Case-Shiller: Seattle Housing Market the Hottest In US

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to March data that was released this morning, Seattle-area home prices were:

Up 2.6 percent February to March
Up 12.3 percent year-over-year.
Up 12.7 percent from the July 2007 peak

Over the same period last year prices were up 2.4 percent month-over-month and year-over-year prices were up 10.9 percent.

Seattle home prices as measured by Case-Shiller shot up yet again to a new all-time high in March, and let the nation in month-over-month and year-over-year price gains for the second month in a row.

The near hockey-stick shape of some of these home price charts is starting to concern me.

Here’s a Tableau Public interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities. Check and un-check the boxes on the right to modify which cities are showing:

Seattle’s rank for month-over-month changes hit #1 in February and held that position easily in March.

Case-Shiller HPI: Month-to-Month

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 metro areas.

Seattle’s year-over-year price growth edged up yet again from February to March, to the highest level it has been at in over three years. Yet again in March, none of the twenty Case-Shiller-tracked metro areas gained more year-over-year than Seattle. From February through August of last year, Portland had been in the #1 slot above Seattle.

Don’t worry, the Northwest will always and forever continue to be literally the envy of other states.

Seven cities hit new all-time highs again in March: San Francisco, Denver, Boston, Charlotte, Portland, Dallas, and Seattle.

Here’s the interactive chart of the raw HPI for all twenty metro areas through March.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve metro areas whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

Case-Shiller HPI: Decline From Peak

In the 116 months since the price peak in Seattle prices are up 12.7 percent.

Lastly, let’s see how Seattle’s current prices compare to the previous bubble inflation and subsequent burst. Note that this chart does not adjust for inflation.

Case-Shiller: Seattle Home Price Index

Check back tomorrow for our monthly look at Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 2017-05-30)


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.

126 comments:

  1. 1
    GoHawks says:

    Feels like we have one more (through next summer) year of this (Amazon at $1,000 etc) then at some point buyers would have to begin to dry up.

  2. 2
    Deerhawke says:

    Tim, you say, “The near hockey-stick shape of some of these home price charts is starting to concern me.” In what way?

  3. 3
    Luther says:

    GoHawks , agree with your prognostication. After summer of 2018 I think slow but steady annual increases at about 3-6%

  4. 4
    sleepless says:

    Bubble, butt, bubble, bubble, bubble butt :)

  5. 5
    wreckingbull says:

    By Luther @ 3:

    GoHawks , agree with your prognostication. After summer of 2018 I think slow but steady annual increases at about 3-6%

    This was probably the most common meme in the SB comments in late 2007. “What we have can’t possibly be sustained, but don’t worry, it will be slow, steady growth from here on out!” It’s not 2007, but ‘slow and steady’ is the last phrase that comes to mind in today’s political and economic climate.

  6. 6
    ronp says:

    Amazon/Google/Facebook will slow their hiring at some point I guess, but then the global warming refugees will start arriving?

    At this point those of us who want reasonably affordable housing in an urban environment will need to get behind these guys and gals — http://seattlemag.com/meet-yimbys-seattleites-support-housing-density

  7. 7
    Luther says:

    RE: wreckingbull @ 5

    Wreckingbull…I think its fair to say that the growth since 2007 in jobs and income in the tech sector (which is also more diversified locally now) can reasonably have driven a “new normal” price level for Seattle MSA housing price levels. There may be a top , as always, and a decline/correction but as long as in migration and incomes continue to rise in a market with severe SFH supply limitations one can reasonably suppose a steep price drop is not in the cards in the near to mid term. Time will tell.

  8. 8
    Doug says:

    2.57% and the next closest city registers at 1.48% — not even close.

    “You can’t stop Seattle” — Delta

  9. 9
    GoHawks says:

    RE: wreckingbull @ 5 – While the political climate might be volatile, other financial markets are not. The stock market year to date has been the calmest in 40+ years. After everyone predicted more volatility with the new President. Why can’t our housing market go sideways for a few years and digest the gains of the past five years and let incomes and savings try and catch up some?

  10. 10

    By Doug @ 7:

    2.57% and the next closest city registers at 1.48% — not even close.

    “You can’t stop Seattle” — Delta

    Remember that the rise in the NWMLS median for April was largely due to a change in mix of the areas sold. I was waiting for the C-S number for April, but this might be an indication that this is yet another type of mix that C-S can’t really handle (the other being distressed properties). If that does turn out to be the case, that would really call into question any advantage of C-S over just using mean/median.

  11. 11
    jon says:

    Snohomish county was up 16.7% in April, King was up 15.8%, although Pierce was up “only” 10%. I don’t have the data for the previous months. That reflects the general trend of people moving further out from King, thus driving prices up there. S-C does not consider new homes, which are tending to be on smaller lots and have other differences from the resales that C-S measures. So it depends on what you want to measure.

  12. 12
    Anonymous Coward says:

    RE: Kary L. Krismer @ 9 – Isn’t that type of a change in mix the exact thing that C-S is *supposed* to be able to catch?

  13. 13

    RE: Anonymous Coward @ 11 – Yes, but the question is whether it does! I think they also purported to catch changes in condition too, but they clearly did not when it comes to distressed properties.

  14. 14
    redmondjp says:

    RE: Luther @ 6 – You’re right. But guess what? The bubble you need to be worrying about is not a housing bubble, but Dot Bomb 2.0. That will likely be the primary driver of lower housing prices in our area.

    The unofficial mascot of Dot Bomb 1.0 was a sock puppet. What will it be this time? Sell that Twitter stock while it is still worth something.

  15. 15
    ess says:

    http://www.marketwatch.com/story/pending-home-sales-decline-again-deepening-housing-market-funk-2017-05-31

    The interesting take away from the above story is the following quote

    ” Homes are coming off the market much more quickly than new listings are being added, NAR Chief Economist Lawrence Yun noted in a release.”

    Is this true for the Puget Sound area? I though we were gaining in listings? Or are the gains in listings offset by more buyers that are once again on the scene for the busy real estate season? What do the professionals here think?

  16. 16
    formerSeattleite says:

    what do you guys think of this article on real estate pricing in canada? Are there parallels to the U.S.? (it sounds awfully like the picture here in the U.S…) The avg home price in Canada is now, wait for it… $559,000 (yikes!)

    excerpt: “..Soaring real estate prices are really a transfer of wealth between generations. In many cities, boomers who paid three times their annual incomes for homes a generation ago are now selling them to millennials who are paying six times their incomes. The weight of that debt is going to suffocate young families for decades to come and drag on economic growth.”

    re: https://www.theglobeandmail.com/report-on-business/rob-magazine/robmagface-it-canadayoure-a-real-estate-addict-and-no-one-wants-acure/article35105002/

  17. 17
    billy milano's ghost says:

    RE: sleepless @ 4

    didnt expect an MOD reference on here lol

  18. 18

    By redmondjp @ 13:

    The unofficial mascot of Dot Bomb 1.0 was a sock puppet. What will it be this time? Sell that Twitter stock while it is still worth something.

    The problem with that market blowing up is it will hurt developing companies that have good ideas/products, not just Twitter.

  19. 19

    RE: ess @ 14 – It depends on your timeframe. YOY we’re likely going to be down. MOM likely up. WOW???

  20. 20
    sleepless says:

    By redmondjp @ 13:

    RE: Luther @ 6 – Sell that Twitter stock while it is still worth something.

    Most folks in the US don’t own stocks, they are too broke paying student loans, mortgages and ever increasing rents.

  21. 21
    jon says:

    By sleepless @ 17:

    By redmondjp @ 13:

    RE: Luther @ 6 – Sell that Twitter stock while it is still worth something.

    Most folks in the US don’t own stocks, they are too broke paying student loans, mortgages and ever increasing rents.

    It used to be many more people than do now. Stock ownership is on a very unhealthy trend downward, which will have a similar effect to having cities full of renters.

    http://www.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx

  22. 22
    N says:

    By Luther @ 6:

    RE: wreckingbull @ 5

    Wreckingbull…I think its fair to say that the growth since 2007 in jobs and income in the tech sector (which is also more diversified locally now) can reasonably have driven a “new normal” price level for Seattle MSA housing price levels. There may be a top , as always, and a decline/correction but as long as in migration and incomes continue to rise in a market with severe SFH supply limitations one can reasonably suppose a steep price drop is not in the cards in the near to mid term. Time will tell.

    Fair point. You could also make a case that other factors have driven the increase, with the tech jobs just making the price increases larger than they would be otherwise. I don’t know the answer to this but would you say Denver or even Spokane is being led by Tech jobs too. It can’t be case with Spokane but yet they are also well above the 2007 high and have inventory down 25% YOY.

    The amount of flipping I am starting to see doesn’t make me feel that this is a new normal either and the fact that flippers are turning a $400k house into a $680k house in 5 months with not that much work makes you wonder (this happened to a West Seattle house). 4 years ago the feds were monitoring appraisers carefully and would never have allowed that much of an increase within a 6 month window. But then again no one with a 600 credit score and 3.5% down was buying houses back then either.

    I could see how Tech could lead to a new normal in the best city neighborhoods, but I don’t see how that translates to Lynnwood, Renton, Everett etc.

  23. 23
    Blurtman says:

    You buy that $1 million home, and in two years it is worth $1,261,129. You sell and minus the transaction fees (RE agents, transfer costs, etc.) you net $160k. Ka-ching!!! Assuming the mortgage payment is equivalent to the alternative, i.e., renting a similar home, you are up by a tidy amount versus sitting on your hands. Ain’t capitalism grand? Coffee’s for closers only.

  24. 24

    RE: ess @ 14

    ” Homes are coming off the market much more quickly than new listings are being added, NAR Chief Economist Lawrence Yun noted in a release.” “Is this true for the Puget Sound area? I though we were gaining in listings? Or are the gains in listings offset by more buyers that are once again on the scene for the busy real estate season? What do the professionals here think?”

    You would need a lot more “professionals here” to get the full Puget Sound area answer. Harder for me to run the stats for my North Seattle markets, but I did a quick stat run for my Eastside markets.

    Before doing the stats I would have answered that homes are coming off market AS quickly AS new listings are being added…as opposed to Yun’s “more” quickly “than”, so that is what I was checking.

    Yun’s statement seems to be saying that people are buying both new and old listings at a high rate, whereas my perception would be they are buying new listings as fast as they come on market and there are virtually no “old” listings. I used on market more than 6 weeks as being “old” for the stats below. I am also using Single Family Homes $700,000 to $1,200,000 because that is the market I have been focusing on for several clients for about a year, so have most familiarity with that segment and what my perception was based on. Testing my perception against the data.

    Bellevue School District

    Sold/Closed since 1/1/2017 = 190 with only 6 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 33 with NONE on market for more than 6 weeks.

    Lake Washington School District

    Sold/Closed since 1/1/2017 = 465 with 53 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 54 of which 11 are on market for 6 weeks or more.

    Issaquah School District

    Sold/Closed since 1/1/2017 = 328 with 40 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 62 of which 16 are on market for 6 weeks or more.

    You probably have to shift the pricing a bit to be more “apples to apples”. But for what I would call the “mainstream market” of the very large area covered by those three school districts, there is very little “old” inventory. Not only now, but for all of this year and likely somewhat before.

    So my perception of “as fast as” vs “more quickly than” seems to be correct for that large area, though of course that doesn’t make Yun incorrect since he is speaking nationally.

    Most people have to evaluate and react to listings quickly as they come on market. Trying to find something sitting around on market for more than 6 weeks to escape the crazy bidding wars would be nice, but not realistic. Not a bunch of stale listings sitting around.

    “I thought we were gaining in listings?” More are coming on now than in February (because that’s how it always is), but no where near enough to meet the needs of pent up demand.

    By August there should be more houses with fewer (though still enough) buyers, as is the case every year in a strong market. The highest pent up demand is January and by now you have fewer “last year’s people” but more this year’s people added. By August you have “next year’s-last year people” and fewer new ones being added. :)

    Rushing out to meet someone at a property before a closing later today. Please excuse typos. No time to run the “edit” feature.

    Required Disclosure: “Stats in this post are calculated in real-time by Ardell and not compiled, verified or published by The Northwest Multiple Listing Service”.

  25. 25
    ess says:

    By Ardell DellaLoggia @ 20:

    RE: ess @ 14

    ” Homes are coming off the market much more quickly than new listings are being added, NAR Chief Economist Lawrence Yun noted in a release.” “Is this true for the Puget Sound area? I though we were gaining in listings? Or are the gains in listings offset by more buyers that are once again on the scene for the busy real estate season? What do the professionals here think?”

    You would need a lot more “professionals here” to get the full Puget Sound area answer. Harder for me to run the stats for my North Seattle markets, but I did a quick stat run for my Eastside markets.

    Before doing the stats I would have answered that homes are coming off market AS quickly AS new listings are being added…as opposed to Yun’s “more” quickly “than”, so that is what I was checking.

    Yun’s statement seems to be saying that people are buying both new and old listings at a high rate, whereas my perception would be they are buying new listings as fast as they come on market and there are virtually no “old” listings. I used on market more than 6 weeks as being “old” for the stats below. I am also using Single Family Homes $700,000 to $1,200,000 because that is the market I have been focusing on for several clients for about a year, so have most familiarity with that segment and what my perception was based on. Testing my perception against the data.

    Bellevue School District

    Sold/Closed since 1/1/2017 = 190 with only 6 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 33 with NONE on market for more than 6 weeks.

    Lake Washington School District

    Sold/Closed since 1/1/2017 = 465 with 53 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 54 of which 11 are on market for 6 weeks or more.

    Issaquah School District

    Sold/Closed since 1/1/2017 = 328 with 40 of those on market 6 weeks or more at time of “sale”.
    For Sale as of today 62 of which 16 are on market for 6 weeks or more.

    You probably have to shift the pricing a bit to be more “apples to apples”. But for what I would call the “mainstream market” of the very large area covered by those three school districts, there is very little “old” inventory. Not only now, but for all of this year and likely somewhat before.

    So my perception of “as fast as” vs “more quickly than” seems to be correct for that large area, though of course that doesn’t make Yun incorrect since he is speaking nationally.

    Most people have to evaluate and react to listings quickly as they come on market. Trying to find something sitting around on market for more than 6 weeks to escape the crazy bidding wars would be nice, but not realistic. Not a bunch of stale listings sitting around.

    “I thought we were gaining in listings?” More are coming on now than in February (because that’s how it always is), but no where near enough to meet the needs of pent up demand.

    By August there should be more houses with fewer (though still enough) buyers, as is the case every year in a strong market. The highest pent up demand is January and by now you have fewer “last year’s people” but more this year’s people added. By August you have “next year’s-last year people” and fewer new ones being added. :)

    Rushing out to meet someone at a property before a closing later today. Please excuse typos. No time to run the “edit” feature.

    Required Disclosure: “Stats in this post are calculated in real-time by Ardell and not compiled, verified or published by The Northwest Multiple Listing Service”.

    Interesting info – thanks Ardell

    With the market the way it is – it appears that one must have their lists of “must haves” and then “would like to haves” in place, do away with contingencies, and move quickly when it appears a potential property appears on the market. I have never bought real estate under those conditions – it must be terribly stressful. And with rising prices – talking about some real money!
    Wonder how much buyer remorse is out there with these conditions?

  26. 26
    Weasel says:

    hilarious – the doom sayers will eventually be right because something will go bang again at some point, and say told you so! Except they have no idea what or when it will happen :-)

    This time around its a different game in town, big data, mass data collection and monetizing it. Facebook, Google, Apple, Uber, IBM and so on. Its not built on vague delusions that something of value will appear out of nothing.

    The housing market hasn’t been built up on sketchy loans, its been built on the back of venture capital on the successful monetization of data collection and the rise of smart devices/phones always connected to the internet.

    The next big nut thats about to be cracked are electric self driving cars, give it 5 to 10 years and the idea of owning a gasoline powered car with over 2000 moving parts in its drive train and driving it your self will be tipped on its head. Uber might go bust and drown in law suits before it happens, if it does Uber 2.0 will emerge from the ashes taking the learned lessons and avoiding the mistakes. The mistakes have to be made the first time around, just like .com 1.0 had to happen in order for the second wave to make a success of it.

  27. 27
    Eastsider says:

    Despite the rapid appreciation, this is a very thin market. Most homeowners paid much less for their homes. If they were in the market today, the majority could not afford their current homes. The current market is rather volatile and unhealthy.

    The new homes market is still in depression. We have never built fewer new homes outside of recessions in at least half a century, and probably longer. Even in the oil crisis 1970’s, we built more single family homes. And that was when the population was more than a third smaller. See http://www.calculatedriskblog.com/2017/05/housing-starts-decreased-to-1172.html.

    Total household debt in the first quarter of 2017 finally surpassed the peak reached during the recession in 2008. The scary part is student loan has grown to 1/6 the size of mortgage loan. With this amount of debt, how will the millennials afford their first homes? See http://www.calculatedriskblog.com/2017/05/ny-fed-household-debt-surpasses-its.html.

    So if you think this is a healthy market and prices are heading one way – UP, I just show you a different perspective. Maybe Seattle is different…

  28. 28
    Weasel says:

    RE: Eastsider @ 23 – As with anything, those that get in at the start of the next upward trend will be fine, they’ll ride out the next reset, its those that get in towards the end that lose out.

    The Student loans thing might get interesting if there is a lack of jobs and incomes to get them repaid, but who holds that debt? The federal government who can just mint another $1trillion dollar coin and make it go away, not private lenders in the housing market kicking people out of their homes to recoup what they can of the asset or security on the loan.

    If you have young kids you’d better get that WA Get college savings plan started today, the way its going college will only be affordable by the wealthy, and by then low skilled service industry jobs might all be gone with the way AI and automation is starting to take over.

  29. 29
    Eastsider says:

    RE: Weasel @ 24 – It is sad that many people, not just you, now believe we “can just mint another $1trillion dollar coin” to make debt go away. Do you want your offsprings to live in the next Venezuela? I just googled “Venezuela” and here are the top three headlines:

    – Venezuela violence: Tens of thousands hit the streets – Al Jazeera · 6 hours ago
    – As Venezuela Enters 3rd Month Of Protests, Anti-Maduro Ire Finds New Target – NPR · 9 hours ago
    – Don’t let Venezuela become the next Libya – Financial Times · 43 mins ago

    Btw, I am not advising prospective homeowners to avoid the housing market. On the contrary, they should never time the market if they can comfortably afford it. As for the marginal players, and I assume that is the majority, they are taking on undue risks even if the market holds up.

  30. 30
    Joe says:

    RE: Eastsider @ 23

    That’s the best post I’ve seen in a long time. It is a thin market. Prices for the entire market are driven by a few transactions at the margin. Most people don’t understand that. I also agree most people today couldn’t afford the home they are living in at today’s prices. Many of these homeowners are retirees on fixed income. The problem is that transactions at the margin can dissipate quickly. In a recession, if Boeing, Amazon, Microsoft, etc. put on a hiring freeze, 50% of the demand could dry up in an instant, and the volume of sellers could triple in less than a year. Those are real risks.

    At this point in time, I would buy a house with 3% down so I could walk away without recourse in a downturn. If I had to put anything more than 3% at risk, I wouldn’t be buying unless I was absolutely sure to own the home for at least 30 years and qualified for a low rate fixed loan..

  31. 31
    Erik says:

    RE: Weasel @ 22
    Do you know what the 3 most expensive words in real estate investing are????? “This time’s different.”
    Things are looking great right now for Seattle. But the good lord giveth and the good lord taketh away. Back at this point in the dot com bubble, I’m sure investors were feeling similar and saying similar things.
    Sell 2024! That is your most probable next peak in the bubble. Sorry to break the news to you, but this time is not different. Prices will crash at some point. Just don’t get caught with your pants down. If you don’t sell 2024, please don’t come whining on here like the software people have been doing for years. I will just say “I told ya so!”

  32. 32

    [Topic: Market “health.”]

    By Eastsider @ 23:

    So if you think this is a healthy market and prices are heading one way – UP, I just show you a different perspective. Maybe Seattle is different…

    I’m not sure who has said this is a healthy market. It’s just unhealthy in a different manner than 2008-2010, and the transition from one extreme to the other was rather fast. Tim tries to show which change in stats are good for buyers and good for sellers, and lately most have strongly favored sellers. That’s not healthy, it’s just something good for sellers (and makes owners feel better).

    I’ll admit I used to say median and C-S were indicators of market health, but I quit saying that a couple of years ago. I’m not sure there is a single stat that would indicate market health–maybe absorption rate, but I’m sure you could probably come up with some scenario where the market would be unhealthy even with 3 months of inventory. You really need to look at the bigger picture, not just a few stats.

  33. 33

    [Topic: Market conditions–buyer/seller remorse.]

    By ess @ 21:

    With the market the way it is – it appears that one must have their lists of “must haves” and then “would like to haves” in place, do away with contingencies, and move quickly when it appears a potential property appears on the market. I have never bought real estate under those conditions – it must be terribly stressful. And with rising prices – talking about some real money!
    Wonder how much buyer remorse is out there with these conditions?

    I’m sure there is a lot of unrealized buyer remorse–to be realized when they eventually go to sell. Settling on a less desirable property will lead to a difficult sale in even a balanced market, and extremely challenging sale in a buyer’s market. And that assumes no issue covering secured debt which might lead to short sale issues.

    The thing is though, there will also likely be some amount of seller remorse as they end up getting sued by their buyers. I’ve linked to the WR videos on bad market practices which have come up in this market. The “monkey see, monkey do” practices of agents are now getting so bad that I’m seeing ignorant listing agents indicate that offers should strike boilerplate language which benefits their seller clients! They don’t have a clue what they are doing, but see some other agent do that so they do it too! At least those requests are relatively easy for a buyer’s agent to deal with, since there’s seemingly little/no downside to the buyer.

  34. 34

    [Topic: Market conditions.]

    By Joe @ 26:

    It is a thin market. Prices for the entire market are driven by a few transactions at the margin. Most people don’t understand that.

    I agree people don’t understand that pricing occurs on the margin, but I don’t think that is the unusual part of this market. The volumes of houses being offered for sale and selling are not that unusual. What is unusual is the ratio of buyers to sellers, and unfortunately we don’t have any real data on that. Redfin tries to publish data on how many houses get multiple offers, but that’s very prone to error.

    But getting back to the thin market, there are always a lot more houses out their not on the market than being offered for sale. And that’s just one of the reasons why comparing median income to median price doesn’t work. The median income data is of all people, not the people in the market to buy.

  35. 35
    Doug says:

    RE: Erik @ 27 – Can you also tell us who will win the World Series in 2024?

  36. 36

    I Should of Grabbed up the Repossessed Unit for $72K two houses from Me

    A couple years later it apparently [recently] it went for like $194K….lots of stealth foreclosures out there, ya need luck to find ’em first. A good realtor will provide foreclosure lists.

    We don’t need Boeing Manufacturing Engineering in the Seattle area….we have clueless “unemployed” home buyers with inheritance bags of cash…bank on it…..until its dried up soon.

  37. 37
    Joe says:

    By Kary L. Krismer @ 29:

    [Topic: Market conditions–buyer/seller remorse.]

    By ess @ 21:

    With the market the way it is – it appears that one must have their lists of “must haves” and then “would like to haves” in place, do away with contingencies, and move quickly when it appears a potential property appears on the market. I have never bought real estate under those conditions – it must be terribly stressful. And with rising prices – talking about some real money!
    Wonder how much buyer remorse is out there with these conditions?

    I’m sure there is a lot of unrealized buyer remorse–to be realized when they eventually go to sell. Settling on a less desirable property will lead to a difficult sale in even a balanced market, and extremely challenging sale in a buyer’s market. And that assumes no issue covering secured debt which might lead to short sale issues.

    The thing is though, there will also likely be some amount of seller remorse as they end up getting sued by their buyers. I’ve linked to the WR videos on bad market practices which have come up in this market. The “monkey see, monkey do” practices of agents are now getting so bad that I’m seeing ignorant listing agents indicate that offers should strike boilerplate language which benefits their seller clients! They don’t have a clue what they are doing, but see some other agent do that so they do it too! At least those requests are relatively easy for a buyer’s agent to deal with, since there’s seemingly little/no downside to the buyer.

    Some of the buying agent asking remove the inspection and appraisal condition to win the offer

  38. 38
    Erik says:

    RE: Doug @ 31
    That is something that is unpredictable for me. There is an infinite amount of variables going into that. Housing bubbles are not so complex. They can be very complex until you make some reasonable assumptions. I assume nothing crazy and out of the ordinary happens. 2024 will leave readers with some nice gains. Keeping real estate beyond that is too risky in my opinion.

  39. 39
    Sid says:

    By Erik @ 27:

    RE: Weasel @ 22
    ….
    Sell 2024! That is your most probable next peak in the bubble. Sorry to break the news to you, but this time is not different. Prices will crash at some point. Just don’t get caught with your pants down. If you don’t sell 2024, please don’t come whining on here like the software people have been doing for years. I will just say “I told ya so!”

    Please also share the exact month and date to sell in 2024.

  40. 40

    By Sid @ 35:

    Please also share the exact month and date to sell in 2024.

    That would be stepping on Zillow’s toes. They are the entity that comes up with that type of nonsense. ;-)

  41. 41

    By Joe @ 33:

    Some of the buying agent asking remove the inspection and appraisal condition to win the offer

    I assume you mean listing agent, but we’ve covered that in the past. Neither is necessarily good for the seller (particularly no inspection), and the appraisal situation can create a lot of uncertainty and misunderstanding, depending on how it’s done.

  42. 42
    Dave says:

    I love it when people here focus on micro variables and ignore the Godzilla in the room.
    Perhaps a number summary might clarify.

    1. Inventory
    How many single family starter homes are being built in WA? Almost none = increasing low inventory.

    2. Interest Rates
    The likely rise in mortgage rates from historic lows means that there will be less incentive for existing owners to move, creating the so-called rate lock-in effect. Homeowners don’t sell because of the perceived or actual difference in their monthly mortgage payments if they swap their old rate for a new higher one, which creates even less housing inventory.

    3. Demographics
    About 20 years ago, in a board meeting we referred to what we saw coming as “Tidal Wave Two”. The nation’s largest living generation, born between ~1980-2000 are now buying homes for the first time. To make things even worse, census data shows that the total number of 25 to 34-year-olds in the US will actually increase from now through 2024.

    “The outlook after 2024 (when the 25- to 34-year-olds will increasingly be “post-Millennials”) is not a dramatic demographic collapse. Rather than a peak, the young adult population will stabilize at a fairly high plateau above 47 million 25- to 34-year-olds through 2035. So there is little basis for forecasting a decline in the key population group that has driven urban growth.”

    https://www.citylab.com/equity/2017/01/flood-tide-not-ebb-tide-for-young-adults-in-cities/514283/
    http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/

    This is not a bubble, this is a tidal wave.

    Nothing short of a monetary or environmental catastrophe is going to deflate these prices and neither of those events are likely to happen anytime soon.

  43. 43
    Doug says:

    RE: Erik @ 34 – Isn’t the exact opposite true? Wouldn’t the short term, between now and 2024, be risky and anything beyond that be less risky?

    For example, I’m fairly certain that property values will be much higher in 20 years from now.

  44. 44
    Eastsider says:

    By Dave @ 38:

    I love it when people here focus on micro variables and ignore the Godzilla in the room.
    Perhaps a number summary might clarify.

    1. Inventory
    How many single family starter homes are being built in WA? Almost none = increasing low inventory.

    Perhaps the reason starter homes are not being built is because not many people can afford them at current prices.

    2. Interest Rates
    The likely rise in mortgage rates from historic lows means that there will be less incentive for existing owners to move, creating the so-called rate lock-in effect. Homeowners don’t sell because of the perceived or actual difference in their monthly mortgage payments if they swap their old rate for a new higher one, which creates even less housing inventory.

    Again, the rate lock-in effect shows that people today can’t relocate for better jobs because of high housing costs. How is that good for the economy? Perhaps home prices need to come down if we are going to have a vibrant economy.

    3. Demographics
    About 20 years ago, in a board meeting we referred to what we saw coming as “Tidal Wave Two”. The nation’s largest living generation, born between ~1980-2000 are now buying homes for the first time. To make things even worse, census data shows that the total number of 25 to 34-year-olds in the US will actually increase from now through 2024.

    “The outlook after 2024 (when the 25- to 34-year-olds will increasingly be “post-Millennials”) is not a dramatic demographic collapse. Rather than a peak, the young adult population will stabilize at a fairly high plateau above 47 million 25- to 34-year-olds through 2035. So there is little basis for forecasting a decline in the key population group that has driven urban growth.”

    https://www.citylab.com/equity/2017/01/flood-tide-not-ebb-tide-for-young-adults-in-cities/514283/
    http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/

    This is not a bubble, this is a tidal wave.

    How are the millennials paying for their homes at current prices? They are probably the most indebted people in generations.

    Nothing short of a monetary or environmental catastrophe is going to deflate these prices and neither of those events are likely to happen anytime soon.

    Hahaha, we are watching the same movie on the same screen. You see prices going higher. I see unaffordability and unsustainability at current prices.

  45. 45
    jon says:

    RE: Dave @ 38 – That’s all true, but Seattle house prices are several times the national average, so the question in the Seattle area is what will happen to that multiplier in the coming years. The main factor is how long Amazon’s hiring binge will continue, and to what extent the other companies that have moved into the area to poach their and Microsoft’s employees will pick up the slack when Amazon slows down.

  46. 46
    Anonymous Coward says:

    RE: Eastsider @ 40“Perhaps the reason starter homes are not being built is because not many people can afford them at current prices.” Perhaps the GMA has limited supply of buildable land which increases prices…“How are the millennials paying for their homes at current prices? They are probably the most indebted people in generations.” They median millennial is NOT buying a house. But we’re not building enough houses for the median millennial live in a house (look at the ratio of SFHs vs MFH units recently built or even in planning) even if they all wanted to. The millennials on right side of the bell curve can afford to buy houses and they are. Remember that hollowing out of the middle class? Yes, that’s the upper middle class getting richer, and yes, some millennials are in the upper middle class…

  47. 47
    Erik says:

    RE: Sid @ 35
    March 27th 2024

  48. 48
    Anonymous Coward says:

    RE: Erik @ 43 – Is that the listing date, the “reviewing offers on…” date or the closing date? ;-)

  49. 49
    Erik says:

    RE: Doug @ 39
    I assume there will be a bubble. Based on property values, it seems likely. I want to sell at the top and rebuy at the bottom. I do a lot of my planning around that. If I’m wrong, I will miss out on more money, but I will still make a lot of money. If I’m right, I will buy west Seattle at the bottom and retire early.

  50. 50
    Dave says:

    By Eastsider @ 40:

    By Dave @ 38:

    Hahaha, we are watching the same movie on the same screen. You see prices going higher. I see unaffordability and unsustainability at current prices.

    I’m a member of that breakfast club Generation X, kicked to the curb but I can move sideways when I see a train coming down the tracks. I’d guess you’re a Millennial and yea, congress totally screwed you over when they monopolized higher education and removed the bankruptcy reset option.

    Being young post 2005 really does suck tailpipe.
    https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_and_Consumer_Protection_Act

    If it makes you feel better, I was a blue team player at the time and begrudgingly attempted to lobby congress that year to try and stop that bad karma nugget, (Last year I actually had to vote for Mr. Fired as I could never forgive Hillary after that generational thunder f##k).

    Conscious clear, at least I tried to stop them. There were so few trying at the time.
    Oh well, let’s move on .org :)

  51. 51

    There’s a lot of talk in the last day or so about this new report on housing. I’m still studying it, but am a little confused why the racial disparity in the “by race” chart, given all of the people are “middle income”. I think they are using different salary amounts for “middle” by race. Still reading…

    https://www.redfin.com/blog/2017/05/priced-out-the-housing-affordability-gap-in-americas-largest-metros.html

  52. 52
    Eastsider says:

    By Anonymous Coward @ 42:

    “Perhaps the reason starter homes are not being built is because not many people can afford them at current prices.” Perhaps the GMA has limited supply of buildable land which increases prices…

    Note that the lack of new homes is not a local phenomenon. Why would the whole country suddenly run out of buildable land? New homes are not built because few(er) people can afford them. The right side of the bell curve for millennials is shifting further to the right than for the previous generations.

  53. 53
    Eastsider says:

    By Dave @ 46:

    I’d guess you’re a Millennial

    Like many of your (previous) comments, I don’t agree with you. But I am 100% sure I am correct on this one. ;)

  54. 54
    Blurtman says:

    RE: Ardell DellaLoggia @ 47 – GIGO. E.g., Hispanic is not a race.

  55. 55
    Brian says:

    Bulls like Doug and Sid seem to ignore the mountain of new apartments that are continually coming online. Eventually, that apartment will look a lot more enticing cost wise. Housing is not all in SFH.

  56. 56

    RE: Blurtman @ 50

    Good point. Surprised Redfin made that error when naming the chart. Good catch!

  57. 57
    Anonymous Coward says:

    RE: Brian @ 51 – Agreed, but the millennials are starting to get married and thinking about children. That 2br apt at $2800/mo loses some of its cache when you contemplate kid no 1 and it’s all downhill from there. We’re simply not building enough 3+ bedroom residences (single family or multi-family) to keep up with the demographics.

  58. 58

    Why do starter homes have to be brand new homes? How many peoples’ first car was a brand new car? How many of the houses built in the 1970s went to first time buyers on the first purchase transaction?

  59. 59
    Blurtman says:

    RE: Ardell DellaLoggia @ 52 – Most people trip over that since it is a made up category that really has no precise meaning.

  60. 60
    jon says:

    The problem is not house prices; it is incomes. Globalization has hidden the inflation that has been going on for decades because of the massive deficits. Products that are globalized, like what you see at chain stores, have been dropping in price and that hides the inflation. House construction, education, and other services that are not globalized have been inflating, and so are no longer affordable to most people.

  61. 61
    ess says:

    By Anonymous Coward @ 53:

    RE: Brian @ 51 – Agreed, but the millennials are starting to get married and thinking about children. That 2br apt at $2800/mo loses some of its cache when you contemplate kid no 1 and it’s all downhill from there. We’re simply not building enough 3+ bedroom residences (single family or multi-family) to keep up with the demographics.

    Apartment living , with noisy inconsiderate neighbors on top of each other , lost its cache way before any kids were contemplated. I couldn’t believe how quiet and pleasant life was when I finally got to live in my first stand alone house. And in our present self centered, its all about me society, I can imagine things are only worse.

  62. 62
    Erik says:

    RE: Anonymous Coward @ 44
    Listing date. You are making fun of me, but I’m serious as a heart attack. This is my tentative sell date.

    It all depends on what happens with credit expansion. If there isn’t much credit expansion, I may not even sell. Based on history and the way things are playing out, we may be in for another bubble.

    My best guess is 2024 based on what I’ve learned about bubbles. This isn’t rocket science. Study up on housing bubbles and tell me why I’m wrong. My friends and family will be getting heat from me to sell and rent when this thing is about to blow.

    My guess is that we have a small recession and the Feds will expand credit to get us out of the recession. Years later it will blow up in tax payer’s faces and we’ll need another tarp. I don’t really care how it happens, I just want to have a lot of cash in hand when it does so I can buy lots of cheap houses like the great and powerful Ray Pepper did last crash.

  63. 63
    brian bixby says:

    RE: Erik @ 58
    If you go off of the 18 year theory it woud be 2026, but I’m leaning closer to your 2024. It’s going to come a little early.

  64. 64
    GoHawks says:

    Mortgage rates are making news lows for the year despite the stock market making new all-times highs. Both are trouble for the bear’s thesis.

  65. 65

    There were five listed houses in King County selling for over $5M which closed last month. Four of them were on the market for less than two weeks!

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  66. 66
    Sid says:

    By GoHawks @ 63:

    Mortgage rates are making news lows for the year despite the stock market making new all-times highs. Both are trouble for the bear’s thesis.

    Last few years have been brutal for bears.

  67. 67

    RE: Kary L. Krismer @ 64
    The Recent Trump Stock Market Surge

    Boosts those VERY high tier sales IMO.

  68. 68
    ess says:

    Does anyone have or have access to information that delineates the percentage of single family houses in Seattle, adjacent cities, as well as Puget Sound? I imagine the percentage has had a precipitous decline in Seattle as of the latest population boom. It would be interesting to track those numbers by decades to determine the actual decrease in the percentage of single family homes.

    As to “starter homes” – what is the current definition of a “starter home”. As I recall, the average single family house size after world war two was roughly 1000 sq feet. And is the new definition of a “starter home” a condo or a town house due to the cost of a single family home in Seattle and area? And is there some sort of square foot number that removes a house from the “starter” category, or is it all price driven these days?

  69. 69

    RE: ess @ 67

    Most major cities have always had more “attached” single family housing “row homes”, “brownstones”, etc. than Seattle. A “starter” home in many other major cities might be a “row home” or a “twin” (one party wall and a space between every two homes where both are separate fee simple properties). My first “starter” home was a twin.

    So the “rowhome/townhome” with 3 bedrooms or more vs a 2 bedroom townhome or a 1 or 2 bedroom one floor “condo” would be the “starter” home of newer construction these days.

    A new 3 bedroom or 4 bedroom townhome, and more “true” 3 and 4 bedroom townhomes are starting to be built these days vs 12 years ago, would be equivalent or greater than a 1921 two bedroom bungalow “starter” home. Both exist “in City” at roughly the same price.

    Kirkland started building some “twins” in the last five years both “close in” and out toward Woodinville.

    In many ways the Seattle Area is just catching up to “the starter homes” of most other major cities. Attached housing.

  70. 70
    GoHawks says:

    MSFT and AMZN close at all times highs, mortgage rates at new lows for the year. Our local market continues through summer of 2018 in my opinion.

  71. 71
    Sid says:

    By GoHawks @ 69:

    MSFT and AMZN close at all times highs, mortgage rates at new lows for the year. Our local market continues through summer of 2018 in my opinion.

    We will easily have another 12+% appreciation in 2017.

  72. 72
    Erik says:

    RE: brian bixby @ 62
    2006+18=2024

  73. 73
    Jens says:

    RE: ess @ 24

    Buyers remorse huge among my tech set friends who bought in the last frenzy. Not just because they overpaid, but they felt rammed and jammed into small, overpriced boxes that me less than 1/2 of what they needed. They were miserable and complained from day 2 after move in and have been stuck in places they hate because there is no where for them to move and they don’t want to get burned again by overpriced, poor quality, tiny boxes, living like rats inside of a gilded box. For all the gen m’s racing around, do not get distracted by the bright shiny objects on this interior. Those things are easy to replace. You need to pay attention to quality of build, privacy if you desire that and it’s even possible; watch out for anything that has a shared driveway, two party + wells, HOA’s that go one way which is only “up” and bring on all kinds of arguments within communities that adds stress and absurdity to your life. Stay patient for what you want. Save your money. markets go up and they do come back down.

  74. 74
    Jens says:

    RE: ess @ 60

    I agree with that however, the new housing developments that are replacing the apartments and are expensive, jammed together, and lure the innocent gen M’s into a deal with the devil because they can’t afford anything else in the area. They get mesmerized by the shiny appliances and tile, and completely overlook that they have a shared driveway, can reach out and touch the home next door through their bedroom and bathroom window, and have an HOA Maffia that demands they keep their ecru house color, over fertilize their lawns to a toxic green color but maintains the supposed value of these lipstick coated, cardboard pigs. It’s now the total sham to corral these kids into these noisy developments that are the first to crash in any market weakness. Buyer beware as it is just a more expensive apartment that can be hard to sell in the end as buyers hopefully get smarter over time from forums like this and are not fooled by these developer prisons.

  75. 75
    ess says:

    Ardell – thanks for the insights on what constitutes a starter house these days. I can only imagine that one is at the mercy of the other occupier of the “twin”. Are there any new single family housing developments in the Puget Sound area with houses between 1000-1500 sq feet that are for sale and not for rent?

    Jens – interesting comments. I didn’t know that HOA were causing so many headaches. And privacy issues – I am seeing more and more housing with some or all of the windows facing neighbors just feet away. While I understand that the interior is paramount, one would think that it is also important to be able to keep the blinds open and see some vegetation and blue sky (when we get it). But the nature of this market is making it so that these issues of less importance to current buyers…….

  76. 76
    jon says:

    By Sid @ 66:

    By GoHawks @ 63:

    Mortgage rates are making news lows for the year despite the stock market making new all-times highs. Both are trouble for the bear’s thesis.

    Last few years have been brutal for bears.

    The stock bears yes, but housing bears will be fine for at least a few years, since they are renting and apartments are sprouting like mushrooms which holds prices down. When rental growth settles down and rents are no longer discounted to fill them, then rents will go up unless the housing market tanks by then.

    But with 1000 people moving to Seattle each week, the already planned growth of apartments not scaring away new builders, as a new 46 story building is in the works https://www.geekwire.com/2017/sphere-influence-46-story-tower-near-amazon-campus-will-domed-top-reminiscent-tech-giants-new-landmark/

  77. 77

    By ess @ 75:

    Jens – interesting comments. I didn’t know that HOA were causing so many headaches.

    They aren’t. It’s just that some people like to complain. They particularly like to complain if they move into a neighborhood which is a certain way and then try to behave in some other way that is inconsistent with the neighborhood. Sort of like moving in near a gun range or airport and then complaining about the noise.

  78. 78

    By GoHawks @ 64:

    Mortgage rates are making news lows for the year despite the stock market making new all-times highs. Both are trouble for the bear’s thesis.

    On the other hand the employment reports have hardly been rosy. The Trump bump was pretty short and rather shallow.
    Our local area is probably different in that respect, but that type of bad news can’t continue nationally forever, and those reports have been pretty pathetic for years now.

  79. 79
    cm says:

    Greetings! Very long time, no talk…

    I’m in the process of buying a hobby farm. The process has not been fun. I found a place, then contacted the bank that would be setting up the loan, and asked them for a preferred real estate agent. They suggested someone at Windermere.

    So we put down some earnest money and we’re off to the races. Some back & forth over the home inspection, but we reach an agreement.

    Now, I find out (a week from close) that my real estate agent will be out for vacation (she suggested the close date) and both the bank and the agent are suggesting that I sign closing documents before doing a walk-through.

    I don’t have a firm date on the closing date, nor on the walk-through date, and I have issues about the seller’s response to the home inspection (that is, if anything was actually done) .

    Is this normal? Does anyone have a suggested course of action? Thanks!!!

  80. 80
    cm says:

    RE: Erik @ 62 – Heard anything from Ray?

  81. 81
    ess says:

    By Kary L. Krismer @ 77:

    By ess @ 75:

    Jens – interesting comments. I didn’t know that HOA were causing so many headaches.

    They aren’t. It’s just that some people like to complain. They particularly like to complain if they move into a neighborhood which is a certain way and then try to behave in some other way that is inconsistent with the neighborhood. Sort of like moving in near a gun range or airport and then complaining about the noise.

    I guess it helps to find out what the rules are before one moves into a neighborhood that has underlying HOA rules and regulations.

    What is the best way to research an HOA, not to determine what the rules are which should be easy enough, but if there are any underlying issues that could be a red flag or an outright deterrent to buying?

  82. 82
    Jasper says:

    By cm @ 79:

    I’m in the process of buying a hobby farm.

    [snip]

    Now, I find out (a week from close) that my real estate agent will be out for vacation (she suggested the close date) and both the bank and the agent are suggesting that I sign closing documents before doing a walk-through.

    I don’t have a firm date on the closing date, nor on the walk-through date, and I have issues about the seller’s response to the home inspection (that is, if anything was actually done) .

    Is this normal? Does anyone have a suggested course of action? Thanks!!!

    Talk to your broker’s managing broker. You need to know what shape the property is in. If the deal is that you get to walk through the property before signing on the final dotted line, you deserve to walk through the property beforehand. Someone at Windermere should be able to set that up for you.

  83. 83
    Lenny Gilsdale says:

    If you buy now you’re stupid. The biggest irony is that a majority of people with money are stupid. So real estate is now a game of chicken. How many stupid people are there? Only time will tell.

  84. 84

    [Topic: HOA Rules]

    By ess @ 81:

    I guess it helps to find out what the rules are before one moves into a neighborhood that has underlying HOA rules and regulations.

    What is the best way to research an HOA, not to determine what the rules are which should be easy enough, but if there are any underlying issues that could be a red flag or an outright deterrent to buying?

    Yes, exactly!

    Some of the larger HOAs have websites which have the rules posted. For others you can select paragraph 8 of Form 22D, which is the HOA review period option, but in this market it may be difficult getting an offer accepted with that option, if for no other reason than it’s easier for a seller and listing agent not to have to provide that information. Best to try to get it on your own somehow. A lot of this, but not all, can be determined by reviewing a title report–which hopefully the listing agent has and will be more than willing to share (or has already attached to the listing if they are a quality agent). For HOAs which are not active (which is a lot of them) that may be all that is required and all that is possible.

    Finally note that with a condo the Resale Certificate will contain all of this information, and is cannot be waived as part of an offer.

  85. 85

    RE: jon @ 45
    Forget About Amazon Wage Impact on Real estate

    Its mostly slave shop warehouse work for like $12/hr…we should have kept the $40/hr Auburn Boeing Fabrication [Manufacturing Engineering] wages and outsourced “high school level” Amazon jobs to Japan instead.

    BTW, engineers in Japan are paid FAR more than Seattle engineers.

  86. 86

    [Topic: Pre-closing rights.]

    By Jasper @ 82:

    Talk to your broker’s managing broker. You need to know what shape the property is in. If the deal is that you get to walk through the property before signing on the final dotted line, you deserve to walk through the property beforehand. Someone at Windermere should be able to set that up for you.

    The first sentence is good advice. The firm should be able to provide someone else to help.

    The second sentence is true, but somewhat shockingly prior to February the contract did not automatically contain such rights. Now the walk through rights are contained in paragraph f of Form 21, but that does not necessarily pertain to inspection items. That would be paragraph d of Form 35, which requires re-inspection by the same inspector, and that can be costly. I’ve not seen a seller be so hyper-technical, but they could be.

    I’m not going to touch on the issue of whether of not all that has to be done prior to signing. For that the buyer can consult their own agent (or substitute agent) or an attorney.

  87. 87

    By softwarengineer @ 84:

    RE: jon @ 45
    Forget About Amazon Wage Impact on Real estate

    Its mostly slave shop warehouse work for like $12/hr…we should have kept the $40/hr Auburn Boeing Fabrication [Manufacturing Engineering] wages and outsourced “high school level” Amazon jobs to Japan instead.

    I’m not sure how you outsource warehouse jobs to Japan? ;-)

  88. 88
  89. 89
    Jens says:

    RE: ess @ 81

    I would engage a real-estate attorney for all transactions. Have them look into pre-foreclosures/foreclosures in the community as this is one indication of the health of the community. Look into any lawsuits in the area for that community – for example, if you want to buy in Coupeville WA and are coming from out of state, you really must look into the prowler/growler issues coming from NAS Whidbey – Very heated debates and many lawsuits came out of that. Get on city data forums. On Redfin, for listings you can scroll down towards the bottom and get a listing of crimes that have been reported within the last couple of years. We also always do a kitten kicker search and it will tell you on a map where they live and we walked away from a purchase in a country setting when we found 4 registered in a supposedly nice area within a one mile radius. We really did not care about the circumstances, we were out. All HOA’s have community names and it is easy to search if there are any pending law suits. Here are a couple of examples: http://www.fssklaw.com/blog/common-lawsuits-involving-hoa-s-and-what-to-do.html

    Homeowner Legal Options Against HOA Abuse of Power – http://www.lynchlegalfirm.com/Articles/Homeowner-Legal-Options-Against-HOA-Abuse-of-Power.shtml

  90. 90
    sfraz says:

    Amazon stock is based on their cloud service, which is in fact, shrinking. More competition.- Google, Microsoft, Digital River….There is no way to explain the valuation. Think… How much is a tulip worth? Negative operating cash flows.

  91. 91
    wreckingbull says:

    By Kary L. Krismer @ 18:

    By redmondjp @ 13:

    The unofficial mascot of Dot Bomb 1.0 was a sock puppet. What will it be this time? Sell that Twitter stock while it is still worth something.

    The problem with that market blowing up is it will hurt developing companies that have good ideas/products, not just Twitter.

    Not just developing companies. Amazon will feel pain as their cloud business vaporizes. Startups almost always use cloud services for their infrastructure. It’s a no-brainer. For Amazon, AWS is a substantial part of their revenue and a high-margin business for them. Without today’s AWS revenue, Amazon is a a much poorer company.

  92. 92
    wreckingbull says:

    RE: sfraz @ 89 – Funny, I did not see your comment before I posted. You are correct. When startups go pear-shaped, so does AWS revenue.

  93. 93
    Eastsider says:

    I just received an “official property value notice” in the mail. My property assessed value went up 20% in one year. On top of that, we have the new ST tax and various levies we recently approved. Forget about appealing the new assessment – you are not going to prevail. How dumb can we be, especially those who can’t make ends meet but thought it was a great idea to tax the ‘rich’ property owners? Of course, we are all in favor of further hiking property tax to pay for education!

    Assessed property values spike in King County
    http://www.king5.com/news/local/assessed-property-values-spike-in-king-county/445039991

    P.s. I don’t see any report on this in Seattle Times. Surprise!

  94. 94

    RE: Eastsider @ 92 – But your taxes almost certainly won’t go up anywhere near 20%. Ignoring the effect of ST3, the bulk of the taxes are based on a total valuation of all properties, and 20% is probably going to be a common increase in valuation, leading to not much increase in tax. Here’s another article on it.

    http://www.kentreporter.com/news/property-values-in-2017-up-21-2-percent-in-parts-of-kent/

  95. 95
    jon says:

    By sfraz @ 89:

    Amazon stock is based on their cloud service, which is in fact, shrinking. More competition.- Google, Microsoft, Digital River….There is no way to explain the valuation. Think… How much is a tulip worth? Negative operating cash flows.

    I don’t know where you are getting you data from, but the major cloud providers are growing at about 50% per year. They are not growing relatively to each other though.

    The software and other IP needed to build and run a cloud is very complex, and so each vendor makes different design choices to optimize based on their market. For example the Microsoft or Oracle clouds are designed for their own software, and Google cloud is based on supporting the type of work that they do internally. Then the cloud users, such as Digital River, have to do a lot of engineering based around the different software interfaces provided by the different clouds. Migrating from one cloud to another is expensive development process and so it is not usually a high priority even at the current profit margins of the cloud providers.

    There are still huge cost savings yet to come, and that is driving a lot of migration of techies into Seattle.

  96. 96
    Eastsider says:

    RE: Kary L. Krismer @ 93 – True, we may not see a 20% increase in property tax bill. But homeowners in King county will certainly see a higher increase, in both absolute and percentage terms, than the rest of the state. Then there are always new levies, both local and statewide, being considered…

  97. 97
    sfraz says:

    RE: jon @ 94 – Karl Denninger- Market-Ticker.org “You have a business that’s valuation is dependent on the cloud taking over the world, but yet their cloud business has seen declining margins and declining prices, which is what happens when every business becomes commoditized . People are buying Amazon stock today for the same reason they bought tulips- because they think somebody will come along and give them more money for them.” https://market-ticker.org/akcs-www?singlepost=3421565

  98. 98
    Sid says:

    RE: sfraz @ 96
    You should buy some AMZN puts then.

  99. 99
    Eastsider says:

    RE: Sid @ 97 – Trouble is “irrational exuberance” can last longer than you think. Timing a market is impossible. Amazon is in a very competitive business. They don’t have monopoly power in online retailing and cloud computing IMO.

  100. 100
    Hugh Dominic says:

    By Sid @ 39:

    By Erik @ 27:

    RE: Weasel @ 22
    ….
    Sell 2024! That is your most probable next peak in the bubble. Sorry to break the news to you, but this time is not different. Prices will crash at some point. Just don’t get caught with your pants down. If you don’t sell 2024, please don’t come whining on here like the software people have been doing for years. I will just say “I told ya so!”

    Please also share the exact month and date to sell in 2024.

    I’ve correlated housing prices to humidity levels and the number of raccoons per acre, which is more science than Erik has used. Based on my data, housing prices will reach a local maxima on June 19th, 2019. This high point will be not be reached again until April 4, 2022.

  101. 101
    Doug says:

    RE: Hugh Dominic @ 99 – The Tim should add a like button feature.

  102. 102
    Doug says:

    Interesting times in interest rate world…

    10y UST back down to 2.16% — seemingly good for 30y mortgages and continued Seattle “bubble”.

    Meanwhile, 10y minus 3m UST stands at 1.23% — only 14 bps away from the low last summer which itself was the lowest since 2008 in the middle of the recession. A Fed hike in June easily drives the spread under 1.00% and likely lower as the 10y probably rallies on the move.

    Is the Fed hiking into a recession? YES! Keep listening to the yield curve. It will tell you when we need to finally begin viewing the world through Justme’s lenses.

  103. 103
  104. 104
    ess says:

    RE: Jens @ 88

    Thank you for your interesting ideas and insights, Jens. While always have been a single family homeowner in the past, we are thinking of relocating to a 55plus community for our “golden years”, and your ideas and suggestions will be put to good use if that is in our future.

    Another analytical tool for anyone buying any property, especially in a hyper growth area such as Puget Sound is the city or town’s own website where one is interested in buying. Of interest are all the proposals that be considered through workshops or studies (which provide what the thinking for the area may be), or changes to the comprehensive plan that often indicate that the quiet idyllic neighborhood under consideration may not be that way for long.

    For example in the town I reside in, there are pricey single family neighborhoods adjacent to areas under consideration for considerable development. The kind of development will include high rises, commercial establishments and low income housing. I would guess that the people that are spending considerable sums on single family houses one or two blocks away from these areas under study and updates in the comprehensive place have no clue that major development that will negatively impact not only the quality of the life they had hoped to have in a single family neighborhood, but their actual investments. A cursory review of the city’s website would reveal these issues and alert potential buyers of problems ahead.

  105. 105
  106. 106
    northender says:

    RE: Hugh Dominic @ 99

    Very interesting concept. How do you get your racoon data?

  107. 107
    Hugh Dominic says:

    RE: ess @ 104 – Based on the information you’ve provided, your home’s value has changed by -0.35% MoM. Given the falling humidity level your best move now is to do a remodel and add four bathrooms. I also recommend buying a condo in West Seattle.

  108. 108
    Hugh Dominic says:

    By northender @ 105:

    RE: Hugh Dominic @ 99

    Very interesting concept. How do you get your racoon data?

    I step outside at 10:05 every Monday evening and observe my back yard for 60 seconds. I count how many raccoons I see. I then extrapolate from this RcPM data point to create a weighted estimate for the Puget Sound region. I adjust upward or downward based how many times Kary has posted in the then-current Seattle bubble thread, not including the posts in which he is just arguing with Ardell.

    I’ve tried other methods but I’ve found that this one is the most reliable.

  109. 109
    northender says:

    RE: Hugh Dominic @ 107

    Thanks for sharing, I can tell you have lots of experience with big data! There’s little doubt you’re at Amazon. I just hope you guys will give us small timers a couple more years before you take over real estate too. Heard a rumor that you’re eying Redfin…

  110. 110
    esskar says:

    RE: ess @ 103

    comprehensive plan – not comprehensive place. sorry

  111. 111

    RE: Kary L. Krismer @ 87
    Good Question Kary

    Amazon needs overpopulation in America for low domestic postage slave labor….America doesn’t need Amazon destroying our prosperity and over-populating Puget Sound just so rich elite get their cheap labor….give us back our Manufacturing Engineering!

  112. 112
    Bizzrian says:

    Keep in mind this is one of the longest business cycles in history, the next recession will come it always does….. that is when you evaluate the housing market again, the fed will be forced to step in with interest rate cuts per the 2009 playbook. Don’t chase if you have the time.

  113. 113

    RE: Bizzrian @ 112 – I agree the economy will remain cyclical, but I’m not seeing this as one of the longest business cycles in history. On what are you basing that claim? The stock market?

  114. 114
    Doug says:

    RE: Doug @ 102 – UPDATE: 10y-3m down 5 bps to 1.18%.

  115. 115

    The NWMLS May stats will be out today. Tim’s running out of time for his preview! ;-)

  116. 116
    uwp says:

    It’s out: http://www.northwestmls.com/index.cfm?/News–Information/page/Latest-Press-Release

    Active Inventory down YOY (of course), but total new listings in May up 10% YOY. That’s a positive for buyers.

  117. 117

    RE: uwp @ 116 – The volume is fairly decent at 2,576 (King Cty SFR) particularly given that it’s up YOY despite the lower inventory.

    Also, keep in mind that due to a combination of relatively low inventory and most agents using an offer review date, the active inventory swings quite a bit on a percentage basis during the week.

    Number from NWMLS sources, but not guaranteed.

  118. 118
    Brian says:

    By Kary L. Krismer @ 117:

    Also, keep in mind that due to a combination of relatively low inventory and most agents using an offer review date, the active inventory swings quite a bit on a percentage basis during the week.

    Do they do anything with the MLS stats to compensate for this? i.e. to make sure for the monthly inventory levels that they’re not comparing a low-inventory wednesday this year to a high-inventory Friday last year?

  119. 119
    N says:

    By uwp @ 116:

    It’s out: http://www.northwestmls.com/index.cfm?/News–Information/page/Latest-Press-Release

    Active Inventory down YOY (of course), but total new listings in May up 10% YOY. That’s a positive for buyers.

    Interesting, sounds like total inventory is increasing quite a bit, just more buyers out there keeping the outstanding inventory lower. Volume of new listings up 10% YOY but actual active listings down 20%+.

    Ken Anderson, president/owner of Coldwell Banker Evergreen in, agrees. “No one is talking about the large number of new listings coming to the market,” he notes. “New listings are at a seven-year high, and fifth highest all-time in our South Sound market,” according to his analysis.

    Northwest MLS brokers added 13,497 new listings during May, improving on the previous month by 2,849 listings for a gain of nearly 27 percent. Compared to a year ago, the volume of new listings increased about 10 percent. Total active inventory is down from a year ago, but about 6.8 percent better than April.

  120. 120

    By Brian @ 118:

    By Kary L. Krismer @ 117:

    Also, keep in mind that due to a combination of relatively low inventory and most agents using an offer review date, the active inventory swings quite a bit on a percentage basis during the week.

    Do they do anything with the MLS stats to compensate for this? i.e. to make sure for the monthly inventory levels that they’re not comparing a low-inventory wednesday this year to a high-inventory Friday last year?

    Not that I’m aware of.

  121. 121

    RE: N @ 119 – I don’t know how much of that carries over to King County. New listings (SFR) are barely up YOY (3,599 to 3,436), and down YTD (12,936 to 13,685). Note closed sales are up about 400 YTD.

    Numbers from NWMLS sources, but not guaranteed by the NWMLS.

  122. 122
    N says:

    By Kary L. Krismer @ 121:

    RE: N @ 119 – I don’t know how much of that carries over to King County. New listings (SFR) are barely up YOY (3,599 to 3,436), and down YTD (12,936 to 13,685). Note closed sales are up about 400 YTD.

    Numbers from NWMLS sources, but not guaranteed by the NWMLS.

    Thanks. Interesting, although nearly even is quite different than down 20%.

  123. 123
    Brian says:

    By Kary L. Krismer @ 120:

    By Brian @ 118:

    By Kary L. Krismer @ 117:

    Also, keep in mind that due to a combination of relatively low inventory and most agents using an offer review date, the active inventory swings quite a bit on a percentage basis during the week.

    Do they do anything with the MLS stats to compensate for this? i.e. to make sure for the monthly inventory levels that they’re not comparing a low-inventory wednesday this year to a high-inventory Friday last year?

    Not that I’m aware of.

    Bummer. Maybe they could have averaged the inventory of the last seven days of the month.

  124. 124

    RE: Brian @ 123 – I think it just can be dealt with by not paying too much attention to small variations that occur in numbers from month to month. For example, a one month drop in median price by $5,000 doesn’t mean much/anything.

  125. 125
    Bizzrian says:

    RE: Kary L. Krismer @ 113

    http://www.cnbc.com/2017/05/08/goldman-says-u-s-economy-may-be-slowly-growing-into-the-longest-expansion-in-history.html

    My apologies I should have said its one of the longest at 95 months in modern history. Two others over 100 Here is the link.

  126. 126

    RE: Bizzrian @ 125 – Thanks and wow. I was actually thinking of those two other periods when I questioned that. I’m actually surprised that the 60s were so short.

    I know a lot of people don’t like the Fed system, but if those are the longest three periods in history, maybe it is a good thing.

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