Case-Shiller Tiers: All Three Tiers Hit Double-Digit Gains

Case-Shiller Tiers: All Three Tiers Hit Double-Digit Gains

Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

  • Low Tier: < $258,908 (up 2.5%)
  • Mid Tier: $258,908 – $415,069
  • Hi Tier: > $415,069 (up 2.8%)

First up is the straight graph of the index from January 2000 through March 2013.

Case-Shiller Tiered Index - Seattle

Here’s a zoom-in, showing just the last year:

Case-Shiller Tiered Index - Seattle

All three tiers shot up in March, with the middle tier gaining the most. Between February and March, the low tier rose 2.0%, the middle tier was up 3.5%, and the high tier gained 2.5%.

Here’s a chart of the year-over-year change in the index from January 2003 through March 2013.

Case-Shiller HPI - YOY Change in Seattle Tiers

The low tier had a whopping 3.4-point boost in its year-over-year growth between February and March. Here’s where the tiers sit YOY as of March – Low: +13.4%, Med: +12.0%, Hi: +10.0%.

Lastly, here’s a decline-from-peak graph like the one posted yesterday, but looking only at the Seattle tiers.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 36.7% off peak for the low tier, 26.7% off peak for the middle tier, and 20.6% off peak for the high tier.

(Home Price Indices, Standard & Poor’s, 05.28.2013)

  

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.

42 comments:

  1. 1
    Erik says:

    Do you know why the sine wave was created? Because things in life and nature tend to follow it. This is no different for the Case Shiller price index. I see it coming.
    Draw a line at 160 and make that the horizontal axis. The case shiller price index will top out at 160+(.8*40)=182. The bottom is at 160-(.8*40)=128. This is for low tier homes. I gave 80% of the max and 80% of the min because people probably aren’t as stupid as they once were. It accounts for lessons learned.
    Sell when low tier CS price index hits 182 and buy when it hits 128. That’s my prediction.

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  2. 2
    mike says:

    Seems the moral of this story is top tier homes hold value better, unless they’re in Kent or Marysville. The tiered data kind of destroys SWE’s assertion that the prime neighborhoods are the ones with 25% declines from peak, since all of the prime neighborhoods are well within the top tier.

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  3. 3
    Matthew says:

    MMMMMMM….. I smell a top….

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  4. 4
    doug says:

    If you show a chart of the DOW we can all see why these case shiller charts are so dangerous to use when purchasing real estate. This is a time for selling.

    The baby boomers are retiring, the corporations are not hiring, and the politicians are lying.
    When the triple bottom on the dow touches 3000 to 4000 you should be buying.

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  5. 5
    Matthew says:

    85 billion a month ain’t chump change. Come talk to me about a housing recovery when Ben aka Dr Feelgood isn’t backstopping the entire mortgage market with pixie dust from his magical balance sheet.

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  6. 6

    Matthew is it possible that they could keep this going for a long, long time? They’ve kept it up thus far without a major collapse. What’s their end game? Thanks. I am listening.

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  7. 7

    RE: mike @ 2
    Hey, I Never Gave a Solid Prediction

    But you bulls on real estate sure do :-)

    I’ve always asserted there isn’t enough data in this low inventory environment to see through the price prediction fog. I bring up Bernanke news on QEs being discontinued soon with news URLs and you think its my predictions….its Reuters.

    Where’s you price bull URLs and better yet, news URLs that have Bernanke promising us QEs forever, like Japan? I know you come up nada.

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  8. 8
    JWS says:

    RE: doug @ 4

    Doug, you predict (or “guarantee”) a huge financial collapse in 2013/2014 on this blog almost daily.

    Have you sold your house? Are you short the U.S. stock market?

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  9. 9
    Scott says:

    By Matthew @ 5:

    85 billion a month ain’t chump change. Come talk to me about a housing recovery when Ben aka Dr Feelgood isn’t backstopping the entire mortgage market with pixie dust from his magical balance sheet.

    The markets with the fastest recovery like Florida, Vegas and Phoenix were mostly cash buyers (50% – 80%)

    The overall national level represents around 30% cash transactions.

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  10. 10
    mike says:

    RE: softwarengineer @ 7 – What you said about 25% off in prime neighborhoods wasn’t a prediction, as it related to the current case-shiller #’s.

    It’s amusing to be labeled a housing bull now, because for years I was the bitter bubblehead renter. I am curious though, if you saw this whole crisis coming from the beginning, why did you buy a house in the first place?

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  11. 11
    Corndogs says:

    RE: softwarengineer @ 7 – “I’ve always asserted there isn’t enough data in this low inventory environment to see through the price prediction fog.”

    Corndog predicted the bottom in Feb 2012 and bought something that month after waiting nearly 9 years… Now, prices are up 30%, a year and a half later… just because you’re brain dead doesn’t mean this wasn’t predictable…. it wasn’t only obvious to Corndog but it was obvious to thousands of investors…….. Somewhere someone told you that low sample size correlates to statistical insignificance….. and you latched onto that and stuck to it like two dogs f#*king in the front yard that can’t be beat apart with a stick….. That can be true, but it doesn’t apply here… so let it die already…. you’re in the same boat with Losh and Ira, understanding the concept of supply and demand requires two steps of evolution beyond your 2 dimensional brain capabilities…. just listen to other people and do what they do, you’ll be better off than trying to think for yourself….

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  12. 12
    whatsmyname says:

    By Matthew @ 3:

    MMMMMMM….. I smell a top….

    That would be a very useful skill for a bottom.

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  13. 13
    David Losh says:

    RE: Corndogs @ 11

    You waited too long, you paid too much, and you are only up 30%.

    Yeah, you are a genius.

    My returns are much higher than yours.

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  14. 14
    Erik says:

    RE: Corndogs @ 11
    As long as you are bragging, I may as well too. Eri read Seattlebubble to try and figure out where the bottom was and bought in November 2011. My deal was probably better than yours. Just cause you timed it right, doesn’t mean you couldn’t have gotten a better deal around that time as Eri did. Sure, I bought a dumpy condo, but I got a huge discount cause the guy that foreclosed wouldn’t let anyone in to see the place. I had my real estate agent write an offer with a clause to back out. After I bought it, I then let my friend with a serious alcohol problem stay here for 8 months while he fixed it up. I compensated him with cigarettes and food.

    My new plan is to sell this place and get an $80k profit. Later I will buy a 4-plex if I can afford it. I may have to buy a place in pierce county even though I despise that county and the people in it. It’s just so cheap down there, it will probably be my only option. No way would I move to that trash heap, but things are so cheap down there and there are so many people that it is unfortunately my only opportunity to achieve the scenario you described last weekend… “People working around the clock to make my life easier.” “Collecting sweaty rent money.” That’s my dream.

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  15. 15
    Erik says:

    RE: Corndogs @ 11
    Are you a trust fun baby like 3rd generation? You said you were collecting rent money when you were 21. All I hear from you is how to make money once you already have it. Maybe you don’t realize that starting out is the difficult part. I think pretty much any moron can make more money if they are given loans by their dad and walked through the process. This is what I have deducted from your comments. You say things like “save up til you can afford a multiplex.” I am paraphrasing of course. Yeah, Corndogs, I’m just gonna save my paycheck until i have $150k. That isn’t feasible and would take 20 years.

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  16. 16
    Erik says:

    RE: Corndogs @ 11
    Are you a trust fund baby like 3rd generation? You said you were collecting rent money when you were 21. All I hear from you is how to make money once you already have it. Maybe you don’t realize that starting out is the difficult part. I think pretty much any moron can make more money if they are given loans by their dad and walked through the process. This is what I have deducted from your comments. You say things like “save up til you can afford a multiplex.” I am paraphrasing of course. Yeah, Corndogs, I’m just gonna save my paycheck until i have $150k. That isn’t feasible and would take 20 years.

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  17. 17
    matrixhead says:

    Is the house party over already?
    http://wallstreetgreek.blogspot.com/2013/05/higher-rates-exposing-underlying.html
    http://www.cnbc.com/id/100772471

    Is there any sensitivity analysis regarding the impact of the recent rise in rates on prices?

    Is there any local data that would show changes more recent than C-S?

    If the economy really does start to pick up I would expect the Fed to slow QE (eventually stop new purchases) and then raise rates again. The market isn’t waiting for the Fed apparently since mortgage rates jumped alot in the past few weeks.

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  18. 18
    ChrisM says:

    RE: Jillayne Schlicke @ 6 – “They’ve kept it up thus far without a major collapse. What’s their end game?”

    I encourage everyone to go back and look at graphs of the Dow 1927-1946 and imagine what it must have been like at the moment not knowing how the graph would turn out. In other words, if it was 1928 and you saw the graph without knowing 1929 forward, how would you react? To repeat, 1928-1932 is very thought provoking.

    http://stockcharts.com/freecharts/historical/djia1900.html

    If the economy is so great, I greatly welcome a return to 5+% interest on my annual CDs. When is that going to happen?

    A review of https://en.wikipedia.org/wiki/Bond_vigilante would also be educational… One may think that the collapse of Europe is priced in, but once that happens what then happens to the US dollar?

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  19. 19
    Corndogs says:

    RE: David Losh @ 12 – “You waited too long, you paid too much, and you are only up 30%. Yeah, you are a genius. My returns are much higher than yours.

    Losh, Corndog knows the dump where you live. You paid $302K in 2003 and you’re tax assessed for $360K. Considering that you have deferred maintenance because that’s the way you live, you probably couldn’t sell for tax assessed value. So by the time you paid RE commission there’s a good possibility that you’re upside down. Remember last year? we talked about where you live and you lied and tried to say it was your place of business and that you lived somewhere else Remember lying because you were embarrassed because you live in a dump? That’s your reality.

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  20. 20
    Jonness says:

    By Jillayne Schlicke @ 6:

    Matthew is it possible that they could keep this going for a long, long time? They’ve kept it up thus far without a major collapse. What’s their end game? Thanks. I am listening.

    Yes, just as in Japan, it’s completely possible they could keep this up for a long time. As long as the U.S. continues to appear to be the best house in a bad neighborhood, the Fed will attempt to print with reckless abandon.

    Right now, the herd is betting the Fed is on the verge of pulling out, and this is going to have a negative effect on the economy. But the more likely bet is, the Fed will only pull out when it spots sustained improvement in the economy. Even then, it will slowly taper off support in order to avoid any big shocks to the system.

    IMO, it’s in the Fed’s best interest to bubble house prices within earshot of the prior peak before attempting to taper off, because as long as banks and people remain underwater on homes, we can never fully pull the boat out of the water onto dry land. This will be complicated by rising rates (perceived improvement brings temporary rate increase) hurting affordability. So we’ll turn back down for a while, affordability will return, rinse and repeat until we no longer appear to be the best house in a bad neighborhood.

    If you take a look at the monetary base, you will probably ask yourself why we aren’t already experiencing hyperinflation?

    http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=BASE&scale=Left&range=Max&cosd=1984-02-15&coed=2013-05-15&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Bi-Weekly%2C+Ending+Wednesday&fam=avg&fgst=lin&transformation=lin&vintage_date=2013-05-30&revision_date=2013-05-30

    Since the monetary base includes excess reserves, when the banks hold their money in excess reserves, it offsets the increase in the money supply. So if the banks don’t lend to Main Street, then the money doesn’t have a chance to compete for asset prices and cause hyperinflation. The flip side is, if the economy starts to improve for real, and all that money gets let loose, then the Fed has to attempt to soak it up before it harms the system. IMO, that’s when we will get into trouble. But it will probably only occur if the economy starts to improve for real, or the current Fed bubble blows so big the banks decide to let go of the reigns.

    In short, the printing can go on for a very long time, or it can unwind in a heartbeat. Nobody knows for certain. This uncertainty is complicated by the fact that financial shocks typically set up very abruptly. So you can appear to be in a stable spot one minute, and be in Hades the next. For now, improvement brings hardship, and hardship brings improvement, so we continue to bounce around and brag about all the money we are making as we mindlessly wag our tails and follow Bernanke around the neighborhood. Unfortunately, this herd-following habit is very reminiscent of the dot com era, housing bubble era, et al and most likely will not end well.

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  21. 21
    Corndogs says:

    RE: Erik @ 1 – Actually Erik, Corndog said last year to draw a line through 2002 to mid 2010 inflection point, that will put houses back to pre-bubble appreciation, your sinusoidal wave will oscillate around that line. Lower tier will take longer because those house are mainly in Pierce and Snohomish, takes longer for the recovery to work it’s way out from the job center. Also, the lower end is still going through foreclosures….

    For a low end estimate draw a line from 2000 through the aggregate peaks in 2011 and 2012. Whatever happens, there will not be wild oscillations in the future like you’re hoping for… this bubble was a once in a lifetime situation. Real Estate will track with inflation with much smaller oscillations…

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  22. 22
    David Losh says:

    RE: Corndogs @ 17

    The bottom was in 2011, August if I remember, just when the Fed dropped interest rates by 1% in a year.

    I paid $302K, and borrowed $570K after selling the rest of my properties, the last in 2007.

    Get the comment out where I said I lived some place else. What I said is you are a creep.

    I’m really good at this, and it’s looking like my house may be hitting that $600K number some time soon, but I don’t care, I already have all my money out of Real Estate with hefty returns.

    In order to get a return you need to sell or refinance. Best of Luck with that.

    You have no idea what you are talking about, you are an entertainer here. In the real world it’s the service industry that is paying the highest return on “investment.”

    You should look up the term investment.

    Now Jonness made a cohesive argument about the Feds plan, but by passed the most important part.

    “In short, the printing can go on for a very long time, or it can unwind in a heartbeat.”

    The Fed never has to be kind to the small investor. In his comment he also points out banks have massive cash reserves that are off setting the amount of printing being done.

    The Fed can stop any time, and in my opinion should have stopped before now, but really things are looking pretty good for an easing of the easing.

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  23. 23
    Erik says:

    RE: Corndogs @ 19
    Yeah, probably. I would never think we’d have as high of amplitudes as we had in the bubble. The 80% was a guess. Probably much smaller as you are saying. My large oscillations are wishful thinking. Larger oscillations would make me more money.
    If Snohomish and Pierce county take longer to recover, that may leave me with an opportunity to buy a multiplex before this market flattens out. I can sell my place in King County and buy a multiplex in Pierce or Snohomish County because I will have cash in hand. I will have to rent if I buy a multiplex, but that’s okay. If I can get a $1000/mo cash flow, I can get afford a pretty nice rental for myself.
    Losh,
    Good for you for selling your last place in 2007. Sounds like you hit the timing about right. I think in the area I bought, the bottom was 2011. Other places like Snohomish and Pierce county, it may have been 2012. Corndogs is trying to support his decision of buying in 2012 by calling that the bottom. It sounds like we all did good. My last real estate decision was good and I attribute it to listening to the people on this site.

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  24. 24
    mike says:

    By Jonness @ 18:

    IMO, it’s in the Fed’s best interest to bubble house prices within earshot of the prior peak before attempting to taper off, because as long as banks and people remain underwater on homes, we can never fully pull the boat out of the water onto dry land.

    Given the huge disparity between bubble prices even within metro areas, it’s going to be difficult to ‘bubble up’ evenly. Somehow the fed would have to flip the popularity of the low end areas that were pummeled with the desirable neighborhoods that didn’t fall as far.

    It’ll be a monumental task convincing the folks in Medina to move to Tacoma, though the reverse migration path will be easier.

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  25. 25

    RE: mike @ 10

    Mike

    In 1999 I saw the bubble a comin’, even before Dr Doom. So I bought a cheap house for $117K…..my rationale, at least with wage degradation population density increasing “EXPONENTIALLY” in the Seattle area, my lower priced unit would have a chance of selling for what I paid for it.

    The King County Asessor values my house and land at $84K today….I was right.

    My realtor thought I was NUTS. She knew I qualified for twice the home I bought, albeit I thought she was NUTS…..so who turned out to be NUTS?

    BTW, they call me Mr. Softwarengineer in my neighborhood now….LOL

    I wasn’t the only higher single income that bought low in real estate in my neighborhood the last 15 years, there were others like me…we wave at each other now.

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  26. 26

    RE: ChrisM @ 16

    Go Back to the Great Depression Graphs Too

    It started looking great then a few years later too; after pouring money in like mad, then the welfare fed support stopped and it got worse with stock collapses and houses worth nothing, hades we didn’t pull out of the 1929 depression until WWII.

    Thank God we don’t have a dust bowl today with food shortages and a 25% REAL UNEMPLOYMENT rate….our farms today may be high priced food from foreign owned slave shops….but at least the spoiled stuff goes to the food banks….

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  27. 27
    corndogs says:

    RE: Erik @ 23RE: David Losh @ 22 – The reason we’re talking about the bottom of the market dummies is because we’re looking at the Case Shiller Index. look at the flippin chart. February 2012 that was a bottom of the market. Losh, the only thing that we can ascertain from your post is you have a $360,000 asset and a $570,000 liability. We all know you burnt up whatever equity you took out. That’s why you’re looking for something in the $60,000 range in Mexico.

    I’m not saying that the chart means everything. But that’s the point of this blog isn’t it? To see who can hit the bottom make a purchase at the right time.

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  28. 28
    Jonness says:

    By David Losh @ 22:

    The Fed never has to be kind to the small investor. In his comment he also points out banks have massive cash reserves that are off setting the amount of printing being done.

    The problem is, the Fed is buying almost all of the MBS and treasuries. So when it stops, rates will skyrocket. When rates skyrocket, Uncle Sam’s cost of borrowing skyrockets well beyond what the incoming revenue stream can bear. Then either the country goes bankrupt, or we print more money and continue back around the circle.

    The Fed can exit temporarily. In fact, we have seen this with QE1, QE 2, QE 3, and QE 4 (QE 2.5 was a mind trick; it was really QE 3). We will most likely see QE 5, QE 6, QE7, and QE 8. The Fed can’t pull out for good. It is the largest buyer of U.S. treasuries in the world, and it currently makes up practically the entire MBS market. So, on the surface, it might appear pulling out will only hurt housing and destroy the small investor. But behind the curtains, all the Fed’s friends get wiped out too. The Fed is trapped between a rock and a hard place and can’t stop printing, let alone unwind its balance sheet.

    Now if we had a real recovery, the above would not be true. But what we are witnessing is not a real recovery, it’s not a recovery at all. It’s nothing more than sugar poured on the fire. The reason people are amazed is, Japan poured all kinds of sugar on its fire, and it still went out. Unlike Japan, the U.S. has been able to reach out and touch the lower bound of its liquidity trap. This has surprised many.

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  29. 29
    mike says:

    RE: corndogs @ 27 – I came golly close to hitting the inflection point. My original plan was to buy during winter 2011-2012, but due to an unexpected company acquisition and job change had to wait until August.

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  30. 30
    mukoh says:

    RE: David Losh @ 13 – Losh returns on a cleaning business can’t be that high, even margins for that matter. LOL

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  31. 31

    Thanks, guys. So The Fed is not going to let the U.S. Economy crash and burn. They are going to continue to help their banking friends and politicians. What you’re telling me is that we are blowing another bubble…slowly….to get us past the bottom.

    The Fed is buying RMBS but what about Wall Street? in Jan 2014 provisions of Dodd Frank Act go into effect paving the way for Wall St to start purchasing residential mortgage backed securities again. Shouldn’t this take some pressure off The Fed and their QEs?

    I’d like to see a blog post on the black swans….the things that Bernanke cannot control….and then what his response would be to the unknown. Or do we already know the answer….that he would prop everything up by printing more money?

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  32. 32
    whatsmyname says:

    RE: softwarengineer @ 25
    So you found one of the very few places where prices didn’t even hold their 1999 levels…..
    and your realtor was nuts?

    p.s. Next time those other high income guys in your neighborhood wave at you, check to see if they are contorting their fingers to look like letters.

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  33. 33
    Jonness says:

    By corndogs @ 27:

    February 2012 that was a bottom of the market.

    After giving this some thought, I think the CS is only meaningful as a generality. Also, if you borrowed money to buy, then the general bottom was Nov/Dec 2012 when affordability peaked.

    The true bottom (so far) was neighborhood specific. It also depends on the house you bought. For instance, there is no way the two places I bought could be had in Feb, 2012 for the prices I paid, because the sellers did not capitulate until the next selling season had past. OTOH, I saw other sellers capitulating in Oct, 2011 when that year’s selling season had past.

    I expect it matters how much you paid compared to how much the house is currently worth. But how do you establish value? The senior tax appraiser claims my properties are worth more than I paid for them. She’s got one of them assessed at 40% higher than the price I actually paid and the other one is a more reasonable 10%. She actually came out and talked to me about it wanting to know how I bought the places so cheap. She didn’t want to listen when I told her both places had been for sale by non-distressed sellers since 2008, and they finally sold for the prices someone was willing to pay. Is that not the fair market value? Well not according to her magic formula that comps my properties against places 15 miles away and then performs a “neighborhood adjustment.”

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  34. 34
    Jonness says:

    By Jillayne Schlicke @ 31:

    I’d like to see a blog post on the black swans….the things that Bernanke cannot control….and then what his response would be to the unknown. Or do we already know the answer….that he would prop everything up by printing more money?

    I’m not certain of all the conditions that can occur, but loose monetary policy only targets specific economic problems. The other side of the spectrum is tight monetary policy, such as what Volcker enacted in order to bring about an end to 70’s stagflation. Just as printing money and lowering interest rates raises asset prices, selling assets at the Fed and raising interest rates puts a damper on asset prices. Thus, if the Fed over-juices the economy, it will have to immediately begin to tighten.

    The Fed will always attempt to straddle the fence. Unfortunately, this is difficult to do because its actions don’t typically show up in the economy until many months after acting. This delayed response makes the timing extremely difficult to judge. The Fed does not have a good track record of getting it right. Thus, we continue to see these extreme economic fluctuations where nothing really gets fixed but manipulations occur causing some people to win at the expense of others who lose. In the meantime, you and I try to pay attention so we wind up on the right side of the equation, but that’s easier said than done.

    As far as printing money to lower rates in the face of a black swan, this only works while we can maintain the illusion of being the best house in a bad neighborhood. The Fed can’t buy 100% of U.S. debt, so if other investors lose confidence in our ability to pay back the massive amount of money we need to borrow to keep the economy on life support, we will have a run on bonds. If this occurs, rates will skyrocket, causing the government to no longer be able to service its debt, because it’s tax revenue stream would pale in comparison to the interest payment due. This would most likely lead to a U.S. default and an ensuing worldwide economic collapse of severe magnitude.

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  35. 35
    mukoh says:

    RE: whatsmyname @ 32 – There is no high income guys in SWE neighborhood!. He lives in a mobile home community. Its not exactly the high rent district.

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  36. 36
    Blurtman says:

    RE: Jillayne Schlicke @ 31 – It is only a bubble if it bursts. It is a balloon if it doesn’t. If ninja loans are banned, and loan criteria for the wittle guy tightened (not for the banksters, perish the thought), then perhaps a meltdown can be avoided. Remember, Mr. Market hates discontinuous movements, and must always backfill to re-establish continuity. It is a wonderful crime to steal money from the future, and have someone else fill in the resulting ditch.

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  37. 37
    AxlRose says:

    By Jonness @ 33:

    By corndogs @ 27:
    February 2012 that was a bottom of the market.

    The true bottom (so far) was neighborhood specific

    I bought a short sale in south Sammamish in May 2010, and took abuse from commenters here for the decision, which according to them, I surely must have been making due to pressure from my wife and realtor, and that I must be dumb. NOBODY was predicting the market cruising up like this back then. It may not have been the bottom but good luck finding a house with these specs within miles of here for what I paid. There aren’t any. So yes I agree with Jonness, bottom is definitely neighborhood specific. There have been very few sales for this type of house anywhere near me, for anywhere close to what I paid, since I bought. Recent sales indicate I could sell my house right now for about 20% more than I bought it for. Seems like a bottom purchase to me.

    http://www.redfin.com/homes-for-sale?src=homepage#!lat=47.59066027255794&long=-122.077075566786&market=seattle&max_price=550000&min_listing_approx_size=2500&min_parcel_size=10890&min_year_built=1980&num_baths=2.0&num_beds=3&sf=1,2,3,4&uipt=1&v=8&zoomLevel=12
    minimum search criteria
    3 bed / 2 bath
    2500 sq ft.
    1/4 acre lot
    built after 1980
    under $550k
    not a rundown dump
    And the cherry on top – I got a sweet tiger mountain and cascades view. Guess I’m a real dummy.

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  38. 38
    David Losh says:

    RE: mukoh @ 35RE: corndogs @ 27

    Here’s how it goes, because we have been here before, just not to this extreme; the Fed will do what it has to to make banks, and financial markets happy. You can look at Case Shiller until the cows come home, but the Fed makes the policy that makes the world go around, financially.

    The bottom was in 2011, just before the massive decline in interest rates, which pushed the price of property up, due to that affordability thing.

    Now you can “invest” in Real Estate if you want, but I’m very happy with my choices of holding onto my cash, and cleaning toilets. Cleaning toilets is a lot better than the construction business, financially.

    I have had a company that does rot repair, mildew removal, house painting, remuddling, and over all maintaining properties. No one ever said anything about that, but cleaning toilets? OMG!!!

    The return on the investment of a couple of vacuums, some rags, and cleaning products, even including the vehicle, is a thousand per cent. I have a hard time believing anyone gets that type of return for any other business.

    So, yeah, I have a lot of the banks money, yeah my property keeps going up in price, and yeah we have excellent cash flow with no upper limit.

    I feel pretty good about that today, because I see the markets correcting; all markets, in commodities, assets, and stocks. I wouldn’t want to be a flipper, or builder with these kinds of uncertainties.

    Show me where I’m wrong.

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  39. 39
    Matthew says:

    The Fed is merely keeping rates artificially low for one final pump so that the banks can unload the rest of their inventory on the bag holders. I track the SoCal market because (for better or worse) it is generally a the canary in the proverbial housing coal mine. Right now it looks like most of the large hedge funds and cash purchasers are attempting to taper off their transactions and are making a move to begin selling a lot of their properties that they have acquired over the last year or so.

    This is a typical echo bubble. Time and time again when the government attempts to step in a fix asset prices it becomes an attempt to delay the inevitable. They will run this badboy up for one final pump, allow the banks to unload as much of their properties as possible, and then eventually the Fed will exit the market and they will allow rates to adjust to where they should be sans the Fed manipulation. You are already seeing a dramatic spike on the 30 yr just based on the assumption that the Fed is going to start tapering MBS purchases by the end of the summer.

    Take a look at mortgage rates right now and run the figures on what the monthly payment would be on a 400k loan at 4.5% as opposed to to 3.5%. It’s almost 300 more per month with just a 1% rise. One can make the argument that this latest rebound in housing prices has more to do with low rates than it has to do with tight inventory. Sure tight inventory is partially to blame but without rates below 3.5% we wouldn’t see this type of appreciation.

    I think this all plays out fairly quickly over the coming months. An increase in mortgage rates will be downward pressure on home prices. Without any real wage inflation or substantive economic recovery driving this latest housing price bump the bubble is destined to pop. Just like last time this is all smoke and mirrors. I’d say the market peaks in July/Aug and by the fall you are going to see the market come crashing back to reality.

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  40. 40
    whatsmyname says:

    RE: mukoh @ 35
    We must restrain our skepticism. We have a statement of direct first person witnessing of high income neighbors. And if I have learned anything from television, it is that the most surprising range of neighborhoods are home to high income earners from the free market (i.e. un-manipulated) pharmaceutical distribution industry.

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  41. 41
    whatsmyname says:

    RE: Matthew @ 39
    I’m always excited to get a little interwebs learning, and i was particularly thrilled to hear that:
    “This is a typical echo bubble. Time and time again when the government attempts to step in a fix asset prices it becomes an attempt to delay the inevitable.”

    Can you tell me about some more government echo bubbles? Please be very thorough. I only have one post left.

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  42. 42
    mukoh says:

    RE: whatsmyname @ 40 – I am sceptical its just I haven’t seen any mobile home neighborhoods of Madison ever. Hmmmm.

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