Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

25 responses to “Local Foreclosures Inched Up in October”

  1. No Name Guy

    Keep the facts and charts coming The Tim.

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  2. Erik Muller

    If I sell my home i’ve lived in for a year, what taxes do I have to pay if i want to put the money in the bank as opposed to keeping it in escrow? If i make 90k total profit minus 10% for excise tax and real estate agents, I should have $72. Should i just put that money in the bank? I want to wait for this new wave of foreclosures to hit the market before i try to buy again. I estimate it will be 6 months after I sell. Please advise.

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  3. Erik Muller

    A “notice of trustee sale” spike means that there are an increased number of houses that will most likely foreclose, right? Isn’t this a good indicator that there are a bunch of foreclosures to come?

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  4. Erik Muller

    Thank you for the information Tim.

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  5. Kary L. Krismer

    RE: Erik Muller @ 4 – It’s an indicator, but not necessarily a good indicator. For example, while I’m not saying this has occurred, you could see a number of new NTS filed to comply with the Bain v. MERS decision. You could also have a number of people receiving NTS file Chapter 13, or more than one NTS for one property.

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  6. softwarengineer

    RE: Erik Muller @ 2

    Cashing in and Re-investing

    This site is real estate slanted, so “other” investments compared to homes listed or short sales will be omitted in general….

    Would I cash in quick if I bought a home a year ago? Probably not….I do not make optimum investment decisions and who does BTW?

    But lets open our minds up and be “flat tabled” pragmatic. What is the chance that Seattle area real estate will just linger at today’s prices forever, more or less? Or another question, what is the chance that Seattle area real estate will plummet in price? Or even go up in price soon?

    Step one to analyzing that can of worms is trust no one, especially the media. A good example is the salesman who’s selling the “get rich” book….if his book really worked, why is he pitching it for money?

    Always check your advice from the source it comes from. If the source has money to make getting you to believe the snake oil works, its probably just that, snake oil.

    Same with this website….homeowner bloggers here generally will not tell you Seattle area home prices could plummet again, remember 2007. Do I believe they will?

    If you know SWE, you know he uses demography science and population density projections to estimate future wage decreases [or increases]….also, when fish, water and trees run out [they have] its very difficult to get more creditors for loan collateral on future deficit spending and lest I add, the 2013 fiscal cliff we face.

    The best news on Seattle home price stabilization and even increases for the future is our current 1.7 birthrate depopulating America the last 3 years, potentially raising future wages. Oh, that’s right, the foreign/corporate controlled media calls a low birthrate a curse to America, needing Immigration Reform….but they predicted higher priices in 2007 too needing uncontrolled population growth in Seattle….remember Mayor Nickels?

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  7. No Name Guy

    RE: Erik Muller @ 4

    Or you can see what the banks have done with the current crop of foreclosures – sit on them en mass and dribble them out to spread out the losses they take, and keep the market from dropping to a price level that will clear.

    With all the free money that the Bernake has given to the banks via LTRO, QE1, QE2, QE etc, the interest on excess reserves, and all the rest, the banks are able to mask the fact that practically their entire asset base (the mortgages they hold and / or the foreclosed homes they hold) are a huge loss. By dribbling them out, the banks only have to realize the losses a bit at a time, while all the ones they sit on are still marked (valued) at “full” price. If the banks were forced to take those losses all at once, they’d be insolvent (which in reality they are – only the fraudulent fantasy marking at full value for severely impaired assets is what’s “saving” them). It’s all part of extend and pretend….try and hold on and hope that it all works out.

    As far as that supposed lack of “shadow” inventory: There are several homes in my neighborhood (unincorp south Sno Co a bit east of Lynnwood and north of Brier) that have been sitting vacant for extended times – long ago foreclosed (one I’ve been watching went on market as an attempted short sale 3/2010, listing removed 12/2010 – been vacant since, obviously foreclosed – nearly 2 years now, another one they didn’t even bother trying to short sale – last sale on Zillow shows in Sept 2006, been vacant for a couple years now) and not on the market for (cough, cough) what ever reason. I could point ‘em out on Zillow / Redfin by address should The Tim care. They’re easy to spot as I drive around on my business, or taking a run. Look at your own ‘hood and you’ll spot them.

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  8. Erik Muller

    RE: softwarengineer @ 7
    Do I have to pay taxes when I extract the money from the sale and place into a bank account or another investment?

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  9. drshort

    RE: Erik Muller @ 9

    I believe if you haven’t owned the home for 2 years you will need to pay capital gains on the sale regardless of what you do with the proceeds.

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  10. Kary L. Krismer

    RE: drshort @ 10 – One possible exception to that might be a 1031 exchange. I don’t think that wouldn’t generally apply to houses used as personal residences though. Also, deferring the tax through a 1031 exchange might not be a good idea if tax rates go up, or the person’s other income is expected to cause them to rise into higher income categories. Finally, doing a 1031 exchange presents the possibility of the exchange facilitator stealing or losing the funds, leaving the seller with a tax liability and no proceeds to pay the tax.

    Really another question that should be directed to a tax professional.

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  11. ARDELL

    RE: softwarengineer @ 7

    Softwarengineer,

    I have been reading your comments for years, and I doubt I will ever be able to “tell you” anything about real estate. But even though this will get thumbs down to milky white forcing Ray to read it, I think it’s time we had a little conversation about what blogging is and isn’t.

    You said: “Same with this website….homeowner bloggers here…” and continually refer to your “posts” and “blogging” here.

    The ONLY person “blogging” here is The_Tim.

    You also refer to your “blogs”. The ONLY “blog” here is Seattle Bubble.

    You also refer to your “posts”. The ONLY person here with a post, unless it is a guest post from Jillayne or someone chosen to do “a post” by The_Tim, is The_Tim.

    I know that you continually strive to be right as rain about most everything and so I give you this information because I believe you will appreciate being called out on this vs everyone ignoring your mis-speak for years and years as we have been.

    The Blog = Seattle Bubble. No one writes “a blog”. The blog is what Tim owns and writes a “post” on.

    A Post = Every new topic written by The Tim is “a post” or “an article” on Tim’s Blog.

    What you and everyone else here does, including me, is comment on one of Tim’s posts on Tim’s blog. You are a “commenter” on a blog.

    You are not blogging here…you are commenting on “a blog”. You are a commenter, not a blogger here on Seattle Bubble. You may be a blogger elsewhere, as I am. But here we are both commenters on Tim’s Blog.

    If I were continuously calling a table a chair, I would hope that someone would eventually set me straight on that, and so I hope you appreciate my passing this info on for what it’s worth. This is not a flame…this is a sincere effort to educate.

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  12. Kary L. Krismer

    RE: ARDELL @ 12 – There are some real estate agents on Trulia that think blogging involves posting their listings as a blog piece. It drives me nuts because I get an email every time they get a listing, change a price on a listing, do an open house, etc. I suspect some clock hour course teacher is teaching agents that’s a good way to get listings more exposure.

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  13. Ira Sacharoff

    RE: ARDELL @ 12
    I’m going to defer to Ardell as being more knowledgeable on all matters blogging, but I always thought that by being a commenter, I was also posting, as in posting comments. I’m wrong again, huh?

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  14. Erik Muller

    “When you sell your primary residence, you can make up to $250,000 in profit if you’re a single owner, twice that if you’re married, and not owe any capital gains taxes.”

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  15. Kary L. Krismer

    RE: Erik Muller @ 15 – [This apparently answers a post that was deleted on 1031 exhanges}

    From memory it’s a longer time than that, but you have to designate your possible purchases within a short time–maybe 45 days–I don’t remember. You generally want to designate more than one property in case the first deal flips.

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  16. Kary L. Krismer

    RE: Erik Muller @ 15 – You can still owe a tax though in some situations. The one I know of is depreciation recapture if the property was used as a rental or home office after sometime in 1997. And I believe that is taxed as ordinary income, not capital gain.

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  17. Erik Muller

    Thanks for the information Kary. It sounds like in my case I won’t be taxed too heavily.

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  18. Kary L. Krismer

    RE: Erik Muller @ 18 – Consult your tax adviser. Taxes can turn on many things, and you don’t want to be surprised by being the “unusual situation.”

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  19. drshort

    RE: Erik Muller @ 15

    You left out the part about needing to have lived in the primary residence 2 of the past 5 years to be eligible for the capital gains tax exemption. In your first comment, you mentioned only living in it for a year.

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  20. corndogs

    RE: drshort @ 20 – I believe it’s one year to get capital gains rate in lieu of regular rate and two years to avoid capital gains… but he should talk to accountant, for 300 bucks you can get your taxes done and probably call in through the year for advice… it’s a good investment.

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  21. ARDELL

    Question for The Tim. My comment #12 had 10 thumbs up and 2 thumbs down and now is 1 and 0. Ira’s comment #14 had 1 thumbs up and now has none.

    Is there a time reset? What would cause these results to change?

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  22. Ira Sacharoff

    By ARDELL @ 22:

    Question for The Tim. My comment #12 had 10 thumbs up and 2 thumbs down and now is 1 and 0. Ira’s comment #14 had 1 thumbs up and now has none.

    Is there a time reset? What would cause these results to change?

    And what if I read Adrell’s comment, give it a thumbs up, the re-read it and think ” She said WHAT?” Can I re-do my thumbs?

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  23. ARDELL

    RE: Ira Sacharoff @ 23

    Haha! Ira wants a “do-over” option.

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