Somehow last month I missed the five-year anniversary of my lengthy email conversation with local mortgage broker Steve Tytler.
Some choice excerpts:
I have been actively involved in the Seattle real estate market for more than 20 years and I have studied the market stats all the way back to the 1960′s. I can tell you that we have never had a major housing price “bust” here like those in other cities such as San Diego.
…
You will never see a major housing price crash here.
…
I expect the housing market to be flat for the next few years. I do NOT expect to see 20%+ price drops as we have seen in other previously housing markets around the country.
When I challenged his logic and conclusions with facts and statistics, he held firm, declaring that “You can’t go strictly by the numbers.”
I’m sticking with my prediction of a flat market (i.e. little or no appreciation) for the next 4-5 years, then our housing market will take off again. I’ve seen it happen over and over again.
…
You are taking a “number crunching” approach, whereas my approach is more art than science — based on my experience, statistical analysis and just plain gut instincts.
I only bring it up today because, well… he asked me to:
You can save this email and throw it back in my face 5 years from now if I am wrong, but I’ll bet you a beer that I’m right.
Too bad I hate beer.
+10
Ray Pepper will be very happy that Seattle Bubble is showing some “love” to his favorite real estate professional, Steve Tytler.
This is why Kary Krismer doesn’t make predictions. There’s always a chance that a few years down the road, one’s predictions will be dug up and you will be exposed as a bloviating fool.
Me? I’m not afraid of making predictions or even wagers. Not that my predictions will be right.
I just don’t think that the fact that I’m a real estate agent gives me any more insight to what’s up ahead than anyone else, but I’ve got opinions and I always think I’m right, so I’ll express myself.
And appearing like a bloviating fool? I’ve been there before, and it will happen again. Just bring me the funny hat and the pointy shoes.
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RE: Ira Sacharoff @ 1 – The reason I don’t make predictions is I understand that there are too many variables out there to account for. It’s an impossible task.
Let’s assume that this email exchange was one year later, and let’s further assume that PIIGS in Europe all default 3 months from now resulting in a catastrophic economic collapse on both sides of the Atlantic. That’s not something you could predict with precision even today, but clearly not four years ago. And international influences are only one of many things which affect real estate prices.
The things that are easy to predict are things where there are far fewer variables. Local gas prices after a major refinery fire, for example, but even there I wouldn’t try to quantify a number. You just know it’s going to go up.
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Man, Ray is going to really love this after he comes back from the Cheesecake Factory and reads it!
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I bet if you compare his paychecks for the past 5 years to your paychecks, you’ll realize who the real winner is.
Even after deducting the cost of a beer.
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RE: tomtom @ 4 –
Anyone can reap a fortune if they’re willing to sell their soul, or participate in the theft of same from others.
What’s your price?
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I dunno, Ira, I think you’re selling yourself short. You’re no Steve Tytler. While you may make predictions, I don’t see you being anywhere near THIS foolish. “Just plain gut instincts” prevailing over rational and statistical analysis? It makes you wonder just how Mr. Tytler ever got his money in the first place…
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Tytler steps on the land mine when he says:
“You are taking a “number crunching” approach, whereas my approach is more art than science — based on my experience, statistical analysis and just plain gut instincts.”
In “Moneyball,” the chief scout makes that same argument to Billy Beane just before he gets fired. I would have inserted the clip, but I couldn’t find one of that scene. In many ways, The Tim’s quest to buy a house during the economic distortions of the bubble is like Billy Beane’s quest to build a baseball team. But I have one question: If Michael Lewis were to write the book, is The Tim the character played by Brad Pitt or the character played by Jonah Hill, or maybe a little of both?
http://www.youtube.com/watch?v=AiAHlZVgXjk
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Thank God for Freedom of Speech
For Tim’s and Steve’s.
I’m sure of one thing about someones’ predictions on Seattle real estate; they tend to be overly positive if you’ve bought in recently or you’re embroiled in it for a salary….
One thing about predicting anything wrong in a free country; if you’re wrong, it can haunt you later and its fair game too.
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RE: tomtom @ 4 – That seems irrelevant to the arguments stated above. As anyone who has made money in the transaction business understands, your monetary rewards are frequently at odds with your understanding of a situation. As Warren Buffett says, “A rising tide lifts all boats, and it isn’t until the tide falls that you find out who has been swimming naked.”
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Not to defend Tytler’s nonsense but I have seen a lot of money made by people who threw out the rule book and all the number crunching monkey stats and just listened to their gut instincts. Sometimes all the rational and statistical analysis in the world turns out to be wrong, too. Say didn’t we just have a global meltdown because of that along with a big dose of fraud on top?
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RE: One Eyed Man @ 7 –
Ah come on. Tim is the very definition of “stud muffin.” Case closed, counselor.
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@ theTim: wait… you hate beer?
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RE: Scotsman @ 11 –
I concede your point in post #11, but in post #5 I have to take issue where you say:
“Anyone can reap a fortune if they’re willing to sell their soul”
When I was young, broke, married and in need of money, I didn’t get squat for my soul. If I hadn’t hedged in the soul future’s market, I’d still be a poor soulless bastard instead of just a poor bastard.
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RE: Pegasus @ 10 –
You heard about the people who gambled that way and won. There are are more who “threw out the rule book and all the number crunching monkey stats and just listened to their gut instincts” and lost it all. The losers are not out there crowing about it.
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RE: kfhoz @ 14 – Never said they could not lose money. The entire global meltdown was all based on wonderful statistics that were guaranteed not to ever happen even “in 1000 years”. Something about real estate prices never went down……I have also seen a fair amount of people make huge money when they had absolutely no knowledge of what they were doing at all. It’s that thing we call “luck”.
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What is it with people who blather “I have been doing X for Y years and blah blah blah blah.” Well, Kodak has been making cameras for over century, and that certainly didn’t keep them from being caught with their pants down. Next to Grumpy Larry C., I find Steve to be one of the most offensive personalities of the bubble.
I also find it amusing that DeeJayOh trashes gold bugs in the first comment. I am no gold bug, but I have to imagine the gold bugs of 2007 are pretty happy today.
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I was always hoping that the RE “professionals” that made such inane comments like these would be forced to wear their comments on their sleeves once the levy broke.
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RE: Craig Blackmon @ 6 – Last time my gut instincts talked to me, I found a Flowbee on my front doorstep. Did not work out so well.
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RE: wreckingbull @ 18 -If we’re talking shorter term investments, the trick is to figure out the gut instinct of others. It doesn’t matter what the fundamentals are–what matters is what most investors think the fundamentals are.
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dont hate beer Tim! good post
-JC
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RE: Kary L. Krismer @ 19 – Absolutely – predicting the gut instincts of the herd and using that to your advantage can be a good strategy. Just don’t predict their gut instincts with your gut instincts.
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RE: wreckingbull @ 18 –
Did you read the directions? You’re a guy. I bet you didn’t. Hopefully the dog, etc. didn’t suffer.
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Steve Tytler…My ALL TIME FAVORITE BUFFOON! I have to endure his commercials day after day on Dori Monson and instead of unleashing I just have 1 question for him……………..” HOW IS YOUR BROKER FRIEND IN ARIZONA WHO OWES 500K + and the value of the home is 200k….and he doesn’t miond making his payments…”
Steve, how long ago did it foreclose? Short sale? Deed in Lieu? Loan Mod? Is he still living there and doesn’t mind making his payments? Please update us Steve………..Also can you PLEASE update your testimonials: http://www.bestmortgage.com/ .. They all looked doped up on Ativan…I love the guy in vid 2 that says it was TOTAL LUCK they found Best Mortgage and they got the BEST INTEREST RATE…
Like lambs to the slaughter……………..
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ugggh..and that smile…..http://www.bestmortgage.com/.
.Looks like a Pit Bull that just ate a poodle…All he needs is a tooth pik…
BTW, I also miss that Mack “Don’t mess with me Ray..I know what your about” Guy….I think hes from the Seattle Times..I don’t even know his name but hes kinda hairy and fat like me if my memory serves well…
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Kudos for defeating Steve! I’ll take that beer off your hands if you don’t want it.
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You hate beer???
Even the kitten kickers must be wondering what is happening to the neighborhood.
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RE: ray pepper @ 24 –
He’s an agent. His name is Mack. Works at Lake and Company, I think.
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RE: ARDELL @ 27 –
That would be Mack McCoy from Seattle Real Estate Professionals who does work at Lake, and Company with his wife Cynthea.
They are good people, he’s from New York, from what I remember, and a little excitable at times.
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Every time I see “violent love’ I think of the Oingo Boingo song. Is the real word really worse than ‘violent love’?
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Hey Steve! Stevie my man!
Steve? Steve, are you out there? Hello?
Hmmmm. Pretty quiet around here if ya know what I mean . . .
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By Scotsman @ 11:
A true stud muffin would have never thrown in the towel so early and bought a house. Grit yer teeth and show some courage. No pain, no gain. :)
Just kidding of course. It’s pretty tough to find anything about housing in which to accurately criticize Tim. :)
But I can see the stair step theory panning out in the data up to a point. It’s just that, history did not repeat like Steve thought it would, and we had a giant correction. Lesson learned is, history actually repeated, but Steve was only looking at the tiny subset of data that occurred in his life in his tiny corner of the world. Therefore, he hadn’t a clue what he was talking about. But don’t tell him that, because, to this day, he will tell you that he accurately forecast this whole thing from the beginning.
Never try to forecast when only looking at a tiny subset of the data that you picked just because it fits what you already think is true. Instead, leave data analysis and forecasting for the people who do it for a living. Your average RE agent lacks the necessary specialized training to dabble in this area. Most people without engineering degrees coupled with the gift of right-brain thinking will never get it right.
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Trying to take RE broker’s words as gospel is not a good idea. They work with people, like lawyers, politicians, salesmen, etc., so their truth is one-sided. You can trust those who work with numbers or machinery :)
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Steve:
Swallow your pride and buy us all a beer? Just tell me the time and the place, and we can all be friends again.
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By Jonness @ 31:
Conversely Eleua was looking at the big picture, and was fairly accurate in what he said would be a problem. Where he admittedly wasn’t accurate was the consequences of those problems. The market and economy did not turn as far south as what he predicted.
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RE: Kary L. Krismer @ 34 –
Not yet. But all of the initial structural problems he and others identified have grown worse, and no realistic resolution is in sight- except reset.
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RE: Scotsman @ 35 – LOL. Probably while you were typing that I was downstairs thinking: “I should have said ‘yet.”
Still, I do recall Eleua making a post admitting things did not end up as bad as he thought they would, within the time frame he thought.
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Looks like Steve has, uh, diversified from real estate?
http://www.stevetytler.com/
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Finally took the plunge. The condo I will be closing for $210K from a short sale was last sold (around the time people were suggesting we’d never see a crash) for $360K. Who’s laughing now?
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By Scotsman @ 5:
Mitt Romney. Explained concisely.
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I totally agree that we live in a area that won’t see a major housing crash. There are too many large establish corporations that will never go away. We are lucky in that way however I also feel that King County is over priced in many areas.
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Great post.
Now it’s time to dig up some of those equally crackpot posts that the more bearish members of this forum made. I recall some guy named Eleau (probably spelled wrong, he had pic of Jason Voorhees as his avatar) and Sniglet who were guaranteeing things like the Dow would be around 1000 right now. Really funny stuff.
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RE: masaba @ 41 – That was not Jason Vorhees ..That was the late Kevin DuBrow from Quiet Riot… I only mention this because I met DuBrow at the Harrah’s Buffet atop Lake Tahoe. The band was there loading up on food prior to the show. I stood next to him with the tongs getting some cabbage and I said..”Are you Kevin DuBrow?..He said………….Yep!…since then I had considered us pretty good friends until his untimely death..I should have stepped in at that very moment and told him….There are two things in life that kill people Kevin..Buffets and Cocaine…Maybe it would have helped. http://www.cduniverse.com/search/xx/music/pid/2039556/a/Metal+Health.htm
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RE: ray pepper @ 42 – So why can’t pharma be allowed to develop safe “recreational drugs?” Imagine how many deaths would result if folks had to procure insulin cooked up by an illicit lab somehwere in Mexico.
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Great post Tim! In your face Steve.
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RE: masaba @ 41 – I think your recollection of his predictions are as bad as your recollection of his name and avatar. Can you point us to this Dow 1000 post?
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RE: wreckingbull @ 45 –
http://seattlebubble.com/forum/viewtopic.php?f=5&t=1962&st=0&sk=t&sd=a&sid=b66d68decc3f397381708a96319979b3&start=15
“I’m predicting a Dow below 2000, and maybe even below 1000 by the time we hit bottom, over the next 4 years. In the meantime I expect to see amazing multi-month rallies that will shoot up 20% or more, only to lose it all again.” — Sniglet, February 22nd, 2007.
In all sincerity, I hope that most people take their investment advice in moderation from all sources.
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RE: Chad Humphrey @ 40 –
Chad- stick to selling houses, since reading isn’t one of your strong suits. We’ve already had a major housing crash unless you don’t consider 20+% losses “major.” Steve’s prediction was made in 2007. It was a total failure. Now he wants to sell you investment advice. Care to sign up?
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RE: Blurtman @ 43 –
Or food cooked up by the Claim Jumper! No wait- that’s happening. Thank gawd Ray has moved on.
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RE: masaba @ 46 – I thought your post was referring to Eleua, but now that I read it again, it was ambiguous. Yes, I agree that Sniglet was over the top.
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RE: wreckingbull @ 49 – Eleua did pop in here about a year ago admitting that things didn’t get as bad as what he had predicted (yet).
I can’t find the post–maybe he posted something somewhere else?
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RE: wreckingbull @ 49 –
Yeah, I couldn’t remember which one of them it was. My only point was that Tim could do quite a bit more of these types of posts with some of the investing ‘advice’ that has been given on this site.
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Hey Tim,
I just happened to be cruising by your site and saw my smiling face.
I don’t have time to read all the comments here, so I don’t know what kind of response your article generated.
But I wanted to take the time to point out that you know I have been far and away the most accurate local real estate columnist in terms of my housing market predictions.
All of my predictions were published in my weekly column in the Everett Herald and copies of my columns were also posted to my blog (which I no longer update).
For example, I first predicted the RE market was starting to peak in December 2006:
http://www.mortgageguru.org/archives/154/ask-the-mortgage-guru-is-the-seattle-housing-market-headed-for-a-crash-by-steve-tytler/
By October 2007 I was predicting a 10-20% drop in housing prices the following year:
http://www.mortgageguru.org/archives/170/ask-the-mortgage-guru-home-prices-to-decline-in-seattle-area-home-market-part-2-by-steve-tytler/
http://www.mortgageguru.org/archives/date/2007/12/
And I followed up with annual housing market predictions at the end of each year:
http://www.mortgageguru.org/archives/173/ask-the-mortgage-guru-seattle-area-home-prices-likely-to-fall-another-5-10-in-2009-by-steve-tytler/
http://www.mortgageguru.org/archives/190/ask-the-mortgage-guru-where-is-the-seattle-area-housing-market-heading-in-2010-by-steve-tytler/
http://www.mortgageguru.org/archives/192/ask-the-mortgage-guru-where-is-the-seattle-area-housing-market-heading-in-2011-by-steve-tytler/
http://www.mortgageguru.org/archives/195/ask-the-mortgage-guru-where-is-the-seattle-area-housing-market-heading-in-2012-by-steve-tytler/
In fact, YOU named me the most accurate housing market predictor in 2010:
http://seattlebubble.com/blog/2010/01/11/predictions-looking-into-the-crystal-ball-for-2010/
Also, I was absolutely correct when I said that the Seattle housing market would NOT crash as far as the boom-bust markets like San Diego, Las Vegas and Phoenix.
Remember, many commenters here were expecting the Seattle housing market to follow San Diego down the rat hole and drop 50%+. I consistently said that would not happen and it didn’t. If you add up my annual predictions, you will see that they total about a 30-35% drop in Seattle area housing prices over the past 5 years which is just about exactly what happened.
So I know you are having fun at my expense, but put my WHOLE track record up rather picking out one email exchange.
I challenge you to find ANY other Seattle area housing market predictions published in the local media over the past 5 years that were more accurate than mine.
To quote “The Tim” himself …
“This year’s winner for the closest prediction is Steve Tytler, whose guesses have consistently been the closest of anyone actually in the industry.”
Can’t get a better endorsement than that!
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The man’s a self-proclaimed guru. At least in his own mind. And sure he did not have time to read the comments here but he had time to post multiple links to various statements over time. My broken watch is right just about the same amount…….
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RE: Pegasus @ 53 –
I was thinking the same thing. good Call Peg! The fact is he DID read them all….
As I said years ago about this guy and it still rings true the same today: http://www.youtube.com/watch?v=0iqFO-Udq6s
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By ray pepper @ 42:
Kevin’s voice almost killed me every time I had to listen to it (sucky tone). But compared to that Hole chick, at least he could sing in tune.
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By Steve Tytler @ 52:
Steve! You are in serious denial!
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“This year’s winner for the closest prediction is Steve Tytler, whose guesses have consistently been the closest of ***anyone actually in the industry***.”
not much on an endorsement.
that’s like saying, one pooh is better than the other pooh.
they’re both pooh!
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“anyone actually in the industry”
Devil’s in the details, as they say. Pretty much EVERYONE “in the industry” sucked at predictions until such time as they appeared so preposterous (and damaging to what little credibility was left) that “the industry” had to change its’ tune. Following just isn’t the same as leading.
Steve, you can’t even be honest about reading/not reading the comments. But you have the time to prepare a detailed response? How do you respond to something you haven’t read?
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