Case-Shiller: Seattle Home Price Gains Still Strong in August

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

Up 0.2 percent July to August
Up 13.2 percent year-over-year.
Up 20.4 percent from the July 2007 peak

Over the same period last year prices were up 0.4 percent month-over-month and year-over-year prices were up 11.3 percent.

Here’s an update of the chart I posted last month showing the year-over-year home price changes in all twenty Case-Shiller cities over the past year and a half:

Case-Shiller Year-Over-Year Home Price Change

Seattle still has by far the largest year-over-year price growth, despite falling off just slightly in August.

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 dropped #9 in July to #16 in August.

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 dropped off just a bit from its July post-peak high. Even so, yet again in August, none of the twenty Case-Shiller-tracked metro areas gained more year-over-year than Seattle. Not even close.

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

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

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 121 months since the price peak in Seattle prices are up 20.4 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

Here are a couple stories about this month’s numbers:

(Home Price Indices, Standard & Poor’s, 2017-10-31)


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.

188 comments:

  1. 1
    Doug says:

    Will this be the first winter in 3 years that we actually get a slight pull back?!

  2. 2
    Rupert D says:

    Comments from Zillow after todays Case Shillar release:

    According to data from Zillow, the Seattle-based real estate media company, it’s a significant milestone for Seattle’s housing market, as the only cities ahead of it — out of the top 50 largest metros in the United States — are all to the south in California.

    Seattle’s metro area includes King, Snohomish and Pierce counties, where median home values break down like so:
    •King — $503,500, up 14.2 percent year over year
    •Pierce — $276,000, up 10.4 percent year over year
    •Snohomish — $370,600, up 10.4 percent year over year

    Here’s how the top five metro markets in the country compare in median value:
    •San Jose — $943,000
    •San Francisco — $812,000
    •Los Angeles — $578,000
    •San Diego — $518,000
    •Seattle — $401,000

    Boston isn’t that far behind, at $400,000, but the wave of tech-related jobs fueling Seattle’s economy are giving the city — and people looking to sell their homes — an advantage.

    “Historically the Boston and Seattle housing markets have been very similar with relatively well educated populations,” Zillow senior economist Aaron Terrazas told GeekWire. “For much of the past decade Boston homes have been more expensive than Seattle homes, but that changed last month. Seattle’s exceptionally strong labor market, strict building rules, and close ties and geographic proximity to California have all helped push up home values in Seattle, and home buyers and sellers are noticing.”

  3. 3
    Doug says:

    RE: Rupert D @ 2 – The west coast is the best coast.

  4. 4
    Brian says:

    In the first graph, Seattle looks like it’s about to do what Portland did a year ago.

  5. 5
  6. 6
    ronp says:

    RE: Scotsman @ 5 – On the household income home price ratio Seattle has a lot catching up to do to compare to other top expensive cities. Still there should be a plateau soon as the economy cools and Amazon HQ2 gets online in Denver(?).

  7. 7
    GoHawks! says:

    RE: Brian @ 4 – very well could be, but that still means prices up 6-8%.

  8. 8
    Justme says:

    Meanwhile, Amazon sells their goods at an overall NEGATIVE margin -of -18% of and papers it over with AWS profits.

    Date Sales COGS Sales/Cog% Fulfillment Net %Profit
    2013/Q1 13271 11801 12.46% 1796 -326 -2.46%
    2013/Q2 12752 11209 13.77% 1837 -294 -2.31%
    2013/Q3 13808 12366 11.66% 2034 -592 -4.29%
    2013/Q4 21072 18806 12.05% 2918 -652 -3.09%
    2014/Q1 15705 14055 11.74% 2317 -667 -4.25%
    2014/Q2 15251 13399 13.82% 2382 -530 -3.48%
    2014/Q3 16022 14627 9.54% 2643 -1248 -7.79%
    2014/Q4 23102 20671 11.76% 3424 -993 -4.30%
    2015/Q1 17084 15395 10.97% 2759 -1070 -6.26%
    2015/Q2 17104 15160 12.82% 2876 -932 -5.45%
    2015/Q3 18463 16755 10.19% 3230 -1522 -8.24%
    2015/Q4 26618 24341 9.35% 4546 -2269 -8.52%
    2016/Q1 20581 18866 9.09% 3687 -1972 -9.58%
    2016/Q2 21116 19180 10.09% 3878 -1942 -9.20%
    2016/Q3 22339 21260 5.08% 4335 -3256 -14.58%
    2016/Q4 30629 28958 5.77% 5719 -4048 -13.22%
    2017/Q1 23734 22440 5.77% 4697 -3403 -14.34%
    2017/Q2 24745 23451 5.52% 5158 -3864 -15.62%
    2017/Q3 28768 27549 4.42% 6420 -5201 -18.08%

    Figures are in billions or percent, as noted.

    This will not end well, neither for Amazon, Seattle, housebuyers, nor speculators. But people insist on sticking their heads in the sand, in their chase of the almighty profit. Oh well. Don’t say I didn’t warn you. Too bad I cannot stop this crazyness, but people have gone completely insane.

    Reference:
    https://market-ticker.org/akcs-www?post=232508

  9. 9
    Scotsman says:

    I wouldn’t expect price increases to slow anytime soon. Seattle still has a long way to go to catch up to CA pricing. Both economies are driven by the same industry mix that provides plenty of high paying jobs with equity options. Taxes are still lower in the NW and both regions are attractive to young, hip, liberal employees. More importantly it seems the majority of current sales are financed with loans that meet traditional criteria for down payments and verified income ratios. The funky loans are out there, but primarily for cars and other consumer goods, not housing. I’ll be the first to admit the national economy on the whole doesn’t rest on the best foundation. Personal saving rates have tanked over the last year, debt of all kinds is up, nationally incomes are generally more flat than up. At some point the national debt and inability to meet pension and other entitlement commitments will drag everything down. But we’re not there yet.

  10. 10
    Scotsman says:

    Justme: Amazon has been losing money since its inception- no reason to do anything different now. With some of my past years spent in commercial banking I know that large companies can function at a loss for years. The issue isn’t so much accounting profits but cash flows. Firms can operate at an accounting loss while building up large stocks of cash. That has been Amazons game. The biggest threat they face is government restrictions. With their fingers in everything from books at the beginning to now food, pharmaceuticals, car parts, computing services, etc. they have come too close to monopoly status and will eventually be regulated. But even as an enormous semi-regulated utility they’ll still employ huge numbers of well paid folks. I’m convinced the only thing that brings it all own is a significant world or national economic event.

  11. 11
    Justme says:

    RE: Scotsman @ 10

    >> Firms can operate at an accounting loss while building up large stocks of cash. That has been Amazons game.

    Bahahahaha!! Oh, yes, building up cash, are they? I refer you to

    https://seekingalpha.com/article/4118423-important-detail-quarterly-report-amazon-glossed

    In short, Amazon isn’t producing positive free cash flow when factoring in all of its effective operating expenses, even though some of those expenses aren’t categorized as such. This is a new development. For the trailing twelve-months as of the second quarter of 2017, it was still free cash flow positive factoring in these capitalized leases.

  12. 12

    On the topic of Amazon and not making money, back in August I bought three of these dead bolt strikes for under $5.00 each.

    https://www.amazon.com/Prime-Line-Products-2480-Security-Deadbolt/dp/B004GXG9C0/ref=sr_1_1?s=hi&ie=UTF8&qid=1509497488&sr=1-1&keywords=Prime-Line+Products+E+2480

    I picked no rush shipping, because I had no immediate need and just wanted them around. Well it turned out they were out of stock, and they finally came this week, but they came in two separate shipments! I don’t know what Amazon’s inventory system is like, but apparently they had two of these sent to one fulfillment center and one or two sent to another fulfillment center, even though they new three should go out of one center unless my order was cancelled. And yes these were “sold by Amazon” items. Just seems rather sloppy.

    On the other hand, they do have their “Subscribe and Save” program, which offers discounts for multiple items shipped at the same time once a month. That undoubtedly saves them shipping costs, but they don’t really promote it much, which seems odd.

  13. 13
    Drone says:

    Hey Tim,
    I’ve always liked the Home Price Index chart, but now that we’re reaching beyond the 2007 peak I wonder if you’d supplement this with an inflation-adjusted chart? I have to imagine that the results would be slightly less dramatic over a 10-year time window. What do you think?

  14. 14

    RE: Drone @ 13 – I believe CS is inflation adjusted. So basically the numbers do not go up to the extent that house prices increased due to inflation (they adjust the paired data).

    http://www.multpl.com/case-shiller-home-price-index-inflation-adjusted/

  15. 15
    Cap''n says:

    RE: Drone @ 13

    Not HPI, but inflation adjusted by the Tim back in a May 2015 post below. Point being preferred measures of inflation adjusted will not show dramatic differences because we have been bouncing around 1 percent annually. Of course, include housing costs and adjusted for inflation is pretty much a straight horizontal line. …
    King County Median Price: Nominal and Real
    When adjusting into 2015 dollars, the median price peaked at $527,607 in July 2007. April 2015’s median price of $480,000 comes in about 9 percent below that level, and is roughly comparable to where prices were in May 2006.

    Last year home prices increased 8.7 percent between April and their 2014 high point in July. If we see another similar increase this year we’ll come just shy of the inflation-adjusted price peak in 2015, hitting about $522,000 in July.

    In other words, any way you look at it, home prices are really high right now.

  16. 16
    Brian says:

    RE: Scotsman @ 9

    You really can’t compare CA home prices to Seattle. Look up California’s Proposition 13. Longtime homeowners have no incentive to sell their home in CA. This causes significant existing and new home supply problems.

  17. 17
    Scotsman says:

    RE: Brian @ 15 – That’s true, but all it expresses is a potential shortage in inventory. A counter argument would be that Seattle’s geography, being very linear in its north/south orientation presents an even more difficult problem. We’re out of buildable land within a reasonable commuting distance to the downtown core . Who wants to spend their life on 520 or 405/90? Bottom line- there’s not that much difference between San Jose and Seattle salaries- but our home prices are significantly lower, and all else being equal, likely to continue their climb.

  18. 18
    Scotsman says:

    RE: Justme @ 11 – Yup, but these guys aren’t dumb. The key phrase from the article you linked is ” investments not paying for themselves ..yet.” Yet. They will pay, the cash flow will come. I’ve been waiting for Amazon to collapse for over a decade. Seriously wrong. A little accounting tweak here and there and away they go- growing ever more. As soon as a recent addition turns cash flow positive they’re off investing it in the next great thing- never a real profit in the traditional sense, but always growing. The only thing that will stop them is antitrust action or a significant world downturn. Currently 12th? in the U.S., headed for 2nd in a couple of years, then a tough time catching Walmart. But even if they screw up, with $140Billion in revenue that’s a lot of momentum and time to rework and get it right. Here to stay.

  19. 19
    Blurtman says:

    McBride is a bankster toady, and he has some quaint ideas such as fundamental value, but here is his analysis:

    On Friday, I posted five economic questions I’m frequently asked. I’ll post some thoughts on each of these topics over the next couple of weeks.

    A common question is: Are house prices in a new bubble? My short answer was: No. Here is an explanation.
    …….
    So prices may be a little overvalued, but there is little speculation – and I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.

    http://www.calculatedriskblog.com/2017/10/are-house-prices-new-bubble.html

  20. 20
    GoHawks! says:

    I’d be curious to see a chart of national home prices vs. the stock market. So many are saying it’s overvalued relative to incomes, but that is just one piece (yes a major piece) of the puzzle. Local home prices are up 80% while Amazon is up almost 600% in that same period of time. Incomes also don’t stay on par with extremely expensive areas, Bay Area, New York City, London, Vancouver, Seattle (?).

  21. 21
    Justme says:

    RE: Blurtman @ 18

    Yeah, Bill McBride (a.k.a CR or Calculated Risk) has gone downhill in a big way since he was part of the bloggers that called out the 2002-2007 bubble. I’m glad I’m not the only one that noticed. These days, CR is rather useless. One of his biggest faults is that he hides behind national statistics, whereas the new bubble is mostly regional. He is becoming as bubble-blind as Alan Greenspan.

  22. 22
    Rupert D says:

    Charts that show credit quality of mortgage originations is much better than 2008. Wells Fargo economic commentary…
    “Mortgage applications for home purchase are up a modest 4.7 percent year to year. Purchase applications have closely tracked home sales. The bulk of origination continues to be for borrowers with the highest credit scores, indicating that lenders remain cautious.”
    Chart of credit scores (p.4) in link below show that Credit Scores (fico) are much higher now than they were prior to 2008 and subprime mtg. ordinations were above 25% of total originations back then vs. 8% today. Another chart (p.7) shows declining homeownership rate and declining housing affordability which will eventually catch up with Seattle. All this info is national and not Seattle specific.

    https://www08.wellsfargomedia.com/assets/pdf/commercial/insights/economics/real-estate-and-housing/housing-chartbook-20171010.pdf

  23. 23
    Rupert D says:

    RE: Scotsman @ 17
    I think Scotsman is exactly right about Amazon. Unlike the majority of most public companies they care more about investing for future expansion than they do about current profitability. So far investors are letting them get away with it without punishing the stock price as they see amazons continued growth and market expansion.

  24. 24

    Getting back to the bubble/future downturn line of thought, I think the people most at risk there are probably the ones buying new construction in less than ideal locations (e.g. lots not built on previously mainly because they were overlooking busy roads, etc.). Not only are they paying a new construction premium, but in only 3 years the most prominent feature of their house will be its poor location.

  25. 25
    Deerhawke says:

    RE: Brian @ 15

    You may not want to compare California home prices to Seattle but Californians absolutely seem to be making that comparison for themselves– and coming to the conclusion that it is way cheaper here. Check out Gene Balk’s column last week, especially the sidebar called “Top 10 Places Newcomers Move From”.

    https://www.seattletimes.com/seattle-news/data/florida-newcomers-surge-the-latest-on-another-year-of-record-breaking-growth-in-seattle-area/

  26. 26
    Doug says:

    I think Justme is an alter ego created by The Tim just to keep a healthy debate raging and the traffic high. I for one come back often just looking to see what new level he can take the crazy bear fearmongering to. It never disappoints.

  27. 27
    Brian says:

    RE: Deerhawke @ 25

    That may be true, but Californians also can move to the entire rest of the U.S. (Austin, Denver, Portland, Boston, Amazon HQ2 location) that doesn’t have Prop 13 inflated home prices.

  28. 28
    Brian says:

    RE: Doug @ 26

    You’d rather it just be a bunch of bulls rubbing their horns on each other? With how much you guys bash him and other bears, it seems like what you’d prefer. There’s just as much, if not more, crazy bull fearmongering here.

  29. 29

    RE: Brian @ 28 – I think the problem is that it’s easy to predict a downturn will occur, because that’s a virtual certainty at some point in the future. The problem is predicting when that will occur. As I recall, Greenspan’s irrational exuberance speech was years before the market turned down, so his warning did little for investors other than cause them to miss a lot of opportunity if they listened.

    I personally don’t mind the bear comments, with the exception of those based on income or maybe something like the old “Seattle is 18 months behind San Diego” theory. Both are so simplistic if not downright stupid that it’s hard to take them seriously. And hearing that over and over and over gets tiring.

  30. 30
    Blake says:

    By Rupert D @ 23:

    RE: Scotsman @ 17
    I think Scotsman is exactly right about Amazon. Unlike the majority of most public companies they care more about investing for future expansion than they do about current profitability. So far investors are letting them get away with it without punishing the stock price as they see amazons continued growth and market expansion.

    This is what monopolies do… they undercut competition and lose money til the competition gives up. Then they raise prices! This doesn’t end well…
    http://247wallst.com/retail/2017/10/31/online-low-price-leader-amazon/
    “On average, Amazon’s prices are 11% lower than the online prices offered by such competitors as Wal-Mart Stores Inc., Target Corp., Walmart’s Jet.com subsidiary and other specialty retailers”

  31. 31
    Blake says:

    hmmm… Rents are falling in SF, NY, Chicago… and Seattle?
    (I’m always looking out for a turning point for when we might sell our investment property in the city. No we’re not going to buy in Seattle again, we’re looking at retirement properties in Baja!)

    https://wolfstreet.com/2017/11/01/biggest-us-cities-where-rents-are-plunging/
    … Even in Seattle, asking rents are coming under serious pressure, possibly due to new construction units piling on the market as years of crane-counting are producing results. The median asking rent for one-bedroom apartments dropped 1.1% year-over-year and is down 7.7% from the peak in August. Part of the sharp decline since the summer may be due to seasonal patterns. Rents for two-bedrooms still rose 3.7% year-over-year but are down 5.7% from their peak in April!

    In this table of the 12 most expensive major rental markets, the shaded area indicates peak rents and the changes since then. Note the prodigious amounts of red ink. Double-digit declines from peak hit one-bedroom rents in four of the 12 cities and hit two-bedroom rents in six of the 12 cities.

    See also: https://wolfstreet.com/2017/10/31/the-us-cities-with-the-biggest-housing-bubbles-3/

    … wow, look at Denver and Dallas!!

  32. 32
    Minnie says:

    RE: Scotsman @ 17

    It’s interesting that you bring this up (lack of build-able land) because I was thinking about this, too. However, there’s actually a lot of land seemingly available right close to downtown, just east of i-5 and both north and south of i-90. Also in and around S Dearborn Street. This area is ~1 mile from Downtown, there’s lots of either derelict buildings or empty parcels. There’s spots like in in and around Seattle. Maybe the asking prices for the land is too high? I don’t know. But I always wonder why more folks don’t live in that area (besides the crime being a deterrent). I’m not a developer but I’d love to know why more people don’t develop here since it’s so close to downtown!

    I guess I just can’t wrap my head around the “no land available” argument because I still see lots of land, a surprising amount of land.

  33. 33
    Justme says:

    RE: Doug @ 26

    How did you like the Amazon profit margin numbers I posted, Doug? Not so much fear-mongering. Just the facts.

  34. 34
    Justme says:

    RE: Minnie @ 32

    Right on, Minnie. For example, that green hill that is the northeast quadrant of I-5/Dearborn St could fit a nice highrise with parking dug into the hillside or parking built up along I-5 to abate the noise. Come to think of it, many condos or rentals on the west side of capitol hill are just as close to I-5 as this.

    But that is just one example. Seattle have lots of 1-2 story warehouses and such that could easily be replaced by residential highrises with commercial stuff on the first few floors. The idea that Seattle is constrained by land is ludicrous.

  35. 35

    By Blake @ 30:

    By Rupert D @ 23:

    RE: Scotsman @ 17
    I think Scotsman is exactly right about Amazon. Unlike the majority of most public companies they care more about investing for future expansion than they do about current profitability. So far investors are letting them get away with it without punishing the stock price as they see amazons continued growth and market expansion.

    This is what monopolies do… they undercut competition and lose money til the competition gives up. Then they raise prices! This doesn’t end well…,

    That may be how a business becomes a monopoly, but that is not how monopolies act at all. Monopolies do not lower prices to compete, because there is no competition. And for a retailer that isn’t likely to be a successful long term strategy, because new competition will eventually appear.

    Or are you using the Seattle City Council definition of monopoly? ;-)

  36. 36

    RE: Justme @ 34 – Some of that land south of downtown may have slide/stability issues. I don’t think they built most of I-5 south of Seattle on pilings because it saved money.

  37. 37
    Doug says:

    RE: Justme @ 33 – What is the market cap of a company who fundamentally changes how the entire world operates?

  38. 38
    Action says:

    https://www.redfin.com/blog/2017/10/heres-the-1-reason-its-so-hard-to-find-an-affordable-home.html

    This paints a pretty good picture of why high home prices are rational and this is not another bubble caused by irrational exuberance.

    Construction costs have risen over the last 10 years since the last peak due to increased material and labor costs, as well as more restrictive land use regulations. Why would we not expect existing home prices to increase as well?

  39. 39
    Brian says:

    RE: Action @ 38

    But they’re wrong. The #1 reason it’s so difficult to find an affordable home is historically-low mortgage rates have pumped up purchase power to crazy levels.

  40. 40
    N says:

    By Action @ 38:

    https://www.redfin.com/blog/2017/10/heres-the-1-reason-its-so-hard-to-find-an-affordable-home.html

    This paints a pretty good picture of why high home prices are rational and this is not another bubble caused by irrational exuberance.

    Construction costs have risen over the last 10 years since the last peak due to increased material and labor costs, as well as more restrictive land use regulations. Why would we not expect existing home prices to increase as well?

    Absolutely labor costs and material are higher and no doubt locally we are very anti building BUT its also true that at the bottom when prices were the lowest in the last decade building a new home was much more expensive than the market value of a used home but that didn’t keep prices up. Home values won’t necessarily follow the underlying cost of building a new home. Plus new homes are such a small sliver of the home market.

  41. 41
    Green-Horn says:

    RE: Minnie @ 32

    There are already big plans in the works for redeveloping a lot of that territory that you have in mind just south of Dearborn.

    https://www.bizjournals.com/seattle/news/2016/04/01/developer-unveils-plans-for-s-project-south-of.html

    We’ll see what happens…

    If you haven’t heard of it, https://www.seattleinprogress.com seems to be a really neat website that consolidates a lot of info on development, permitting, plans & applications that can be viewed very conveniently from a map interface. (I have no stake in them) Would be very interested to hear what all the old experienced minds think of that and how useful it is… Perhaps there are other interesting references worth knowing about?

    Otherwise, that vacant buildable land I suspect you have in mind just “East of the I-5” is my backyard, aka “the Jungle” aka the East Duwamish Greenbelt, which belongs to Seattle Parks.

    https://www.seattle.gov/parks/find/parks/east-duwamish-greenbelt

    https://thebeaconhillbeat.wordpress.com/2012/05/09/welcome-to-the-junglei-mean-the-east-duwamish-greenbelt-7/

    There is also this parcel which I did previously see listed at one point.
    https://www.redfin.com/WA/Seattle/3600-Hahn-Pl-S-98144/home/120631829
    I never imagined that they would list a parcel like that publicly. I figure the land & CRE brokers would already know who all the developers are who could do something with this and be able to make a few phone calls and pitch appropriately. Would be curious about the challenges of developing that. Judging from the prices developers are paying for land with many serious deficiencies and challenges it’s pretty clear they’re scraping the bottom of the barrell and the only option remaining option is to “recycle” used land by tearing down existing structures to be replaced with more, denser & taller…

    With regard to that strip east of the I-5, even if the land didn’t belong to the public and could be developed, it doesn’t actually amount to much space. It’s barely a block wide up to the edge of the freeway and it’s VERY steep and classified as a “Steep Slope Environmentally Critical Area.”

    Have a look at this map to see all the bits of blue and green that either prohibit or constrain development.
    https://imgur.com/a/j913D

    A number of my neighbors would love to sell out to developers. We’re all zoned for higher density and it would seem to make sense if the technical challenges can be resolved economically. Alas they are on the very steep edge of that greenbelt. Even though we all are bombarded with unsolicited offers from developers and their dirthounds to buy our properties to turn into 4, 5 and 6 packs of townhomes or possibly apartments, they pass after studying feasibility of permitting a project and building on a steep slopes like that with Environmentally Critical Areas & Protected Wildlife Habitats. One neighbor I know after his property was passed over for development, he investigated the possibility of replacing his old “tear-down-worthy” mess with a new single family home. Turns out that since that place was built in the ’50s or ’60s the required minimum setbacks to the lot lines, the steep slope and critical areas have gotten so much stricter that he may not even replace the home on the same foundation with the same footprint. Something about “substantial alterations” require the entire structure made to conform with all current codes… Overlapping setbacks apparently leave developable space on his lot a only a narrow filet for new construction. So until he gets a better legal & technical opinion, his only choice would seem to be to throw a lot more money into salvaging a falling-down house than it would cost to build new.

    I love greenspaces and all, but the railways in SODO, the adjacent freeways as well as the flight paths overhead burden the area so much with emissions and noise making such a rigid rationale for exclusion from development seem absurd. As far as wildlife goes in that Jungle woods, the only thing to be observed are the junkies and illegal campers who are likely to blame for the chronic dumping of refuse on our properties as well as frequent break-ins and burglaries in the neighborhood.

    Charming territory… Good thing I’m not trying to sell anybody on it…
    But maybe somebody knows somebody who’d be worth introducing to my neighbors who could figure out how to do something more valuable with their challenging parcels that they might be interested in selling?

    Until then, the best hope might be that predictions about calamitous rising sea levels come sooner than expected, both cleaning out the Jungle and giving us water frontage.

  42. 42
    Eastsider says:

    RE: Doug @ 37

    Without AWS, Amazon would be trading at half its current stock value. And that’s probably still too high.

    P.s. If you still have doubt, take a look at MSFT stock chart before/after it became a Cloud provider. Ballmer vs Nadella. LOL.

  43. 43
    uwp says:

    Is that fact that AWS makes ridiculous amounts of money supposed to be a bad thing for Amazon?

    Pretty nice that they have a profitable side-business while they decimate traditional retail until they stand alone.

  44. 44
    whatsmyname says:

    By Brian @ 39:

    RE: Action @ 38

    But they’re wrong. The #1 reason it’s so difficult to find an affordable home is historically-low mortgage rates have pumped up purchase power to crazy levels.

    You are saying the primary reason it is difficult to find an affordable house is that higher priced houses are now more affordable. This would explain a rise in contract prices, but not a more difficult or more competitive or less affordable market.

  45. 45
    whatsmyname says:

    By N @ 40:

    Absolutely labor costs and material are higher and no doubt locally we are very anti building BUT its also true that at the bottom when prices were the lowest in the last decade building a new home was much more expensive than the market value of a used home but that didn’t keep prices up. Home values won’t necessarily follow the underlying cost of building a new home. Plus new homes are such a small sliver of the home market.

    You are totally right about prices not necessarily rising to meet construction costs. I think the gist of their message was that when costs can’t be covered, construction stops. They are saying that a decade of under-construction has skewed the supply/demand ratio for the total SFR market, causing prices to rise. Seems hard to argue with that, especially in a place where the population has been growing quickly.

  46. 46
    whatsmyname says:

    RE: Justme @ 34 – Highrise construction is extremely expensive, and has limited demand. When people say Seattle is too land constrained, they are talking about unavailability of land for low density (especially single family) housing – which is what I always thought this blog was about.

  47. 47
    Justme says:

    RE: uwp @ 42

    >>Is that fact that AWS makes ridiculous amounts of money supposed to be a bad thing for Amazon?

    Bahahaha. What is bad for Amazon is that the AWS profits are barely enough to offset the losses in their core retail business. AWS is the only saving grace for Amazon. Readers, do not fall for the hyperbolic statement that uwp is making here.

    Perhaps Amazon should ditch their retail business (145B net revenue last/trailing 12 months (TTM) worldwide) and become a web hosting company, with a TTM revenue of 16B? That way Amazon might not have a negative free cash flow of $(1,030) MILLION in the last quarter (2017/Q3).

    Reference:
    10/26/17 Q3 2017 Amazon.com Inc Earnings Conference Call Slides
    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjgyNjY3fENoaWxkSUQ9MzkyMjI4fFR5cGU9MQ==&t=1

  48. 48
    jon says:

    Amazon is growing their market share and keeping prices low to discourage other companies from investing heavily in that business. Then as more automation becomes possible, they will be able to downsize their labor usage and become immensely profitable.

  49. 49

    RE: jon @ 47 – It hasn’t discouraged Walmart from investing in the area. In addition to their own website (and probably Sam’s Club has a site too) they bought Jet.com just over a year ago.

    Amazon will probably have an advantage in automation over all but the biggest competitors, at least for the next many years.

  50. 50
    Blurtman says:

    RE: Brian @ 27 – Precisely. It is rather biased reasoning to not conclude that Seattleites can seek greener pastures in lower cost areas (except Boston), just as Californios can do in Seattle.

  51. 51
    wreckingbull says:

    RE: Justme @ 34 – The biggest deterrent to entry-level housing being built here is regulation. Condo construction is all but shut down in Seattle, except for some high-end luxury projects which are being built for non-residents to park their cash and not for habitation.

    A better approach for balancing home buyer protection with builder liability is needed. Will we get it? I doubt it. The council is busier with more pressing issues, like hand-wringing over whether or not homeless camps should be purged or allowed to fester into hazardous waste sites.

  52. 52
  53. 53

    By wreckingbull @ 50:

    The council is busier with more pressing issues, like hand-wringing over whether or not homeless camps should be purged or allowed to fester into hazardous waste sites.

    I don’t understand why they don’t at least put dumpsters nearby. Sure a lot of the homeless might not use them, but some will, and even after accounting for others illegally using the dumpsters it would probably be less expensive than having people go in after the fact and pick stuff up (while avoiding sharps).

  54. 54
    N says:

    By Kary L. Krismer @ 48:

    RE: jon @ 47 – It hasn’t discouraged Walmart from investing in the area. In addition to their own website (and probably Sam’s Club has a site too) they bought Jet.com just over a year ago.

    Amazon will probably have an advantage in automation over all but the biggest competitors, at least for the next many years.

    Amazon may be dominant but the one player that can compete somewhat is Walmart and they have gone all in — As you mention Jet.com, launched a 3rd party sellers marketplace like Amazon, YOY online sales up something like 60%. Undercutting Amazon on minimum purchase amount for free shipping (which gives you 2 day shipping instead of the 7 or so with Amazon). They appear to be committed for the long run. I’ve seen reports where 7 out of 10 products are cheaper on Walmart.

    Which goes to the one secret out there — Amazon no longer has the best prices, that’s not their advantage, its about ease of use.

  55. 55

    RE: ronp @ 6
    High Housing Prices Causing a $140 Billion Business Money Removed Out of California the Next Decade

    Proportionately, Washington State losing around $30 Billion due to unaffordable real estate driving businesses out of Seattle [where do the $10/$15/HR workers live? Homeless tent cities?]…..Hey Eric? I hear Kansas City is a HQ2 option for Amazon. Should be buying repossessions there, instead of Seattle, to flip later?

    Kansas City is quickly becoming the “hypothetical Seattle Replacement illegal alien” stealing the high cost Sanctuary Wash State jobs where legal Kansas American workers can actually afford the rent and home payments. Imagine that, the American is real for all then.

    Trump’s Tax Plan allows up to $10,000/yr property tax deduction…no California/NY income tax deduction [BTW, Kansas has a small income tax too, but lower sales tax and MASSIVELY lower property taxes]. Hey you tax accounts and tax lawyers….better find a new profession….LOL

    What comes around goes around?

  56. 56

    Trump= 3% GDP Growth Per Qtr

    Oct 0.19% 0.07% 2.33% 1.41% 1.54%
    YTD 1.92% 3.44% 16.90% 14.35% 22.15%
    Last 12 mo 2.29% 1.17% 23.64% 25.68% 23.84%

    In order: long-term CD rate, Long-term Bond rate, American Stocks, Foreign Stocks, Foreign Stocks

    Did Seattle real estate go up like stocks? Nada….I goofed BTW….should have rode the stock market out retired….very few if any did BTW.

  57. 57
    Market Timer says:

    RE: Kary L. Krismer @ 12
    I’ve always thought it was funny. I’d love to have an option to add things to a cart like container that they could ship say once a week.

    we’ll often be going through our day and realize we’re getting low on something, but it’s not urgent and I’d rather they save the money and ship it to me along with a half dozen other things i bought that week.

    So maybe they could have an “add to bulk shipment” option next to “add to cart” and “one click”

    it’d be like subscribe and save, except i just want to buy it one time, i’m just in no hurry and would rather they save the money and the pollution and ship it along with a bunch of other non urgent stuff. then i’ll use one click for the occasional things that I actually want to get in two days.

  58. 58
    uwp says:

    Some of the tax changes that came out today would hit Seattle homeowners. Capping interest deductions at 500k, property taxes capped at 10k, removing sales tax deductions. These seem like the type of things that could hit the 1+ million market, and might filter its way down.

    We’ll see how much (if any) actually gets implemented…

  59. 59
    Blake says:

    By softwarengineer @ 55:

    Trump= 3% GDP Growth Per Qtr

    Well… We’ve almost reached the 4% quarterly rates that we saw under Obama in 2010, 2012 and 2014!!! ;-)
    https://tradingeconomics.com/united-states/gdp-growth

    Trump’s “alternative facts!”
    Donald Trump Says U.S. Never Hit 3% GDP Growth Under Obama
    http://fortune.com/2017/08/30/donald-trump-springfield-mo-3-gdp/

  60. 60
    ess says:

    By uwp @ 57:

    Some of the tax changes that came out today would hit Seattle homeowners. Capping interest deductions at 500k, property taxes capped at 10k, removing sales tax deductions. These seem like the type of things that could hit the 1+ million market, and might filter its way down.

    We’ll see how much (if any) actually gets implemented…

    The magic words are in your last sentence.

    But progressives will love the changes to housing tax deductions that you describe. After all – those who will be affected are the rich who probably don’t deserve to be in such expensive housing in the first place.

    As to removing the sales tax deductions – another reason to buy used stuff and to go to garage sales.

  61. 61

    More Sawant/Seattle landlord tenant news. I wouldn’t be surprised if the legislature passes a preemption statute, similar to guns, to stop Seattle from doing what it does.

    http://crosscut.com/2017/11/kshama-sawant-stop-economic-evictions-landlords-pay-new-legislation/?utm_source=crosscut-facebook&utm_medium=social

  62. 62

    By ess @ 59:

    By uwp @ 57:

    Some of the tax changes that came out today would hit Seattle homeowners. Capping interest deductions at 500k, property taxes capped at 10k, removing sales tax deductions. These seem like the type of things that could hit the 1+ million market, and might filter its way down.

    We’ll see how much (if any) actually gets implemented…

    The magic words are in your last sentence.

    Yep, I don’t tend to even follow tax legislation.

    Imagine if the result depends on the date of purchase of house or loan, where old purchases/loans still get full deductibility (or at least as full as it is today, which isn’t full). That could create a situation like in California where people are less likely to want to move.

  63. 63
    Doug says:

    RE: uwp @ 57 – Yep, if passed, the mortgage deduction piece is unequivocally bad for home prices. No doubt about it. We shall see.

  64. 64
    ess says:

    By Kary L. Krismer @ 60:

    More Sawant/Seattle landlord tenant news. I wouldn’t be surprised if the legislature passes a preemption statute, similar to guns, to stop Seattle from doing what it does.

    http://crosscut.com/2017/11/kshama-sawant-stop-economic-evictions-landlords-pay-new-legislation/?utm_source=crosscut-facebook&utm_medium=social

    More dumb policy that will decrease the number of rentals and increase rent. And it will also benefit landlords outside of Seattle that will also be able to raise the rent to economic refugees that no longer can afford to rent in Seattle. And Seattle landlords will help pay the expenses for landlords outside of the city for those tenants displaced by increasing rents that are affected by the statute. And one can be assured that even the mom and pops that don’t bother raising the rent for a good tenant will be raising the rents 9.9% every year in order to protect themselves against unforeseen expenses in the future.

  65. 65

    RE: ess @ 63 – It could help increase the number of SFR houses for sale, as landlords get fed up with being a landlord in Seattle.

  66. 66
    ess says:

    By Kary L. Krismer @ 64:

    RE: ess @ 63 – It could help increase the number of SFR houses for sale, as landlords get fed up with being a landlord in Seattle.

    And at the same time reduce the number of single family residences that are on the rental market, and increase prices for those that are remaining. Oh boy, as a landlord outside of Seattle – I love when Seattle interferes with the housing market. I MUST ask all my Seattle friends to contact city council in support of this legislation which is going to benefit landlords all around Puget Sound.

  67. 67
    Eastsider says:

    RE: Blake @ 58
    Here is the chart of real GDP growth of the United States from 1990 to 2016.

    https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/

    In the 90’s, we experienced 4+% growth in half of the decade . In the last 10 years, we had only 4 years of 2+% growth (none over 3%), but also two years of contraction.

  68. 68
    Eastsider says:

    RE: Doug @ 62 – I would think QE is by far the #1 contributor to high RE prices. MID is not going to burst the bubble. LOL.

  69. 69

    RE: Eastsider @ 67 – There’s a middle ground. MID might impact the mean more than the median, assuming a $500,000 mortgage cutoff.

  70. 70
    Deerhawke says:

    RE: Kary L. Krismer @ 60

    Typical of Sawant that she introduce this kind of garbage legislation. I love that line, “If we don’t have a way of getting that data easily, then we should do a study, but not having those number should not stop us,” she says. “It’s clear that anecdotal evidence is telling a statistical story.” (Whaaat?)

    Most of the people who raise their rents 10% or more in one annual cycle are :

    1) Lazy landlords who did not stay current with market rents and then decided that they would
    finally catch up all at once, or

    2) New buyers of rental unit(s) who bought from lazy landlords who had not stayed current with market
    rents and wanted/needed to catch up all at once.

    One way or another, you could view this as:
    1) some landlord subsidizing their tenants for a long period of time and
    2) the tenant having gotten used to that rent,
    3) they see it as their rock-bottom right to have their rent continue to be subsidized.

    Answer to the problem? Don’t subsidize your tenants! They certainly won’t thank you for the gift. They will just take it for granted. Do an annual benchmarking exercise to find out what your unit/units should be renting for and then keep within a 2 percent of that level. People who don’t do this and try to catch up all at once end up on the front page of the Seattle Times.

    The headline never says, “Here is a kind-hearted landlord who subsidized his tenants by thousands of dollars over the years. How his tenants love him. ”

    The headline is always something like, ” Suddenly Homeless after Landlord Jacks Up Rent on Long-term Tenant’s Beloved Home by 75%!” The tenants say how much they loved their “home” and how rooted they are in the neighborhood where their “home” is located and how they feel shocked to be taken from their “home’s” wonderful friends and neighbors.

    The landlord will come off as looking like a blood-sucking leech.

    This is an age-old story line that the Seattle Times runs out every time rents jump a bit. Here is one from a few years ago.

    https://www.seattletimes.com/business/free-lunch-is-over-for-tenants-1000-hikes-hit-some-older-seattle-rentals/

  71. 71

    Hey, people paying for your own insurance. You can now check and see how much you’ll pay. It’s open enrollment time.

    For me to stay with the same insurance company I’d have to move somewhere next to Idaho, because Regence not only pulled out of the Exchange, they pulled out of most counties in Washington state!

    For me to stay with the same doctor through a company on the Exchange I’d have to pay 52% more. So staying with the same doctor is not really a cost effective option given I typically only see a doctor once a year for a physical. So I guess hello Group Death!

  72. 72
    ess says:

    RE: Deerhawke @ 69

    Answer to the problem? Don’t subsidize your tenants! They certainly won’t thank you for the gift. They will just take it for granted.

    ——————————————————————————————————————————-

    Not only do they not thank you for any “gift”, but we have discovered over the years that there is little or no correlation between providing lower rent and having a tenant take good care of the place because of the break in rent. Knowing this – especially in Seattle where there are limitations to how much security deposit one can obtain, it is important to get as much rent as possible, if only to insure as much of a security deposit from a group of individuals with such a low net worth, that except for their job, they are essentially judgement proof if they do any real damage.

  73. 73
    S-Crow says:

    I have never met a home buyer who said they are buying because of the MID. However, I ‘ve met scores who have said they are eager to build equity by home appreciation.

    People are way underestimating the debt loads AND leverage buying out there to get a piece of the “action.” Cause Beastmode says it’s…..https://www.youtube.com/watch?v=cKTWiRrSEG4

  74. 74
    redmondjp says:

    By Kary L. Krismer @ 70:

    Hey, people paying for your own insurance. You can now check and see how much you’ll pay. It’s open enrollment time.

    For me to stay with the same insurance company I’d have to move somewhere next to Idaho, because Regence not only pulled out of the Exchange, they pulled out of most counties in Washington state!

    For me to stay with the same doctor through a company on the Exchange I’d have to pay 52% more. So staying with the same doctor is not really a cost effective option given I typically only see a doctor once a year for a physical. So I guess hello Group Death!

    That’s unpossible, Kary.

    President Obama promised us that under Obamacare, if you like your doctor, you can keep your doctor. I listened to that speech myself and still remember it.

    Oh, and look at the news today about Hillary having taking control of the Democratic Party (finances) well before becoming the chosen candidate. Bernie never had a chance from day one.

    Are the R’s any better? The latest proposed tax cut helps global corporations, and screws the middle class.

    Our country is like guy in the leper colony with the most fingers left. In bad shape, but relatively better off than everybody else.

    Now, back to the regularly-scheduled bubble banter . . .

    Oh P.S. – if you have a Tesla Model 3 reservation, you may want to sell it to somebody else or get your money back while you still can. At their current rate of production of the new model, it will take almost 500 years to build all of the cars for which they have reservations. The foolish decision not to do a pre-production run with soft tooling may well be the final nail in the coffin for the company.

  75. 75
    Ray Pepper says:

    I’m here! I’m here! People talking about me and nobody lets me know? Ardell? Ira? Jillayne? Kary? Dammit, I don’t wanna go back and read all the blogs! Let’s have a Festivus Party at Cheesecake Factory Tim ! I have grievances with all of you!! 🍷👏🍺🍕

  76. 76

    By redmondjp @ 73:

    By Kary L. Krismer @ 70:

    Hey, people paying for your own insurance. You can now check and see how much you’ll pay. It’s open enrollment time.

    For me to stay with the same insurance company I’d have to move somewhere next to Idaho, because Regence not only pulled out of the Exchange, they pulled out of most counties in Washington state!

    For me to stay with the same doctor through a company on the Exchange I’d have to pay 52% more. So staying with the same doctor is not really a cost effective option given I typically only see a doctor once a year for a physical. So I guess hello Group Death!

    That’s unpossible, Kary.

    President Obama promised us that under Obamacare, if you like your doctor, you can keep your doctor. I listened to that speech myself and still remember it.

    In his defense, he admitted having mislead us on that one. But the biggest lie was the “competition” argument. That the exchanges would lower prices by creating competition between insurance companies.

    That completely ignores the fact that the price driver of insurance premiums is medical services and drug costs. Money out in expenses has to be made up by premium money coming in. You’re not going to lower or even contain insurance costs unless you lower medical costs, and Obamacare did next to nothing in that area. It also ignores the fact that almost all insurance is regulated, to their profits effectively controlled. And finally, it ignores the fact that having more insurers is more inefficient due to more duplication (e.g. paying seven figure salaries to 8 CEOs rather than 4).

    Obamacare was written by and for service providers and drug companies to get them as much money as possible. There was no way insurance prices were going to go down or even be contained.

    Are the R’s any better? The latest proposed tax cut helps global corporations, and screws the middle class.

    Well on this healthcare topic the Republicans have not had any better proposals, so I’d agree with you there. The idea of buying insurance across state lines is complete nonsense.

    But I disagree with you on the corporate tax cut helping global corporations. We effectively subsidize the corporate income tax of every other country by allowing a tax credit (not deduction) for income taxes paid in other countries. By basically halving the rate here that means there will be less of an advantage to operate in other countries. and probably that taxes will be more expensive elsewhere if the companies operate there. The point though is that existing tax law benefits the global corporations AND foreign countries.

    Now if you just said domestic corporations I might have agreed with you, but I would point out that most people work for corporations. So is their employer being benefited a bad thing? The money not paid in taxes will largely either be paid out in dividends or wages for jobs on new projects. The problem will come with companies like Apple being the exception, which will just sit on the money. But at least that money can be loaned out by banks so that it is in someway productive.

    The real issue isn’t who will benefit and who will be harmed, the bigger issue is what will the long term impact be on the deficit.

  77. 77

    By S-Crow @ 72:

    I have never met a home buyer who said they are buying because of the MID. However, I ‘ve met scores who have said they are eager to build equity by home appreciation.

    I’ve run into it a few times, and I think it was an idea pushed by the lender or just what people commonly think.

    NAR is really opposed to these changes, but this is yet another area I disagree with them (as in the past I tend to agree with WR more than NAR). You don’t want a tax policy that encourages people to encumber their homes. Personal interest expense should either be allowed on all interest, or better yet all interest except home mortgage interest. There should not be a tax benefit to buying a new SUV by encumbering your home with a HELOC.

  78. 78

    By redmondjp @ 73:

    Oh, and look at the news today about Hillary having taking control of the Democratic Party (finances) well before becoming the chosen candidate. Bernie never had a chance from day one.

    That was from Donna Brazile, the person who leaked Hillary the debate questions.

    Getting confirmation of this bias for Hillary from her is like getting confirmation of the casting couch from Harvey Weinstein.

  79. 79
  80. 80
    Deerhawke says:

    I doubt if it is really worth our time to try to figure out whether this new tax package is going to help or hurt the real estate industry. This is just the kickoff. There are still four full quarters to play. Well, maybe that is a poor analogy, since it is not just the two teams, the Dems and the Repugnicans out on the field. The real action will be on K Street. Big budgets on K Steet this year.

    I do find it pretty funny that there is all this talk about this tax package being centered on a “middle class tax cut”. But you will notice that the carried interest provision is untouched and now we are talking about doing away with the estate tax entirely. Great stuff for that struggling middle class hedge fund manager with a net worth in excess of $5.4 million.

  81. 81

    By Deerhawke @ 79:

    But you will notice that the carried interest provision is untouched and now we are talking about doing away with the estate tax entirely. Great stuff for that struggling middle class hedge fund manager with a net worth in excess of $5.4 million.

    It will be really bad news for those who make their money selling estate planning services (except maybe in states like Washington that still have estate taxes–not sure if the conflict between WA law and federal law was ever worked out.).

  82. 82

    The Seattle Times has this story today about how no one is selling, complete with a graph showing that people are holding twice as long as average as 10 years ago.

    https://www.seattletimes.com/business/real-estate/seattle-home-prices-are-so-high-partly-because-barely-anyone-is-selling-despite-chance-for-big-profits/

    Maybe I missed it, but they seem to fail to realize that that longer holding period is largely due to the drop in the market–people didn’t tend to sell during those years, and that has lead to longer average holding times.

    Still, only holding on average for less than 6 years–the number from 10 years ago, is sort of crazy. That seems really short to me.

  83. 83
    Blake says:

    Excellent comments all around… seems to me the system is rigged! :-)
    Bernie and Trump both campaigned on this and they both would have won the primaries if Hillary Inc. didn’t rig the Dem contest. But K Street and the worst Congress money can buy reign supreme!

    But wait…
    Republicans Are Already Divided Over Big Parts of Their Tax Plan
    https://www.bloomberg.com/news/articles/2017-11-03/gop-s-united-front-on-tax-cut-plans-masks-underlying-divisions
    -snip- President Donald Trump: “The lobbyists are storming Capital Hill, but the Republicans will hold strong and do what is right for America!” (Hah!!)
    … The draft bill presented Thursday is sure to look quite different as it goes through the legislative process. The bill is likely to be changed by Ways and Means Chairman Kevin Brady even before the committee begins its consideration of it on Monday. It’s unclear how long it will take the committee to approve the bill; markups can last for hours or days, as panel members debate and vote on amendments. Then the measure would be sent to the House floor, where it could undergo additional changes. (end quote)

    Seems to me the middle class needs to hire good lobbyists… hah!

    The 5,500 Americans who have estates large enough to pay taxes (0.2% of estates) don’t need lobbyists… they own their Representatives. Repealing estate taxes will cost “only” $270 billion over the next 10 years.

  84. 84

    By Blake @ 82:

    Excellent comments all around… seems to me the system is rigged! :-)
    Bernie and Trump both campaigned on this and they both would have won the primaries if Hillary Inc. didn’t rig the Dem contest.

    It’s not just Bernie that was affected. There were four D nominees and might have been more except for the Democratic fascination of/control by the Clintons.

    It’s really the Republicans that should love the Clintons. The Clintons brought us Gore, who brought us eight years of George W. And then they brought us Hillary who brought us Trump. Okay, well maybe the Republicans might not like that last one, but clearly if they were smart the Democrats should not want to have anything to do with Clintons at this point.

  85. 85
    Blake says:

    RE: Kary L. Krismer @ 83
    All true… the Clintons have dominated the Dems for a whole generation… and they were prepping Chelsea! But it appears other Dem insiders are now trying to exorcise the Clinton machine.
    https://www.politico.com/magazine/story/2017/11/02/clinton-brazile-hacks-2016-215774
    … it’ll be ugly, but it needs to be done.

    And don’t forget it was Bill who deregulated Wall Street in the late 90s and we’ve seen two financial collapses since then. Of course, the Wall Street geniuses are experts at “managing risk!” (…or filling their pockets?) It can’t happen again, can it?

  86. 86
    uwp says:

    Question for the crowd re:comparisons to 2006/2007:
    Was anyone talking about how they didn’t want to sell their home because they were afraid of trying to buy the next house in a crazy market?

    Seems to be a semi-consensus that’s part of the reason for the low inventory today. Just wondering if that is similar to previous run-ups or a new phenomenon.

  87. 87
    Erik says:

    RE: Ray Pepper @ 74
    I wanna tag along. Name a time and location other than Saturday night and I’ll be there.

  88. 88

    RE: Ray Pepper @ 74

    Sorry…you know I usually give you a heads up, but I was busy. :)

    https://www.redfin.com/WA/Redmond/6208-189th-Pl-NE-98052/home/443216

    Besides…they were saying the same thing they were saying the last time I gave you a heads up. LOL!

  89. 89
    uwp says:

    RE: Ardell DellaLoggia @ 87
    Pending in one day!
    I assume everyone was happy with the way it was priced.

    Fun times to be a home buyer.

  90. 90
    Doug says:

    RE: Ardell DellaLoggia @ 87 – Wow. 2,200 sq ft of construction grade mediocrity, small garage, and a weird staircase and I’ll bet it cleared well over $1mm.

    It was the best of times, it was the worst of times.

  91. 91
    Jeff Bezos says:

    From a landlord perspective,
    The new tax bill will grandfather in existing loans for the tax deduction, so this will be an incentive to keep these homes and not sell. …
    I don’t think they have a chance to pass this anyways –

  92. 92

    By Blake @ 84:

    And don’t forget it was Bill who deregulated Wall Street in the late 90s and we’ve seen two financial collapses since then.

    Actually one downturn started before he even left office–it just wasn’t as severe as the one eight years later.

  93. 93
    noogakl81 says:

    Here is the latest from Bremerton / Kitsap county area. I have commented here before, having left the place I was renting in south Seattle to purchase a house in Bremerton.

    The housing market here is still nothing like Seattle and is much more affordable, but there is still competition.

    The fast ferry, which started in July has been more reliable during the last month and lots of people want to take it. What is funny is the reasoning behind the demand for the fast ferry, besides the obvious fact that it is faster than the slow ferry. For whatever reason, the city of Seattle and King County will fully reimburse your public transportation expenses if you work for them, but this does not apply for Washington State Ferries. So people who work for the city and county all want to take the fast ferry, because it costs more to take the Washington State Ferries.

    When reservations for the boat open up on the first of the month, almost all of the afternoon sailings from Bremerton to Seattle are booked for the next month within hours. For the morning sailings from Bremerton to Seattle, there are usually some empty seats; there seem to be a number of people who take the slow Washington State ferry from Bremerton to Seattle (it’s free) and take the fast ferry home in the afternoon / evening.

    So if you are planning to move to Kitsap County / Bremerton and take the fast ferry to Seattle…demand already exceeds supply. Don’t count on being able to always get a spot on the boat unless you arrive 25-30 minutes early and wait in line. You will sometimes need to take the slow ferry sometimes or work remotely. I see lots of techies like myself on the slow boat working with WiFi hotspots.

    The boat from Kingston to Seattle starts next year and it will be able to carry 150 passengers. The Bremerton boat has to be specially designed to not produce a wake and thus it can only carry 118 passengers.

    I am happy I made the move. I have a low monthly mortgage payment and lower taxes. There is less traffic. It is close to Olympic National Park. I miss being able to get home quickly after Sounders games, but I sleep better at night because I owe a lot less money than I would have if I bought a house in Seattle.

  94. 94
    QA Observer says:

    Sad market state. I looked around today on Redfin for the first time in 6 mouths to see what is out there and it was disturbing. For $375k, you too could have a piece of the American dream, 0/0.75, 555 sf condo.

    Pretty sweet deal.

  95. 95
    Justme says:

    RE: noogakl81 @ 93

    Washington State Ferries have a mileage of 10.55 MPG*Passengers when full of passengers, per reference below. Quite a lousy number. The Kitsap/Bremerton water taxis MAY be slightly better, but I could not find any data. Of course the manufacturer is not publishing any numbers on their website.

    RE: Kary L. Krismer @ 79

    The idea of having water taxis on Lake Washington therefore sounds like a massive waste of oil. Not surprising, developers will will concoct any environmentally unsound scheme to ensure their own profits. And by the way, if Renton is going to become an office hub for anything, would it not have been nice if those eastside train tracks had not been torn up?

    Reference:
    http://www.mdpi.com/1996-1073/4/2/239/pdf

  96. 96

    RE: Justme @ 95 – One thing you may be overlooking as to the the ferry stat (but not the Lake Washington stat) is that the miles traveled are a lot less because the route taken is more direct. For example, driving from Seattle to Bremerton would be about 65 miles, where the ferry would be more like 15 miles.

    That Lake Washington is not a mileage saver may explain why the ferries from the very old days did not survive. What might revive them is the availability of parking, not efficiency.

  97. 97
    Doug says:

    RE: Ardell DellaLoggia @ 88 – it was only a few days ago that you very clearly stated that you firmly believe this is a bubble.

    And yet, moments later listed a construction grade small home for $950k which presumably went pending with a $1mm+ offer. How do you reconcile that?

    I’m not trying to pass moral judgement, but it just seems like sales people shouldn’t negatively opine on the value of their own product.

  98. 98
    Justme says:

    RE: Kary L. Krismer @ 96

    I’m not sure I overlooked anything, Kary. The significant comparison would be with building a bridge or a tunnel. For example, a bridge from Alki Point (West Seattle) to Restoration Point (Bainbridge Island) would be 2.8 miles long. Another 3/4 mile span from Bainbridge to the mainland would be needed to get you to Bremerton quickly. Other alternatives exist, too.

    That being said, I am still very interested in finding out the efficiency (MPG*Passengers) for the newer water taxis from Kitsap. The fact that they do not carry cars is a great choice. Can anyone help?

  99. 99
    ronp says:

    RE: Kary L. Krismer @ 71 – you could get a job with employer paid insurance?

    Trump sabotage of the ACA is criminal. I hope it gets resolved soon, very easy fixes for many of the issues.

  100. 100

    RE: Justme @ 98 – That’s only a valid comparison if the bridge option exists, and then MPG wouldn’t be the main factor. It would be the cost of putting in a bridge (for which proposals have been made for decades, but not done probably due to construction cost and the necessary tolls).

    As I recall though, there was a proposal to build a bridge across Elliot Bay to replace the viaduct, and that was cheaper than the tunnel, but everything was cheaper than the tunnel. If the bridge had been more expensive, Seattle would have probably pushed for a bridge instead of a tunnel.

  101. 101

    By ronp @ 99:

    RE: Kary L. Krismer @ 71 – you could get a job with employer paid insurance?

    Trump sabotage of the ACA is criminal. I hope it gets resolved soon, very easy fixes for many of the issues.

    Trump’s “sabotage” is stupid, because Obamacare was in the process of destructing. Companies were pulling out of markets well before Trump was ever elected and maybe even before he was the nominee. That will just give the pro-Obamacare people some nonsense to promote, like the claims that premium increases were only due to the fictional claims that the prior policies were junk policies. (I would also add that it’s questionable whether he sabotaged anything in that there was already a lawsuit to end those same subsidies, and the legal claim was apparently rather a good legal claim–but now the story will be that it was Trump who sabotaged it).

    My other option though would be just to quit working and get free insurance! Yet another problem with Obamacare.

  102. 102

    RE: Doug @ 97 – Maybe to counter that she just passes out a copy of her prediction record at open houses. ;-)

  103. 103
    Doug says:

    RE: Kary L. Krismer @ 102 – lol. I can’t ever knock someone for making inaccurate predictions of the future — I’ve certainly made some bad calls in the past.

    But saying the very thing that supports your livelihood is just a bunch of hot air on a public forum probably isn’t wise. Especially when it makes you $30k only days later.

  104. 104
    Doug says:

    A little Saturday humor for everyone. I present to you, “Amazon.bomb: Investors are beginning to realize that this storybook stock has problems”

    http://www.barrons.com/articles/SB927932262753284707

  105. 105
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 102

    I don’t do Open Houses unless it doesn’t sell the first week, which is rare. I prefer that buyers get their advice from their own agents and not the agent for the seller.

  106. 106
    Justme says:

    RE: Doug @ 104

    It is supposed to be funny that a newspaper article dated 1999/05/31 talks about Amazon being overvalued? Not in my universe.

    Amazon AMZN peak in 1999 and low in 2001:
    AMZN high 112.00 on 1999/12/10
    AMZN low 5.97 on 2001/09/28
    ratio 5.97/112=0.0533035714285714, that is a staggering **94.7%** loss in value

    I don’t think it would be funny for owners if Amazon lost 94.7% of its current value starting today and dropping over the next 1-2 years, would it? Because that is what happened in 1999-2001.

    “It’s different this time”, some people always say. Not that I did not warn them.

  107. 107
    S-Crow says:

    From CCN Money: http://money.cnn.com/2017/11/03/investing/tax-bill-business-lobby-realtors-homebuilders/index.html

    “The fear, at least in the housing industry, is that these tax breaks could sap demand for pricey homes, especially in expensive markets. Many of those markets, such as San Francisco and Manhattan, are in high-tax states. That’s a problem because the GOP tax plan would eliminate state income tax deductions altogether.”

    “The concern for realtors is that a slowdown in housing could hurt their income or even employment prospects. It’s a major employer. There are about 2 million active real estate licensees in the U.S., according to the Association of Real Estate License Law Officials. The NAR alone represents 1.3 million realtors.”

    Um, has CNN Money even tried to look at the CURRENT sales and price data in those “pricey” markets TODAY that CURRENTLY has the mortage interest deduction in tact? They are softening with the current tax plan as it is. Talk about total and utter nonsense. Look, if a home buyer is buying solely because of a current interest deduction “perk” of home ownership then they need to take a look inward to re-evaluate why they are buying. And about those sky high housing prices talked about…..you think those well heeled buyers give a bleep about the mortgage interest deduction?

    I have never met a buyer signing their closing docs in front of me that have shared they are so excited to be buying in order to deduct their mortgage interest.

    Consumer debt loads are what risks the real estate market.

  108. 108
    S-Crow says:

    From the Mercury News: http://www.mercurynews.com/2017/11/02/gop-tax-proposal-would-wallop-new-bay-area-homeowners/

    “Jeff Bell, realtor and chair of the Silicon Valley Association of Realtors legislative action committee, said the tax plan could make a challenging market even harder for first-time home buyers. The association estimated that the cut in mortgage deductions would cost a Santa Clara County homeowner with an $800,000 mortgage on a $1 million home about $4,800 a year.”

    sarc/on: after putting down $200K or so the $4,800.00 will crush them. Just crush them. The market will just tank because of this. Sarc/off

    This is the kind of reasoning where the industry is in need of looking up the definition of “credibility.”

  109. 109
    jon says:

    Of course one would not buy a house just for the MID, but it does figure in to the calculations of what you can afford, and therefore it affects the overall demand and ultimately the price. But companies routinely deduct interest. What is to stop people from setting up corporations to buy a house and lease it to an individual? It would go like this. The buyer buys shares in the corp, which uses the money for the down payment, and then the buyer signs a long term lease for the property, which the corporation uses to get a mortgage. There is a general prohibition on transactions that are purely to avoid taxes, but perhaps with a little window dressing this arrangement could provide other benefits as well. One way would be to have one corporation service multiple houses and thus allow them to offer choices of who shoulders the risk/reward of changes in the market. Currently there is little incentive for such a market, but with the elimination of the MID for personal use such a market would start up overnight.

  110. 110
    ess says:

    By S-Crow @ 108:

    From the Mercury News: http://www.mercurynews.com/2017/11/02/gop-tax-proposal-would-wallop-new-bay-area-homeowners/

    “Jeff Bell, realtor and chair of the Silicon Valley Association of Realtors legislative action committee, said the tax plan could make a challenging market even harder for first-time home buyers. The association estimated that the cut in mortgage deductions would cost a Santa Clara County homeowner with an $800,000 mortgage on a $1 million home about $4,800 a year.”

    sarc/on: after putting down $200K or so the $4,800.00 will crush them. Just crush them. The market will just tank because of this. Sarc/off

    This is the kind of reasoning where the industry is in need of looking up the definition of “credibility.”

    A perfect example of the principle that when you inquire of individuals who they would consider to be either upper middle class or rich – it is usually someone who has more income and assets then they do, regardless of how much they make or assets they own. Most Americans can only dream of living in a house that cost a million dollars or more. Many have trouble making the rent on a 1500 dollar two bedroom apartment, and will have little sympathy for those who have to pay a bit more each year when purchasing a million dollar plus house.

    The Republicans are actually starting to scale back some of the tax deductions that the wealthy benefit from the most. The mortgage and tax deductions are still available for the middle class home owner up to ten thousand dollars per year for property taxes and 500K for mortgages. That will include the vast majority of home owners in the United States. There should be cheering from liberal bastions such as northern California that the rich are finally “going to pay their fair share”, rather than condemnation that they as newly designated rich individuals with million dollar homes have to pay a bit more.

  111. 111
    MGSpiffy says:

    And I’m trying to get everything together to take out a $900k mortgage by the end of the month… Last time I was here, I said my buying would bring about the markets to shift direction… see :)

    If the mortgage interest deduction is slashed, it’ll hurt but we’ll survive, especially if the next phase of my current work takes place (it’s been publicly announced already, so there is some commitment there) and we wind up paying off the mortgage by 2026.

    Ironically, we may get some of that back with the other proposed changes. When I got married 3 years ago, it wound up costing us ~$1100 a month in additional federal taxes (we’re in one of the worst spots of you look at a heat map of married vs 2 single taxpayers) as my wife and I both make 6-figures and both have kids from priors, which by being married results in their deductions being phased out, as well as the brackets.

  112. 112
    Blurtman says:

    RE: ess @ 110 – “Most Americans can only dream of living in a house that cost a million dollars or more.”

    I don’t think most Americans dream of living in a million dollar or more crapshack in SF, LA, or Seattle. I do think most Americans would like to live in a nice place, which costs far less than a million in many locations in the USA. But attempts at one-size-fits-all policies that ignore regional realities will always seem unfair.

  113. 113

    By ARDELL DellaLoggia @ 105:

    RE: Kary L. Krismer @ 102

    I don’t do Open Houses unless it doesn’t sell the first week, which is rare. I prefer that buyers get their advice from their own agents and not the agent for the seller.

    That’s rather odd. The reason to do open houses is to generate multiple offers. That is less likely after the first weekend.

    But I guess that’s consistent with your accepting an offer before the first weekend even passes (assuming that was your advice and that your client didn’t go against your advice).

    But in any case, when I post a ” ;-) ” that means I was joking. It doesn’t really need a substantive response.

  114. 114

    RE: S-Crow @ 107 – I forget what I’ve said where, but I don’t support NAR’s position on MID. Any policy that encourages the encumbrance of a home is a bad policy, so I’m happy about the reduction in the maximum debt allowed. I wouldn’t mind if it even went further.

    Interesting though that homeowners get a deduction for state taxes paid while corporations have received a credit for foreign taxes paid (if I recall correctly). That’s one of the reasons I like the reduction of the corporate tax rate–it reduces our subsidy of foreign income taxes, and will even make it less likely corporations will do some activity in other countries.

  115. 115

    RE: jon @ 109 – I’m going to have to think about that one, but if it worked it would not only allow you to take interest, but also depreciation. What you would give up though would be the tax free sale when you sell. which is one of the best tax deals out there.

    I think you’re right the IRS might disallow it as being form over substance, but it might be more likely to work if a landlord with other rentals lived in one of their many rentals.

  116. 116

    By Doug @ 103:

    But saying the very thing that supports your livelihood is just a bunch of hot air on a public forum probably isn’t wise. Especially when it makes you $30k only days later.

    Here’s my substantive response. It’s very unlikely that a potential buyer even knows who Ardell is, let alone read that one very short post. So the only time the issue is likely to come up would be if she had contact with a buyer and they happened to ask her what she thought the market would do, and that isn’t terribly likely either.

    But let’s assume Ardell did have a listing agreement signed at the time she made that post. RCW 18.86.040 indicates that she should “(a) To be loyal to the seller by taking no action that is adverse or detrimental to the seller’s interest in a transaction; . . ..” I think you may have a good point in that scenario that making a public negative comment about the future of the market would be taking an “action adverse of detrimental to the seller’s interest.” I’d be shocked though if DOL acted on such a complaint. That is far too hyper-technical an interpretation and I would not support it.

    But in the past I’ve said I would like there to be a rule against agents making predictions because they are not trained to do so. From a hyper-technical point of view, RCW 18.86.040 was such a rule, at least for agents who have listings, but that would only cover negative predictions, which wasn’t my desire at all.

  117. 117

    By Kary L. Krismer @ 114:

    RE: jon @ 109 – I’m going to have to think about that one, but if it worked it would not only allow you to take interest, but also depreciation. What you would give up though would be the tax free sale when you sell. which is one of the best tax deals out there.

    I think you’re right the IRS might disallow it as being form over substance, but it might be more likely to work if a landlord with other rentals lived in one of their many rentals.

    Thinking about this further, wouldn’t the the interest deduction (or most of it) be offset by the rental income, so you’d only be gaining the depreciation deduction? You’d have to set the rent low enough to not cover the interest, and the IRS would probably have a big problem with that in most cases.

  118. 118
    Green-Horn says:

    RE: Deerhawke @ 80

    However one views the President’s character or his opinions, so far he has shown very little ability to shepherd any ambitious legislation through congressional opposition filled with hostile partisans on both sides who both hate Trump’s guts. As you Deerhawke notes, it’s even less likely the President will succeed with comprehensive renovation of the tax code in the face of resistance mobilized by highly motivated special interests. K Street is just public choice theory made real – into monstrous flesh – that the sausage factory on Capitol Hill eagerly transforms into their disappointing final product.

    More interesting than an improbable major tax reform on the federal level is the possibility that Democrats take control of both chambers in Olympia. Being relatively unfamiliar with Olympia politics & traditions, I wonder if a Republican minority would still be able to obstruct Democratic controlled State House & Governor from being able to make long time progressive dreams of state income tax & rent control realities? Unanticipated state policies should probably be more of a concern for their impact on local real estate than a very unlikely success of a major renovation of federal tax policy.

    Until it instituted a state income tax in 1991, Connecticut also used to be one of the few states without. It used to be very attractive to high net worth individuals who made that state home and where they located their business activities. Ever since then, these appear have been fleeing Connecticut, taking their business with them, also bleeding that state of its economic vitality. Ironically it would seem that the income tax that was intended to stabilize Connecticut’s fiscal situation accomplished quite the opposite, probably through adverse selection and flight of talent and capital. Unfortunately widespread reporting and awareness of such a case seems to have been quite scanty…

  119. 119
    Green-Horn says:

    RE: Green-Horn @ 117

    Would love to hear how likely everyone thinks a major progressive revolution is in Washington State should Democrats take both State Houses on Tuesday…

    Not only capital is mobile. Talent moves too. Everyone acknowledges that employers in low tax states can be more competitive attracting talent because their pay equates to better effective compensation than in high tax states.

    Food for thought: The Jock Tax
    https://www.nytimes.com/2017/05/12/opinion/another-terrible-thing-about-taxes.html

    For example, Real Estate in Connecticut’s most exclusive districts favored hedge fund & finance titans has been suffering as these have been moving to more favorable tax climes, e.g. Florida. How significant would the impact be on Western Washington should the tax burden from state and local levels be increased significantly? Can’t imagine Washington State is home to anything like a cluster of mobile Hedge Fund managers to be scared away by a state income tax. Perhaps there still exists a significant enough class of HNW residents in Washington that is similarly tax-sensitive and would be motivated to take flight. Like in Connecticut, when they all start trying to sell en masse. it could depress real estate values in certain markets…

  120. 120
    jon says:

    By Kary L. Krismer @ 116:

    By Kary L. Krismer @ 114:

    RE: jon @ 109 – I’m going to have to think about that one, but if it worked it would not only allow you to take interest, but also depreciation. What you would give up though would be the tax free sale when you sell. which is one of the best tax deals out there.

    I think you’re right the IRS might disallow it as being form over substance, but it might be more likely to work if a landlord with other rentals lived in one of their many rentals.

    Thinking about this further, wouldn’t the the interest deduction (or most of it) be offset by the rental income, so you’d only be gaining the depreciation deduction? You’d have to set the rent low enough to not cover the interest, and the IRS would probably have a big problem with that in most cases.

    The income tax would be based on rental income minus interest and other expenses, which you would want to keep as small as possible, so there wouldn’t be much tax consequence there. The loss of the tax free sale would be the big problem, but that only happens if there is a gain. If there is a loss, you get a taxable loss which you would not otherwise get.

    Many people would fine with renting a house (and having no capital gain or loss at all), except for the problem of having to move when the owner sells. Having an arrangement where you rent, but the lease terms are more favorable to the renter because they are partial owners of the corporation would solve that problem. It would also provide a way to diversify, and to provide an investment for people who want to invest in housing but don’t want the illiquidity of owning a house.

  121. 121

    RE: Kary L. Krismer @ 115

    I don’t fully understand how being honest when asked a question is something anyone could find fault with. I don’t lie. It’s as simple as that.

    Yes…my clients DO ask me all the time what I think the market will do. I answer them honestly.

    I really wouldn’t do it any other way. No one can tell me I have to lie.

  122. 122
    Bubble Trouble says:

    By Green-Horn @ 117:

    RE: Deerhawke @ 80

    More interesting than an improbable major tax reform on the federal level is the possibility that Democrats take control of both chambers in Olympia. Being relatively unfamiliar with Olympia politics & traditions, I wonder if a Republican minority would still be able to obstruct Democratic controlled State House & Governor from being able to make long time progressive dreams of state income tax & rent control realities? Unanticipated state policies should probably be more of a concern for their impact on local real estate than a very unlikely success of a major renovation of federal tax policy.

    Until it instituted a state income tax in 1991, Connecticut also used to be one of the few states without. It used to be very attractive to high net worth individuals who made that state home and where they located their business activities. Ever since then, these appear have been fleeing Connecticut, taking their business with them, also bleeding that state of its economic vitality. Ironically it would seem that the income tax that was intended to stabilize Connecticut’s fiscal situation accomplished quite the opposite, probably through adverse selection and flight of talent and capital. Unfortunately widespread reporting and awareness of such a case seems to have been quite scanty…

    Isn’t an income tax forbidden by the WA constitution? Oh silly me, I forgot, Democrats don’t pay attention to pesky things like that. They’ll get a liberal judge to say it’s A-OK as long as it’s for the children.

    100% spot on with CT. In the 70s and 80s it was like a Texas of New England. Low taxes which attracted businesses from neighboring NY and MA. And then in the 90s CT decided to start a war on the rich. Fast forward 25 years and Hartford is broke, Aetna, GE and Travelers all moved their HQ out of the state. Real estate prices in Hartford today are basically where they were in 2000. Adjusted for inflation that is a huge drop. The state has been in decline for decades due to the anti-business, pro-union political shift.

    And the solution by Democrats who run the state: more taxes on the rich of course.

    Oh but this will never happen to WA. After all we have Microsoft and Amazon. And Amazon won’t ever move its HQ to another ci….oooohhh, right. Well let’s tax evil rich people anyway. What could possibly go wrong?

    There are very few places that can get away with that. NYC is high tax, but people will still go there because it’s the center of the universe for finance, media, fashion, etc. You want to make it? You have to be in NYC. Same with LA for entertainment and SF for tech.

    But Seattle? Nothing special about it. Crappy weather on top of it. Kill the golden goose with high taxes and there is no reason for anyone to be here. Boeing left. Amazon is 1/2 out the door. Microsoft could easily leave as well. There’s nothing unique about Seattle that can’t be found by Amazon or Microsoft in Austin or Atlanta or Denver. The progressives of WA are about to find that out the hard way if they go down the Connecticut path.

  123. 123
    Bubble Trouble says:

    By S-Crow @ 107:

    From CCN Money: http://money.cnn.com/2017/11/03/investing/tax-bill-business-lobby-realtors-homebuilders/index.html

    “The fear, at least in the housing industry, is that these tax breaks could sap demand for pricey homes, especially in expensive markets. Many of those markets, such as San Francisco and Manhattan, are in high-tax states. That’s a problem because the GOP tax plan would eliminate state income tax deductions altogether.”

    My Give-A-F**k Meter is pegged at 0 if millionaires in LA and NYC (most of whom are Democrats) lose some of their deductions. These are the same people who voted for Bernie and Hillary, who ran on a promise to make the rich pay. Well, y’all got exactly what you voted for. Just turns out, the other guy is going to do it.

    Womp. Womp.

    And this is why the GOP crafted the bill this way. Dems in NY and CA will hate them. Big deal. They already hate them. Meanwhile a family making $60K in Wisconsin or Pennsylvania or Ohio will get a $2K tax cut. Politically this tax bill is brilliant.

  124. 124
    Bubble Trouble says:

    By Doug @ 97:

    RE: Ardell DellaLoggia @ 88 – it was only a few days ago that you very clearly stated that you firmly believe this is a bubble.

    And yet, moments later listed a construction grade small home for $950k which presumably went pending with a $1mm+ offer. How do you reconcile that?

    I’m not trying to pass moral judgement, but it just seems like sales people shouldn’t negatively opine on the value of their own product.

    In her defense, if someone is dumb enough to buy that house for $1M, why shouldn’t Ardell profit from that stupidity? As a selling agent, if you believe we’re in a bubble, then advising a client to sell is the right thing to do. Advising someone to buy on the other hand is morally suspect. But in this case, Ardell’s in the clear.

    And even if she were representing a buyer….it’s bidness. At the end of the day, the buyer makes the decision. Ardell is just the middlewoman. You can’t blame a middlewoman for poor financial decisions.

  125. 125
    Bubble Trouble says:

    By Jeff Bezos @ 91:

    From a landlord perspective,
    The new tax bill will grandfather in existing loans for the tax deduction, so this will be an incentive to keep these homes and not sell. …
    I don’t think they have a chance to pass this anyways –

    From a landlord perspective it is irrelevant. For rental properties, there is no limit on the MID now, nor will there be one in the future under the GOP plan. Want a $10M loan on a rental property? Go ahead, you can deduct 100% of the interest.

    If we still had a functioning news media, as opposed to nothing more than a Democrat Talking Point Distribution Center, someone would have pointed that out.

  126. 126
    Eastsider says:

    By Bubble Trouble @ 121:

    The progressives of WA are about to find that out the hard way if they go down the Connecticut path.

    Unfortunately, it will be at least 20 years before the city/state suffers. Exhibit A is Venezuela where Hugo Chavez became its president in 1999. Chavez was praised by the current (socialist/progressive) leader of British Labour Party in a 2013 tweet – “Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world.” – NOT!

  127. 127
    Bubble Trouble says:

    By Eastsider @ 125:

    By Bubble Trouble @ 121:

    The progressives of WA are about to find that out the hard way if they go down the Connecticut path.

    Unfortunately, it will be at least 20 years before the city/state suffers. Exhibit A is Venezuela where Hugo Chavez became its president in 1999. Chavez was praised by the current (socialist/progressive) leader of British Labour Party in a 2013 tweet – “Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world.” – NOT!

    Communism is great for equality. Eventually everyone becomes equally poor and miserable. Well almost everyone that is. Chavez and his BFF Fidel Castro (may they both rot in hell) both died as mult-billioniares.

    You’d think after 100 years of communism failing 100% of the places it was tried, these dolts would understand. But alas…..

  128. 128

    By Ardell DellaLoggia @ 120:

    RE: Kary L. Krismer @ 115

    I don’t fully understand how being honest when asked a question is something anyone could find fault with. I don’t lie. It’s as simple as that.

    Yes…my clients DO ask me all the time what I think the market will do. I answer them honestly.

    So you tell them you don’t have a clue? That would be the only honest answer–as long as we’re talking about honesty.

  129. 129

    By Bubble Trouble @ 122:

    And this is why the GOP crafted the bill this way. Dems in NY and CA will hate them. Big deal. They already hate them. Meanwhile a family making $60K in Wisconsin or Pennsylvania or Ohio will get a $2K tax cut. Politically this tax bill is brilliant.

    I would tend to agree with that, but I think we’re all missing another big special interest group. Profitable corporations. They are getting their maximum tax rate cut in half. I’m not sure how many lobbyists profitable corporations have, but I would suspect they vastly outnumber all of the other groups that would oppose the tax bill.

    I see the main obstacle not as being the Democrats (and Bernie), but instead the opposition of the deficit hawks.

  130. 130

    By Bubble Trouble @ 123:

    In her defense, if someone is dumb enough to buy that house for $1M, why shouldn’t Ardell profit from that stupidity? As a selling agent, if you believe we’re in a bubble, then advising a client to sell is the right thing to do. Advising someone to buy on the other hand is morally suspect. But in this case, Ardell’s in the clear.

    And even if she were representing a buyer….it’s bidness. At the end of the day, the buyer makes the decision. Ardell is just the middlewoman. You can’t blame a middlewoman for poor financial decisions.

    First, I don’t think the issue was Ardell advising anyone to do anything. It was what she said publicly on this site. As I noted above, it’s rather far fetched to think that a potential buyer of that particular house would have read Ardell’s earlier post, or that if they had they would have changed course. But what if the Seattle Times had picked up the comment, like they did with her “bottom call” blog piece? Again rather a slight chance of that, but is that the type of publicity you would want to see your agent get if you were going to be selling?

    Second, I think your second paragraph gets it right. People don’t typically go to real estate agents to get advice whether to buy or sell (although some agents may try to talk some people into action). They go to agents to get assistance doing whichever it is that they happen to want to do (or maybe both). In any case, the advice that would be useful is how to sell the house for the most amount of money with an acceptable level of risk, or how to buy a house that is a good buy given the market conditions.

    Finally, what is morally suspect is advising people whether to buy or sell when you don’t have the training and also don’t even follow the relevant news that could affect the market. This doesn’t pertain to Ardell at all, but I’ve seen agents who don’t seem to follow anything–local stats, national news, nothing. But I’m sure that doesn’t stop them from giving their wonderful opinion on what the market is going to do. And the sad thing is the people they give that opinion to are likely to believe the agent, because they want to believe them! It’s the same as some people paying money to a fortune teller–they want to believe.

  131. 131
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 112

    Sorry. Missed that earlier. Well at least you can’t accuse me of “monkey see; monkey do”. :) I know some agents will write an offer on their own listing when there are multiple offers. It doesn’t seem fair to me, so I try to avoid that vs encourage it. Obviously I think they do more harm than good for my client, or I would do things differently.

  132. 132

    Sorry if I missed this in one of the comments, but I am reading in RE places that the main complaint of the proposed tax changes from “the industry” is the change from owning the home for 2 of the last 5 years to owning it 5 of the last 8 years to qualify for capital gain relief. Many work in areas where prices are not as high, so the MID change doesn’t affect them. The change that might make inventory even tighter if people can’t sell before 5 years without a capital gain tax seems to be upsetting them more.

  133. 133

    RE: ARDELL DellaLoggia @ 130 – I’m not sure what writing offers for buyers has to do with open houses. I can’t even tell you if a buyer at an open house has ever asked me to do that. It probably has, but I certainly don’t remember it. The topic comes up more when someone calls wanting to see a house, and that’s when the topic of Redfin usually comes up.

    But on the topic, we hold our own open houses rather than having other agents do them because we want to sell the house, not convert an unrepresented buyer into a client. I’ve heard some agents say they get 2-3 buyer clients off of each listing, which I find sad. The seller is not opening up their house to strangers for the purpose of helping someone find clients, and if the agent isn’t the listing agent they might be helping an agent that they don’t even know! At our last open house a buyer commented about how few agents holding open houses know anything about them, which is also sad.

  134. 134

    By Ardell DellaLoggia @ 131:

    Sorry if I missed this in one of the comments, but I am reading in RE places that the main complaint of the proposed tax changes from “the industry” is the change from owning the home for 2 of the last 5 years to owning it 5 of the last 8 years to qualify for capital gain relief. Many work in areas where prices are not as high, so the MID change doesn’t affect them. The change that might make inventory even tighter if people can’t sell before 5 years without a capital gain tax seems to be upsetting them more.

    If I remember correctly, the prior rule you had to wait until you were 55 to sell tax free, and you could only do that once in your lifetime. (And there was also the ability to roll over gains, almost like a 1031 Exchange.)

    I don’t have a problem with that proposal though because the idea of the tax free sale, at least originally, was to not tax inflation. If you’re talking about significant after costs of sale gains after only two years, you’re talking about more than inflation.

  135. 135
    S-Crow says:

    RE: Kary L. Krismer @ 129 – But here is the issue coming from a consumer perspective: if people are going to be paying out tens of thousands in fees to the brokers, wouldn’t consumers think that the agent should be prepared to offer some guidance and opinion about the market?

    I mean, do the economists at NAR or Zillow or Redfin or Windermere get a pass because they offer market condition data that in some regards is directly contrarian or promulgating a potential fiduciary duty problem for their agents working with buyers who are or have bought in a market that does not favor them? For example, what are consumers to do when scores of agents suggest that buyers eliminate Financing or Inspections contingencies or offer $20K, 30K or 100K over asking because otherwise “you won’t get the home?” Or, do brokerages just play stupid. Do the Economists at Zillow or Redfin or Windermere think that is normal and that rates from 3.5-4.5% over the last 12-18 mos is just normal and sustainable? In another example, this blog topic is based upon Windermere’s ecnonomist emphaticaly stating we are not in a bubble. People will recall that Economists, NAR and Brokers were horribly embarrassed by that call last time.

    What we need to do is define what makes a real estate bubble environment.

    After all, “given market conditions,” as you mention implies that there are in fact “market conditions” be them “good, bad or neutral” depending upon what side of the settlement statement a consumer resides on (buyer or seller.)

    Or, are agents relegated to being paid fees just to fill out forms or list a home and just wait a few hours or a day for an offer to come in during a hot market or sit there in front of a buyer or seller and say, “gosh, um, er, hmmm, I dunnnnnno about the market; it is what it is ?”

  136. 136
    Seattle Citizen says:

    Many of you feel that it is a bubble but in spite of snow, open houses were very busy today at Sammamish. Not sure where this is going to end.

  137. 137
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 132

    So you think an agent isn’t going to show the house? Do you think there are buyers or agents who won’t know the house is for sale if it’s not open? Again, your market may be different. That is not the case where I work. Buyers are active and have instant alerts. Seeing the house with their own agent is as easy as hitting a button. I had 90 showings in three days back in Feb. when I shut it down “early”. I don’t always do the same thing; but I always do the right thing.

  138. 138

    By S-Crow @ 134:

    RE: Kary L. Krismer @ 129 – But here is the issue coming from a consumer perspective: if people are going to be paying out tens of thousands in fees to the brokers, wouldn’t consumers think that the agent should be prepared to offer some guidance and opinion about the market?

    I mean, do the economists at NAR or Zillow or Redfin or Windermere get a pass because they offer market condition data that in some regards is directly contrarian or promulgating a potential fiduciary duty problem for their agents working with buyers who are or have bought in a market that does not favor them? For example, what are consumers to do when scores of agents suggest that buyers eliminate Financing or Inspections contingencies or offer $20K, 30K or 100K over asking because otherwise “you won’t get the home?” Or, do brokerages just play stupid.

    Well again, they aren’t trained to predict the future, so I don’t know what the point is of expecting such predictions, but what agents can do is give information on the current market. Right now it’s not too difficult to say that we have a strong seller’s market. The advice I give to buyers is to strongly consider selling when they buy, meaning look for features that might make it difficult to sell in a more balanced or even weak market. Buyers tend to get desperate in this market, and completely overlook a house’s shortcomings.

    As to the last point, that’s an area where Ardell and I strongly disagree. I discourage my sellers from accepting offers without inspection contingencies and advise them to include offer instructions that encourage inspections (and not allow pre-inspections). I encourage my buyers to get inspections. Clients generally follow my advice, but they are not required to, but they will be informed, both orally and in writing, of the risks they are taking on.

    As to price, there is way too much focus on making an offer over list. List is just a number that may be high or may be low. True there are not that many listings priced low right now, but they do happen, and IMHO too many buyers are too unwilling to go too much over list, but if the house were priced higher they would make an even higher offer. But yes, buyers do need to maintain some self-control, unless maybe they are very wealthy and the extra money isn’t that big of a deal to them.

  139. 139

    By ARDELL DellaLoggia @ 136:

    So you think an agent isn’t going to show the house? Do you think there are buyers or agents who won’t know the house is for sale if it’s not open?

    It’s about numbers. The more people through the better because the greater chance you’ll get more offers. That’s pretty obvious. But if a house is in an area that is really popular, then it can be difficult to view even if the house is vacant, because agents lining can be up to get in. That could discourage some from coming through.

    If a house isn’t vacant, then seller consideration is also at play. During the first weekend they will hopefully get a ton of calls to view, and have to make arrangement to leave the house each time. If instead they can get multiple people through the house at a pre-determined time, that will make it much easier for seller clients.

    And finally, on the topic of multiple offers, it isn’t just price at play. It’s finding the combination of the best buyer’s agent, the best lender (or cash) and even the best buyer (e.g. if you’re selling an early 20th century house, one who has owned such a house in the past). Having less choice on offers is not a good thing (although having too much choice isn’t good either).

  140. 140

    One more thing on the tax bill and Obamacare. There’s some discussion of adding in an elimination of the individual mandate to the tax bill. If that’s not done by way of a temporary suspension of the mandate, and is instead a total elimination of the mandate, that might allow the Republicans to kill two birds with one stone. Without the mandate Obamacare is likely unconstitutional (there’s been some change in the Supreme Court since their Obamacare decision, but it’s not clear the change would change the result).

    I’ve yet to see a news story mention that possibility–but obviously I’ve not read every news article on the topic. But something to watch–both if that happens and if anyone catches on.

  141. 141

    RE: Blake @ 59
    Politically Brainwashed by the MSM?

    Obama’s GDPs were mostly in the 1-2% range and no major hurricanes and ISIS out of control left by good old Obama. Obama [Bush and Clinton too] not only left North Korea a TOTAL MESS….he destroyed almost all our manufacturing doing it through [unfair] free trade by our renown village idiot progressives…we’re on to you now, your lies don’t work anymore.

    Without DEBT Obama had no GDP. The trouble with you open border Progressives is you’re basically lazy and want foreign slaves to do all your work.

  142. 142
    Eastsider says:

    RE: Kary L. Krismer @ 139 – A self employed 25-year old making $35k/year is required to pay $3k-$4k in Obamacare premium. That’s over 10% of his income. And all he/she gets is basically a catastrophic policy. Why should anyone in his/her twenties pay more than $1k for a catastrophic insurance policy? Even if the employer pays for health insurance, the premium basically comes out of paycheck. The millennials should be revolting…

  143. 143

    RE: Kary L. Krismer @ 138

    No reason for you to constantly back-seat-drive other agents’ methods, Kary. They most all have their own good reasons for everything they do, even if those are different than yours. I firmly believe in the principal of “unfettered access” for the first 4 or 5 days. I think that is better for the seller than trying to herd all of the buyers into an Open House time window.

    We don’t all do things the same way. I encourage my sellers to move out when they don’t need the proceeds from the sale to get where they are going. If they can’t do that, then usually I have them leave for the first 4 or 5 days so that ready, willing and able buyers can see the property with their agents at a time that suits the buyers and their agent.

    It works. I find that non buyers can say horrid things in an Open House in front of buyers. I see no reason to invite their criticisms where other people can hear them. Just as someone here made a negative comment about the house, people come into the Open House and say things like that. They have no intention of buying the house, but poking a stick at an expensive property makes them feel important in some way for their own personal reasons. I see no reason to invite them in.

    I hear you about the competent buyers’ agent, but at the same time I try not to penalize a buyer because they chose the wrong agent. The agents aren’t parties to the contract. I try to keep that old “fiduciary” duty, even though WA doesn’t require it, and do things without regard to the agents in the room. We are not the important people when someone is buying and selling a home. We shouldn’t let our petty perceptions of one another interfere with the parties in interest. My $.02. YMMV

    How can you really say to a buyer that the seller loved their offer, but you hated their agent? You hate almost every agent, so what you really want is full control of both sides. Not by being the agent for both sides but rather by being able to choose the agent you “like” to work with, by saying it is better for the seller if you are happy with the agent. You need to take that out and examine it, given you have previously said there is only one agent you like, and you only half like that agent. :)

  144. 144
    Shark77 says:

    On the Amazon comments about free cash flow, remember that what makes that negative is largely it’s capital expenditure. If your issue is the reporting of certain metrics, your not looking close enough at the details. Your issue should really be that you don’t think it’s capex is well invested, not that FCF is negative, because for a company to grow this big this quickly, it’d be expected to have a negative FCF.

  145. 145

    By Ardell DellaLoggia @ 142:

    I hear you about the competent buyers’ agent, but at the same time I try not to penalize a buyer because they chose the wrong agent. The agents aren’t parties to the contract. I try to keep that old “fiduciary” duty, even though WA doesn’t require it, and do things without regard to the agents in the room. We are not the important people when someone is buying and selling a home. We shouldn’t let our petty perceptions of one another interfere with the parties in interest. My $.02. YMMV

    How can you really say to a buyer that the seller loved their offer, but you hated their agent? You hate almost every agent, so what you really want is full control of both sides.

    The reason to be wary of bad agents (or lenders) is they tend to screw up transactions, either because they’ll do something wrong or they failed to account for something. It has nothing at all to do with fiduciary duty, but if it did there were be even more reason to avoid them.

    I don’t hate almost every agent. There are plenty of agents out there with good practices. What I hate are bad agent practices. What are there–something like 30000 agents in Washington, and only about 2,000 watch the WR’s videos on proper practices?

    That said I do admit that sometimes it’s not the agent driving a decision, it’s the client. It’s hard though to believe that many clients force their agent to present an offer with no inspection contingency when the instructions indicate that they are encouraged.

    But really, on the topic of bad practices, I need to start keeping a running tally on documents sent to me improperly. It’s amazing how many of the documents which should be sent to my office (acceptance of offer/counter-offer, buyer’s inspection response, etc.) are improperly delivered. That’s something fairly simple, but fortunately now the forms allow me to accept the improper delivery so that we’re not in legal never-never land (e.g. seller accepts my buyer’s inspection proposal, but does not properly deliver the acceptance). That shouldn’t be that difficult to do, but even some of the experienced agents who appear good cannot seem to grasp the idea of proper delivery.

    Oh, finally, I’ve never had to tell a buyer that their offer wasn’t selected due to a bad agent. I’m not sure where that thought even comes from. But if an agent asked, I would tell them the deficiencies in their offer.

  146. 146
    Bubble Trouble says:

    By Kary L. Krismer @ 128:

    By Bubble Trouble @ 122:

    And this is why the GOP crafted the bill this way. Dems in NY and CA will hate them. Big deal. They already hate them. Meanwhile a family making $60K in Wisconsin or Pennsylvania or Ohio will get a $2K tax cut. Politically this tax bill is brilliant.

    I would tend to agree with that, but I think we’re all missing another big special interest group. Profitable corporations. They are getting their maximum tax rate cut in half..

    Who pays corporate taxes? You do. As do I. As does everyone reading this.

    Consumers pay 100% of corporate taxes since every single dime of expenses, including taxes, an evil corporation has, is passed on to the consumers of its goods/services. So a corporate tax cut is really a consumer tax cut.

  147. 147
    Deerhawke says:

    This issue of whether or not to have an open house should not even be a question. Of course there should be an open house– or two or three.

    Most agents understand that it is in their interest to sell. Buy or sell side, they first have to sell themselves to the client. Then they have to list the house (or find listings) so that they increase the chances of a sale. Then they have manage the offer so it is solid. Then they get paid.

    So the whole emphasis for real estate agents is on sales, sales, sales. Because sales gets them paid.

    Marketing is one of those things that they talk a lot about– especially during listing pitches. And the smart ones are willing to spend money on brochures and marketing materials for themselves to build their own personal brand. But marketing for the client? To sell a house? Why do it? It is expensive and time consuming. As one agent told me, “Marketing is a feel-good effort for the client, but doesn’t do much. For the agent, it just takes your eye off the ball.” In other words, once you have the listing, why not just let the MLS do its magic?

    No Fortune-500 company making a product would ever see this as an acceptable way to do business. You have a marketing department to create and focus demand for your product. You have a sales department to push the deal over the finish line.

    From my perspective as a builder, the agent’s job after finding me the dirt is to give me a steady stream of information on the market and the potential consumer. When we are 60 days out from completion, I tell the agent I want to see a marketing/sales plan and schedule. It should have a list of deliverables and a date for each of those deliverables to be completed. I cannot tell you how many times I have gotten a completely blank look at this point.

    If there is any pushback about getting it done, I write it up and furnish it to the agent. If it becomes apparent that they are totally out of their depth in doing the marketing I need, I give them the contact information for the experienced agent they should partner with to get it done. Usually at this point (because I will not sign a listing agreement without a marketing/sales schedule) the agent snaps to attention and either gets things done, or tries, or tries to make it look like they are trying. If agents are making an effort and making some progress, I end up training them. If not, the suggestion that they partner up becomes non-negotiable.

    Real estate agents are getting paid a good deal of money to sell very valuable assets in this economy. I take a great deal of risk in what I do. In fact, the financial risk of the entire transaction over an 18-24 month period is entirely mine. So I don’t think it is unreasonable that for the substantial professional fee they are paid (risk free, by the way) I should see their main job as mitigating my risk with a professional quality marketing and sales effort.

    And yes, of course, open houses are an integral part of that effort.

  148. 148
    Bubble Trouble says:

    By Ardell DellaLoggia @ 131:

    Sorry if I missed this in one of the comments, but I am reading in RE places that the main complaint of the proposed tax changes from “the industry” is the change from owning the home for 2 of the last 5 years to owning it 5 of the last 8 years to qualify for capital gain relief. Many work in areas where prices are not as high, so the MID change doesn’t affect them. The change that might make inventory even tighter if people can’t sell before 5 years without a capital gain tax seems to be upsetting them more.

    I think this will be at the very edge margin case. First off, I’d bet 85% of the general public don’t even know about the current 2/5 rule.

    Second, people sell homes because they need to move for whatever reason…job relocation, nee a bigger place after kids, etc. I can’t see too many people giving up that change in their lives just to save money on capital gains taxes (that most don’t even know about). Maybe if you’re at 4.5 years and can hold off for another 6 months and you stand to profit a few hundred thousand. I can see that situation causing someone to wait it out. But again, an edge case that will not affect the vast majority of people.

    And I’ve wondered about that. Does the IRS have a way to check? Yeah an IRS flunky could get online, go to a county website and figure out when homes were bought. But there’s not enough manpower for that. And I really doubt there is any systematic way that the IRS checks, they’d have to have an interface with every county’s recorder office in the country for that, which is impossible to maintain. So when you get to the question on the IRS form “did you sell a house this year?”, do like Nancy Reagan and JUST SAY NO!

  149. 149
    Shark77 says:

    By Bubble Trouble @ 144:

    Consumers pay 100% of corporate taxes since every single dime of expenses, including taxes, an evil corporation has, is passed on to the consumers of its goods/services. So a corporate tax cut is really a consumer tax cut.

    It can be profit margin that can eat tax as well. The competitiveness of the product’s market really dictates where tax cost will be burdened. Otherwise, corporate taxes wouldn’t matter to shareholders.

  150. 150
    Bubble Trouble says:

    By Kary L. Krismer @ 139:

    One more thing on the tax bill and Obamacare. There’s some discussion of adding in an elimination of the individual mandate to the tax bill. If that’s not done by way of a temporary suspension of the mandate, and is instead a total elimination of the mandate, that might allow the Republicans to kill two birds with one stone. Without the mandate Obamacare is likely unconstitutional (there’s been some change in the Supreme Court since their Obamacare decision, but it’s not clear the change would change the result).

    I’ve yet to see a news story mention that possibility–but obviously I’ve not read every news article on the topic. But something to watch–both if that happens and if anyone catches on.

    The mandate for all intents and purposes doesn’t exist. Legally, the only way the IRS can collect a penalty for not having insurance is from a refund. So, no refund = no penalty. Just under pay a little, and then owe money on April 15th, presto, bingo….they can’t collect the penalty.

    The problem with O-Care isn’t the mandate. It’s the essential benefits that dictate every policy has to cover maternity, mental health, wellness checks and all sorts of other things that not everyone wants or needs. It always amuses me that my policy covers maternity even though I had a vasectomy. Well amuses isn’t the right word. Since I am forced to pay for maternity coverage, seething rage is more like it.

    I wish the focus were taken away from the mandate, which is inconsequential right now and re-focused on the real problems with O-Care. But that would require a functioning MSM and a functioning GOP. And sadly we have neither.

  151. 151

    RE: Eastsider @ 141
    Yes Eastsider

    The foreign managed brainwashing is destroying America. More news MSM won’t print on the Japanese engineered Takata Airbags likely in your foreign car….fix ASAP or it can go off like a bomb and blind [metal shrapnel] or kill you during an accident. Its not cheap replacement either and likely needs dealer installation for warranty.

    https://www.airbagrecall.com/en/

    There’s a Class Action suit against Takata, the bankrupt Japanese engineering company.

    My 2014 Charger does not use the Takata HORRIFYING airbag BTW.

  152. 152

    RE: Bubble Trouble @ 147
    We Have Only Two Real Parties in America Now

    The Progressives [Rich and unintelligent Minority poor] and the Populists [middle income and intelligent workers for Majority American Dream].

    The Dem/Reps are gone.

  153. 153

    By Bubble Trouble @ 146:

    And I’ve wondered about that. Does the IRS have a way to check? Yeah an IRS flunky could get online, go to a county website and figure out when homes were bought. But there’s not enough manpower for that. And I really doubt there is any systematic way that the IRS checks, they’d have to have an interface with every county’s recorder office in the country for that, which is impossible to maintain. So when you get to the question on the IRS form “did you sell a house this year?”, do like Nancy Reagan and JUST SAY NO!

    There’s an IRS form which asks about five of six poorly written confusing questions, which determines whether the escrow sends a 1099 on the transaction. Yes people could lie, so it’s not perfect. But then even if a 1099 is sent (which I believe it is on all transactions over $500,000), the sale could be explained away in a tax return (as probably happened a lot with short sales and foreclosures before).

    So no, they probably don’t have the horsepower to check all the transactions, but there is a system in place.

  154. 154

    By Bubble Trouble @ 147:

    By Kary L. Krismer @ 139:

    One more thing on the tax bill and Obamacare. There’s some discussion of adding in an elimination of the individual mandate to the tax bill. If that’s not done by way of a temporary suspension of the mandate, and is instead a total elimination of the mandate, that might allow the Republicans to kill two birds with one stone. Without the mandate Obamacare is likely unconstitutional (there’s been some change in the Supreme Court since their Obamacare decision, but it’s not clear the change would change the result).

    I’ve yet to see a news story mention that possibility–but obviously I’ve not read every news article on the topic. But something to watch–both if that happens and if anyone catches on.

    The mandate for all intents and purposes doesn’t exist. Legally, the only way the IRS can collect a penalty for not having insurance is from a refund. So, no refund = no penalty. Just under pay a little, and then owe money on April 15th, presto, bingo….they can’t collect the penalty.

    The problem with O-Care isn’t the mandate.

    You’re preaching to the choir, and to what you said I would add it’s too low of an amount to do any good.

    My comment was more that Obamacare survived in the Supreme Court only because they found it was within the government’s power to tax. Take that tax away and . . ..

    All in all though, if Obamacare went away I doubt we’d get much relief in Washington state, at least until the last insurers started going away like the last time the state tried to impose coverage for pre-existing conditions.

  155. 155

    By Deerhawke @ 145:

    This issue of whether or not to have an open house should not even be a question. Of course there should be an open house– or two or three.

    You’d probably be surprised how many agents disagree with you on that. On agent sites they tended to be largely panned in the past, but really it was more about some agents being too lazy or having too many listings to do a proper job.

    It’s interesting how many more open houses there are now though compared to prior years. Hopefully it’s the desire to generate multiple offers that’s driving it, rather than the desire to convert buyers into clients.

  156. 156
    Bubble Trouble says:

    By softwarengineer @ 149:

    RE: Bubble Trouble @ 147
    We Have Only Two Real Parties in America Now

    The Progressives [Rich and unintelligent Minority poor] and the Populists [middle income and intelligent workers for Majority American Dream].

    The Dem/Reps are gone.

    No, no, no. A nice man on CNN told me Democrats represent fine upstanding working men and women of the country, while Republicans represent Hitler’s love child and rich old white men who gleefully destroy the environment. And CNN never lies.

  157. 157
    Bubble Trouble says:

    By Kary L. Krismer @ 151:

    By Bubble Trouble @ 147:

    By Kary L. Krismer @ 139:

    One more thing on the tax bill and Obamacare. There’s some discussion of adding in an elimination of the individual mandate to the tax bill. If that’s not done by way of a temporary suspension of the mandate, and is instead a total elimination of the mandate, that might allow the Republicans to kill two birds with one stone. Without the mandate Obamacare is likely unconstitutional (there’s been some change in the Supreme Court since their Obamacare decision, but it’s not clear the change would change the result).

    I’ve yet to see a news story mention that possibility–but obviously I’ve not read every news article on the topic. But something to watch–both if that happens and if anyone catches on.

    The mandate for all intents and purposes doesn’t exist. Legally, the only way the IRS can collect a penalty for not having insurance is from a refund. So, no refund = no penalty. Just under pay a little, and then owe money on April 15th, presto, bingo….they can’t collect the penalty.

    The problem with O-Care isn’t the mandate.

    You’re preaching to the choir, and to what you said I would add it’s too low of an amount to do any good.

    My comment was more that Obamacare survived in the Supreme Court only because they found it was within the government’s power to tax. Take that tax away and . . ..

    All in all though, if Obamacare went away I doubt we’d get much relief in Washington state, at least until the last insurers started going away like the last time the state tried to impose coverage for pre-existing conditions.

    Well it wasn’t that bad pre-OCare for me, in WA state. It wasn’t super cheap, but it was reasonably priced, I thought. Since O-Care my premiums have more than doubled and the deductible has gone from $2500/year for the family to $12,000/ year for the family. I think I should sue the federal govt for breaching truth in advertizing laws, since this bill was called the AFFORDABLE Care Act.

    And yeah Jon The Turncoat Roberts was right. This is a tax. It’s a tax on me – an evil sorta rich guy who works for a living – used to subsidize the insurance of the popr/lazy of society who sit on their asses all day collecting govt cheese. Yeay America!!

  158. 158

    By Bubble Trouble @ 154:

    Well it wasn’t that bad pre-OCare for me, in WA state. It wasn’t super cheap, but it was reasonably priced, I thought. Since O-Care my premiums have more than doubled and the deductible has gone from $2500/year for the family to $12,000/ year for the family.

    I would agree, but my point is that Washington is unlikely to roll back these wonderful Obamacare improvements. /sarc A post-Obamacare Washington would look a lot like now–until it collapses.

  159. 159
    ess says:

    RE: Bubble Trouble @ 144

    Who pays corporate taxes? You do. As do I. As does everyone reading this.
    Consumers pay 100% of corporate taxes since every single dime of expenses, including taxes, an evil corporation has, is passed on to the consumers of its goods/services. So a corporate tax cut is really a consumer tax cut.

    ——————————————————————————————————————————

    They don’t believe that in Seattle where all corporations are evil, and increased taxes on corporations only make them “pay their fair share”. As a matter of fact – many progressives in Seattle who believe that corporations should pay more in taxes regularly inform each other of that very fact on their electronic devices, before ordering yet another goodie from Amazon while sipping their Starbucks brew.

  160. 160
    Bubble Trouble says:

    By ess @ 156:

    RE: Bubble Trouble @ 144

    Who pays corporate taxes? You do. As do I. As does everyone reading this.
    Consumers pay 100% of corporate taxes since every single dime of expenses, including taxes, an evil corporation has, is passed on to the consumers of its goods/services. So a corporate tax cut is really a consumer tax cut.

    ——————————————————————————————————————————

    They don’t believe that in Seattle where all corporations are evil, and increased taxes on corporations only make them “pay their fair share”. As a matter of fact – many progressives in Seattle who believe that corporations should pay more in taxes regularly inform each other of that very fact on their electronic devices, before ordering yet another goodie from Amazon while sipping their Starbucks brew.

    Heh. Yep. Nothing more idiotic than someone using an iPhone to call for the destruction of capitalism. They have zero sense of self awareness. At least these cretins are too cretinous to understand. But you’d think people who work at Amazon or Apple or Microsoft would get it. They don’t either.

  161. 161
    ARDELL DellaLoggia says:

    RE: Deerhawke @ 145

    I’ve always loved Open Houses but in this market I’ve had weird neighbors saying bad things and disgruntled buyers ranting sbout how little you get for the money these days.

    Also if parking is almost nil the Open House can highlight that weakness.

    Agent showings only works better right now. But then you always have a brand new wow house. Not every house has that advantage. :)

  162. 162
    uwp says:

    By ARDELL DellaLoggia @ 158:

    Also if parking is almost nil the Open House can highlight that weakness.

    Clever. I wouldn’t have thought about that, but very true. A full open house can make street parking look horrible.

  163. 163

    By ARDELL DellaLoggia @ 158:

    Also if parking is almost nil the Open House can highlight that weakness.

    That’s the one instance I would agree with you. I was previewing or showing a house last week and remember thinking: This would be a really horrible house for an open house. I don’t recall the specifics though, but I remember it was hard just to park even one car. So in that case even an agent showing where the agent drives where would make that problem obvious.

  164. 164
    QA Observer says:

    By ARDELL DellaLoggia @ 158:

    RE: Deerhawke @ 145

    Also if parking is almost nil the Open House can highlight that weakness.

    RE: Kary L. Krismer @ 160

    I am a civil site engineer by day and the “postage lots” we have been working on just over the past 18 months are being designed to NOT include parking. We just finished a 30 town home site in Issaquah Highlands and of those 30 units, 24 did not have a garage or a parking space. Seems to be developers are gambling on the new generation of home buyers not needing a car. May be there is some foresight, but we are not there yet.

  165. 165

    The NWMLS number are out. Sales of SFR King County down slightly, but the median and mean are both up about $80,000-90,000 respectively YOY.

    Active inventory is down over 10% YOY, about 400 units, while the YTD is down about 800 units. Seemingly significantly higher prices are not enough to get people to sell.

    Numbers from NWMLS sources, but not guaranteed. Also I might have subtracted something incorrectly.

  166. 166

    RE: QA Observer @ 161 – Maybe future owners can convert a bedroom into a garage. ;-)

  167. 167
    ess says:

    By uwp @ 159:

    By ARDELL DellaLoggia @ 158:

    Also if parking is almost nil the Open House can highlight that weakness.

    Clever. I wouldn’t have thought about that, but very true. A full open house can make street parking look horrible.

    Near the transit centers that Sound Transit travels up or down I-5, I have noticed a dramatic increase of parking on the adjoining streets as commuters are unable to park in the full lots that are provided for them. This situation will only deteriorate when Sound Transit Light Rail comes on line. Gazing into my crystal ball, I will conjecture that the number of off street parking spots that a residence has will become increasingly important and advertised for housing rentals and sales near and adjacent to Light Rail portals

  168. 168
    Ross says:

    By ARDELL DellaLoggia @ 136:

    RE: Kary L. Krismer @ 132

    So you think an agent isn’t going to show the house? Do you think there are buyers or agents who won’t know the house is for sale if it’s not open? Again, your market may be different. That is not the case where I work. Buyers are active and have instant alerts. Seeing the house with their own agent is as easy as hitting a button. I had 90 showings in three days back in Feb. when I shut it down “early”. I don’t always do the same thing; but I always do the right thing.

    For me personally, I only see homes through open houses or the listing agent. I’m not interested in giving 3% to a buyer’s agent, and even less interested in any sort of agency agreement. I’d only bother to contact a listing agent if I’m already extremely interested in the home. Open houses are for the interesting bucket. Surprises happen at open houses, where it shows better or worse than expected. Though the worst case is where a listing agent is too lazy to show a home to an eager buyer and tries to pair you with some 6-month-new buyer’s agent from their brokerage without letting me know. [FWIW:I’ve bought three homes with this approach, two with dual agency with the listing agent (who rebated 2-3%), the other through an attorney (with near 3% concessions from the listing agent).

  169. 169
    Deerhawke says:

    For those of you bears holding out hope for the bubble popping, or at least for a really nasty correction, here is some disappointing news.

    Permit timelines in Seattle have gone from bad to absurd. Permit intake timelines had gone from nonexistent (2008-2010) to a week (2011-12) to 2 weeks (2013-14) to a month (2015) to 6 weeks (2016).

    Last week, my architect called for an intake appointment for our new project in Leschi. First appointment is in mid-March 2018. No typo there. Four and a half months!

    Mind you, that is to just put things into the queue for review. Add on all the reviews and all the delays in that process and you are looking at 8 months to get a simple single-family permit for a site without ECA.

    Since builders will be able to do fewer projects per year and their holding costs will rise substantially, what do you think is going to happen to prices for new homes in Seattle?

  170. 170
    Jasper says:

    RE: Kary L. Krismer @ 163 – Like this?

    A Garage Fit for a Queen: a May 2011 Fine Homebuilding article about a San Francisco family that replaced a bedroom with a garage. The house is a Queen Anne Victorian. The city insisted that the façade remain the same, so the garage door looks like a bay window!

  171. 171
    QA Observer says:

    By Deerhawke @ 165:

    Last week, my architect called for an intake appointment for our new project in Leschi. First appointment is in mid-March 2018. No typo there. Four and a half montha

    Hmm, interesting. I just went in with my initial BP set last week and got an appointment for second week of January. My 60% SIP approval took 4.5 months for approval with two 8-week review cycles. Are you sure your architect had all their documents ready? BP have typically taken about 4-5 months for approval.

    There are nervous developers. No one wants to be the last person holding a permit.

  172. 172
    Green-Horn says:

    RE: Deerhawke @ 165

    Such sensible background is certainly refreshing. Why do we never hear about this kind of thing in the media? Many who are accused of being uncharitable and indifferent to the kinds of challenges that well-intended blow-hards in power claim to address are actually quite concerned about the situation, but perhaps just skeptical because of the unintended consequences of the blow-hards’ ostensibly well-intended policies.

    Maybe there are policies that could actually move the needle that nobody’s considered? Have policy makers been welcoming developers’ participation and input? Do they at least review draft proposals to consider possible unforeseen consequences? Like doctors, our policy makers should at least commit “to first do no harm…”

    If I were a rentier capitalist pig landlord, many Seattle City policies would probably make me crazy, but on balance I probably should probably be grateful about how all the stupidity serves my interest by limiting the competition.

  173. 173
    randomseattledummie says:

    RE: Deerhawke @ 165

    Do you think construction costs impact SALE price? I think it is two completely different things. This will definitely impact raw land costs as holding costs and risk goes up for longer timelines from acquisition to selling but I don’t think it will have the slightest impact on the end product sale value. Buyers don’t know/care how much it cost to build.

  174. 174
    ess says:

    RE: Green-Horn @ 168

    If I were a rentier capitalist pig landlord, many Seattle City policies would probably make me crazy, but on balance I probably should probably be grateful about how all the stupidity serves my interest by limiting the competition.

    ——————————————————————————————————————————–

    Being one of the aforementioned swine, located outside of the Seattle city limits (but close enough to city Seattle limits to be impacted), I can assure you that not only do I appreciate the stupidity of Seattle City Council real estate policies, but actively encourage my friends who reside in Seattle to support all council efforts to social engineer the housing situation. I have already had tenants who have given up looking in Seattle and have gone further out looking for less alternatives. Although my rents are less expensive – they have increased faster than the expenses of operating the rental business.

    And addressing the issue of limiting completion through counter productive housing policies, I related this story some time ago, but I shall repeat it again. I once by circumstances ended up talking to someone running for Seattle city council. I encouraged him to do everything he could to support rent control for Seattle (which was the big issue of the time). When he asked me why I was so passionate about the issue, I responded ” because as an owner of rental property outside of Seattle, passing rent control in Seattle will make me rich”. He laughed, and later lost his bid to be elected to the Seattle City council.

  175. 175

    As long as we’re bashing Seattle (which is entirely appropriate, IMHO), here’s a blog piece some might enjoy.

    http://www.happyhour786.com/seattle-only-enabling-not-helping/

  176. 176
  177. 177
    Eastsider says:

    RE: Deerhawke @ 165

    The same thing happens in every boom. Permits get longer to approve. Costs and labor get expensive. Prices soar. That is, until the market turns and builders/banks are left holding expensive inventory. I just described the last RE boom/bust. The next bust will surely arrive one day. I don’t know when but I will be cautious at this stage of the cycle.

  178. 178

    RE: Eastsider @ 173 – Yes, but the lengthening of the process just makes it worse, both for the contractors holding more inventory and for society in general. If the time from buying dirt to selling a completely house was shorter, the cycles would not be as extreme.

  179. 179

    RE: Kary L. Krismer @ 151
    The Obamacare Mandate is Stealth Dead

    It wouldn’t fit on the postcard to do our taxes.

  180. 180
    Dustin says:

    By Deerhawke @ 165:

    Since builders will be able to do fewer projects per year and their holding costs will rise substantially, what do you think is going to happen to prices for new homes in Seattle?

    Another way to frame your question: what will happen to the builders? These conditions could be good for buyers, eventually, if they put pressure on developers to move away from SFRs in favor of higher density projects.

  181. 181
    Eastsider says:

    By Kary L. Krismer @ 174:

    RE: Eastsider @ 173 – Yes, but the lengthening of the process just makes it worse, both for the contractors holding more inventory and for society in general. If the time from buying dirt to selling a completely house was shorter, the cycles would not be as extreme.

    Not necessary. The lengthening of process is largely due to the influx of new projects. So there will be more completions, not less, in the next couple years. IMO, builders are taking on too much risk in this hot market. That said, I wish DH the best.

  182. 182
    N says:

    @ Deerhawke165: That would seem to me to be the best possible news for bears – a backlog of permits means more housing starts on the horizon to go along with the massive amounts of housing units currently coming on line.

  183. 183

    By Eastsider @ 180:

    By Kary L. Krismer @ 174:

    RE: Eastsider @ 173 – Yes, but the lengthening of the process just makes it worse, both for the contractors holding more inventory and for society in general. If the time from buying dirt to selling a completely house was shorter, the cycles would not be as extreme.

    Not necessary. The lengthening of process is largely due to the influx of new projects. So there will be more completions, not less, in the next couple years. IMO, builders are taking on too much risk in this hot market. That said, I wish DH the best.

    What I was contemplating was a shortening of time for government review of projects. Basically government doing its job better and faster, regardless of the demand. Unlikely, I know, but I think that’s probably the only way to significantly shorten the time from purchase of dirt to completion–I don’t think the builders are typically being that inefficient.

  184. 184
    Eastsider says:

    By Kary L. Krismer @ 182:

    What I was contemplating was a shortening of time for government review of projects. Basically government doing its job better and faster, regardless of the demand. Unlikely, I know, but I think that’s probably the only way to significantly shorten the time from purchase of dirt to completion–I don’t think the builders are typically being that inefficient.

    Builders may not be inefficient, but in a hot market, there is nothing a builder can do if his subs are behind with backlogs. We are in this situation today.

  185. 185
    Ross says:

    By Ardell DellaLoggia @ 175:

    Time to invest in parking spaces like L.A. and NYC?

    https://www.nytimes.com/2017/11/02/realestate/parking-spaces-that-could-make-you-rich.html

    Self-driving cars are going to change the parking market in the not to distant future.

  186. 186
    OA says:

    RE: Ross @ 185

    how so? where will they park?

  187. 187
    redmondjp says:

    I just received an actual hand-written letter a few days ago, out of which fell out a 2″ square head shot picture of a woman. I half expected the letter to say “I am looking for a husband,” but no, she is a local real estate agent (who has a square business card with her picture on the back? weird) who was telling me that she has a ‘good friend’ who would like to buy my house. Riiiiiight . . .

    And this in addition to the Kirkland builder that has cumulatively sent me at least $6 over the past few years, sometimes enclosing an actual dollar bill with his (computer-generated) cursive letter asking me if I want to sell a few times a year. Sometimes it pays to open your junk mail!

    My neighbors don’t seem to get these same letters from what they tell me (or they do but recycle them without even knowing it), so the apparently dilapidated condition of my house must be a magnet for these types of opportunists, assuming that I’m hard up for cash (which is pretty funny since I only owe four figures on my house now and it will be paid off within a year).

    To the moon, Alice!

  188. 188

    RE: OA @ 186 – Charging stations not necessarily located in the immediate vicinity to where people live and work. I think the thought is they won’t be owned by individuals–think of it as a modern Uber.

    BTW, one issue with self-driving cars is that they are not very efficient. The computing power, sensors and mechanisms take up a considerable amount of power. I think I read that they are something like 10% less efficient than a similar normal car.

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