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.

59 responses to “March Reporting Roundup: FRENZY Edition!”

  1. ARDELL

    “Why would sellers care more about “catching the historically low interest rates”…

    Because if interest rates were at 6% or 7%, which is likely where they should be at minimum without undue influence, they wouldn’t be able to sell their home at all. Part of the current “frenzy” was created by the 3.87% deemed as readily available most any day, jumped to 4% and above briefly. The scare of losing the opportunity to get 3.875% or even 3.75% on a 30 year fixed pushed more people into action mode.

    I’m surprised that more of the stories about multiple offers don’t credit the slight blip up in rates for the anxious market, given it clearly had an impact. Shouldn’t have…and I try to keep my clients calm and not frenzied about it, but it clearly had an impact.

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  2. Scotsman

    “Fast and furious” strikes again! Or is it Slaughterhouse-five?

    “You’re gonna need a bigger boat?” . . . if you want to land that house!

    Feeding Frenzy!!

    Toga! Toga! Toga!

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  3. Kary L. Krismer

    The “frenzy” situation might not be reported in Snohomish and Tacoma papers (or even more outlying areas), because it might not exist in such places to the same extent, if at all. So you could be seeing a difference in focus.

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  4. Kary L. Krismer

    By ARDELL @ 1:

    “I’m surprised that more of the stories about multiple offers don’t credit the slight blip up in rates for the anxious market, given it clearly had an impact. Shouldn’t have…and I try to keep my clients calm and not frenzied about it, but it clearly had an impact.

    I don’t think I’ve seen a buyer worried about increasing rates either, so I wouldn’t be so sure that isn’t just coincidental.

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  5. David Losh

    RE: ARDELL @ 1

    I noticed that also, at 4% it seemed like slight motivation, but of course you are right.

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  6. Hugh Dominic

    I have a question. Since the east side is an irrelevant dead zone, how does one assess south-of-I90-ness in Seattle? I90 terminates at about 4th Ave.

    That leaves the following neighborhoods WEST of I90:

    – Ball(of Lard), which we all know sucks
    – Magnolia, which is pretentious and sucks
    – Queen Anne, which does not suck
    – West Seattle, which is full of whites who are always in everyones business and entitled and have no sense of industry, according to our resident racist David Losh

    How are we supposed to pre-judge these neighborhoods without the bright red line of I90 to guide us?

    Ardell, help me out with this one. Since you only work in elite neighborhoods, what is your interpretation?

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  7. David Losh

    RE: Hugh Dominic @ 6

    I’m just a guy with a toilet brush, and a dream, but West Seattle is South of I-90.

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  8. Dorothea

    RE: Hugh Dominic @ 6 – The secret with West Seattle, of course, is that it is neither north OR south of I-90. It is, of course, WEST of I-90.

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  9. Jonness

    By ARDELL @ 1:

    “Why would sellers care more about â��catching the historically low interest ratesâ��…

    Because if interest rates were at 6% or 7%, which is likely where they should be at minimum without undue influence, they wouldn’t be able to sell their home at all. Part of the current “frenzy” was created by the 3.87% deemed as readily available most any day, jumped to 4% and above briefly. The scare of losing the opportunity to get 3.875% or even 3.75% on a 30 year fixed pushed more people into action mode.

    Exactly! And for the same reason, these frenzied idiot buyers will be trapped underwater on their homes in the near future when rates go up causing prices to go down.

    Bernanke borrowed 61% of government debt last year in order to keep mortgage rates low. This is unsustainable. So let the 3 stooges bid against each other for this overpriced trash. If you really want the house, wait 3 years for the current round of buyers to default.

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  10. Green Machine

    Since local unelected green councils will eventually be empowered to determine carbon requirements on new and existing homes, people should expect home prices long-term to go sideways or go down… this is already happening in the UK… read it at http://news.sky.com/home/politics/article/16205139

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  11. Kary L. Krismer

    RE: Green Machine @ 10 – That is the type of thing Washington Realtors and Seattle King County Realtors fight. Seattle was considering something of an energy audit for existing houses, and I believe that was successfully fought off.

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  12. softwarengineer

    RE: Kary L. Krismer @ 3

    Its Probably Impossible to Poll

    I’d imagine more of the highly educated [with more investment savvy too] live in the suburbs, not city central. It explains Samamish.

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  13. softwarengineer

    If Buyers Are Really Buying On the Premise of 4% versus 6% Mortgage Interest

    They have no brake pad left and they’re financially almost on metal to metal, if that’s solely hinging our Seattle real estate market, we are screwed.

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  14. Craig Blackmon

    Per the Tim: “Lower prices are a good thing. We don’t need prices to ‘stabilize’ to have a ‘positive market’.”

    I’m no formally trained economist, but are you sure about this? If prices fall over an extended period of time, then wouldn’t that be considered “deflation”? http://en.wikipedia.org/wiki/Deflation That’s a bad thing…

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  15. Kary L. Krismer

    RE: softwarengineer @ 12 – My point was the wealth levels and health of the economy are probably not as great in more outlying areas. Sorry for not explaining.

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  16. Kary L. Krismer

    There’s a Fannie Mae property on Bangor in Skyway that was listed at $149,000 and reportedly sold yesterday for $192,000!

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  17. David Losh

    RE: Craig Blackmon @ 14

    There was a commenter here that warned about deflation. It’s actually a good thing.

    In order to have true inflation we would need to have wages go up, the economy, as a whole, would need to grow. If can’t do that then deflation is a good thing. It lowers prices to match what is more affordable.

    What we have right now is low interest financing of higher prices. Is more debt a better thing? Especially in housing, which is long term debt; is having a lower mortgage payment for thirty years a good thing, or are more affordable prices for a larger consumer base better?

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  18. Kary L. Krismer

    By David Losh @ 17:

    RE: Craig Blackmon @ 14

    There was a commenter here that warned about deflation. It’s actually a good thing.

    No it’s not. It’s good if you have cash, bad if you have debt. Overall it’s generally bad for an economy.

    There are limited exceptions, such as very early on in the history of this country when things became cheaper because the economy was less dependent on Europe. It would be like how it would be good for Hawaii if they discovered large oil deposits and then built their own refineries causing energy prices to drop.

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  19. softwarengineer

    RE: David Losh @ 17

    All Economists Know

    A depression with deflation is far better than unemployment lower wages with inflation [stagflation].

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  20. No Name Guy

    RE: Craig Blackmon @ 14

    Yeah, deflation is bad. I guess folks who bought a piece of iCrap for $200 with more memory and computing power than a “super” computer of 30 years ago think deflation is a bad thing. I guess the Bernake should do what he can to prop up the prices of computing equipment. Ditto that for any piece of electronics almost since the beginning of the industry. After all, we know how hard pressed the makers of electronics are in their deflationary environment.
    /snark

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  21. Kary L. Krismer

    RE: No Name Guy @ 20 – The price of a single commodity or product increasing or decreasing is not inflation or deflation.

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  22. Ira Sacharoff

    RE: Craig Blackmon @ 14
    Sure, if we have deflation on all items, it’s not a good sign. But if you’re one of those people who believe that a greater number of homeowners is good for society and good for the economy, then lower home prices are indeed a good thing. A lot of people would like to buy houses, but feel that either they can’t afford to or that houses are still too expensive. Lower prices would allow them to.

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  23. Kary L. Krismer

    RE: Ira Sacharoff @ 22 – Maybe my reply to No Name should have also included Craig. I would consider housing a single product.

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  24. One Eyed Man

    There are a couple of issues related to deflation and decreases in home prices that aren’t being specifically articulated here in my opinion. First with regard to macro-economics, general deflation in an economy can cause holding money idle to be the best investment choice. If income producing assets are decreasing in value, then idle currency may be effectively earning a return by being idle rather then being invested in the production of goods and service because the purchasing power of uninvested money is increasing. There is an incentive to not invest and to not produce goods and services. This can result in a shrinking economy, decreased GDP, recession and depression.

    Second, when one talks about the decreasing price and affordability of homes, one also probably has to include a decrease in the features and sq footage for future supply (new construction and remodels). The false demand for homes at peak bubble price, created in part by market momentum and easy money during the bubble, is reflected in the price curve as an oscillation that needs to corrected by falling prices. But it also resulted in a lot of entry level homes with higher end features like granite, stainless, tile, higher sq footage, etc. rather than vinyl, builder’s white, smaller rooms and linoleum. Those higher end features could be included at a profit by the builder at bubble prices. But they probably aren’t all within the entry level builders budget once the price curve reaches a more realistic long term equilibrium. Decreases in material costs and in wages may bring down replacement cost, but replacement cost is not likely come down as much as the price of bubble built homes. When one talks about decreasing price and affordability, one probably also has to scale back the features included in new construction (which is a portion of future supply) at the new, decreased, affordable price.

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  25. redmondjp

    By Kary L. Krismer @ 11:

    RE: Green Machine @ 10 – That is the type of thing Washington Realtors and Seattle King County Realtors fight. Seattle was considering something of an energy audit for existing houses, and I believe that was successfully fought off.

    Along these same lines, Kary, have been trial-balloon ideas (through the EPA) such as mandating that all homes sold have energy-star-rated appliances. I suspect that this is still forthcoming, especially with the smart-meter implementation now going on (the next step is to require new major home appliances that can communicate with the smart electrical meter).

    This trend of using government regulation to force new markets in the name of safety and environmental protection has been gaining ground lately. Take the new requirements for carbon monoxide sensors in residences, for example. And then, to add insult to injury, the sensors “expire” after 7 years and must be replaced . . . genius!!!

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  26. Dirty Renter

    By Dorothea @ 8:

    RE: Hugh Dominic @ 6 – The secret with West Seattle, of course, is that it is neither north OR south of I-90. It is, of course, WEST of I-90.

    WEST of I-90…..holy cr*p, my head’s gonna explode.

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  27. Kary L. Krismer

    By One Eyed Man @ 24:

    There are a couple of issues related to deflation and decreases in home prices that aren’t being specifically articulated here in my opinion. First with regard to macro-economics, general deflation in an economy can cause holding money idle to be the best investment choice. If income producing assets are decreasing in value, then idle currency may be effectively earning a return by being idle rather then being invested in the production of goods and service because the purchasing power of uninvested money is increasing. .

    I think the opposite is also probably true–inflation causes money to be spent, leading to more inflation. It’s part of the reason why significant inflation and deflation are difficult to get under control.

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  28. Kary L. Krismer

    For those of you complaining about the price of houses in Ballard, Medina, etc., how about a $41,000,000.00 parking lot bought with cash!

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/10/BUET1O0RN2.DTL

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  29. Sheldon Wells

    RE: Ira Sacharoff @ 22 – Absolutely – count me among the latter category. I would like to own a house so I can put all the years of carpentry, electrical, finish work, mechanical, roofing, and everything else I did for my Dad’s contracting business to use.

    –BUT–

    I seen no indication that wages will do anything other than stagnate for most, or drop. Most areas I’ve looked at in Seattle seem way overpriced compared to salaries on either an average or median basis. 3:1 annual income to purchase price should be the HIGH end for affording a property long term. Instead, if your lucky that kind of money will buy you the cheapest crap-shack in most areas – unless I’m badly misinformed on the stats.

    So for example, Shoreline has an average household income of around 70K at last check. That means there should be lots of middle of the road houses available for abut 200K or slightly less. There should be plenty on the low end as well for considerable less.

    Instead, 200K gets you bottom of the barrel in Shoreline. Sure there’s a few condo-ish places available for a little less, but then you have to deal with HOA fascism, dues, assessments, and all the assorted a$$hattery that goes along with that scene – not exactly a great deal.

    If you could convincingly make the case that average household incomes in Shoreline(just an example) will jump from 70K to around 130K in the next few years, you might have a case for prices being where they are now, but short of that, I see no alternative than to call it like I see it:

    Z-O-M-B-I-E ______ M-A-R-K-E-T

    Am I missing something?

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  30. Disappointed Buyer

    Not everyone buys the max amount of house they can we were told by the bank we were good too $400,000 or self exposed cap it $300,000 at 4% (because I don’t want to eat hotdogs and roman nuddles every night) So the higher the interest rate claims the smaller or self exposed cap number gets. $300,000-$275,000-$250,000 ect.

    So if I was the saler of a $300,000 house i would care where interest rates were low.
    Unless I had a lot of money in the bank paying almost no interest, I can see where though people are getting the short end of the stick after saving for retirement.

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  31. John Bailo

    Here’s one to drive you crazy.

    Two weeks ago every local media source was saying there was a “desperate shortage” of Seattle apartments.

    Guess what:

    Seattle Signals Glut Risk as Apartment Construction Rises
    http://www.bloomberg.com/news/2012-04-05/seattle-signals-glut-risk-as-apartment-construction-rises.html

    WHICH IS IT?!?!

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  32. Jonness

    By Craig Blackmon @ 14:

    Per the Tim: “Lower prices are a good thing. We donâ��t need prices to ‘stabilize’ to have a ‘positive market’.”

    I’m no formally trained economist, but are you sure about this? If prices fall over an extended period of time, then wouldn’t that be considered “deflation”? http://en.wikipedia.org/wiki/Deflation That’s a bad thing…

    If you look at the (non-housing) economy, we are actually experiencing inflation.

    Meanwhile, Seattle area homes are still about 25% overpriced, as a whole, compared to historical relationships to incomes. Having prices come back down to levels families can comfortably afford is a good thing. It would be much worse to trap these families in large mortgages they can barely afford to pay, only to have them lose the homes to foreclosure down the road or to have them not send their kids to college because, after paying the mortgage, they can’t afford it. There are plenty of recent examples of this activity, and it is not good for families, nor is it good for the American economy.

    Consumers represent about 70% of GDP. If all their money is locked up paying interest and debt for homes that are priced 25% higher than they can comfortably afford to pay, discretionary spending will take a big hit as we move forward, and it will exert the contractionary forces on GDP (deflationary influence).

    Nobody said you can manipulate the economy, borrow yourself into a corner, and not experience unpleasant effects (OK, the politicians say this all the time, but it’s a lie). It’s time for those who placed bad bets to get wiped out in order that our economy can experience a reset; thus, allowing new investors to move in and clean up the mess.

    Homeostasis of our nation’s finances should be our country’s chief objective. Unfortunately, the politicians have brainwashed the people to believe we can borrow all the free and easy money we ever wanted and never have to pay it back. While the people’s minds are distracted figuring out what they want to buy with all the free money, the politicians are selling our country down the tubes. At the end of this miserable game, the only thing that will remain standing is the horrible amount of debt our nation has taken on. On that day, people will learn what true misery is all about.

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  33. Jonness

    100 years of home prices.

    This chart is a year old, but we are still perhaps 20% above historical norms in prices (nationally). Keep in mind, this chart is adjusted for 2 types of inflation: rising consumer prices and rising square footage of homes.

    http://www.ritholtz.com/blog/wp-content/uploads/2011/04/2011-Case-SHiller-updated.png

    IMO, it’s wishful thinking to believe we will escape the aftermath of a bubble. Yes, the NAR and government can slow the process by lying in the media and borrowing trillions of dollars to artificially prop up prices. But at the end of the day, we are headed back to where we came from. This can take place through further reduction of prices and/or further adjustment for inflation.

    Due to low rates, it might or might not be a good time to buy a house, depending upon your needs and intentions. But one thing is for certain, there is no rush to lock in low prices.

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  34. David Losh

    What has happened is the middle class has been squeezed out of wealth building, and into wage slavery. Debt has become a burden rather than a stimulus. Most consumer debt is to pay for things that are not immediately affordable with this idea inflation will once again solve the problem.

    If debt is invested for a return, great, and for many in the upper income brackets it is, debt is paying returns daily.

    The middle class is treading water at best, and judging from foreclosures, and short sales, that is taking a toll. Something will have to give, and price reductions are the preferred option. If the middle class hits the wall, crashes, and burns no amount of inflation will rebuild that consumer confidence.

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  35. Kary L. Krismer

    RE: Jonness @ 33 – C-S data going back 100 years is nearly meaningless.

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  36. Axion44

    “This chart is a year old, but we are still perhaps 20% above historical norms in prices (nationally). Keep in mind, this chart is adjusted for 2 types of inflation: rising consumer prices and rising square footage of homes.”

    Great chart. Thanks!

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  37. Axion44

    “C-S data going back 100 years is nearly meaningless.”

    Nonsense. The chart clearly shows cycles. We are retreating from a boom cycle and we are still overvalued when compared to historical trends. I expect the national housing market to continue sideways or even downward.

    As I recall back during the peak of the housing boom (just like during the tech boom of the late 90’s) people claimed that the old rules — the old norms — of what was affordable didn’t count anymore. Such folks were proven wrong. Just as the folks who claimed that it was okay to buy tech companies with astronomical P/E ratios and nebulous business cases were proven wrong.

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  38. One Eyed Man

    RE: Jonness @ 33

    “Keep in mind, this chart is adjusted for 2 types of inflation: rising consumer prices and rising square footage of homes.”

    Are you sure there’s been some kind of adjustment to the chart data for change in average sq footage over time Jonness? IMO rising sq footage isn’t inflation, its a change in the asset whose price is being measured. Commonly the CS index tracks the change in price for the same house (paired sales) without change in things like sq footage. The language on the chart itself says “an equivalent standard house” which IMO isn’t clear either way as to a sq footage adjustment. Did Shiller use a different methodology than the CS index to create the chart that say that chart is adjusted for the rising square footage of the average home over time?

    Just to be clear, I don’t necessarily disagree with your conclusion. IMO its generally less risky to take a lower up front price by waiting than to try to arbitrage interest rates and inflation over a long term asset hold. But I think the idea that the chart is adjusted for increasing sq footage over the last hundred years conflicts with the normal CS index methodology.

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  39. Kary L. Krismer

    By Axion44 @ 37:

    “C-S data going back 100 years is nearly meaningless.”

    Nonsense. The chart clearly shows cycles.

    I would agree it shows cycles, but the claim was made as to relative levels between now and many, many years ago. C-S doesn’t even show that between now and 5 years ago.

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  40. Rumpole

    RE: Axion44 @ 37

    And, to pick a current example, some people seem to think that gold will continue to climb to infinity. Seems to me that a return to the historical trends will be due at some point.

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  41. Colin

    Re confusions above:

    “Inflation” as measured by the cpi, ppi etc. is about newly-produced goods and services. It does not include asset prices e.g. prices of existing houses. It would include a rise in the price of new construction.

    Deflation, a general fall in the prices of (newly-produced) goods, is bad because current incomes must fall in money terms as well. Net debtors, whether businesses or individuals, are then trying to use falling money incomes to meet payments to creditors fixed in money terms by contract. You get waves of bankruptcy, and a situation discouraging new lending, whether for commerce or consumption.

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  42. David Losh

    RE: Colin @ 41

    Wages have to rise with inflation in order to pay the higher prices. Wages could remain the same with deflation, but debt would be paid with hard dollars, rather than inflated dollars. If we already have low wages compared to inflated prices we would only be getting to an equilibrium.

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  43. Kary L. Krismer

    RE: David Losh @ 42 – You can have wages follow inflation/deflation. Higher wages don’t have to cause inflation. And it’s likely absent a long term union contract that wages will follow deflation down.

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  44. Colin

    “Wages could remain the same with deflation, but debt would be paid with hard dollars, rather than inflated dollars.”

    nope — what pays for wages is sales. Deflation means sales receipts for the same volume fall. Wages, in the aggregate, *must* fall. And this “hard” business is nonsensical. Your creditors want to be paid, period, and a dollar is the asset that legally discharges a debt. There is no hard/inflated distinction when you make a payment.

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  45. Jonness

    By Kary L. Krismer @ 35:

    RE: Jonness @ 33 – C-S data going back 100 years is nearly meaningless.

    It’s only meaningless to people, such as yourself, who feel good about having bought a house in 2007 at the peak of the bubble. Had you simply looked at that chart, you would have known better.

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  46. Jonness

    By One Eyed Man @ 38:

    Are you sure there’s been some kind of adjustment to the chart data for change in average sq footage over time Jonness?

    I read it just the other day. I didn’t save the reference though. I’ll see if I can dig it up.

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  47. Kary L. Krismer

    By Jonness @ 45:

    By Kary L. Krismer @ 35:
    RE: Jonness @ 33 – C-S data going back 100 years is nearly meaningless.

    It’s only meaningless to people, such as yourself, who feel good about having bought a house in 2007 at the peak of the bubble. Had you simply looked at that chart, you would have known better.

    How many times do I have to explain that our old house has probably declined more in value than our new house? FWIW, Zillow has it about the same.

    How many times do I have to explain that in reviewing what to do back then I recognized that declining values were a possiblity? News flash–I bought after the peak. Declines were hardly unforeseen as being a possibility.

    How many times do I have to explain that keeping both houses wasn’t an option, even though financially it was an option?
    How many times do I have to explain why renting is not an option for me?

    How many times do I have to explain that the free rent I’ve obtained on the new house is pretty close to the decline in value? So if renting had been an option, I still would have been in about the same position.

    I’m glad though that you realize I’m glad about the decision. Don’t know why you think I should have known better. That’s a rather foolish comment. Why would I have wanted to live in a lesser house, in a lesser neighborhood for the past 4.5 years, only to obtain lesser economic returns?

    Rather obviously you don’t understand complex economic and financial decisions. I’d recommend that you avoid making any of them.

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  48. Scotsman

    RE: Rumpole @ 40

    We’ve entered an age of linear expansion- to infinity, and beyond! Gold may fall, but APPL is going to double every 9 months from now until you retire. ;-)

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  49. Jonness

    RE: Kary L. Krismer @ 47 – Your logic makes no sense. You should have taken my advice back in 2007, sold your house, lived frugally until now, and then bought another home. You would be hundreds of thousands of dollars ahead.

    You should have also took my advice last June and put your sidelined money into aapl. It’s doubled since then.

    Relatively speaking, housing is a terrible investment class right now.

    If you’d have studied the 100-year chart 5 years ago, you’d have known better.

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  50. Jonness

    By Jonness @ 46:

    By One Eyed Man @ 38:
    Are you sure there’s been some kind of adjustment to the chart data for change in average sq footage over time Jonness?

    I read it just the other day. I didn’t save the reference though. I’ll see if I can dig it up.

    OK, this isn’t the reference I was referring to, but I see similar statements from numerous sources.

    Note that he [Robert Shiller] has attempted to adjust for the significant increase in the size and quality of homes over the past 100 years. In effect, he has attempted to estimate the price of houses of constant size and quality; otherwise, we’d be comparing apples and oranges.

    http://observationsandnotes.blogspot.com/2011/06/us-housing-prices-since-1900.html

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  51. Kary L. Krismer

    RE: Jonness @ 49 – Renting is not an option. Is that impossible for you to understand? It’s sort of like how buying is not an option for you because you’re flat on your ass broke!

    But in any case, you’re wrong. During that time I would have paid at least $81,000 in rent to live in a house of similar quality (which is probably understated), which with taxes at only 15% taxes that would be over $95,000. That’s pretty close to the drop in value of my property, so I’m close to even.

    If you want to compare staying in the same place rather than moving, Zillow shows me $6,200 behind doing that. Trulia shows me $17,500 ahead. Corelogic shows me a whopping $80,706 ahead!

    Like I said, I’d avoid making any financial decisions if I were you. You don’t know how to analyze such things. Now go down to the unemployment office complain that your benefits are about to run out.

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  52. Kary L. Krismer

    By Jonness @ 49:

    You should have taken my advice back in 2007, lived frugally until now, .

    BTW, why would I want to live frugally? I’m not flat on my ass broke and waiting for unemployment to run out like you are. Like I always say, different people make different choices.

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  53. Jonness

    Tim:

    I have an idea for a new poll:

    “How much would you pay to live in another house (than your current house) for 5 years?” (At end of stay, you walk away from house with that much profit or loss and have no remaining equity. Negative amount is living frugally and earning free money. Positive amount is living in luxury and paying a steep price.)

    1)-$1 million (flee infested rat’s nest in the heart of the ghetto)
    2) $-500K (must walk you kids to school, but otherwise safe)
    2) $-250K (roughly the same house you currently live in)
    3) $-100K (a 10% improvement from your current home)
    4) $0K (a 20% improvement from your current home)
    5) $250K (a 25% improvement from your current home)
    6) $500K (a 30% improvement from your current home)
    7 $1 million (a 35% improvement from your current home)

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  54. Jonness
  55. Kary L. Krismer

    RE: Jonness @ 54 – How gullible do you think I am? I’m supposed to just accept the claim that you’ve made more than me in 5 years than I have in my entire life? 1. You have no idea how much I’ve accumulated (other than that it’s over $425,000). 2. You’re anonymous and can make any claim, because it’s entirely unverifiable.

    In any case though, you’ve yet to explain why I should live frugally rather than spend cash to live in a house and neighborhood I really like.

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  56. Kary L. Krismer

    RE: Jonness @ 53 – Thank you for proving that you’re not capable of making or analyzing economic and financial decisions.

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  57. David Losh

    RE: Colin @ 44

    You can pay debt with inflated dollars, dollars that have a lower value, that is what every heavy debt holder has been expecting. It didn’t happen.

    Wages don’t have to follow deflation. In terms of sales, lower parices can create sales maybe even better than lower interest rates.

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  58. Jonness

    RE: Kary L. Krismer @ 55 – Perhaps I haven’t pass you yet, but if the last five years of your investment decisions compared to mine are any sort of indicator, how much longer can it take?

    You bought a house at the peak of the bubble due to your investment theory being, “you cannot time markets, so buying into any particular asset class now is as good of time as any.”

    You dispute that mathematical probability theory, charts, graphs, and intensive analysis has any place in investing, and you are content to pay somebody else 1% per year of your total worth in order to make your investment decisions for you, despite the fact your guru’s stock portfolio is currently lower than it was in 1999.

    And after all that, you expect me to believe you are more of an expert on the aftermath of housing bubbles than the world’s foremost authority, Dr. Robert Shiller.

    As I stated before, anybody who took Dr. Shiller’s aforementioned chart seriously back at the peak of the bubble would have been well served. And our current situation is no exception. Yet you claim the chart is worthless. It’s only worthless to you Kary. Many others have and will continue to find value in it that directly translates to monetary gain.

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  59. Kary L. Krismer

    By Jonness @ 58:

    RE: Kary L. Krismer @ 55 – Perhaps I haven’t pass you yet, but if the last five years of your investment decisions compared to mine are any sort of indicator, how much longer can it take?

    I’m sorry, but this debate has gone far beyond being theoretical, to nothing short of absurd. At least twice in post 49 you say that I “should have taken your advice.” ROTFLMAO. Really?

    You seriously think that any person on this planet should take the advice of some anonymous poster on the Internet? That’s laughable that you would even suggest such a thing, and demonstrates that more likely than not you are in fact flat on your ass broke and worried about your unemployment running out.

    Again, stay away from complex financial decisions. You don’t have the aptitude, education or ability to understand such matters.

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