Posted by: 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.

26 responses to “Around the Sound: Listing Supply Still Tight”

  1. joe smith

    I’ll second the happy birthday note, this is a terrific blog I enjoy reading quite a bit, guy, keep up the great work

    Rate this comment: Thumb up 0

  2. Mike

    While looking at some of the few remaining foreclosure resales back in the bubble days I had an interesting revelation. After putting 20% down and 2 years of good appreciation – IF I could get one of those 125% LTV equity loans that were popular back in 2007 with the same loose appraisal guidelines, I could buy a similar house outright with cash and let this one go back to the bank. I’d be free and clear.

    Anyone (maybe Erik?) looked into this lately? It seems unlikely, but if we’re truly heading back to a market similar to the bubble peak these kids of opportunities should be available again…

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  3. Erik

    RE: Mike @ 3
    I tried to get a no doc loan when I was unemployed at the beginning of this year. Those do exist, but you need to find the right lender I was told. I don’t know of any 125% LTV loans, but I do know of a method to accomplish zero down and that suits me just fine.

    You just realized the more assets you hold, the more you will make if the appreciate? Either this is a joke or you are an idiot. The trick is not to get caught with your pants down. That is why many of us come on this site… So we don’t get caught with our pants down again.

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  4. Blurtman

    RE: Erik @ 4

    runnin’ round with the wrong crowd
    goin’ out on a last stand
    playin’ too hard an’ too loud
    bad cards in a bad hand
    wanna dance
    wanna sing
    whip you with that lickin’ thing
    tonight I’m gonna kick up
    out drivin’ in a big truck
    an’ maybe I’ll get beat up
    caught with your pants down

    lining up for a roll call
    goin’ out with a big bang
    gettin’ caught in a shootout
    take it hard like a big man
    women workin’ so hot
    givin’ it everything you got
    just like it’s never gonna stop
    tonight I’m gonna kick up
    out drivin’ in a big truck
    an’ maybe I’ll get beat up
    caught with your pants down

    she take em’ down down down
    she rip off her stockin’s when the place start rockin’
    down down down
    she was a woman with a mission stick it in your face

    caught with your pants down

    down down down
    caught with your pants down

    https://www.youtube.com/watch?v=qKPaoRRcva0

    Rate this comment: Thumb up 2

  5. Ardell DellaLoggia

    Happy Seattle Bubble Birthday to you Tim! I just calculated that you have put $1.5M worth of time into this thing! …and we all appreciate it immensely.

    Many more…and thanks for the memories.

    Rate this comment: Thumb up 0

  6. Ira Sacharoff

    Nine years is a helluva long time. And to put up with us? Couldn’t be easy.

    Rate this comment: Thumb up 2

  7. Mike

    RE: Erik @ 4 – I actually know someone that did this. A couple in their 60’s pulled the equity from their Kirkland home and bought a house in Edmonds, then maxed out their personal credit to remodel and furnish the place. They then attempted to sell the Kirkland house, then short sale it unsuccessfully, then let it go back to the bank – at which point they simply declared bankruptcy and retired to their fully paid off home 4 blocks from the sound…

    Rate this comment: Thumb up 1

  8. Erik

    RE: Mike @ 8
    You are getting confused by these old people that bought and sold at the wrong times. I will show you the secret equation for success. Are you ready? The equation is F=P(1+i)^n. In real estate agent terms, it says future value is present value times the quantity of 1 plus your appreciation rate to the power of the number of years. If you have a large “p”, which the present value of your assets, your future value will increase faster.

    The way you can screw yourself is if interest rates go negative. That is whst I mean when I say you cannot get caught with your pants down aka don’t hold property when housing is depreciating and “i” is negative. Sheesh.

    On another note, are those trees still blocking your view. $300 and I will fix you up with a $30k appreciation in value. My only requirement is that you are present during the scandal and you get in trouble if I do. I don’t like the idea of getting taken down by myself for doing dirt for someone else. Summer is almost over. It’s now or never. We could mob down there using the cover of night like 2 real estate bandits.

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  9. SaffyThePook

    I think Erik just broke the site. I guess it was only a matter of time.

    Rate this comment: Thumb up 8

  10. Kary L. Krismer

    By Mike @ 8:

    RE: Erik @ 4 – I actually know someone that did this. A couple in their 60’s pulled the equity from their Kirkland home and bought a house in Edmonds, then maxed out their personal credit to remodel and furnish the place. They then attempted to sell the Kirkland house, then short sale it unsuccessfully, then let it go back to the bank – at which point they simply declared bankruptcy and retired to their fully paid off home 4 blocks from the sound…

    Total unadulterated BS, unless they also committed bankruptcy fraud by not disclosing the asset. The homestead exemption is $125,000. You can add costs of sale to that, and the trustee will want to keep at least $10,000, so the most expensive unencumbered house you’d be likely to keep would be worth maybe $150,000. There are no houses in Edmonds four blocks from the sound that have been remodeled that are worth anywhere near that amount.

    Rate this comment: Thumb up 5

  11. Ardell DellaLoggia

    RE: Kary L. Krismer @ 11

    I think you may be mixing up your RCWs. Try RCW 61.24.100 or so regarding deficiency judgments after a Trustee Sale vs a Judicial Foreclosure. I don’t think it has anything to do with “The Homestead Exemption” rules, given in Mike’s example there is a new homestead which is not the property the person is defaulting on.

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  12. Kmac

    RE: Ardell DellaLoggia @ 12
    Nope. I think Kary read it correctly.
    If you read the order of events as presented:

    By Mike @ 8:

    RE: Erik @ 4 – I actually know someone that did this. A couple in their 60’s pulled the equity from their Kirkland home and bought a house in Edmonds, then maxed out their personal credit to remodel and furnish the place. They then attempted to sell the Kirkland house, then short sale it unsuccessfully, then let it go back to the bank – at which point they simply declared bankruptcy and retired to their fully paid off home 4 blocks from the sound…

    it is my understanding that the homestead exemption would protect the “paid in full” house only up to the exemption amount (125k in WA) , plus an amount that the bankruptcy trustee would feel is reasonable to carry out a forced sale.
    Use of credit cards were also mentioned and I’m sure that there was other debt besides anything related to the foreclosed home (which may or may not be pursuable by the bankruptcy trustee).

    As Kary stated, $150,000 +/- should be “homestead exemption” protected. Now if there was a bank note on “paid off” property which left only <$150k equity, then it should be protected.
    I would guess that a $400,000-$600,000 paid off home being left untouched during a chapter 7 bankruptcy is highly unlikely.

    As a side note, I think that if all of this maneuvering was done in under 90 days prior to filing for bankruptcy, a bankruptcy court may see that as fraud and waive any protections offered by the bankruptcy process.

    Rate this comment: Thumb up 2

  13. softwarengineer

    Great Work Tim

    You should be proud :-)

    Rate this comment: Thumb up 0

  14. Kary L. Krismer

    By Ardell DellaLoggia @ 12:

    RE: Kary L. Krismer @ 11

    I think you may be mixing up your RCWs. Try RCW 61.24.100 or so regarding deficiency judgments after a Trustee Sale vs a Judicial Foreclosure. I don’t think it has anything to do with “The Homestead Exemption” rules, given in Mike’s example there is a new homestead which is not the property the person is defaulting on.

    I know you like to argue with lawyers about the law, but I was a bankruptcy lawyer. I represent bankruptcy trustee’s as a real estate agent. I’m not mixing up anything.

    In Washington state you can pick either the federal exemptions or the state exemptions, but the state exemptions are much more generous on the homestead, so I used the state.

    The way the thing works though our system benefits the wealthy because costs of sale are factored in by the trustees. The owner of a $150,000 house can barely get by without their unencumbered house being sold. The owner of a $1,000,000 house though can have about $225,000 of equity before their house is sold. Almost twice the amount of the statutory exemption, and for a more expensive house it would even be more.

    I’m not sure what you mean by the last sentence. When they bought a new house and moved into it, it would automatically become their new homestead.

    Rate this comment: Thumb up 1

  15. softwarengineer

    Tight Banks

    And tight inventory seem to go hand in hand….there’s no way to prove the banks are orchestrating the “bogus” whole thing secretly…but assuming they are, it explains everything.

    Rate this comment: Thumb up 1

  16. Kary L. Krismer

    By Kmac @ 13:

    As a side note, I think that if all of this maneuvering was done in under 90 days prior to filing for bankruptcy, a bankruptcy court may see that as fraud and waive any protections offered by the bankruptcy process.

    The 90 day period is for preferences. The period for losing a discharge is one year prior to bankruptcy, and creating a large exempt asset within that period might do that, but not necessarily.

    If they didn’t list the house on their bankruptcy the bankruptcy trustee could probably reopen the case and sell it today.

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  17. Ardell DellaLoggia

    RE: Kary L. Krismer @ 15

    Last I looked…only the Pope was infallible…lawyers…not so much. :)

    See WA in this link, and this is my understanding. The answer is NO…unless the lien holder opts for a judicial foreclosure. Has nothing to do with the homestead exemption.

    http://www.alllaw.com/articles/nolo/foreclosure/anti-deficiency-laws.html

    Another quote from an attorney site that agrees with me on this:

    The Washington Deeds of Trust Act severely limits your liability for a deficiency judgment if your home is sold at trustee sale. First and foremost, if your primary residence is sold at trustee sale, your lender can never get a deficiency judgment against you.

    http://www.rosenberglawgroup.net/post-foreclosure-deficiency-judgments-in-washington/

    Whether or not this applies to a vague hypothetical…it is VERY important for people in WA who are being pursued by agents to proceed with a short sale to “avoid foreclosure” to know that often…letting the house go to Trustee Sale MAY and often is the better option. There are no commissions paid to agents of sellers at these sales, so many agents steer people in the wrong direction.

    At minimum I would appreciate at least a mild disclaimer noting that when people let their homes go to foreclosure…they are usually NOT subject to homestead limitations, even when the instant case may be a bit convoluted.

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  18. Ardell DellaLoggia

    RE: Ardell DellaLoggia @ 18

    I forgot to sign that as Roesanne Rosannadanna

    https://screen.yahoo.com/roseanne-rosannadanna-smoking-000000279.html

    I’m getting ready for my “Jersey Shore” vacation. Leaving at the end of next week. :)

    Rate this comment: Thumb up 1

  19. Kmac

    By Ardell DellaLoggia @ 18:

    RE: Kary L. Krismer @ 15

    Last I looked…only the Pope was infallible…lawyers…not so much. :)

    See WA in this link, and this is my understanding. The answer is NO…unless the lien holder opts for a judicial foreclosure. Has nothing to do with the homestead exemption.

    http://www.alllaw.com/articles/nolo/foreclosure/anti-deficiency-laws.html

    Another quote from an attorney site that agrees with me on this:

    The Washington Deeds of Trust Act severely limits your liability for a deficiency judgment if your home is sold at trustee sale. First and foremost, if your primary residence is sold at trustee sale, your lender can never get a deficiency judgment against you.

    http://www.rosenberglawgroup.net/post-foreclosure-deficiency-judgments-in-washington/

    Whether or not this applies to a vague hypothetical…it is VERY important for people in WA who are being pursued by agents to proceed with a short sale to “avoid foreclosure” to know that often…letting the house go to Trustee Sale MAY and often is the better option. There are no commissions paid to agents of sellers at these sales, so many agents steer people in the wrong direction.

    At minimum I would appreciate at least a mild disclaimer noting that when people let their homes go to foreclosure…they are usually NOT subject to homestead limitations, even when the instant case may be a bit convoluted.

    I think you are the only one aligning a foreclosure deficiency to the eligibility of the Homestead exemption. The “paid off” and retained house is what is being discussed as to the subject of Homestead exemption.

    One other thing that may be worth noting is that a homeowner that experiences a trustee sale may escape any deficiency judgment, but if there was a co signer on that mortgage , the co signee is very much on the hook for any deficiency and I believe is subject to six years statute of limitations.
    That aught to go over real good with your father in law that guaranteed your first home purchase that you decided to bail on ;-)

    Unqualified Real Estate agents really shouldn’t be giving legal advice to anyone.
    Often, things are not what they seem to be on the surface and it takes someone with specific knowledge with all of the facts presented in context to determine the best course of action.

    Rate this comment: Thumb up 1

  20. Marc

    RE: Ardell DellaLoggia @ 18 – Ardell, I’m afraid you’re way off on this one. You’re talking about a very different factual situation than what dillweed laid out.

    Rate this comment: Thumb up 1

  21. Ardell DellaLoggia

    RE: Marc @ 21

    I never argue with you Marc. :) My pet peeve is the issue of people acting like “saving someone from foreclosure” by talking them into short sales so they can make a commission. That is why I think it is so very important to point out the benefit of non-judicial foreclosure for many…not all…people in WA vs a State with Judicial Foreclosures as the norm. Hence the Roseanne Rosannadanna sidetrack. Maybe everyone else is too young to remember her.

    The more common scenario is for underwater people to buy their new home with a mortgage and then default on the house they left. That is why it is much harder now for people to buy first and sell later. It’s getting a little easier, but for awhile there the lenders were very wary of someone buying a new primary residence before selling their former home.

    Used to be…you had to explain exactly what you were doing when you pulled the equity from your home in order to get that approved. I think when someone says they are pulling money out to buy a different primary residence, they should have to agree to treble damages if they then stick the HELOC lender with the house they are leaving. Banks are big boys. They will figure out how to stop this fraudulent practice.

    I don’t spend a lot of time worrying about the poor bank getting shafted…they should have seen that one coming. I’m more concerned about people generally thinking their deficiency protections are lesser than they are…and limited to a homestead amount.

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  22. Ira Sacharoff

    By Ardell DellaLoggia @ 19:

    RE: Ardell DellaLoggia @ 18

    I forgot to sign that as Roesanne Rosannadanna

    https://screen.yahoo.com/roseanne-rosannadanna-smoking-000000279.html

    I’m getting ready for my “Jersey Shore” vacation. Leaving at the end of next week. :)

    The Jersey shore is more than the beach and the ocean. Also some of the best sausage sandwiches anywhere.

    Rate this comment: Thumb up 1

  23. Kary L. Krismer

    RE: Ardell DellaLoggia @ 18 – The response to this and other posts on this topic will be in the open thread.

    Rate this comment: Thumb up 0

  24. Blurtman

    RE: Ira Sacharoff @ 23 – I remember when syringes and medical trash used to wash up on the beach from off shore ocean dumps. Where I grew up in NJ, the local stream used to turn unusual colors depending on what the factories were discharging into it. Our pool would occasionally have strange sediment in it from whatever the factories dumped into the air. Driving through local industrial zones, one would be treated to many exotic smells. But the shore is nice. Island Beach State Park is very nice. During the summer, all young folks would make the journey to the shore, getting wasted in the bars of Belmar or Asbury Park. It was a death trap, a suicide rap, and you had to get out while you were young…

    Rate this comment: Thumb up 2

  25. Jason Shutt

    Would it be possible to see the data for Bainbridge separated from Kitsap? Thanks

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