Local Incomes: Median & Per Capita, Real & Nominal

Okay let’s revisit the discussion on local incomes once more.

First up, I’d like to highlight the top comment from Monday’s discussion, posted by “gr8day”:

I make less today than I did 6 years ago. So does my barber, my brother, my next door neighbor, best friend, pastor at church, and most of the people I work with. (Perhaps the employees of Amazon make more – but I am not good friends with anyone who works there). This is not taking into consideration inflation or other fuzzy math, but real end-of-week paycheck amounts. I also have less benefits – no more 401K match or education benefits, and I pay higher medical insurance.

I know of 10 families that are now living multi – generational. The kids have moved in with parents or vice – versa. Most have families w/children and are are living w/ in-laws. They are not internationals where this is common practice – they are from the US, where this practice has not been seen in the recent past.

The issue is jobs. Until people have reliable jobs, it is a risk to purchase a home and commit to a monthly payment in a specific location for 30 years. What if I need to move for a new job? There is too much instability in the financial world and the job market for most of my circle to take that leap. How does one pay for a house payment and then also property taxes, upkeep, car payment/repairs, school loans, save for kids education, dentist, school fees, raising utility costs, retirement savings (I will need about a million – ha ha ha)… and on and on… when I have unstable employment?

Years ago I took a financial planning class. At the end of it I realized how important my monthly income was. It is my ability to earn an income that will keep me with food and shelter. No income…no money for food and shelter.

That is my compelling coherent case… after years of fancy research.

There were also numerous comments about real (inflation-adjusted) vs. nominal incomes, as well as one suggestion that I post per capita income. While my point was simply that nominal incomes have risen and will likely continue to rise, I went ahead and downloaded the per capita income data from the Bureau of Economic Analysis as well as the Consumer Price Index data from the Bureal of Labor Statistics, in order to produce a full set of the following four charts.

First up the same chart I posted on Monday, nominal median household incomes:

Nominal Annual Median Household Income

Next, median household incomes adjusted for inflation using the Seattle-area CPI less shelter, expressed in 2010 dollars:

Real Annual Median Household Income

No increases there since 2007. Incomes are rising, but not quite at pace with inflation.

Next, nominal per capita income. Note that while the latest median household income from the OFM is from 2011, the most recent per capita income data from the BEA is from 2010:

Nominal Per Capita Income

Steady, four-decade upward trend there save for the post dot-com bubble and post real estate bubble.

Finally, here is per capita income in 2010 dollars:

Real Per Capita Income

It’s interesting to me that this one shows more of an upward trend over the long term than real median household incomes. Also, the real decline between 2009 and 2010 is much less severe in per capita incomes that it is in median incomes, with Pierce actually showing an increase.

So what does it all mean? My take is that incomes are not robust, and we aren’t seeing any strong gains post-boom yet, but they also aren’t falling through the floor, and things are the trend is moving in a better direction than it was between 2007 and 2009. I still expect things to improve over the next few years.

  

About 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.

64 comments:

  1. 1
    ChrisM says:

    Tim – what is the basis for your belief that we’ll see a gradual return to 6% interest? Thanks!

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  2. 2
    sniffy says:

    “It’s interesting to me that [real per capita] shows more of an upward trend over the long term than real median household incomes.”

    That probably supports some of the supposition from the previous post’s comments, that incomes of the top 5-10% are rising (and skewing the mean) but that the majority are still on a downward trend. It looks like the median got a much smaller bump from the dotcom bubble (though it held flat until the current recession) than per capita. Per capita also recovered more quickly and built on the gains. Again those high incomes at the top, most likely.

    That story would also be in line with your post showing how hi-tier homes have broken out (and up) from the rest on the C-S index over the last couple years.

    I was one of those asking for the per capita numbers, so thanks for digging this up!

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  3. 3
    billybeer says:

    Tim,

    The key with the median income charts that is always ignored is that it is nowhere near a normal distribution. There is a massive clump of people in the lower end range and a tiny bit of people significantly above the median.

    If you can find the data that breaks it out by income percentile, you will see even more stark results. I know on the national scale, the top 5% of income earners have seen the bulk of all income increases (almost doubled) since ~1970 while the middle quintiles are nearly flat and the lowest quintile is actually lower. I believe Your per capita income charts are merely a reflection of the fact that the rich have become significantly more rich and “buoyed” the rest of us upward to make things look better than they actually are.

    Then factor in that our formula for CPI has been “re-balanced” several times. For instance, food and energy is now one of the smallest factors in our inflation calculations of any country in the world. Ask anyone in those bottom two income quintiles what they spend the majority of their money on and it is apparent that the real purchasing power of the lower/middle-to-lower class is much lower over the last 25 years.

    Sadly, I don’t see any end to it in the near term.

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  4. 4
    billybeer says:

    Here’s a chart of national income broken out by incomes:

    http://irregulartimes.com/wp-content/uploads/2010/09/meanhouseholdincome1967to2008.png

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  5. 5

    RE: sniffy @ 2

    Good Point

    Let’s Use Mean Income, Not Per Capita Income

    To eliminate the Bill Gates types incomes skewing it artificially upwards.

    “…As it is a mean value, it does not reflect income distribution. If the distribution of income within a country is skewed, a small wealthy class can increase per capita income far above that of the majority of the population. In this respect Median income is a more useful measure of prosperity than per capita income, because it is less influenced by the outliers….”

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

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  6. 6

    RE: softwarengineer @ 5

    We Need Another Chart Tim

    Medium Per Capita Income.

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  7. 7
    drakob says:

    By billybeer @ 3:

    Then factor in that our formula for CPI has been “re-balanced” several times. For instance, food and energy is now one of the smallest factors in our inflation calculations of any country in the world. Ask anyone in those bottom two income quintiles what they spend the majority of their money on and it is apparent that the real purchasing power of the lower/middle-to-lower class is much lower over the last 25 years.

    Sadly, I don’t see any end to it in the near term.

    To your point, billybeer, Shadowstats has done a great job of publishing CPI-1980 and CPI-1990 based calculations to present dates.

    http://www.shadowstats.com/alternate_data/inflation-charts

    Long term averages of 5-7% inflation sound almost crank-ish when we’ve been focused on the 2-ish% headline CPI based on the CPI current formula, but eliminating hedonics and rebalancing, it doesn’t really seem all that unreasonable to think that inflation is actually running consistently 3-5 points higher than advertised.

    This level of inflation during expansionary times is somewhat easier to swallow, since incomes are generally rising with costs. I believe part of the pain we’re experiencing now is due to the contractionary forces (unemployment, household deleveraging), combined with inflation rates that are higher than we think.

    While buying a house now at these record-low rates seems sensible with higher inflation on the horizon, the potential for headwinds is significant. The overall loss of purchasing power that we continue to experience in this stagflationary period removes the primary driver for housing purchases. As inflation ramps up, rates will need to be raised to rein it in, risking another recession and a second hit to housing prices. The uncertainty and chaos that are inherent in this scenario are not fertile soil for a strong stable run for housing.

    Far too much focus on short-term noise in the data and not nearly enough focus on long-term outlook for the cycle. ‘Til then, we will be watching the show from the sidelines…

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  8. 8

    RE: drakob @ 7

    Stagflation is One Good Description of Our Current $4/gal Gas/Food Economy

    I’d much prefer an old fashion Depression to Stagflation, at least as wages degraded and unemployment went chronic, prices of essentials plummetted as relief.

    I call today’s quagmire a Repression….LOL

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  9. 9
    sniffy says:

    By softwarengineer @ 6:

    RE: softwarengineer @ 5
    We Need Another Chart Tim: Medium Per Capita Income.

    Median per capita doesn’t make sense as a measurement: ‘median’ takes a single person in the group as representative. Per capita adds up all the money in the group and divides by all the people in the group. You can’t make a median per capita analysis because once you’ve made your per capita number, there’s no single representative person left within that figure to extract from it as a median.

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  10. 10
    David Losh says:

    RE: billybeer @ 4

    http://financial-dictionary.thefreedictionary.com/Bubble+Economy

    I posted this on another thread, because that is what we have; we have a bubble economy that mimics inflation.

    billybeer has posted what is actually happening with wages, without adding in the unemployment rates.

    I have to go back to work, but this is what I posted earlier today:

    It’s like you are comparing pricing to a set of standards that don’t exist.

    Here is the definition you are using: http://www.investopedia.com/university/inflation/inflation1.asp#axzz27dguIl2o

    Which by passes this part of the definition:

    in·fla·tion/inˈflāSHən/
    Noun:
    1.The action of inflating something or the condition of being inflated.
    2.A general increase in prices and fall in the purchasing value of money.

    Lastly here is the definition of a bubble economy which is what we have: http://financial-dictionary.thefreedictionary.com/Bubble+Economy

    The bubble mimics inflation, but the value of the dollar remains constant.

    The reality is your dollar is buying much more today than it did ten years ago. Look at computers, technology, biomedicine, cars, housing, dining, or services. No one is raising prices except speculators.

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  11. 11
    Pegasus says:

    RE: softwarengineer @ 8RE: drakob @ 7 – Common guys. Stagflation? Admittedly certain items like healthcare, some food and gas are up sharply but many of the big tickets items are a lot lower. Equivalent rent, computers, natural gas, phone bills unless you want to blow all your money on cell phones, big screen TV’s cost about a tenth of what they sold for 5 or 6 years ago, car payments and mortgage payments are lower. Home owners not in trouble likely refinanced for a much lower payment or shorter maturity. Home owners in trouble have had all of that free rent money to buy TV’s and vacations. The last time we saw real stagflation was in the 1970’s

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  12. 12
    Eastsider says:

    Many lower and middle income family budgets are squeezed by food, energy, healthcare (insurance) and transportation (tolls, “free-ride” zone!) I just read in WSJ that many families are now forgoing restaurant meals, ballgames, etc to pay for their new iPhones and increased monthly phone bills. Many of the above items are not fully accounted for in the official inflation number. So you can see why people are feeling poor as their household budget is maxed out.

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  13. 13
    Sweet Pea says:

    RE: Pegasus @ 11

    Disagree on rent. If I renew my lease, mine will be going up 11%. They did something almost as high last year, too, because they can. They have made no upgrades to my unit. Maybe it is lower than 5-6 years ago if you are renting a single family home. Otherwise, plenty of gouging to go around. I’d just rather get gouged by the landlord than the home builder down the street, I guess.

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  14. 14
    wreckingbull says:

    RE: Pegasus @ 11 For the working poor, gas, food and healthcare eat up the entire monthly budget after housing expenses. Probably feels very much like the 1970s to them.

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  15. 15
    Tim McB says:

    RE: Pegasus @ 11

    Grocery prices are up too.

    (http://business.time.com/2012/03/12/food-fight-stores-producers-consumers-battle-over-high-food-prices/)

    I suspect that this will continue into 2013 as well once the full effect of this year’s drought is felt.
    Though the numbers only vaguely bear this out I think we’ve been in a state of stagflation for at least a couple years. Especially when taking into account food, transportation, healthcare, housing, you know the stuff that matters. On the flip side, as you noted, consumer goods (ie crap made in China and the stuff that shouldn’t matter) seems to keep dropping in price, especially once the next version comes out (see iPhone 5).

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  16. 16
    Pegasus says:

    RE: Eastsider @ 12RE: wreckingbull @ 14RE: Tim McB @ 15RE: Sweet Pea @ 13 – Sweetie…the point is that not all rents are going up 11 percent a year especially when compared to 2007 even though the listing agents are trying their darndest to convince everyone that they are. Move. I am not saying that some items have not gone up and the ones that impact the lower income tiers the most are food, healthcare, energy(including gasoline) and shelter. Healthcare increases moderated last year, shelter is still cheaper than 5 years ago, food costs are up and so is gasoline. Claiming stagflation when the overall the CPI is up 1.7 percent the past 12 months while Bernanke is doing everything he can to stimulate inflation than risk deflation shows how bad our economy is. The Bernanke is even knowingly allowing the speculators to run up commodity prices in hopes, it appears, to prevent anyone from recognizing how close we are to deflation. What do you think he has been doing with the securities markets? Do you guys realize that during the 1930’s depression that government agents actually burned crop fields to try to create shortages to drive up food prices since demand had fallen? Bernanke does not care about the masses. Most don’t benefit from higher stock prices and commodity prices, in fact these manipulated low rates are killing the pensions of the masses that primarily invest in bonds. Who does benefit? Why it is the criminals running our banking system and the top 5 percent. Whatta a surprise.

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  17. 17
    David Losh says:

    There is no way the people here, on a bubble blog, don’t see that we are in a period of commodity speculation.

    Oil is my favorite. The price of oil keeps going up, and stays up, even though we have a glut, natural gas is plentiful, we have alternatives in energy, but we keep playing the threat of the Middle East will raise our oil prices.

    Energy independent? Come on, we can do that any time we choose.

    Gold is my other favorite. In what world will gold become a valuable asset to have? I can see after the economic collapse some one with gold coins wanting to barter. They would be laughed at.

    Food has to be the most devastating. We manipulate food prices with excuses like it cost more to bring produce to market. Oil, and gas prices are usually the culprit.

    You aren’t making any sense that with the amount of unemployment we have that wages are increasing. It’s just not happening.

    I got a call at five this morning from a guy wanting to work.

    The fact is we are in economic times that are pointing to defaults.

    It’s a bubble.

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  18. 18
    David Losh says:

    RE: Sweet Pea @ 13

    You can move, and pay less, or get a better place. Land lords are screaming for good renters.

    Gouging is the correct word.

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  19. 19
    Nick says:

    Bubble economy? Deflation? HA!

    If you want to claim that the price of a single commodity is driven by speculation and not inflation, I’ll let that slip. But every commodity, product, service, lease rate? That’s all speculative bubbles? Give me a break!

    General price increases are inflation. Inflation is general price increases. This is by definition. You can have a bubble in a thing, but a bubble in everything is not a bubble – it’s inflation.

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  20. 20
    Pegasus says:

    RE: Nick @ 19 – Most of your life passes before your eyes are truly opened and then, too soon, they are shut forever.

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  21. 21
    ChrisM says:

    Isn’t it astonishing that, since the 30+ years that have passed since the 70’s, computer technology is still so “backwards” that we cannot track real-time purchases of food & gas? Why, one would certainly say that WalMart must be lying when they say they track US purchases in real time. Hmm, or is the govt simply lying when they say that tracking food purchases is impossible?

    Others say that one can substitute lower quality/cheaper food, that food is effectively fungible. Well, I’ll have to ask at what point does the meat purchase get so cheap (https://en.wikipedia.org/wiki/Pink_slime) that it can’t get any lower? How does that affect food consumption? And health costs? Poor people cannot afford vegetables. Why it OK to exclude food from the CPI?

    I raise very high quality poultry & pork raised on organic feed, free of corn & soy. It ain’t cheap. My primary cost is animal feed. The cost of animal feed has significantly increased in the past two years.. But somehow that should not be factored in when we’re trying to determine inflation? I’m raising my prices to cover my expenses, but somehow that isn’t inflation?

    There’s a brouhaha floating around on the internet around possible bacon shortages. I don’t know if that will happen or not, but Slate (http://www.slate.com/articles/business/moneybox/2012/09/unavoidable_bacon_shortage_u_k_s_national_pig_association_has_everyone_worried_about_the_price_of_pork_.html) is advocating buying chicken instead. Well… what happens if chicken becomes more expensive than bacon? The author of that article doesn’t appear to realize that conventional farmed pork & poultry are both raised on soy & corn.

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  22. 22
    ChrisM says:

    RE: Tim McB @ 15 – Your link links to http://business.time.com/2012/03/06/youre-already-the-victim-of-inflation/ which states “In short, American consumers are experiencing 1970s-style inflation unless they sit home all day in old jeans and sweaters, doing nothing but surfing the Internet.”

    I doubt the author is familiar with the term stagflation.

    I wonder if kids today will ever know that ice cream and coffee used to be sold by the pound.

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  23. 23
    David Losh says:

    RE: Nick @ 19

    This is real easy, it’s called credit, debt, and speculation.

    This is a set of charts for national debt: http://www.usgovernmentspending.com/federal_debt_chart.html

    This is a set ofcharts of personal debt: http://chartingtheeconomy.com/?cat=27

    You’ll see the rise of personal debt since 1980. Before that we were closer to a cash economy. Beyond the debt is the debt industry that buys, sells, trades, and insures this debt against losses.

    Yes you can have a complete bubble economy.

    Bubble Economy
    An economy market in which prices for goods and services rise far above actual values. This trend continues until investors realize just how far prices have risen, usually but not always resulting in a sharp decline. Bubbles usually occur when investors, for any number of reasons, believe that demand in the economy will continue to rise far beyond what is sustainable. This results in the increased prices. See also: Bubble.

    We have never had this much debt. This debt was accumulated in a very short amount of time.

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  24. 24
    Topdog says:

    Inflation is not a price increase, which may just be supply and demand reaching an equilibrium. Inflation is an increase in available money plus credit relative to the supply of goods and services. I.E. there is more money (credit can be used to purchase too) which is now worth less than the previous rarer units.

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  25. 25
    ChrisM says:

    RE: David Losh @ 17 – David, you state “Gold is my other favorite. In what world will gold become a valuable asset to have”

    Throughout much (most?) of written human history gold has been valued. Why would this current downturn be any different?

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  26. 26
    redmondjp says:

    By ChrisM @ 25:

    RE: David Losh @ 17 – David, you state “Gold is my other favorite. In what world will gold become a valuable asset to have”

    Throughout much (most?) of written human history gold has been valued. Why would this current downturn be any different?

    True that. For thousands of years, gold has been used as a currency by pretty much every civilized nation. And every fiat monetary system ever tried has eventually failed, rendering the currency worthless. What makes you think that this time will be any different?

    And did you know that several states already have or are looking at allowing the use of precious metals as currency?

    http://money.cnn.com/2012/02/03/pf/states_currencies/index.htm

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  27. 27
    Unsettled Worker says:

    RE: David Losh @ 17

    You are right. No, you are 100 % right. We live in the age of speculation. This speculation is itself a very dangerous symptom of deeper disease of global capitalism. I´m not against capitalism as a system where we are all equal and can do barter, but against its current form which is governed by banking sector with no production. How comes every second person is now a financial adviser? How comes all big companies now have to invest on the stock market instead of just producing and selling? The system itself has to be reworked. We can not be enslaved by debt that does not even exist. We can not be manipulated to take loans and mortgages that we can never pay. Or being protected by insurance that does not even work (as you can check on Seven Caveats with Bank-Owned Mortgage Insurance Coverage).

    There is no real growth without production as well as there can not be more work without production. We have to realize that and give mandate to politicians that will really bother about us.

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  28. 28

    By Sweet Pea @ 13:

    RE: Pegasus @ 11

    Disagree on rent. If I renew my lease, mine will be going up 11%. They did something almost as high last year, too, because they can. They have made no upgrades to my unit. Maybe it is lower than 5-6 years ago if you are renting a single family home. Otherwise, plenty of gouging to go around. I’d just rather get gouged by the landlord than the home builder down the street, I guess.

    Charging current rents is not gouging.

    If you disagree, let me know if you have any assets that have gone up in value since you bought them. I might be interesting in buying them from you for what you paid for them.

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  29. 29

    By Pegasus @ 16:

    Healthcare increases moderated last year, . . .

    Regence doesn’t think so. I don’t remember the increase in my insurance, but it’s going up over 10% this year. It’s been doing that so long now I don’t think the Seattle Times even reported on it this year.

    To the extent it has moderated at all, that’s probably due to the effects of high unemployment reducing demand.

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  30. 30

    By David Losh @ 17:

    There is no way the people here, on a bubble blog, don’t see that we are in a period of commodity speculation.

    Oil is my favorite. The price of oil keeps going up, and stays up, even though we have a glut, natural gas is plentiful, we have alternatives in energy, but we keep playing the threat of the Middle East will raise our oil prices.

    Unlike you, the rest of us don’t make up facts. There is no oil glut and the price of natural gas is currently very cheap.

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  31. 31

    By David Losh @ 17:

    Gold is my other favorite. In what world will gold become a valuable asset to have? I can see after the economic collapse some one with gold coins wanting to barter. They would be laughed at.

    You really don’t understand what makes something valuable.

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  32. 32
    wreckingbull says:

    RE: Topdog @ 24 – DING DING DING DING. I was waiting to see how long it took before someone actually stated the correct definition of inflation.

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  33. 33
    David Losh says:

    RE: redmondjp @ 26RE: ChrisM @ 25

    It is all fiat currency, and if gold were the standard the people with the most gold would win, like Peru.

    The only reason we maintain this fantasy is because we had a gold rush in California, so the United States thought they had a basis for the currency they printed.

    It’s a useless commodity that only shows why we need to get past 1970s economic theory, and look at hard realities like government default.

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  34. 34

    By Kary L. Krismer @ 28:

    By Pegasus @ 16:
    Healthcare increases moderated last year, . . .

    Regence doesn’t think so. I don’t remember the increase in my insurance, but it’s going up over 10% this year. It’s been doing that so long now I don’t think the Seattle Times even reported on it this year..

    The Times did report on the request to raise rates by 15%, but not the approval (which I think may have been 15% for me).

    http://seattletimes.com/html/localnews/2018484854_regence21m.html

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  35. 35
    David Losh says:

    RE: Topdog @ 24

    The credit is based on low monthly payments.

    Our economy is being propped up by Fed policy to ensure those lines of credit stay open. What it has done is create the illusion that prices are rising. Most of that rise in price is speculation that has made large cash reserves.

    If there was a conspiracy in this we will see that cash come into the market place to buy up whatever might have value.

    Is credit currency?

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  36. 36

    By Unsettled Worker @ 27:

    Or being protected by insurance that does not even work (as you can check on Seven Caveats with Bank-Owned Mortgage Insurance Coverage).

    That’s a rather stupid article that merely describes the nature of the type of insurance as being disadvantages.

    I would agree that type of insurance is typically not a good deal, and it would most likely make sense to buy other types of insurance instead, but not for many of the reasons stated in that article. For example, lots of life insurance doesn’t generate cash surrender value, and in the context of mortgage insurance, even if it did, little would be generated over the life of most loans.

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  37. 37
    Blurtman says:

    RE: Topdog @ 24 – Says you. And Mish and likely other Austrians. But the common man says no.

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  38. 38
    Blurtman says:

    RE: Unsettled Worker @ 27 – Communist! People died to protect or freedom to engage in deception, manipulation, and upwards wealth concentration.

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  39. 39
    Pegasus says:

    RE: Kary L. Krismer @ 34 – I was speaking nationally. We all know our favorite Wa. “non-profit” healthcare insurer is constantly crying destitution while amassing a billion dollars in reserves that will be a boon when they are finally allowed to become “for-profit”.

    National costs: http://www.healthcostinstitute.org/news-and-events/snapshot

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  40. 40

    RE: Pegasus @ 39 – Have they made any effort to become a for profit entity? The reserve issue for me is a non-issue as a long term customer. It’s like having too much money in your mortgage escrow account. Eventually it evens out, and them having enough reserves is certainly better than the alternative.

    Since the increases were approved by the insurance commissioner, I assume there were increases in expenditures that justified the increases.

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  41. 41
    apartment boy says:

    RE: David Losh @ 17
    Natural gas rigs are down 50 -70% because the drillers are losing money under $4 per thousand bcf. I’d also point out that new crude, be it shale or deep water, breakeven cost is ~ $80/b.

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  42. 42
    Dont Buy It says:

    Sorry, but I don’t buy the woe is me thing. Amazon hired thousands of people into six figure jobs. They do hire locals. You just need to tool yourself with skills that the economy needs. UW has plenty of programming courses that you don’t even need to take as credits. Microsoft has 6000 jobs open and do other tech companies in the area. There’s no reason to be pining about how you don’t have a high paying job that doesn’t give you benefits.

    You didn’t strategically focus your career and make sure you were moving forward in the right direction. Take ownership of that and fix it.

    The multi generational house effect is more a matter of so many people being too stupid to plan for retirement. The baby boomers largely haven’t retired at the rates you’d expect and thus older people are now taking up entry level jobs that the young would typically use to join the workforce. It is what it is. On a macro level, it’s the the fault of people living too large and not saving and investing.

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  43. 43
    Pegasus says:

    RE: Kary L. Krismer @ 40 – The insurance commissioner almost always approves, after grumbling, whatever the companies tell him to do. He is a captured regulator.

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  44. 44
  45. 45
    David Losh says:

    RE: apartment boy @ 41

    Because gas is plentiful, and new technology is making it easier to get, the price is dropping to a point where it is more profitable not to drill.

    The price of oil should have followed, but it didn’t.
    OPEC sets the price per barrel at $100, but it is pegged at $93, or down to $80 per barrel.

    There is no reason for oil to be driving prices any more than a drought would. Corn is grown around the world, and without the need for ethonal it should also be plentiful.

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  46. 46
    redmondjp says:

    By Dont Buy It @ 42:

    Sorry, but I don’t buy the woe is me thing. Amazon hired thousands of people into six figure jobs. They do hire locals. You just need to tool yourself with skills that the economy needs. UW has plenty of programming courses that you don’t even need to take as credits. Microsoft has 6000 jobs open and do other tech companies in the area. There’s no reason to be pining about how you don’t have a high paying job that doesn’t give you benefits.

    You didn’t strategically focus your career and make sure you were moving forward in the right direction. Take ownership of that and fix it.

    The multi generational house effect is more a matter of so many people being too stupid to plan for retirement. The baby boomers largely haven’t retired at the rates you’d expect and thus older people are now taking up entry level jobs that the young would typically use to join the workforce. It is what it is. On a macro level, it’s the the fault of people living too large and not saving and investing.

    On the first issue – you are clueless. Tech companies want to hire smart, eager 20-somethings who will gladly work 60-80 hours per week. When these same workers get in their 40s and are getting paid much higher (and typically have families and no longer want to live at work), many of them are “managed out.” Lather, rinse, repeat.

    Tell me why Microsoft quietly lays off thousands of people every year who have gotten a ‘5’ ranking (who already have the proper degree, experience, and training) and then out of the other side of their mouth claims they can’t find qualified workers. Wouldn’t it be far less expensive to simply do in-house retraining of these existing employees?

    How likely is it for a local tech company to ever hire a middle-aged person who has gone back to school and gotten a computer science degree from a good school (but has no real programming experience) yet? The odds of winning Powerball are better . . .

    On the multi-generational housing – this is primarily due to H-1Bs bringing over their parents and grandparents (who provide daycare for the children), and living in the same apartment or house.

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  47. 47
    whee says:

    Amazon hasn’t hired any ‘thousands’ of people for six figure jobs recently. Maybe a few hundred, if that. They have plenty of seasonal hiring going on, but that’s not six-figures or steady, obviously.

    I remember during the bubble when google opened a small office (500 or so) in Kirkland and they thought home prices would double there or close to it, because, googlejobs!

    They didn’t double. Amazon is not a Boeing or MSFT, and pretending it is would be the sort of pink ponyism that was seen even as late as 2009. Median income is pretty high, but it’s not six figures even in most of the pricier parts of King County.

    I guess Seattle is special at coming up with delusions at the drop of a hat.

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  48. 48
    corndogs says:

    RE: redmondjp @ 46 – I’m not seeing what you’re saying at all…. the turn over is based on competition, all ages, races and nationalities seem to be welcome….. if you lose, you lose…. but if you vote for Obama all your problems may be solved… check this out. http://www.youtube.com/watch?v=tpAOwJvTOio&sns=fb

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  49. 49
    redmondjp says:

    By Corndogs @ 48:

    RE: redmondjp @ 46 – I’m not seeing what you’re saying at all…. the turn over is based on competition, all ages, races and nationalities seem to be welcome….. if you lose, you lose…. but if you vote for Obama all your problems may be solved… check this out. http://www.youtube.com/watch?v=tpAOwJvTOio&sns=fb

    So are you then saying that competition in the workplace is good and that we should only keep the best & the brightest workers? I say bring it on! Let’s stack-rank all of our police, firefighters, teachers, and all government workers in the same manner then . . . if you lose, you lose!

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  50. 50
    corndogs says:

    RE: redmondjp @ 49 – welll.. if you lose, you just have to find a different job you’re more suited for…. if you’re at the absolute bottom, like the piece of trash in the video…. welll life aint that bad you still get an Obama phone, food stamps and a place to live … of course cops, and firefighters and teachers should be under the same system… they aren’t heroes any more than any other guy showing up to work everyday… historically these were low paying jobs… still should be.

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  51. 51
    HappyRenter says:

    RE: Corndogs @ 50RE: redmondjp @ 49
    I think that you need to set a quality standard and anybody taking a particular job needs to fulfill the quality standard. In my opinion, this is better than setting everybody against everybody. Education is important because it gives everybody a chance to achieve the quality standard required for a job. At the workplace you want to move as a team, not as a lonely fighter. My experience is that lonely fighters will eventually make some crucial mistake because they tend to isolate themselves. One could argue whether a merit based system encourages lonely fighters or team workers.

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  52. 52
    Blurtman says:

    RE: Corndogs @ 48 – Ain’t these poor peoples funny? The thing is, some 240 years ago or so, this woman could have been babling some nonsense about overthrowing the British.

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  53. 53

    By David Losh @ 45:

    RE: apartment boy @ 41

    Because gas is plentiful, and new technology is making it easier to get, the price is dropping to a point where it is more profitable not to drill.

    The price of oil should have followed, but it didn’t.
    OPEC sets the price per barrel at $100, but it is pegged at $93, or down to $80 per barrel.

    There is no reason for oil to be driving prices any more than a drought would. Corn is grown around the world, and without the need for ethonal it should also be plentiful.

    Wow.

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  54. 54
    Sweet Pea says:

    By Kary L. Krismer @ 28:

    By Sweet Pea @ 13:
    RE: Pegasus @ 11

    Disagree on rent. If I renew my lease, mine will be going up 11%. They did something almost as high last year, too, because they can. They have made no upgrades to my unit. Maybe it is lower than 5-6 years ago if you are renting a single family home. Otherwise, plenty of gouging to go around. I’d just rather get gouged by the landlord than the home builder down the street, I guess.

    Charging current rents is not gouging.

    It is gouging if the cost inputs are not increasing at the same rate. And yes, supply, demand, blah blah blah, except we have achieved the market gridlock on renting and buying that I feared. Supply sucks all around, so the market dictates prices go up. So we continue the redistribution of wealth from the haves to the haves-way-more. Interest rates are at the bottom of the barrel, and sales inventory still sucks.

    So, yes, in the big picture I see this as gouging, because we all have to live somewhere and will pay one way or the other, or get roommates (maybe mom and dad), and either way quality of life by many measures continues to slide backwards for a lot of people. But, supply, demand, blah blah blah, all the way to the bank for a few.

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  55. 55
    2kt says:

    RE: David Losh @ 35RE: David Losh @ 10

    I read this three times and still trying to understand what exactly you meant to say here, Dave? I am not the smartest cookie in a jar, with IQ of only 130, but you really make me feel stupid, Dave.

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  56. 56
    David Losh says:

    RE: 2kt @ 55

    Well, you are right, it makes sense to me that we are in a bubble economy based on credit, with low interest payments, but obviously it’s a tough concept to grasp.

    10 thumps down can’t be wrong.

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  57. 57

    By Sweet Pea @ 54:

    By Kary L. Krismer @ 28:
    By Sweet Pea @ 13:
    RE: Pegasus @ 11

    Disagree on rent. If I renew my lease, mine will be going up 11%. They did something almost as high last year, too, because they can. They have made no upgrades to my unit. Maybe it is lower than 5-6 years ago if you are renting a single family home. Otherwise, plenty of gouging to go around. I’d just rather get gouged by the landlord than the home builder down the street, I guess.

    Charging current rents is not gouging.

    It is gouging if the cost inputs are not increasing at the same rate. .

    So you think that someone who has owned a house since 1970 should only rent it out for what it would have rented for in 1970, plus whatever taxes might have increased?

    Apparently you totally missed the point of my post. Cost does not control what something sells for. Again, if you have some object you’ve bought in the past that is now more valuable, please let me know what it is so that I can consider buying it from you for what you paid. You wouldn’t want to gouge me know, would you? What I’d particularly like is maybe a cherry one-owner 1964 1/2 Mustang. I’d probably be willing to give you $3,000 for it. That should be fair.

    Costs don’t get passed on to the consumer. That’s a myth. Sometimes prices go up when costs go down. Costs are sort of like time of possession in football. They may tend to indicate what the price will be, but they do not not determine price.

    Sellers may try to pass costs on, but whether or not they can is dependent on the market.

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  58. 58

    By 2kt @ 55:

    RE: David Losh @ 35RE: David Losh @ 10

    I read this three times and still trying to understand what exactly you meant to say here, Dave? I am not the smartest cookie in a jar, with IQ of only 130, but you really make me feel stupid, Dave.

    Not sure why you didn’t also click on post 53 there. That’s one messed up post too, although perhaps more understandable.

    I think Dave’s problem is that he doesn’t understand credit. He thinks that because too loose of credit standards is is a bad thing, that all credit is bad (although I think he may accept credit to buy productive assets). Because our economy still has functioning banks, which grant credit, he thinks the entire economy is a bubble. While it’s true prices are higher because we have functioning banks, it does not follow that we have a bubble situation. Without the banks the US would have the economy of Afghanistan.

    He does have a point that not all people use credit wisely. But not all people do anything wisely, even some basic bodily functions.

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  59. 59
    David Losh says:

    RE: Sweet Pea @ 54

    Landlords are gouging, and we talk with people every week who call the bluff, and move.

    In time it will settle out, but in the mean time people are being screwed.

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  60. 60
    David Losh says:

    RE: Kary L. Krismer @ 58

    First let me show you your first concern: http://www.ioga.com/Special/crudeoil_Hist.htm

    and now the increase in debt: http://chartingtheeconomy.com/?cat=27

    Wow!

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  61. 61

    RE: David Losh @ 60 – David, I don’t think you know what the first link even means.

    As to the second link I’ll stand by what I said about you in post 58.

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  62. 62
    Sweet Pea says:

    By Kary L. Krismer @ 57:

    By Sweet Pea @ 54:
    By Kary L. Krismer @ 28:
    By Sweet Pea @ 13:
    RE: Pegasus @ 11

    Disagree on rent. If I renew my lease, mine will be going up 11%. They did something almost as high last year, too, because they can. They have made no upgrades to my unit. Maybe it is lower than 5-6 years ago if you are renting a single family home. Otherwise, plenty of gouging to go around. I’d just rather get gouged by the landlord than the home builder down the street, I guess.

    Charging current rents is not gouging.

    It is gouging if the cost inputs are not increasing at the same rate. .

    So you think that someone who has owned a house since 1970 should only rent it out for what it would have rented for in 1970, plus whatever taxes might have increased?

    Apparently you totally missed the point of my post. Cost does not control what something sells for. Again, if you have some object you’ve bought in the past that is now more valuable, please let me know what it is so that I can consider buying it from you for what you paid. You wouldn’t want to gouge me know, would you? What I’d particularly like is maybe a cherry one-owner 1964 1/2 Mustang. I’d probably be willing to give you $3,000 for it. That should be fair.

    Costs don’t get passed on to the consumer. That’s a myth. Sometimes prices go up when costs go down. Costs are sort of like time of possession in football. They may tend to indicate what the price will be, but they do not not determine price.

    Sellers may try to pass costs on, but whether or not they can is dependent on the market.

    I’ll reply by using a mirror of your argument to demonstrate how ridiculous it is. Do you think someone who owned a house since 1970 should only rent it out at a price reflecting an 11% increase each year, regardless of the actual changes in the economy over that time? Sellers of goods and owners of property in the U.S. have had a sweet deal, in that Americans will pay what they are able, in many cases, rather than what makes sense. The same mentality that resulted in millions of people taking outrageous amounts of debt to pay inflated prices for homes has not disappeared overnight.

    And I ignored your comments about buying something for its original purchase price. You invented some argument where I supposedly made that suggestion for rent. I didn’t miss the point, I just thought it was too simplistic. You have also made the assumption that I’m saying costs are the only input to price, but if you don’t think costs get passed on to the consumer, you apparently don’t live in the same world I do. Cost of fuel is an input that, when it increases, in turn increases prices on a large swath of goods. Tried feeding livestock here over the last 20 years? Known anyone who has discussed price with a hay dealer? Or, how about the more simple idea that if cost can’t be passed on to a buyer, unless the seller is willing to take a loss he can cover with other revenue, he will eventually stop selling the item.

    Cost, scarcity, demand, and available income to pay all affect price. Unfortunately, the primary flaw of capitalism (which, unfortunately, is still the best system available) is that in the real world it entails charging as much as possible for something to consumers who are often lazy, strapped for time, and / or do not have perfect information available. Many Americans are too polite to bargain, and we’ve been taught that we can just borrow in order to pay.

    I spoke with the leasing office, to negotiate price, and when I pointed out the 11% proposed increase and that I wondered whether the owners thought that renters in this area are receiving 11% raises, the staff person laughed. She won’t be receiving an 11% raise, either. The owners / agency are happy to attempt to give themselves one, though.

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  63. 63

    By Sweet Pea @ 62:

    I’ll reply by using a mirror of your argument to demonstrate how ridiculous it is. Do you think someone who owned a house since 1970 should only rent it out at a price reflecting an 11% increase each year, regardless of the actual changes in the economy over that time?. . .

    No. What I’m saying is that they should take changes in the economy into account. Supply and demand. You’re the one saying they are gouging because they are increasing the rent.

    I spoke with the leasing office, to negotiate price, and when I pointed out the 11% proposed increase and that I wondered whether the owners thought that renters in this area are receiving 11% raises, the staff person laughed. She won’t be receiving an 11% raise, either. The owners / agency are happy to attempt to give themselves one, though.

    It’s not the raises in wages that matter. It’s what people are willing to pay for whatever reason. Wages could be going up with them able to get lower rents, if say more people were buying because of their sudden new felt wealth. Wages not going up is a factor, but if you have more people in the area earning the same wage, rents will tend to go up (all other things being equal).

    I’ll go back to my original point. It’s not gouging simply because rents are going up. If they can’t collect their 11% increases, they’ll find out the hard way. If they can, it just means others are willing to pay more than you.

    When all the new apartments come on the market, as addressed in the recent article, rents will probably head back down. That will be good for you, bad for landlords. If and when that occurs, I won’t be here complaining that renters are taking advantage of landlords.

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  64. 64

    By David Losh @ 60:

    and now the increase in debt: http://chartingtheeconomy.com/?cat=27

    If you go down to per capita consumer credit, it’s at about $9,000 per Dave’s charts. Apparently about a third of that is student loan debt!

    http://www.usnews.com/news/articles/2012/03/06/5-shocking-facts-about-student-loan-debt

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