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Here is your open thread for Monday April 30th, 2012. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
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Shiller housing thoughts. Of course you will have to weigh his credibility and analysis, against NAR which reports foot traffic increasing.
NEW YORK (Reuters) – The Housing market is likely to remain weak and may take a generation or more to rebound, Yale economics professor Robert Shiller told Reuters Insider on Tuesday.
Shiller, the co-creator of the Standard & Poor’s/Case-Shiller home price index, said a weak labor market, high gas prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on prices for the foreseeable future
“I worry that we might not see a really major turnaround in our lifetimes,” Shiller said.
The S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.2 percent in February on a seasonally adjusted basis, the first uptick in prices in 10 months.
But Shiller called it “a very mixed bag.” Nine of the 20 cities recorded falling or flat prices on the month.
He said suburban areas in particular might endure further price declines as high gas prices increase demand for “walkable cities.”
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RE: Bob @ 1 –
Most People In the Seattle Area Working Boeing/MSFT Jobs
Don’t work in the city, they work in the suburbs….does that mean walkable likely means buying a Seattle suburb home?
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By Bob @ 1:
What I’m really curious about is what exactly he means by the word “turnaround.” I believe Scotsman brought this up in another recent thread, but are we talking about a price turnaround or a sales volume turnaround? If price, are we talking about a return to peak pricing in real dollars or nominal dollars?
I think it will be quite a bit longer than a single generation before we ever get anywhere close to the pricing at the peak in real (i.e. inflation-adjusted) dollars. I’d say never, but it’s not wise to underestimate humanity’s capability to ignore the lessons of history and engage in mass stupidity time and time again.
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The suburb I live in (Redmond) is very walkable. I can walk to restaurants, grocery stores, coffee shops, Target, the hardware store… Honestly, I don’t know how this compares to other suburbs, because I grew up in cities.
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By T. Y. Lee @ 4:
It is if you are looking for a two bedroom or less. There is very little that is 3 bedroom or more/family friendly. 3 bedrooms and walking distance to the transit center is near impossible to buy.
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By Howard @ 5:
But fear not, Redmond Central Planners are already working on this. Witness the mid-rise McCondos downtown, and coming soon to Overlake as well (on the old Group Health campus). Downtown and Overlake are to be the new growth centers for Redmond, per UN Agenda 21 / WA Growth Management Act / Puget Sound Regional Council mandates.
Oh, wait – did you say three bedrooms? Who needs three bedrooms? Who has kids anymore?
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By Natalia Orinko @ 43:
the French ten-year is at 3%. no they aren’t bankrupt.
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By The Tim @ 3:
if wages rise home values will follow.
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By T. Y. Lee @ 4:
Seattle is rated very walkable on walk score.
http://www.walkscore.com/WA/Seattle
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Interesting graphic of estimated shadow inventory in Portland Oregon area:
http://www.oregonlive.com/front-porch/index.ssf/2012/04/portland-area_foreclosures_rea.html
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Be careful out there tomorrow. It’s a good day to go fishing unless you like teargas….
Tensions mount in Seattle on brink of May Day protests
Some groups appear to be pushing for a big event in the city reminiscent of WTO protests of 1999 that not only shut down much of downtown but also cost millions in damage to property. Rumors of these plans caused McGinn to publish a release warning the city:
“We … have evidence that other people may be coming to Seattle on Tuesday with the intention of using the public demonstrations as an opportunity to commit violence, damage property and disrupt peaceful free speech activity. There has been a significant increase in graffiti and posters alluding to violence around the May 1 events. Websites have described trainings in how to conceal weapons beneath signs and banners, and how to target police officers on horses.”
http://www.kplu.org/post/tensions-mount-seattle-brink-may-day-protests
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RE: Pegasus @ 11 – Unleash the DRONES!
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http://www.redfin.com/WA/Seattle/1521-2nd-Ave-98101/unit-3802/home/21617036
Probably not quite the “investment” the previous buyer thought they were making. $1.3M loss + $200k+ in transaction costs + $60k HOA fees. OUCH!
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[...] light of the “established market values” comment, I find it interesting to note (hat tip to WestSideBilly) that Unit 3802, the second-largest unit on the 38th floor (the tower’s top level), recently [...]
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Aaarghhh!
In return for the privilege to live in King County, I had to cut my bi-annual real estate tax check to King County today. My assessed value dropped 4% since last year (maybe not too far off), but my representatives in politics and my fellow citizens increased the levy rate by over 4%. Bottom line…my property taxes went up. Really? Since 2008 the unemployment rate has doubled, house values are down over 30% and I’m paying more in Real Estate taxes? Being in a snit, I went to the King County Budget website:
http://www.kingcounty.gov/council/budget.aspx
In 2008 the budget was $4.9 Billion. 2009 was $4.9 Billion. 2010 was $5.0 Billion. 2011 was $5.1 Billion. 2012 will be $5.2 Billion. WTF!
Isn’t there any fat to be cut from the budget? Should the County budget be somehow tied to assessed values? I’m voting to throw the bums out in November.
Sorry for the rant, but…I feel better now ;o)
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RE: Bingo @ 15 – The bulk of your tax bill has the rate determined by the total assessed value of properties in the county. And the total amount collected goes up by about 1% a year.
So if everyone’s property value went down by 50%, their tax rate would slightly more than double. If everyone’s property value went up by 100%, their tax rate would be almost cut in half. Either way the amount paid would increase by about 1%. In practice though it doesn’t work that way because some places to up or down more than others, and some types of property (e.g. commercial, vacant land, etc.) go up or down more than others. Also, more valuable properties are more likely to appeal.
Unlike the real estate excise tax, the county didn’t benefit from increasing tax values for real property taxes. There are exceptions, such as special taxes for libraries, schools, fire departments, which are based on so many cents per thousand.
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By Bingo @ 15:
BTW, why do you think that should be the case? Why should government revenue be affected by property values? It’s not like it’s their job to increase property values–if anything, just the opposite.
The gas tax doesn’t go up with the price of gas. Too bad the same thing is not true of the sales tax. Why should the government benefit from certain assets going up in value?
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RE: Pegasus @ 11 –
Of course the gov would never seed the crowd with troublemakers so they have an excuse to crack down. No, no precedent for that. /sarc
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RE: Pegasus @ 11 –
“Websites have described trainings in how to conceal weapons beneath signs and banners, and how to target police officers on horses.”
My cousin and I have found the liberal mindset in Seattle to be somewhat disturbing. But we realize that America is all about freedom, so we will accept it. But if police officers are injured because young misguided “youth” are throwing bricks, then that is too much. They need to be sent to a gulag for some “re-education.” Perhaps we can get Pfft to attend the classes??
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RE: Natalia Orinko @ 19 –
“My cousin and I have found the liberal mindset in Seattle to be somewhat disturbing. ”
Seattle is just whacked- the Russia of old, born again in the west. The San Francisco of the north. Commie heaven. But King County is worse. My taxes are twice what they would be for the same valuation if I lived in Bellevue. I know, because a friend with the same valuation lives there. Bellevue, for gawd’s sake. I’m in the weeds. Oh well.
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RE: Bingo @ 15 – Sorry, but Wall Street ripped off King County, and ultimately, folks like you must pay. That is what the wealth transfer effect is all about. Wall Street transfers money from you, under the guise of selling you bogus Triple A investments, in some cases, designed to fail. Pension funds, county investment pools, mutual funds – all have had money stolen, that sooner or later, must come out of taxpayers pockets. Bend over. And then wake up and kill the bankers.
King-County-could-lose-millions-from-investments-1265077
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By Natalia Orinko @ 19:
you should be trying to prove why France is bankrupt. how about that?
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how is austerity going?
Spain in recession as austerity bites deep
http://www.reuters.com/article/2012/04/30/us-spain-economy-idUSBRE83T08520120430
I thought austerity was supposed to inspire confidence and therefore growth?
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RE: Natalia Orinko @ 19 – Classes wouldn’t do any good. pfft has a severe memory problem.
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RE: Kary L. Krismer @ 16 –
Pretty good explanation of how property taxes work, Kary.
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RE: Kary L. Krismer @ 17 –
An argument could be made that the budget was tied to real estate values on the way up. In 2006, the budget was $3.46 Billion. 2 years later in 2008 the budget was $4.9 Billion. A 40% increase.
It just seems to me that most individuals and businesses cut back during recessionary times. Government doesn’t seem to operate that way. (cue Pfft and the stimulus theory)
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RE: Natalia Orinko @ 19 – shut the ef up… how about it.
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RE: The Tim @ 3 –
Related story from Smart Money. http://www.smartmoney.com/spend/real-estate/why-us-house-prices-wont-recover-1335877657114/
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RE: Bingo @ 26 – I mentioned the Real Estate Excise tax earlier. That’s where the county really benefited during the bubble, and got hurt afterward.
In 2007 the total volume of King County SFR sales just through the NWMLS peaked at just over $1,500,000,000 for a month. The low point was just over $300,000,000. Since then the high was just under $850,000,000. When you consider that the sales of commercial probably saw even greater drops, and that the government takes in nearly 2% of those figures, that’s quite a fluctuation in revenue! I would guess it’s their most volatile revenue source.
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RE: Kary L. Krismer @ 29 – The good news is that the county was able to spend every penny of those high income years……
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Let’s try a commnet here.
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are all comments being moderated?
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RE: David Losh @ 32 – Yes there is a temporary problem with my anti-spam utility that is causing all comments to be held in moderation until I approve them manually. I’m getting to them as quickly as I can but I do have work to do so I can’t just sit here and refresh the comments every five seconds. Please be patient, all comments will appear before too long.
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RE: The Tim @ 33 –
I understand, you got a spammer, which is really too bad.
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By Pegasus @ 30:
And add more and more programs, which apparently can’t be touched, meaning that when less revenue comes in they absolutely have to cut from traditional government services, like animal control. /sarc
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RE: sally buttons @ 27 –
“Shut the ef up… how about it.”
Gosh Sally, I know you are feeling sad for yourself because of your name. It is so 1950′s – 1960′s. But there are ways to improve your self esteem, like losing weight, or maybe socializing with men. Let me know if I can be of help. I have a cousin who is also a spinster.
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RE: Scotsman @ 20 –
There is hope Scotsman. The Russians and Ukrainians are moving in. Join us. We know how do deal with socialists. They are a simple lot. They mean well but after good intentions, there isn’t much there.
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RE: Natalia Orinko @ 36 – RE: sally buttons @ 27 –
Come on you two. You’re both better than that. Substantive discussion mixed with a few witty and good natured comic jabs is constructive, but purely non-substantive personal insults don’t move the discussion forward. For example, Scotsman and I occasionally disagree and heatedly discuss substantive matters, but our attempts at a little witty comic relief at the other’s expense is just a form of good natured competition like a sports rivalry and not ment to offend or indicate a true lack of respect for each other. For example I knew it was all in fun when I tried to bait him by asking what he wore under his kilt and he managed a brilliant retort in answering “your wifes lipstick.” By the way Scotsman, she asked me to says “hi” to “legs” next time I posted a comment and thanks for the email that I’m out of single malt. I hate it when I get home and I can’t have a drink cause somebody finished off all the booze.
Next time lets discuss the extent to which laize faire capitalism needs regulatory moderation in order to deal with positive and negative externalities to the market system and whether limited socialist legislative agenda can provide a more efficient and effective system by accounting for known costs and benefits that are external to the economics of the marketplace. Or perhaps, whether “right to work” legislation is an appropriate or inapproprate form of government interference in the free market allocation of labor. Or maybe whether after all that hiking Scotsman has sexy ankles or hideous cankles.
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RE: One Eyed Man @ 38 – RE: Natalia Orinko @ 37 – Get with the times. Socialism is so 20th Century. We’ve moved well past that now, to Obamaism, where the government doesn’t just give you stuff, they force you to buy stuff. It’s much more efficient, because now when the government requires to much stuff to be made, they also require it to all be bought! Less waste that way. Supply equals (forced) demand.
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RE: Kary L. Krismer @ 39 -
Truly bending the curve.
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