benchmarks that are essential to success, the child is set up to fail.

    President Obama should be commended for pushing high schools and colleges to improve the quality of their course work and to make education far more affordable for the average American – although his proposals only scratch the surface of the problem. The failure of our schools to educate our children may reflect the quality of our teachers. But it surely reflects the quality of America’s parents. Parents have off-loaded the responsibility for educating their children onto the schools. In so doing, they have sent a message to their kids that striving for excellence is not important, that being diligent is useless. The Michigan Department of Education lays it out clearly:

    “The most consistent predictors of children’s academic achievement and social adjustment are parent expectations of the child’s academic attainment and satisfaction with their child’s education at school. Parents of high-achieving students set higher standards for their children’s educational activities than parents of low-achieving students.”

    Government institutions can’t solve all our problems, and they can’t absolve us of our responsibility. One parent who is not a “tiger mom” told me, “I hope that school doesn’t ruin my children’s education.”

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  29. Blurtman

    RE: Scotsman @ 24 – With regards to spending, it is true that the rate of increase of expenditures from 2009-2011 (roughly $300B/yr) is much greater that the rate of increase of expenditures from 2000-2008 (roughly $162B/yr). The stimulus significantly contributed to the rate of expenditures increase under Big O. As this is presumably a one time stimulus, an apples to apples comparison would be to compare 8 years to 8 years. Absent the stimulus, referring to your graph expressing spending as a percentage of GDP, it is likely that GDP would be lower in the periods illustrated, of course spending would be, and likely receipts as well.

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  30. Sweet Pea

    Hmm, this is interesting. A “law” used to predict US unemployment rate is “broken.”

    “Okun’s law indicated the unemployment rate should have remained steady when the rate unexpectedly dropped 1.7 percentage points from a recent peak, Andrew Tilton, a senior economist in New York at the firm, said in an interview today on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt.

    “For a long time, we and most other economists used Okun’s Law as a rule of thumb for deciding what kind of unemployment rate we should expect given a GDP outlook,” Tilton said, calling the recent loss of correlation “really quite striking.” ”

    http://www.bloomberg.com/news/2012-02-13/okun-s-law-broken-as-u-s-jobless-rate-unexpectedly-declines-tom-keene.html

    Sooo…is the law outdated, is the underlying methodology and therefore the rate wrong, or are problems with the methodology being ignored to encourage a desired outcome…?

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  31. David Losh

    RE: Sweet Pea @ 30

    Good for you, that was a great find.

    The drop in unemployment was due to the pent up demand for consumer goods. Consumer credit purchases also increased in both December, and January, I think it was $19 Billion in December, and $20 Billion in January.

    Retail sales are strong.

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  32. Scotsman

    RE: David Losh @ 31RE: Sweet Pea @ 30

    Garbage in, garbage out. When the government lies and provides “data” that doesn’t mirror reality causal relationships break down. But pay no attention- it’s all being done for your own good. Now go watch TV opr something. ;-)

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  33. David Losh

    RE: Scotsman @ 32

    I’m writing a book about the Black Panther Party in Seattle, so I don’t have a lot of free time.

    This kind of fits in to what I’m doing so it’s no stretch to say that retailers, and bank servicers need to add people. We aren’t talking manufacturing, or wholesaling, we are only talking about unloading a back log of inventory.

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  34. Blurtman

    RE: Sweet Pea @ 30 – It’s not science. “Law” is used rather loosely.

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