NWMLS: Nearly everything about the Seattle-area housing market continued to tilt in sellers’ favor in October

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October market stats have been published by the NWMLS. Here’s a quick excerpt from their press release:

Key indicators for Western Washington housing still rising, but brokers detect slowdown and uncertainty

Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.

“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region.”

Compared to spring months, Scott expects volumes in the next few months will be at 30-to-50 percent of spring totals. “The stage is set once again for a frenzy housing market after the first of the year in the price ranges where there is a shortage of active listings for sale.”

Lennox sure likes that word “frenzy.” He seems to think that it has positive connotations. Personally I think it’s exactly the opposite. People do irrational and stupid things in a frenzy that they usually regret later. Is he saying that’s true of the current housing market? Maybe we actually agree more than I thought…

Now let’s dive into the numbers for October.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

October 2017 Number MOM YOY Buyers Sellers
Active Listings 2,619 -15.6% -13.4%
Closed Sales 2,441 -2.8% -2.9%
SAAS (?) 1.03 -11.7% +14.3%
Pending Sales 2,760 +0.9% -2.4%
Months of Supply 1.07 -13.2% -10.8%
Median Price* $630,000 +0.8% +14.5%

The only tiny shred of kind-of good news for buyers is that closed sales and pending sales are down slightly from a year ago. Of course, listings are down considerably more than sales, so the market overall is still trending in sellers’ favor.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell three percent between September and October. Last year over the same period closed sales were down just a tenth of a percent. Year-over-year closed sales were down three percent.

King County SFH Pending Sales

Pending sales were up one percent from September to October, and were down two percent year-over-year. Year-to-date pending sales are down four percent from 2016. Meanwhile year-to-date closed sales are up one percent. I still don’t know exactly why that’s happening, but my guess would be that fewer pending sales are collapsing this year than last year.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Inventory fell sixteen percent from September to October, and was down about the same amount from last year.

Here’s the chart of new listings:

King County SFH New Listings

One tiny bit of good news: new listings were up eleven percent from a year ago.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Still nothing new here. It seems like it’s been the same story forever: It’s a great time to be a seller and a terrible time to be a buyer.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year price changes fell a couple points between September and October and are still sit at a very high level.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

Up slightly from September, but not quite back to the all-time high hit in July.

October 2017: $630,000
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle home prices jump nearly 18 percent; West Bellevue median hits $2.6 million


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.

548 comments:

  1. 501
    Blake says:

    Sorry Kary, I didn’t see your previous post til after I posted that, but it reinforces my point and problem with this bill.

    The article was titled “4 Good Things in a BAD Tax Bill,” and immediately he notes: “The Tax Reform Act of 1986 was a landmark piece of bipartisan legislation, preceded by years of groundwork by Treasury Department experts and carefully crafted…”

    “Bipartisan”… “experts”… “crafted”… This current bill was none of the above!

    The author of that Bloomberg article was obviously trying to put lipstick on a pig… “silver linings?”… “yes, but Mussolini made those trains run on time!” (…he actually didn’t!)

    As Bruce Bartlett noted, this bill is a “POS!” It is not time to look for silver linings, it is time for anyone with half a brain cell and some measure of decency left to condemn the way this bill was cobbled together and rammed through without ANY hearings or oversight.

    As the usually dispassionate Norman Ornstein wrote: “There has never been a more outrageous, revolting, unfair process to pass a corrupted bill in the history of Congress.”

    I admit I’ve become especially unhinged after it was revealed Friday that the Center for Disease Control had alerted all their staff to not use the terms “science-based” or “evidence-based” in any budget requests. The Center For Disease Control!! I have worked most of my adult life trying to identify and promote medical practices that have sound evidence/data backing their use and de-implement medical practices that do not have any evidence to support their continued use. I also have friends who are senior scientists at the CDC and they feel like they are working for total morons. It is unhinged! You know that at some point the religious “believers” and nuts on the right intersect with the far-left New Age nutcases in their contempt for science and empiricism. I always condemn these idiots on the left and would be outraged if they ever gained control of a Federal agency supervising scientists. We all must condemn these idiots who have contempt for the scientific method… or the nutballs running Congress who disregard ALL the checks and balances designed by our founding fathers and maintained for centuries in the United States. These people are barbarians…

    Funny… as it turns out Trump and Ivanka truly connect the far-right and New Age nuts with their “magical thinking.”
    http://inthesetimes.com/article/20736/Trump-White-House-Self-Help-Norman-Vincent-Peale-MAGA
    “Trump worshipped in the temple of the movement’s prophet, Norman Vincent Peale: Manhattan’s Marble Collegiate Church. Indeed, Peale presided over Trump’s first wedding in 1977. Trump’s father was a die-hard adherent of Peale’s preachments, as is his daughter Ivanka, who wrote in her 2009 self-help tract, The Trump Card, that “perception is more important than reality” and you shouldn’t “go out of your way to correct a false assumption if it plays to your advantage.”

    “This same process of magical thinking drives the Trump presidency… The twisted, incantatory logic of Peale’s positive-thinking gospel now drives the federal agenda… Empirical facts can never penetrate this carapace of fantasy. Positive thinking works for its adherents because it makes them act and feel as if they can do no wrong!”
    aiiiiiiii!!!!!

  2. 502
    Blake says:

    RE: Kary L. Krismer @ 490
    Kary: “Illogical. You say there is no reason and then you give a reason! ;-)”

    I wrote that a tax cut/stimulus is not “needed” at this point in the business cycle – so that is not the reason they did it. I note that their reason/motivation for this bill was not to help the economy, but to give trillions to their benefactors, damage government, and worsen the deficit. amirite? So they do have a certain sick logic that is consistent with their principles and ideology… as ugly as their “principles” may be!

    Kary: “Seriously, if you believe in cycles to the extent of Erik, the economy is doomed pretty soon no matter what we do. Most expansion periods do not last terribly long and lead to downturns.”

    Aiii,,, connect me with Erik! Damn you! ;-)
    Nothing is written in stone, but credit cycles have a fairly strong empirical basis. People/businesses tend to get too optimistic and borrow too much, then they get overextended, defaults rise, consumers pull back and it “corrects”… sometimes very painfully.
    I’ll go out on a limb and predict a correction in the next… say 5 or 10 years! ;-)

  3. 503

    RE: Blake @ 491 – I think this tax bill is sort of like Obamacare–more about what can get pushed through Congress (particularly the Senate) than what the President at the time or the party in in the majority at the time wanted. Although I think Trump probably was more active in actually shaping the tax bill, which is somewhat surprising given he has no real understanding of the process, but maybe his input was due to that!

  4. 504
    whatsmyname says:

    By Eastsider @ 487:

    So you think every question has a simple yes or no answer? That might be something for you to think about. Bye!

    Now, now. I never said anything about “every” question. This is just one question, and it is a simple opinion question about whether you think something will work out to your advantage. In fact, simpler than that, it is merely a confirmation: Do you mean to agree with what you appeared to say when you said that losing the MID would make things cheaper for homeowners? Surely you know your own mind. What could be an easier yes or no?

    I suppose there are other ways of asking. For example: Do you believe the cost of a thing is the nominal price – as opposed to how much money you have to actually spend? That seems like an easy question.

    Sure, some people might interpret the question in terms of, Did Eastsider make a bold statement of cause and effect while missing an important aspect of both – even while mentioning it? I think we know the answer to that.

    But that just leads to more questions. Since Eastsider won’t defend or abandon his earlier position, is he rethinking to include the big picture? Or is he hiding his ideological pet in a bramble of distractions and cognitive dissonance, only to bring it out again when the resistance is less robust?

    That, I just don’t know; but I think you did answer the questions in the first three paragraphs, so I thank you for that.

  5. 505
    jon says:

    As Kary has pointed out, the reduction of the MID is pretty small, especially in comparison to the reduction in corporate taxe rates and the run-up in the stock market that that has caused. While current homeowners are grandfathered in, when it comes time to sell they will find that buyers can afford less. The reduction in price will be determined by the elasticity of demand, and so the price will be somewhere in between current price and a total write-down from the seller.

    Other big concerns are of course the increase in the budget deficit, and also the incentives for corporations to bring home profits that are currently held off-shore. That will bring jobs and inflation to the US, and deflation to the rest of the world. The Fed will presumably want to offset the inflation with reduction in its purchases, which will drive up interest rates. The effect of the rising interest rates will be similar to the reduction in the MID, in that current owners are unaffected until they try to sell. Since they are likely going to have to buy somewhere else, most will hold onto their current mortgages, just as with the MID.

    The deflation caused by corporations repatriating profits will presumably eventually be partially offset by new purchases and investment by the shareholders.

  6. 506
    ess says:

    By Kary L. Krismer @ 452:

    RE: Eastsider @ 451

    I particularly like (read hate) the slippery slope argument that passing this will lead to gutting social security. What is gutting social security is the inertia which has gripped Congress for probably the past 16 years plus. Every year with no fix merely means the fix will be more extreme.

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

    Social security will never be “gutted”. Those of us that are old enough call recall Representative Dan Rostenkowski being chased to his car by outraged seniors when years ago he had the tenacity to introduce legislation to attempt to somewhat “fix” social security when it need a great deal less “fixin” than it does today and tomorrow. As we all (the royal we) know, social security has no separate “lock box” to draw from, and in a number of years its receipts will not equal what is paid out in benefits, thus possibly necessitating some sort of reduction in benefits. By then, there will be so many old codgers in the US that both vote and receive social security (like me hopefully), that reducing benefits will truly be the third rail of American politics. On the other hand, the file and suspend strategy was (I believe) recently abandoned, so perhaps there is hope that there will be a few politicians with some backbone that can implement some sort of strategic change.

    The real problem with Social Security is that it is essentially a classic Ponzi scheme operated by the government. And with all Ponzi schemes, when there are not enough new investors to pay the dividends and withdrawals of the prior investors, the scheme is exposed for what it is, and the only ones making money are all the lawyers. Social security when first implemented had something like eight working individuals paying into a fund to support one retiree. These days we have about three workers per retiree, soon to be two per retiree. In addition, most social security recipients receive much more in benefits than they paid, as a result of increasing life expectancies.

    The difference between social security and Ponzi schemes is that Ponzi scheme manipulators get to go to jail, while the politicians that both designed and supported social security in its current form have buildings, airports and warships named after them, as well as a very nice government pension to live out their old age not dependent upon social security.

  7. 507
    Eastsider says:

    “Or is he hiding his ideological pet in a bramble of distractions and cognitive dissonance”

    Lovely. I’ll let SB readers be the judge…

  8. 508
    whatsmyname says:

    By Eastsider @ 497:

    “Or is he hiding his ideological pet in a bramble of distractions and cognitive dissonance”

    Lovely. I’ll let SB readers be the judge…

    Yay. Another distraction. That’s 4 posts without a 2 line blurb on why you were right, or even a confirmation that you agree with yourself.

    And so touchy about the ideological tag. Remember, I also offered the option that you were reconciling your view with the big picture. I think you’ve answered my questions from paragraph 4.

    Thank you.
    Happy Holidays.

  9. 509

    By ess @ 496:

    By Kary L. Krismer @ 452:

    RE: Eastsider @ 451

    I particularly like (read hate) the slippery slope argument that passing this will lead to gutting social security. What is gutting social security is the inertia which has gripped Congress for probably the past 16 years plus. Every year with no fix merely means the fix will be more extreme.

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

    Social security will never be “gutted”. Those of us that are old enough call recall Representative Dan Rostenkowski being chased to his car by outraged seniors when years ago he had the tenacity to introduce legislation to attempt to somewhat “fix” social security when it need a great deal less “fixin” than it does today and tomorrow. As we all (the royal we) know, social security has no separate “lock box” to draw from, and in a number of years its receipts will not equal what is paid out in benefits, thus possibly necessitating some sort of reduction in benefits. By then, there will be so many old codgers in the US that both vote and receive social security (like me hopefully), that reducing benefits will truly be the third rail of American politics. On the other hand, the file and suspend strategy was (I believe) recently abandoned, so perhaps there is hope that there will be a few politicians with some backbone that can implement some sort of strategic change.

    I would probably agree with most of that and hope you’re right. But my point remains that what will need to be done at that point in time to accomplish X will be a lot more than if something was done ten years ago, five years ago or even today.

    The real problem with Social Security is that it is essentially a classic Ponzi scheme operated by the government. And with all Ponzi schemes, when there are not enough new investors to pay the dividends and withdrawals of the prior investors, the scheme is exposed for what it is, and the only ones making money are all the lawyers. Social security when first implemented had something like eight working individuals paying into a fund to support one retiree. These days we have about three workers per retiree, soon to be two per retiree. In addition, most social security recipients receive much more in benefits than they paid, as a result of increasing life expectancies.

    I would put it a little differently. Life expectancy was shorter and population growth was a lot greater when SS was enacted. I read recently that our birth rate was near historical lows–presumably as a percentage of the population or some such thing. But clearly there are a lot fewer large families today than in the past, and we’re living longer. Those are just the opposite of what the system needs to be maintained, so in that regard it is perhaps similar to a Ponzi scheme.

    Maybe a robot tax will save SS. ;-)

  10. 510

    By jon @ 495:

    As Kary has pointed out, the reduction of the MID is pretty small, especially in comparison to the reduction in corporate taxe rates and the run-up in the stock market that that has caused. While current homeowners are grandfathered in, when it comes time to sell they will find that buyers can afford less.

    I think it will go beyond what they can afford. People over-estimate the benefit of tax deductions. So it might be sort of like 2007 when people thought that the loan provisions had tightened up more than they had. That really hurt the low end of the market because of the more wealthy people just (correctly) believing that they could get financing and continued to buy until the crisis. In contrast this might hurt the upper end instead.

    One of the things I like is I think they are getting rid of deductions for new HELOC loans. A tax policy that encourages people to encumber their homes is not a good thing–although I might distinguish between loans that were spent to improve or repair the property and loans for other purposes.

  11. 511
    Blake says:

    ESS… all true, but you forget that the US prints our own fiat currency and can “pay for” anything. A few months ago the Congresscritters raised the DOD budget by a cool $80 billion in ONE YEAR. How the heck did they pay for that!? Hah!

    Here’s the latest report from Mnuchin…
    https://www.ssa.gov/policy/trust-funds-summary.html
    “The Trustees project that the combined OASDI Trust Funds will continue growing through 2021 as total annual income exceeds total annual costs. Beginning in 2022, however, they project the OASDI annual cost will exceed total income, so the trust fund reserves will be drawn down until they are depleted in 2034,”

    So in 2034 theyll have to fire up the printing presses to cover a the shortfall for SS payments instead of just for F35s… OMG… the sky is falling!! The report notes that the 75-year actuarial deficit for SS is projected to be 1.0% of US GDP. I predict that by 2034 we’ll have much worse problems given our current course!

  12. 512
    Kmac says:

    By Kary L. Krismer @ 499:

    I would put it a little differently. Life expectancy was shorter and population growth was a lot greater when SS was enacted. I read recently that our birth rate was near historical lows–presumably as a percentage of the population or some such thing. But clearly there are a lot fewer large families today than in the past, and we’re living longer. Those are just the opposite of what the system needs to be maintained, so in that regard it is perhaps similar to a Ponzi scheme.

    Maybe a robot tax will save SS. ;-)

    And you just hit on the main reason that illegal immigration enforcement will never happen. The pols need them for a multitude of reasons, including keeping the Ponzi alive.

  13. 513

    RE: Kmac @ 502 – Interesting thought, but doesn’t that assumes that they work with a fake SS number rather than under the table?

    I don’t really know how that works. I could see if you had immigration reform which allowed large numbers into the system who had not previously been contributing there would be problems. But if they had a significant number of dependents, that could both hurt (more in survivor benefits) and help (more younger people paying in).

    I’m not even sure how the system deals with legal non-resident aliens. Do they pay into SS? If so, do they get any benefits?

  14. 514

    Per this article, the Senate approved the tax bill this morning.

    http://www.nydailynews.com/news/national/gop-tax-bill-individuals-article-1.3710628

    Note the headline–what the bill “does to individuals.” If you look at the reporting, it’s virtually all negative, so it’s no wonder that it’s not a popular bill. The New York Times even has an opinion piece that says the vote shows no respect for democracy. Apparently, the NYTs doesn’t know what system of government the United States works under! /sarc

    Two things interesting in that article. They say the new MID cap expires and will eventually return to $1M. I’d not read that elsewhere. Also, they have some excellent tax planning advice–if your SALT is going to be capped in 2018, pay your real estate taxes in 2017. That though might be difficult for those who pay RE taxes as part of their mortgage, and SALT deductions are probably mainly useful for people with mortgages (unless they have over $24,000 a year in RE taxes).

    One thing odd in that article, and a lot of the reporting. Note how it has the increase in the standard deduction at the top and the elimination of the personal exemptions at the end. I’ve seen very little reporting that puts those two together to explain that the doubling is only a slight benefit for a married couple (because it gets rid of $8,200 of exemption) and a disadvantage for a married couple with two dependents (because it gets rid of $16,400 of exemption). I’m not sure how the child tax credit factors in there too, but that should also be included in the analysis. But the news articles seem to treat them all separately.

  15. 515

    By Kary L. Krismer @ 504:

    Per this article, the Senate approved the tax bill this morning.

    Per the New York Times the Senate made minor changes, so the House has to vote again. It’s somewhat amazing how difficult it is to find press stories of the status of a fairly major piece of legislation.

    Oh, and expect more drama between Trump and Rosie as the latter apparently Tweeting While Intoxicated attempted to bribe two Senators to vote against the bill. Fun times. /sarc

  16. 516

    RE: Kmac @ 502
    Actually According to the 2000 Census Bureau

    Life expectancy has fallen to 1960s levels, we’re dying sooner now.

    Fake News from President Bush presented the opposite CDC brainwashing findings….LOL

    Did you believe Bush? LOL

  17. 517

    RE: Kary L. Krismer @ 505

    My 2018 $4K/YR Raise is In The BANK Now Kary!

    I’m dancing and singing…LOL

    I had a $200 lunch at the exotic/luxury “SEATAC Hilton Spenser Steaks and Chops” yesterday with my daughter and her mate from Kansas City to celebrate the HUGE Win-fall to my family.

  18. 518

    The Millenials Hate Seattle’s Failed Politics

    Its depressing to them and 70% of the Millenial Women want to be a stay at home lady, with a male bread winner….like it or not you Fake News Progressives against seniority and skills, that of course favor white males…its happening.

    Smell the coffee, votes matter.

  19. 519
  20. 520
    Kmac says:

    By softwarengineer @ 506:

    RE: Kmac @ 502
    Actually According to the 2000 Census Bureau

    Life expectancy has fallen to 1960s levels, we’re dying sooner now.

    Fake News from President Bush presented the opposite CDC brainwashing findings….LOL

    Did you believe Bush? LOL

    What on earth are you talking about?

  21. 521
    N says:

    https://www.marketwatch.com/story/why-its-so-hard-to-forecast-home-prices-for-2018-and-why-that-should-worry-you-2017-12-19

    In the most recent survey, Loebs told MarketWatch, the spread between the most optimistic of the forecasters on his panel and the most pessimistic rose to the widest it’s ever been. In other words, economists’ forecasts, rather than converging after years of practice, have gone the other way.

    “Anybody who’s a stakeholder in housing, whether a homeowner or aspiring homeowner or an institutional mortgage portfolio manager should be aware that things have not returned to normal and housing risk has certainly not abated.”

  22. 522
    Kmac says:

    By Kary L. Krismer @ 503:

    Interesting thought, but doesn’t that assumes that they work with a fake SS number rather than under the table?

    I don’t really know how that works. I could see if you had immigration reform which allowed large numbers into the system who had not previously been contributing there would be problems. But if they had a significant number of dependents, that could both hurt (more in survivor benefits) and help (more younger people paying in).

    I’m not even sure how the system deals with legal non-resident aliens. Do they pay into SS? If so, do they get any benefits?

    Illegals working w/ fake Ids

    It is against federal law to question the id provided.

  23. 523
    Blake says:

    RE: Kary L. Krismer @ 504
    Kary: “If you look at the reporting, it’s virtually all negative, so it’s no wonder that it’s not a popular bill.”

    Yup Kary… the bill is unpopular because of the liberal media and haters. If journalists were “fair and balanced” like Fox then the public would have a clearer understanding of what’s in the secret bill. Like when Trump says: The “rich will not be gaining at all”… “This is going to cost me a fortune, this thing, believe me… this is not good for me,” fair and balanced media coverage should have one liberal expert say “no, this is not true” balanced with a Republican expert saying “the President is correct!”
    … Coverage should simply be “Democrats say” vs. “Republicans say”… THAT’S what the job of journalists is right? There is no objective reality and the job of journalists is NOT to point out that the emperor is naked. “Perception is more important that reality” as Ivanka wrote.

    Mnuchin: “Not only will this tax plan pay for itself, but it will pay down debt”
    … “The priority for the moment is middle-income tax cuts.”… there will be “no absolute tax cut for the upper class”… “People who make a million dollars or more, their taxes are going to go up.”

    Yup yup… That’s our Treasury Secretary… he’s a former Goldman Sachs partner and very, very smart. Plus he’s rich! No one should question what he says.

    Mnuchin also said:
    “The bill would be scored by the Treasury department,… “What’s more, they would show their work.”
    No and no… They never scored it and never released any analyses to back up their assertions.
    But… that’s just my opinion!

  24. 524
    Blake says:

    By Kmac @ 510:

    By softwarengineer @ 506:

    RE: Kmac @ 502
    Actually According to the 2000 Census Bureau

    Life expectancy has fallen to 1960s levels, we’re dying sooner now.

    Fake News from President Bush presented the opposite CDC brainwashing findings….LOL

    Did you believe Bush? LOL

    What on earth are you talking about?

    Software Engineer meant for “real Americans”… lower, middle-class Trump voters with opioid habits… salt of the earth!

    But if you look at this graph, squint and tilt your head slightly to the left… he’s right!!
    http://www.data360.org/dsg.aspx?Data_Set_Group_Id=195

  25. 525
    Anonymous Coward says:

    By softwarengineer @ 509:

    RE: softwarengineer @ 508
    http://www.zerohedge.com/news/2017-12-17/exodus-starts-millennials-ditch-city-life

    Did you miss the part of the article that specifically mentioned that Millennials are still flocking to Seattle?

  26. 526

    By Blake @ 513:

    RE: Kary L. Krismer @ 504
    Kary: “If you look at the reporting, it’s virtually all negative, so it’s no wonder that it’s not a popular bill.”

    Yup Kary… the bill is unpopular because of the liberal media and haters.

    The bias is rather obvious unless you have the same bias and are oblivious to it. Press stories attacking the bill even include pointing out the fact that foreigners will benefit because foreigners own US stocks, or that members of Congress will benefit because they actually have financial lives too. And again, the repeated claim that people will lose health coverage, when in fact it’s simply that more people will make the free choice not to buy it. Clear bias and all complete nonsense, unless the author’s goal is to publish something negative about the tax bill. I wish I’d saved the Google News page though that lead to that comment so that I could repeat some of the headlines.

    Again, there are good things and bad things in the bill. I’m neither excited or upset that it passed, but I do find it very interesting, in part because I like tax issues.

  27. 527

    By Anonymous Coward @ 514:

    Did you miss the part of the article that specifically mentioned that Millennials are still flocking to Seattle?

    But that’s from Zerohedge. Maybe he noted that, but was also making an implicit assumption that it was wrong given the source! ;-)

    Somewhat related, this latest Harney article mentions Seattle as somewhere people might move if they are upset by the SALT limitations. It also mentions the fearmongering NAR study that said RE prices would drop 10%. I wonder how long it will be before NAR starts walking that one back?

    http://buffalonews.com/2017/12/20/nations-housing-tax-proposal-could-carry-high-costs-for-many-homeowners/

  28. 528
    Blake says:

    How could any objective reporting about this bill NOT be negative? The President and his top officials have continually LIED about the bill, circumvented due process and kept tge details secret… and refused to allow the Treasury experts and CBO to score the bill! THAT is why MOST Americans hate this bill. They read the assurances from Trump and Mnuchin and they know they are full of sh!t. Only the most corrupt and cynical politicians or pundits or downright morons believe any of that crap!

  29. 529
    uwp says:

    RE: Kary L. Krismer @ 527 – But… Zerohedge was quoting from another source (time.com).
    :)

    I can’t remember who was knocking on Bill McBride & Calculated Risk earliler, but I was wondering if ZH was at least was right in calling the financial crisis… Turns out ZH was founded in early 2009. So it has basically been bearish since the bottom, and wrong the entire time. Compare that to CR calling the bubble and catching the upswing.

    EDIT: I guess ZH was right one Gold for a few years, but it has never given up that ghost either.

  30. 530
    uwp says:

    RE: tax reform, at least the bill from the conference committee is a bit better than the House/Senate bills.

    But it really strikes me as a tax-cut in boom times, rather than the growth inducing tax-reform the GOP has promised for decades. The most frustrating part to me is the budgetary futzing around to make it “only” raise the debt by 1.5 trillion. They want to argue it both ways, “it won’t expand past 1.5 trillion” but also “we will extend the tax-cuts when the time comes.” You can’t have both!!!

    From most analysis it seems clear that the majority of people except for some strange edge cases will get a tax cut in the early years. It’s easy to design a tax-cut if you don’t care about spending deficits (other than as campaign devices). They did the easy part.

    The no-brainer campaign ad for Democrats is “They made the corporate tax cuts permanent, but set yours to expire. Who’s side are they on?” Feeds right into the existing stereotypes.

    Anyway, we’ll see if anyone notices. Partisanship is so strong and the GOP party so toxic, that I doubt people will be singing Trump’s praises for their extra $25/paycheck next year.

  31. 531

    By uwp @ 530:

    RE: tax reform, at least the bill from the conference committee is a bit better than the House/Senate bills.

    But it really strikes me as a tax-cut in boom times, rather than the growth inducing tax-reform the GOP has promised for decades. The most frustrating part to me is the budgetary futzing around to make it “only” raise the debt by 1.5 trillion. They want to argue it both ways, “it won’t expand past 1.5 trillion” but also “we will extend the tax-cuts when the time comes.” You can’t have both!!!

    I think the main growth part of this tax bill is the corporate tax cuts, although also part of the motivation for that is stopping the bleeding of jobs, which is more maintenance rather than growth. Whether this is reform is debatable, but it’s clearly not simplification beyond allowing more people to file a short form return.

    As to the futzing around, apparently, that’s part of some Senate rule which limits what they can do as part of this process. But there’s nothing stopping them from extending those tax cuts as part of some other bill as early as tomorrow–other than probably the 60 vote thing.

    The no-brainer campaign ad for Democrats is “They made the corporate tax cuts permanent, but set yours to expire. Who’s side are they on?” Feeds right into the existing stereotypes.

    Again, part of the Senate rule, but if you’re going to make one side temporary to meet budget deficit issues it would be the individual side, because corporations might not expand as much for temporary tax cuts. Actually, I’m not terribly convinced of the relative benefits of individual cuts relative to corporate cuts. Corporations are not terribly popular, but some of them do provide people with high earning jobs. But yes, one of the better Democratic party sound bites. At least it has some substance behind it and isn’t just pure rhetoric.

    I’m really on the fence about the new pass-through rules, even though I think those will benefit me personally. On the one hand, I get the argument that they are trying to level the playing field to compensate for the lower corporate taxes. That C-corps would have a new competitive advantage with the new rates. On the other hand, when you get down to the owner level, the owners of C-corps face double taxation. So arguably the S-corps, LLCs and other pass-throughs will again have an advantage. I really don’t see that this pass-through thing was necessary, and for many entities those tax cuts won’t be any more stimulative than the individual cuts I question.

  32. 532
    Rupert D says:

    At over 500 comments I do not have time to go back and look at the comments about the status of the Tim….anyone know?

  33. 533
    uwp says:

    By Kary L. Krismer @ 531:

    I think the main growth part of this tax bill is the corporate tax cuts, although also part of the motivation for that is stopping the bleeding of jobs, which is more maintenance rather than growth. Whether this is reform is debatable, but it’s clearly not simplification beyond allowing more people to file a short form return.

    I understand this was all done to cut corporate taxes, but corporate profits and the stock market are at all-time highs (which I’m not saying is bad), I just don’t think you can point to corporations and say “The reason they aren’t hiring is because they pay too much in taxes,” or “Corporate taxes are complicated.” They are already focusing the majority of their excess cash on stock buybacks and dividends (which, again, I don’t think is necessarily bad) I just don’t think that if you gave them more after-tax money, they would say “well now we need to hire more people because we have more money!”

    Companies hire people when they need people to help them produce goods/services to sell.

  34. 534
    Doug says:

    My god. Going by the Estately numbers, Y-o-Y SFH inventory in King county is down 25.4%!

  35. 535
    Doug says:

    RE: Rupert D @ 532 – Think he just got burned out on the broken record that is our real estate market. It has been confirmed he is otherwise ok, though.

  36. 536
    ronp says:

    https://www.bloomberg.com/news/articles/2017-12-20/inside-wall-street-s-towers-traders-grouse-over-trump-tax-plan

    “Atop their list of worries: New limits on deductions for mortgage interest and state and local taxes — relatively high throughout New York, New Jersey and Connecticut — will cost them thousands of dollars annually while depressing the value of their homes. That would chop local tax revenues and erode the quality of schools and other amenities traders expect for their families.”

    I can’t imagine we will see much of this around the country. I bet a recession will have more of an effect. Looking forward to the day a more progressive tax code can be implemented.

    We had pretty good economic growth under the following rates –

    “1960 Key Facts
    The 1960 top federal tax rate on regular income was 91% while the rate on capital gains was 25%. The rate on regular income was higher than its historical average while the capital gains rate was at its average.
    Average top income tax rate: 63%
    Average top capital gains tax rate: 25%
    The top rate on corporate tax this year was 52%”

    TIM, CONTACT ME I WILL WRITE A NEW BLOG POST FOR YOU!!!

    :)

  37. 537
    N says:

    https://wolfstreet.com/2017/12/20/what-will-the-tax-bill-do-to-the-housing-market/

    Currently, about 44% of US homes are worth enough to carry a mortgage whose interest would be large enough to surpass the old standard deduction, and thus would incentivize homeowners to take the mortgage interest deduction by itemizing, according to Zillow. With the new standard deduction, this proportion of homes drops to 14.4%.

    In total, at least 23 million fewer households will be motivated to buy a new home under the new law, Zillow figures. Others have different estimates. Whatever the final numbers, one thing is sure: the tax incentives of homeownership have been radically slashed

    Nevertheless, the new tax law represents a momentous change for how housing will be promoted in the future. The relentless wisdom that buying a home is the smart tax-thing to do will no longer apply for most households. The new law also reduces or eliminates the highly touted tax benefits of debt.

  38. 538
    Kmac says:

    I wonder how many people with a million dollar house actually only have 25% equity in it?

    I’m not talking potential debt, but actual.

  39. 539
    Blake says:

    By uwp @ 533:

    By Kary L. Krismer @ 531:

    I think the main growth part of this tax bill is the corporate tax cuts, although also part of the motivation for that is stopping the bleeding of jobs, which is more maintenance rather than growth. Whether this is reform is debatable, but it’s clearly not simplification beyond allowing more people to file a short form return.

    I understand this was all done to cut corporate taxes, but corporate profits and the stock market are at all-time highs (which I’m not saying is bad), I just don’t think you can point to corporations and say “The reason they aren’t hiring is because they pay too much in taxes,” or “Corporate taxes are complicated.” They are already focusing the majority of their excess cash on stock buybacks and dividends (which, again, I don’t think is necessarily bad) I just don’t think that if you gave them more after-tax money, they would say “well now we need to hire more people because we have more money!”

    Companies hire people when they need people to help them produce goods/services to sell.

    Spot on! Japan cut corp taxes, but required the corps to actually increase wages and investments. The Repugs just talk and lie and truly don’t give a damn.
    https://twitter.com/TheOnion/status/943575765781831681

    https://www.bloomberg.com/news/articles/2017-12-15/how-america-s-inequality-machine-is-firing-the-dow-into-orbit
    “Japan, which is also preparing corporate tax cuts, plans to make them available ONLY TO BUSINESSES THAT INCREASE SPENDING ON WAGES AND INVESTMENT. In the U.S., companies are flush with cash but they’re using it to buy more customers via mergers, or reward capital through dividends.”

  40. 540
    Eastsider says:

    Back to the earlier discussion on 10yr yield in early November (that’s how long Tim hasn’t posted!) Today 10yr yield closed at ~2.5% compared to 2.37% at the beginning of the month. The FED’s 1/4 pt hike pushed up interest rate across the yield curve. In the last few days, the yield curve is steepening. So we will likely see higher mortgage rates in 2018.

  41. 541
    Weasel says:

    By softwarengineer @ 488:

    RE: softwarengineer @ 477
    Hey Weasel?

    Do trains and buses have bathrooms for endless traffic delays? Maybe wear depends adult diapers on the stranded buses? LOL

    Sounder commuter trains have a bathroom in each car. Train rarely sees delays over 5 minutes, occasionally 10 to 20 minutes. If we hit something because people are being dumb at level crossings, then that usually writes off 2 hours – we get one of those about once a year on average.

  42. 542

    By uwp @ 533:

    By Kary L. Krismer @ 531:

    I think the main growth part of this tax bill is the corporate tax cuts, although also part of the motivation for that is stopping the bleeding of jobs, which is more maintenance rather than growth. Whether this is reform is debatable, but it’s clearly not simplification beyond allowing more people to file a short form return.

    I understand this was all done to cut corporate taxes, but corporate profits and the stock market are at all-time highs (which I’m not saying is bad), I just don’t think you can point to corporations and say “The reason they aren’t hiring is because they pay too much in taxes,” or “Corporate taxes are complicated.” They are already focusing the majority of their excess cash on stock buybacks and dividends (which, again, I don’t think is necessarily bad) I just don’t think that if you gave them more after-tax money, they would say “well now we need to hire more people because we have more money!”

    Companies hire people when they need people to help them produce goods/services to sell.

    I would agree with much of that, and also point out that some corporations are sitting on a ton of cash. Maybe some of that is the off-shore amounts–not sure. But sitting on cash is not a normal business activity, and we are now a more global economy, so the issue isn’t only having more business activity, but having more of it here.

    At least one company has announced more due to the tax cuts.

    http://about.att.com/story/att_to_invest_an_additional_1_billion_in_the_united_states_if_competitive_tax_rate_enacted.html

  43. 543

    By ronp @ 536:

    https://www.bloomberg.com/news/articles/2017-12-20/inside-wall-street-s-towers-traders-grouse-over-trump-tax-plan

    “Atop their list of worries: New limits on deductions for mortgage interest and state and local taxes — relatively high throughout New York, New Jersey and Connecticut — will cost them thousands of dollars annually while depressing the value of their homes. That would chop local tax revenues and erode the quality of schools and other amenities traders expect for their families.”

    One thing concerning about this is it does seem like a war on states that traditionally vote Democrat.

  44. 544

    By Kmac @ 538:

    I wonder how many people with a million dollar house actually only have 25% equity in it?

    I’m not talking potential debt, but actual.

    It’s been a very very long time since I’ve looked at those numbers, and when I did the market was considerably different. But a lot of buyers would just get whatever the maximum conventional loan amount was because over that amount the interest rate would be higher. It wasn’t tax driven. Still, I suspect now you’ll probably see the second level of cutoff being $750,000 rather than the old $1,000,000, if there was such a second level before (I don’t recall seeing it).

    But I’m not sure this is strictly a real estate issue. Many of the people in these houses may just want a high dollar mortgage because it might be cheaper or have longer more consistent terms than what they can borrow from other means.

    If you think about it, if you absolutely need to borrow $1,000,000 to buy a $1,200,000 house, you should probably buy a $600,000 house instead. But conversely, if you don’t need to borrow $1,000,000, it still might make sense to borrow $1,000,000 if that might make sense for reasons that have nothing to do with buying the house. And the tax bill limits on deductions might not stop you from borrowing that $1,000,000. Again, the difference in tax isn’t that huge.

  45. 545
    sfraz says:

    RE: Doug @ 535 – Maybe some on here need to quit hijacking his blog. nod nod, wink wink…

  46. 546

    RE: Kary L. Krismer @ 509
    Social Security Was Dead Healthcare A Long Time Ago

    Its been restricting care to doctors who will accept about 50% off MSRP as the total cost….meaning bankruptcy to doctors accepting Medicare the last couple decades. I know, I do volunteer Bio-engineering for the hospitals and talk to management. Medicare barely pays for just the medical billing costs, leaving none for doctors.

    Ya got Medicare now, ya lost all your doctor choices [local ones]. The wait in lines for care with Medicare reminds me of Canada’s failed health care [they come to America, because we treat them ASAP with cash payments].

    Nope without insanely expensive ACA private insurance you’re screwed.

  47. 547

    RE: Weasel @ 540
    LOL…Wake up and Smell the Coffee

    The freeways are a mess in Seattle and barely move at normal rush hour [literally hours of wasted time away from home]; enjoy your expensive home while ya sleep before work and never see it until weekends…

    Seattle is the good life?

    Then what’s a nightmare?

  48. 548
    Justme says:

    .>>I know, I do volunteer Bio-engineering for the hospitals and talk to management. Medicare barely pays for just the medical billing costs, leaving none for doctors.

    Oh rubbish. Your healthcare management friends are lying.

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