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.

251 comments:

  1. 1
    Marc says:

    For several years I would tell buyer clients don’t worry, inventory can’t get worse than it is now so next year will be better. I finally gave up on that theory in late 2015 and started saying I don’t think inventory will go any lower but I’ve been wrong so many years in a row that who knows, but hopefully prices have risen to a point that it’s bound to start bringing out sellers due to the basic law of supply and demand.

    I am now giving up on that theory as well as it seems all signs are pointing to more of the same and inventory sinking lower still or plateauing at or near record lows. Either way, it points to yet another absurd spring of bidding wars and waived contingencies.

    I understand that a lot of the bullish people on this site feel strongly that this is a rational and sustainable market and not another bubble. I can’t deny that job and wage growth are strong and expected to remain strong. Amazon is Amazon, Microsoft is Microsoft and San Fran North is what Seattle is destined to be.

    However, I cannot reconcile why so many other real estate markets all across the United States are experiencing some version of the same thing just with slightly more modest rates of price appreciation despite not having Amazons and Microsofts, and Googles, and Facebooks, etc. I mean I just saw on Zillow that prices in St. Louis are up 18% year over year. I didn’t bother to read the details and I’m not knocking on ole’ St Louie because that’s not the point.

    Have you looked at a Dow Jones or S&P 500 historical chart lately? Asset prices across the board are on rocket ships and it cannot all be sustainable.

    I believe this is the natural, if unintended, result of unprecedented intervention by central banks across the globe and that it will end very badly at some point. Moreover, whatever happens will come to be looked at in the same way we currently look back at the last real estate bubble and Great Recession of ’08-’09., i.e., what the hell did they think was going to happen?

  2. 2
    Rupert D says:

    I think the best data on housing prices is Standard & Poors Case Shiller. The last month it shows seattle as having the highest year over year growth by far. In that respect most other real estate markets are not experiencing the same increases that Seattle is. All real estate markets are local and have different dynamics. I am not sure why there are so many RE bears making comments on this site. Oh wait, do they have a financial interest in getting existing home owners to sell because “home prices cant go higher – the bubble must be about to burst”? If you look at all the available data and just read the Seattle Times, etc. articles they usually have the data, it makes sense why prices in Seattle and other hot markets are going up. San Fran has been a hot market for decades because people want to live there and companies create jobs there. Don’t fight the trend. Prices will go up until they go down. Much good info on why Seattle is such a desirable place to live in this monthly report.
    http://nwreporter.nwmls.com/Library/NWREporterContent/2017/11_November/Nov2017PrintPDF.pdf

  3. 3

    By Marc @ 1:

    For several years I would tell buyer clients don’t worry, inventory can’t get worse than it is now so next year will be better. I finally gave up on that theory in late 2015 . . .

    But S-Crow thinks that your clients should expect you to give them those predictions! You’re just doing what your clients wanted. ;-)

    Seriously, I don’t know that anyone was thinking it would get so much worse year after year. It’s similar to when interest rates dropped and then kept dropping years ago.

    However, I cannot reconcile why so many other real estate markets all across the United States are experiencing some version of the same thing just with slightly more modest rates of price appreciation despite not having Amazons and Microsofts, and Googles, and Facebooks, etc. I mean I just saw on Zillow that prices in St. Louis are up 18% year over year. I didn’t bother to read the details and I’m not knocking on ole’ St Louie because that’s not the point.

    Have you looked at a Dow Jones or S&P 500 historical chart lately? Asset prices across the board are on rocket ships and it cannot all be sustainable.

    Not to argue against it being a bubble (on which I take neither side), but the price increases could be due to people taking gains in the stock market. Also, the 4-5 years without people buying was bound to create some additional demand.

  4. 4
    S-Crow says:

    RE: Kary L. Krismer @ 3 – Kary, silly “Predictions” is like throwing a house on the market at a stupid price to see if it will stick with a cash buyer who is foolish enough not to get an appraisal.

    What I’m pointing out is the absurd notion that people wouldn’t listen to agents or as you suggest “shouldn’t” who are paid thousands per transaction. Consumers, right or wrong, “think” that their agent should be the expert because they are paying them tens of thousands. If my signature is on a check for $30K in commissions or more and agents are only relegated to filling out a form to list the property or to sell it, then maybe consumers should reconsider what the heck they are paying for. They do listen. I hear about it when I sign buyers and sellers, frequently. You may want to take a neutral stance on the market for whatever reason or RCW. I would want my agent to have conviction and be a student of the market.

    What Marc is suggesting and I agree with is that we do not have what many would consider a “normal” market because of the enormous intervention as he points out.

  5. 5
    Taleah C. says:

    We are selling our North Seattle house (hopefully by March) to travel full time. It’s a single family home, about 800 SQ with a small lot. When we brought it 3 years ago, it sat on the market for a long time even though it was correctly priced at market price. No idea why.

    I’m fearing it will sit for a long time this time as well when we need to move. I don’t think the bidding wars are as bad as everyone says…I see staged homes being on for 20+ days without being touched. What happens to those? There’s quite a bit of those on RedFin.

    (Lurker here, just needed some advice/what to expect/what to prepare for, thanks for reading.)

  6. 6

    RE: S-Crow @ 4

    People have always appreciated my telling them what I think. For some reason most agents think that if you tell them a house is overpriced, it will change what they do.

    Always reminds me of a guy named Jim who wanted a house with a pool that had storage above the garage for his wife’s 26 boxes of Christmas decorations and a two car garage to store an old vet. Homes with pools were about as scarce there as they are here.

    Back in 1994 or so one came on market for I think $209,000. I remember telling him it was about $10,000 more than it should be. He said, “That’s OK. I plan to live there 20 years and an extra $500 a year is well worth it to me to pay for my family’s happiness.” I just looked it up and he did sell it in almost exactly 20 years.

    https://www.redfin.com/PA/Holland/76-Summer-Dr-18966/home/39020899

    There’s no reason to lie to people or act like you have zero opinion about anything. But I do remember people in my office back then and pretty much always being surprised when I say things like “Let’s go find the monster” when they want to see a house that is much too good of a deal. :) I remember a rookie being shocked that I said that (about a different house)…we found the monster…the client bought it. Being honest works for me.

  7. 7
    Green-Horn says:

    RE: Marc @ 1RE: Marc @ 1

    Would the all new all blue Democratic majority in both State Houses be able to push through a capital gains tax?

    Are there procedural measures the opposition could use to block it?

    I can imagine a new Washington State capital gains might prompt many home owners sitting on juicy unrealized gains to suddenly try realize these gains without state tax liability before that window closes. Might represent a brief reprieve for buyers by juicing the inventory with a few new motivated sellers that might have otherwise held on…

  8. 8
    Justme says:

    A reference on the ongoing proposal of a Washington State capital gains tax. If anyone has something better please post.

    http://www.thenewstribune.com/news/politics-government/article143183574.html

  9. 9
    Deerhawke says:

    Some of us have good reasons to be bullish and bearish. I know I do. Builders have a particular kind of market schizophrenia, bordering on having dual personalities.

    When I am offered a development property, I really want the market to drop –right then. But it doesn’t hear me or it doesn’t listen and it just plain doesn’t care. How insensitive. I storm around the house and curse the seller for wanting so much. “Thieves! Greedy SOBs! Moneygrubbers! Such intolerable avarice! Why can’t they just cut me a break? ” My wife quietly observes this behavior for a while. Eventually she looks up from her newpaper and tells me not to take it so seriously, or at least not to take it so personally. If I am really in a bad way, she tells me it is time for a glass of wine. This always helps.

    Of course, when I have bought that property and developed it and built it out, I am a complete bull. If I could find a place to buy them, I would get pom-poms. I am not just hoping for a strong market, I am in full on cheerleader mode. “C’mon you cheap b-stards. Loosen up a bit would you? Forget those contingencies and write a stronger escalator. Don’t hold back! I still have some debt from those absurd college tuitions I paid. I dont just want a higher price, I need a higher price. In fact, I deserve a higher price!” My wife calculates that I am in a bad way and decides that wine might not do the trick in this case. She offers a snifter of Armagnac. Yes indeed, this helps.

    We are all that way a bit, right? When we buy our houses, we want to get a great deal. And when we sell our houses, we want … a great deal.

    But for those of us who make this a business, we have to find a middle ground and decide, really decide, where this market is heading. We need to specifically make a decision about whether this is a bubble or not.

    I respect Ardell, but I have a very different opinion on this matter from her. I have lived through a time when I saw another city (New York) go through a fundamental transformation in its real estate market. This feels very much the same. And it is more than just a feeling, I think the data is there in spades — including this month’s figures.

    I believe we are seeing a similar transformation here to what I witnessed in New York in the 80’s and 90’s.

  10. 10
    Justme says:

    RE: Justme @ 7

    I did some more digging and found that the proposed bills sb5111 and hb1730 both exempt certain housing units from the capital gains tax. QUOTE:

    20 NEW SECTION. Sec. 3. This chapter does not apply to the sale or
    21 exchange of:
    22 (1) Any residential dwelling, which means property consisting
    23 solely of a single-family residence, a residential condominium unit,
    24 a residential cooperative unit, or a floating home as defined in RCW2582.45.032;

    ENDQUOTE

    (“Chapter” in this context appears to refer to the bill as whole.) I guess I do not understand whether bundles of such housing units sold by a builder would also be exempt. Say, for example, when a builder sells a whole condo project either piecemeal or all together to another investor. Kary? Marc?

    References:

    http://app.leg.wa.gov/billsummary?BillNumber=1730&Year=2017
    http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/House%20Bills/1730.pdf
    http://app.leg.wa.gov/billsummary?Year=2017&BillNumber=5111
    http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/Senate%20Bills/5111.pdf

  11. 11

    By S-Crow @ 4:

    RE: Kary L. Krismer @ 3 – Kary, silly “Predictions” is like throwing a house on the market at a stupid price to see if it will stick with a cash buyer who is foolish enough not to get an appraisal.

    What I’m pointing out is the absurd notion that people wouldn’t listen to agents or as you suggest “shouldn’t” who are paid thousands per transaction. Consumers, right or wrong, “think” that their agent should be the expert because they are paying them tens of thousands. If my signature is on a check for $30K in commissions or more and agents are only relegated to filling out a form to list the property or to sell it, then maybe consumers should reconsider what the heck they are paying for. They do listen. I hear about it when I sign buyers and sellers, frequently. You may want to take a neutral stance on the market for whatever reason or RCW. I would want my agent to have conviction and be a student of the market..

    You’re not getting it. Yes consumers want that. That’s human nature, and the reason fortune tellers and other scammers exist. But it’s not possible! Agents can’t just become a “student of the market” and then suddenly be able to predict the future. But what they can know is the current market. It’s like the weather. Knowing that it’s 47 decrees out and not raining right now is easy. Knowing what the whether is going to be in 10 days is not because there are too many factors at play. Actually, real estate is worse because the next fall in the market could be caused by virtually anything. Maybe war between Iran and the Saudis, or a solar flare that wipes out electronic communication for a week.

    Anyone who thinks that they are paying an agent because that agent knows what will happen in the future is fooling themselves, if not being outright foolish. Agents are valuable for other reasons. Doing the impossible is not one of them.

  12. 12

    RE: Ardell DellaLoggia @ 5 – Telling someone you think the house is overpriced for the market is entirely different. That is something it is possible to have an opinion on that is based on some actual data that is fairly easy to assess.

    I would also add that in the scenario you described, where the person had very specific and hard to find desires for house features, accepting a bit of over-pricing is entirely normal. It would be foolish to let something hard to find slip by.

  13. 13

    By Deerhawke @ 8:

    I respect Ardell, but I have a very different opinion on this matter from her. I have lived through a time when I saw another city (New York) go through a fundamental transformation in its real estate market. This feels very much the same. And it is more than just a feeling, I think the data is there in spades — including this month’s figures.

    I believe we are seeing a similar transformation here to what I witnessed in New York in the 80’s and 90’s.

    I loved your post until this part. What you describe is probably the worst way to try to predict the future, because something will undoubtedly be different now in Washington that you’re not accounting for. You can focus too much on the similarities and not notice the differences.

    As an example, in 2008 I was expecting the condo market to be much more affected in the downturn relative to the SFR market, because that’s what happened in the downturn in the late 70s, early 80s. But it turned out differently, and I haven’t even bothered a theory of why.

  14. 14

    By Justme @ 7:

    A reference on the ongoing proposal of a Washington State capital gains tax. If anyone has something better please post.

    http://www.thenewstribune.com/news/politics-government/article143183574.html

    Note that article said the proposal totally excluded the sale of residences.

    The problem I see with getting this ever passed is that if the legislation is struck down the state would be in a world of hurt–a budget nightmare. Seattle can pass questionable tax ordinances because they have money coming out of their ears. The state doesn’t have that luxury, so it would be risky unless they passed the tax to generate funds for a rainy day fund while waiting for a court decision. But if they did that, the court might be even more likely to strike it down, because doing so wouldn’t have the same consequences.

  15. 15

    Here’s a Harney article on the proposed changes regarding income taxes and home deductions, like the change to the 2/5 year rule Ardell mentioned above. Another one he mentions is the second home–no longer deductible for loans taken out after Nov. 2 (he gives other effective dates too). I could see that would affect some retirement areas, as people might be less likely to become “snowbirds.” Alternatively, it might loosen up some inventory up north.

    http://www.kinston.com/opinion/20171107/ken-harney-hidden-costs-for-homeowners-in-latest-tax-bill

  16. 16
    Justme says:

    RE: Kary L. Krismer @ 12

    Kary and others, I have a comment in moderation (will become the new number 9 presumably ) since last night because it has too many links. It covers the exemption/exclusion what-to-call-it for certain residences.

    (When the post appears it will screw up the numbering of some back-references to existing comments, I think. I wonder if that could be fixed by some automated blog software process.)

  17. 17
    Justme says:

    There is a distinction between a house being overpriced “for the market”, and a house (or market) being overpriced relative to incomes and other economic conditions (fundamentals).

    Very often, “the market” is just what the greatest current fool can be goaded into paying. That generally can be quite a lot more than fair market value based on economic fundamentals. People overpay all the time, that’s what a bubble is.

  18. 18
    Justme says:

    RE: Taleah C. @ 5

    Get it on the market ASAP. March will be too late. The market is going to drop no matter what you do, but you may as well get out early rather than late.

  19. 19
    Bubble Trouble says:

    I for one welcome our new Democrat overlords who now control the entire state govt, lol.

    Enjoy the forthcoming income tax Seattleites….you voted for it.

  20. 20

    So Far From My Periscope

    The Seattle Real Estate federal tax plan deductions only include up to $10K in property tax [we’re all mostly safe]. No state income tax deduction [so what]. Double the standard deduction. Child tax credits back again. IRA limits? NFL stadium debt tax credit butcher axed? Samamish rich elite forced to close country club [just kidding….LOL].

    I believe the 12% low bracket [it used to be 15%] goes to $50K [after standard deduction or before?]….then the 25% bracket kicks in to $90K I believe…..

    The 39.6% rich elite [very small minority of voters] bracket added, for income disparity weeding out to middle income Populists [the voter majority now].

  21. 21

    By Justme @ 16:

    RE: Kary L. Krismer @ 12

    Kary and others, I have a comment in moderation (will become the new number 9 presumably ) since last night because it has too many links. It covers the exemption/exclusion what-to-call-it for certain residences.

    It’s up now as number 10. I hate that system where multiple links puts it into moderation.

    As to your question, I suspect that builder sales would not be taxed because they are not capital gains, they are sales of inventory. But that would depend on whether they use the IRS rules. See IRC 1221(a)(1).

  22. 22

    By Bubble Trouble @ 19:

    I for one welcome our new Democrat overlords who now control the entire state govt, lol.

    Enjoy the forthcoming income tax Seattleites….you voted for it.

    Here’s an alternative opinion, which suggests something hopeful. That unlike DC, Olympia isn’t just filled with liberals and conservatives. There are actually some swing moderates.

    https://www.seattletimes.com/opinion/editorials/democrats-may-control-the-legislature-but-moderates-will-set-the-agenda/

  23. 23
    Bubble Trouble says:

    By Kary L. Krismer @ 22:

    By Bubble Trouble @ 19:

    I for one welcome our new Democrat overlords who now control the entire state govt, lol.

    Enjoy the forthcoming income tax Seattleites….you voted for it.

    Here’s an alternative opinion, which suggests something hopeful. That unlike DC, Olympia isn’t just filled with liberals and conservatives. There are actually some swing moderates.

    https://www.seattletimes.com/opinion/editorials/democrats-may-control-the-legislature-but-moderates-will-set-the-agenda/

    Moderate = Democrat who hasn’t gone 100% bat-sh**t crazy. They will still bring in an income tax. Their “moderate” compromise will be to lower it to 5% instead of 7% or something like that. Also look for another gas tax increase but instead of 20 cents it will be a “moderate” 17 cents.

  24. 24

    RE: Bubble Trouble @ 23 – I don’t mind the gas tax increase. There was a story a month ago about how Washington has high gas taxes but also generally better quality roads and bridges. So the money is helping. If more money would create more roads, that would be even better.

    The state just extended the HOV lanes on 167 south of Hwy 18. It was a relatively short extension, and it should go further. Also, I-405 south of Bellevue is a joke. We need more roads built, and I’m willing to pay taxes to get them. (Actually on I-405 north of Bellevue I almost always pay to be in the HOV lane if I’m alone, in part because it’s safer and in part to provide funds to improve that section of road. Usually though when I go through it’s $2.00 or less.)

  25. 25
    Eastsider says:

    RE: Kary L. Krismer @ 24 – Instead of increasing gas tax, how about mileage based tax on electric (and hybrid) vehicles? Why should poor Kia drivers subsidize wealthy Tesla drivers?

  26. 26

    RE: Eastsider @ 25 – That would be good too, and probably necessary given the changes in technology. Even gas cars are much more efficient than they once were. I think the state is starting a pilot project on that.

  27. 27
    Bubble Trouble says:

    By Eastsider @ 25:

    RE: Kary L. Krismer @ 24 – Instead of increasing gas tax, how about mileage based tax on electric (and hybrid) vehicles? Why should poor Kia drivers subsidize wealthy Tesla drivers?

    It’s coming. The state is going to charge car taxes based on miles driven. So the Prius owner who drives 15K miles a year will pay more than the evil owner of an SUV who only drives 10K miles a year. There is a pilot program already in place.

    It’s funny that all the Greens out there in their EVs who thought they’d save money, will get spanked with the new system.

    Pass the popcorn….

    https://www.seattletimes.com/seattle-news/transportation/washington-state-to-test-pay-by-the-mile-as-a-way-to-fund-highways/

  28. 28
    Taleah C. says:

    RE: Justme @ 18

    Ummm. Even I think you give trollish advice…and I’m new here.

  29. 29
    Nick says:

    RE: Eastsider @ 25
    Actually EVs pay (~$200) surcharge in our TAB fees.
    Surprised me at first, but after some mental arithmetic I figure it’s fair given:
    I drive about 7,500-10,000 miles per year on my EV and gas car (each).
    Gas tax (federal + state) is ~$0.65 last I checked
    My SUV gets ~30 mpg, so figure I’m paying about $175-$225 in gas taxes/year.
    About the same as the tab fee.

  30. 30
    ess says:

    RE: Taleah C. @ 5

    I don’t know about the house selling particulars, but the traveling sure sounds like fun. The last time we were going to do a bit of serious traveling – it ended up being 1.5 years both in the US and abroad. Even started a business so we could take a month or two every year to do a nice trip. Have gone in the US with a VW camper, Dodge camper, tent trailer, RV, car with tent, and during my poor college days – thumb!

    Where are you going, and how are you going to get there?

    Good luck!!

  31. 31
    Green-Horn says:

    RE: Taleah C. @ 5

    Congratulations on your successful investment! You’ve been very fortunate over the past few years. Also it’s so exciting to be able to look forward to travelling like that!

    Have you considered holding on to it as a rental, perhaps AirBNB? I haven’t done the math personally but I’ve heard of people who finance a nice lifestyle travelling outside the area by finding somebody locally to manage their homes as AirBNB rentals. People who actually need and want to be here are willing to pay good money. If it adds up, you could enjoy a nice bit of cash flow to support that travel… Downside is your property isn’t liquid like a big wad of cash you might get from realizing your equity in a sale. Otherwise, what do intend to do with the proceeds from your sale? Do you have an investment in mind that you think will do better than real estate in Seattle? I’m sure many here would be quite eager to hear about such a promising opportunity!

    @Deerhawke thinks that the market is in the midst of a fundamental structural transformation to a global “Winner Region” like NYC or SF. I’m inclined to agree that compared to other available investments, you’ve already picked a horse that looks likely to outperform any of the other available “horses” for at least the next couple years. Economists have been showing how many of the gains from our era’s economic growth are actually being captured by rents for the land under the boom regions. So if understanding this correctly, owning land in a boom region is better than any possible mutual fund. It automatically picks the “winners” because the winners grow and need more space no matter which business models or companies they are. For example if you own Silicon Valley real estate, you really don’t care who wins the race between Google, Facebook, Apple or some unknown startup that disrupts and crushes all the old legacy players. It’s heads I win tails you lose.

    Whenever anybody warns “Bubble Bubble!” It’s not very useful. In any case you’re speculating with a sale by moving your assets from the real estate property to another asset. Bubble panic-mongers seem to favor cash, probably because that’s the asset class that performed so well in the last crisis. There’s no guarantee that the next crisis will be the same as the last. The next crisis could even be the kind of inflation that has faded from everyone’s memory that erodes the value of cash while making whatever debt burden easier to carry.

    Nobody really knows.

    What would you do with the proceeds? Wall Street has also outperformed for the past year. Stocks tend to be more volatile than real estate. Both could of course “revert to the mean” but if past experience is any guide, expect the stock market reversion to be more punishing than any decline in the property market. You could also take the proceeds from your Seattle property and “pick another horse” in a different regional market if you’re convinced the Seattle market is getting tired and might be ready to give up and stagnate while other competing markets zoom ahead and catch up. Something like seems to be already happening in the Bay Area, with, where prices look like they’re bumping against some kind of ceiling, perhaps because property sellers are already extracting the maximum that buyers there can afford. Inevitably something like that will occur in Seattle too.

    For my decisions, I’m not thinking “Is Seattle in a Bubble? Could my property lose value?” Rather I’m thinking “What assets are likely to do better? Where is there a better value with a greater likelihood for appreciation and less risk of a decline?” At the moment stocks in the US, or Developed or Emerging Markets look likely overvalued and not particularly inviting. Interest rates are also finally rising again which portend an end to the bull market in bonds so that certainly doesn’t look like a great idea either. Our economies are at full employment and with employers already scraping the bottom of the barrell to fill vacancies; inflation will inevitably accelerate from its current historically extraordinary low level. Furthermore the collapse in energy prices is over that had buffered the economy and helped contribute to the price stability that we’ve enjoyed for so long. Inflation should return to a more normal pattern and any acute crisis could kick off a sudden surge in expectations and a sustainable acceleration of price increases. So cash doesn’t even look particularly safe.

    I’m not sure if thinking about it as picking a horse in a horse race is helpful way to view things, but that’s how I make sense of it. Maybe other participants can share how they make sense of it? As well as share what horses they think will do best for the short race over the next two – three years as well for the long race over the next ten – twenty. If real-estate, then what regions? If not real-estate then what other asset classes?

    For me I’m convinced that Seattle property will probably outperform almost any other competing investment over the next few years. Any who are fortunate enough to already have property would probably do well to hold. At some point after that the market in our region might slow down and other dynamic regions will pick up speed and start racing faster than Seattle, even while still far from catching up to Seattle’s high values. There are certain to be a dips along the way, but these are really nothing to fear. The only things I find worth fearing are unknown unknowns that could eventually cause Seattle to entirely lose favor and completely reverse the boom trend by turning the economy into a kind of desperate stagnating and declining region like so many areas US have become. The other fear is a major macroeconomic disruption like has happened in Greece over recent years that impacts the entirety of the United States. That’s not entirely far-fetched… But where would be a safe refuge? Europe? New Zealand? Singapore? Latin America? Don’t make me laugh. Sure the US was the secure place to be the last time Europe was in flames. If the US goes up in flames, Europe might end up as Western Civilization’s lifeboat. For now neither looks particularly safer than the other.

    In a real SHTF scenario the value of our real estate might be the least our concern. Instead we’d be worrying if we’ve stockpiled enough beans and bullets…

  32. 32
    Marc says:

    By Ardell DellaLoggia @ 6:

    RE: S-Crow @ 4

    There’s no reason to lie to people or act like you have zero opinion about anything. … Being honest works for me.

    I believe this about Ardell and I live by it. I have found nothing to be as powerful and easy as the truth. People are so accustomed to being sold to or lied to or exaggerated to that when someone tells them why they shouldn’t buy this or pay so much for that, the reaction is priceless. They believe me. I can’t tell you how many times a week I tell someone not to hire me and why. They almost all want to hire me anyways.

    A somewhat related phrase I say to myself a lot and to others when the subject comes up is “don’t be afraid of the truth.” Many people actually are about certain things and I do not understand why. It seems to me that they have a vision of reality in their mind and they struggle to assimilate things that conflict with that reality to the point that they don’t want to know it and actively seek to dismiss or disprove it. On those issues they often cannot or will not consider someone else’s perspective on the issue. It’s sad really. Not me, I’ll take the truth everytime, good, bad, or ugly.

  33. 33
    Doug says:

    RE: Taleah C. @ 28 – lol. Justme has a saying; something along the lines of, “sell now or forever be underwater”. I forget what it was exactly, but I remember it making me laugh.

    If you’re selling because you need the money to go travel then do it. The market will still likely be hot in the spring and you’ll do fine.

    Would you make more money by holding for another 10 years? Probably. Do what makes sense for you as it relates to the rest of your portfolio and needs.

  34. 34
    Marc says:

    RE: Green-Horn @ 7 – I’m afraid that’s outside my area of expertise not to mention that I haven’t been following any proposed changes to state or local taxes.

    I will say that I have long since given up any hope for well thought out governance from the City of Seattle (where I live) and, at this point, have little optimism at the state level. The overall trend seems to be driven by reactive liberalism which in my opinion is well-intentioned but terribly misguided. I’ve always been very fiscally conservative but otherwise moderate. In recent years I have grown more and more contemptuous of the nanny state that we seem to be heading towards. This is not a popular position to hold in Seattle or west of the Cascades for that matter.

  35. 35
    Marc says:

    RE: Doug @ 33 – Taleah, I agree with Doug and recommend waiting until after the new year if it’s otherwise all the same to you. I expect the first half of next year to be just like the last 4 and, if so, you won’t necessarily have to wait for the heart of spring to get a better outcome than listing it today.

    The market will begin kicking into higher gear around mid-January and listing anytime around that or later will be good even if the bidding wars and frenzy don’t reach max warp speed until April-May-June.

  36. 36
    Minnie says:

    RE: Taleah C. @ 5

    Hi Taleah,

    I sold my home this summer and I needlessly worried a lot. I’m sharing my advice with you simply because I am hoping it will help you worry less. I was happy with the offers we received and I’d like to think that my attention to detail and preparation had something to do with it.

    First of all, it’s a scary experience! I fully understand your fears and if you are researching and posting on this forum then I can tell you are a proactive person.

    When you bought your home 3 years ago, you bought it because you liked it. Remember what you liked about your home, and rest assured, there are other people that will like your home too. Three years ago is not today, and there have been year over year gains in the area and less inventory (but you know that already, as a SeattleBubble reader) :)

    As a seller, I felt like I had no control (despite it being a sellers market) and I’m a person who likes to have control, that’s just the way I am. I tried to focus on what I could control, and not worry about what I couldn’t (offers on the offer review date, getting asking price, etc).

    Here’s my tips for getting ready to sell (ie, what YOU can do). Note these are only recommendations and i encourage others to give their 2 cents as well! Note I am not an agent or real estate professional and I make no claims to be one.

    During open houses, go into the homes in your neighborhood. Compare those homes to the listing photos. The homes that are “sitting” sometimes have flaws not evident photos (strange layout etc). NEVER look at photos only and try to come to any conclusion about list price, days on market, etc. This will drive you crazy! Go into the homes to see what they look like. Also try and look at comparable homes (similar square footage, beds/baths, condition).

    Ensure your home is as clean as possible, both inside and out. This sounds like common sense, but seriously it makes a difference and a lot of sellers don’t fully clean. I’m talking all light fixtures, every nook and cranny, everything. It should look like someone could eat off the floors. It may take along time, but it’s worth it. I cleaned until my arms were sore, and I did it all myself because I didn’t trust hiring it out. While our home was on the market I went and checked on it every day and vacuumed and cleaned it at night….people are really sloppy when they tour homes and I wiped plenty of hand prints and forehead (!!!) prints off the windows daily. Your agent can do this but I felt better doing it myself (this is just my preference).

    If you can, consider moving out and fully staging. You want your home to look as much like a show-home as possible. Less is more. The more you can show that your home is move in ready, the better. If you are concerned about costs, you can have a stager give you their recommendations and just use your own furniture. Or look on youtube for ideas on staging. You can rent a space at a storage facility relatively inexpensively if you only stay for 1-2 months. It’s a pain to move twice, but if you have to declutter its worth it. Or just donate or get rid of excess stuff. It has to look clutter free.

    Paint any walls that need repainting. New paint makes things look new. Replace worn or dated cabinet hardware. Replace an old light fixture. You don’t have to go crazy with this and it’s just a suggestion.

    Groom your outdoor spaces. Curb appeal is important. Replace old address numbers if they need it (home depot has nice ones) and your mailbox if its old. Wipe down your window sills and clean your outside windows. Mow the lawn and ensure the space looks tidy.

    Think positive thoughts while in your home. This sounds hokey, but its true. Think positive thoughts while cleaning, packing, etc etc. Someone will love your home and will want to live in it and make it their own. Visualize the new owners in your home.

    Do not focus on the negative (similar to above). Do not focus on why your home sat on the market 3 years ago because its actually silly to do so; that was a different time and different conditions.

    People will ask you what you’re planning on listing your house for (you will be surprised and maybe caught off guard – I was). Don’t get psyched out, like I did, when I told someone and his response was “FOR THAT?!?” That rattled me, but in the end my home sold for $100K more than I told him. I decided not to tell anyone after that and just responded with “I’m not sure yet”. They’ll get the hint.

    Try to relax. This is the most important thing, honestly. It’s still a sellers market and there’s no signs of it slowing down. Just embrace the process and be happy you bought a home 3 years ago and aren’t a first time buyer :-)

    Good luck! I hope this helps.

  37. 37
    Doug says:

    I know everyone thinks mortgage rates are going to explode any day now, but 10s-2s just reached its flattest level (68 bps) since October 2007. If only someone would have warned us…

  38. 38
    GoHawks says:

    RE: Taleah C. @ 28 – Mic drop!

  39. 39

    By Marc @ 34:

    I will say that I have long since given up any hope for well thought out governance from the City of Seattle (where I live) and, at this point, have little optimism at the state level.

    Well they seemed to select the better candidate for mayor, IMHO, so that’s a change. I wonder how she’ll get along with the Council?

  40. 40
    Green-Horn says:

    RE: Kary L. Krismer @ 39

    I can’t imagine them paying me enough to work with THOSE colleagues and to subject myself to the hostility and abuse of all the protesting activists.

    Is it even enough power and authority to achieve much?

    Looks like responsibility and criticism > autonomy to be able to accomplish anything that makes people happy.

    If in democracy, the people are the boss, then we are really among the most horrible stupid and abusive of bosses.

  41. 41

    RE: Taleah C. @ 5

    I remember one about that time that was behind some apartments on Greenwood Ave. It sat on market for about 9 months and eventually sold a bit under asking…but that was not the original asking price. Several price reductions before it got to that price.

    Cute little house. Builders didn’t want the lot back then, but could be different this time around per something Deerhawke said not too long ago about their being willing to take smaller “frontage” lots than they used to. I think it was a 3,000 to 3,500 sf lot in an SF5000 zone.

    When the house is less than 1,000 sf, usually the builders grab it up. But not if the lot is too small to build on. At one time that was at least 4,000 sf with a 40′ frontage, but I think Deerhawke said 36′ is OK now. The one I’m thinking of is just under that as to street frontage and backs up to apartments, so builders may not want to take that risk on a spec house.

    Long story short. Don’t overprice it or it will again look like the house no one wants, and then the time on market expands dramatically. Staged houses doesn’t always mean a quick sale if they are “decorated” vs staged to highlight the home’s strengths and downplay the weaknesses.

    I think it may be on a street that is not a busy street, but near a major arterial with condos and road noise?

    Am I close? :)

  42. 42
    Marc says:

    RE: Kary L. Krismer @ 39 – Yes, I am glad Ms. Durkan won and I hope she follows a more productive path. I’m afraid, however, that the city council is too far gone and will put the kibosh on any policy out of line with their socialist bent.

  43. 43
    Marc says:

    By Deerhawke @ 9:

    Some of us have good reasons to be bullish and bearish. I know I do. Builders have a particular kind of market schizophrenia, bordering on having dual personalities.

    I have helped a lot of clients selling to or buying from a builder and this comment is entirely consistent with my experience. Those deals are consistently the most challenging because of the mindset builders bring to every deal. Rule number one in their world is “buy right” which means as cheap as humanly possible. That doesn’t mean they’ll screw you but it does mean that if you let them screw you, they gladly will.

    It is incumbent on sellers to protect themselves and the first thing I tell prospective clients when they call is “you are now dealing with a pro and they will not miss a beat.”

    At that point they are still in the honeymoon phase where everything is great and this deal is going to be super easy because it’s all cash, I don’t have to fix anything, they’ll close quick, I get to stay in the house, etc. Um hmm.

    And buying new construction? Don’t get me started. Especially in a planned development. I don’t know why anybody does it let alone pays such a premium for it. At this point I turn down anyone looking at presales. Rather twiddle my thumbs. If it’s completely finished and has been on market for no less than a couple of weeks, then I’ll think about it. Brand new on market, hard pass.

  44. 44
    Eastsider says:

    By Doug @ 37:

    I know everyone thinks mortgage rates are going to explode any day now, but 10s-2s just reached its flattest level (68 bps) since October 2007. If only someone would have warned us…

    The Fed is on track to raise interest rate by 25bp in December. If 10y-2y maintains the spread, mortgage rate will increase by 25bp. That corresponds to a 6% increase in mortgage rate. After that, the current consensus is for another 50bp increase (or more) in 2018. All said, it will be about 20% increase from today’s mortgage rate. I would think borrowers will consider a 20% increase in interest payment an ‘explosion’. LOL.

  45. 45
    uwp says:

    RE: Eastsider @ 44

    Here is a link to a handy chart of the 30-year mortgage rate since the Fed first started raising rates in December 2015:

    https://fred.stlouisfed.org/graph/fredgraph.png?g=fFpJ

    The Fed has raised rates 4 times since then, and I presume the market has somewhat priced in the expectation that they will raise again in December.

    Mortgage rates are exactly where they were 2 years ago. Why are you so confident rates will change?

    People have been predicting higher rates for the entire existence of this website; over ten years!!

    Someday they will be right, I guess.

  46. 46
    Eastsider says:

    RE: uwp @ 45 – The 30yr mortgage rate tracks the 10yr yield. In general, when 10yr-2yr spread goes negative, we have a recession. The current spread is already near historic low with little/no room to go much lower. So we can expect 10yr to track 2yr closely. The only unknown is the new Fed chair and DC politics.

  47. 47
    Ross says:

    By Kary L. Krismer @ 11:

    […]
    Anyone who thinks that they are paying an agent because that agent knows what will happen in the future is fooling themselves, if not being outright foolish. Agents are valuable for other reasons. Doing the impossible is not one of them.

    I generally have a fairly low opinion about the advice and opinions that real estate agents give me. I assume most are incompetent, especially if they haven’t been in the business long. All the same, I am interested in and appreciate hearing their honest opinions of the market. Even their RE-industry biased opinion. I assume the bias, and I heavily discount what agents say; though after a non trivial conversation, one can get a sense of the ones who know their stuff and the ones who are BS’ing.

    So in short, I’m interested, as a buyer, to know the opinions of real estate agents. I assume a biased, incompetent and sales-oriented opinion, discount accordingly. But all the same, I still can get value out of it (sometimes a lot), especially from seasoned agents.

  48. 48
    Ross says:

    By Nick @ 29:

    RE: Eastsider @ 25
    Actually EVs pay (~$200) surcharge in our TAB fees.
    Surprised me at first, but after some mental arithmetic I figure it’s fair given:
    I drive about 7,500-10,000 miles per year on my EV and gas car (each).
    Gas tax (federal + state) is ~$0.65 last I checked
    My SUV gets ~30 mpg, so figure I’m paying about $175-$225 in gas taxes/year.
    About the same as the tab fee.

    Though a lot of EVs are currently short range commuter cars such as the leaf; several of them do 2000-4000/mi per year. So they are actually subsidizing the gas guzzlers. Pay per mile is fairest, though I hope the bureaucracy doesn’t screw up the implementation.

  49. 49
    Doug says:

    RE: Eastsider @ 46 – uwp gets it.

    10y was 2.12% the day before fed funds increased in December 2015. It then actually rallied all the way down to 1.36% by July of 2016 and it now stands at a whopping 2.33% after 3 additional hikes (4 hikes total). So I don’t know why you think the 10y has a 1-to-1 relationship with fed funds. By that logic the 10y should yield 3.12% right now. They are completely independent rates; one controlled by the Fed, one controlled by the market, absent QE.

    I also don’t understand why you might think the current spread is “near historic low with little/no room to go much lower”. It has 68 bps to fall before hitting zero and then has no textbook limit to how negative it could go. The lowest I’m seeing was in February 1980 at -2.01%. I wouldn’t consider 269 bps to be “no room to go much lower”.

    The point is simply that we are watching the Fed engineer the next recession per its tightening policy which I believe is what I’ve been saying since first ever posting on SB. To be clear:

    Fed induces recession –> asset prices take their haircuts (I don’t know by how much*) –> Fed drops rates to even lower levels than the prior recession (and yes they can be negative) –> asset prices climb to new all-time highs –> repeat process until the great reset (creative minds can guess what could cause that)

    *Real estate doesn’t necessarily have to take a haircut in a recession. Prices actually increased through the early 1980’s recession and through the tech recession.

    EDIT: Sorry, I now see you were referencing the relationship between 2s and 10s, but it doesn’t matter, they too are not correlated on a 1-to-1 basis.

  50. 50
    whatsmyname says:

    By Eastsider @ 46:

    RE: uwp @ 45 – The 30yr mortgage rate tracks the 10yr yield. In general, when 10yr-2yr spread goes negative, we have a recession. The current spread is already near historic low with little/no room to go much lower. So we can expect 10yr to track 2yr closely. The only unknown is the new Fed chair and DC politics.

    The FRED chart does show very good correlation between the 10-2 split going negative and the onset of a recession – generally 1 to 2 years later.

    The current spread is not near a historic low. It has been lower than the current number of 0.69 for considerable time during the last 35 years, including the long periods extending from Jan 1995 to Feb 2001 and April 2005 thru October 2007 – not bad periods to be in real estate.

    The last time it was 0.69 points above where it is today was in 2015 -nearly 2 years ago. Even the rate of sharp decline this year could continue for another year+ before reaching 0.

    By your numbers, we should seriously consider possibility of a recession onset – in another 2-4 years.

  51. 51
    Eastsider says:

    RE: Doug @ 47

    I assume 10-2 spread will remain positive since no one wants a recession. And if the economy is growing faster, e.g. 3%+ GDP growth, the spread should widen. I did not suggest that 10y had a 1-1 relation with Fed funds. But when the spread is near lower bound, I expect strong correlation.

    As a side note, bank profits is very much dependent on the yield curve/spread. When the spread goes negative, banks will be under severe stress.

  52. 52
    Taleah C. says:

    RE: Minnie @ 36

    Oh my goodness! I feel like I should have hired you for writing all that! Thank you so much Minnie, those are excellent points I would have not thought of! *Saves to doc* =) I think I’m overly anxious as this is our first time selling/asking for help.

  53. 53
    Taleah C. says:

    RE: Ardell DellaLoggia @ 41

    Thank you Ardell! I’m a bit starstruck, yes you are dead on. We are very close to I-5 and a 15 minute walk from the future Northgate lightrail station. Developers knocked on our neighbor’s door but not us. We’re still zoned as single family. Our neighbor’s down the street was rezoned. Our lot is only 2200 SQ total.

    We will be traveling abroad for 4-5 years but hoping to come back to the Puget Sound after that.

    My husband wants to sell but I want to rent it out using a good property manager. The rent won’t cover the mortgage unfortunately (negative cash flow of -700 a month) so we’re thinking of selling.

    Isn’t the principle of landlording to cash flow? Or just bank on appreciation in an already overzealous market, ohhh this is hard.

  54. 54
    Taleah C. says:

    RE: ess @ 30
    We’re not that exciting haha. We were blessed with good timing and stocks, childfree for now, my husband can work remotely from anywhere with wifi…which leaves me planning of heading Far East for some vlogging and adventures. Then after a few years, come back to the Sound to start a little family.

    @green-horn
    It wasn’t exactly successful unfortunately. We had more repairs than what we thought was a quick fixer upper (our fault for missing the signs). We will be cash flow negative by $500-800 a month. Thailand isn’t very expensive and money isn’t a big issue – we’re just worried about the stress and huge liability mortgage wise (:

  55. 55
    Justme says:

    RE: Eastsider @ 49

    The usual suspects (Doug, uwp, to some extent whatshisname) completely ignore the elephant in the room: The reversal (unwinding) of quantitative easing (QE) by FRB (“The Fed”).

    The QE unwind officially started last month (October 2017) with a 10B/month target. QE unwind currently is split between $6B USG bonds and $4B mortgage backed securities (MBS) per month. The purpose of unwinding QE is to increase the interest rates of USG bonds and MBS, just as the purpose of the original QE was to REDUCE these same interest rates.

    So, yes, mortgage interest rates soon will be increasing.

  56. 56
    Timbo says:

    RE: Bubble Trouble @ 27 – This is a hairbrained proposal. Why let all the tourists, out of state freight carriers, and bike path riders get a free pass– Not to mention punishing the rural folks who have no transit options or folks who do the majority of their driving in neighboring states. Vancouver residents and E WA residents come to mind.

  57. 57
    Doug says:

    RE: Justme @ 53 – I just doubt their ability to materially unwind before having to reverse course. I believe interest rates are about as high as they’re going to go short term and will go lower and below 0% at some point.

    But between my primary residence, bank stocks, crypto, a few other individual equities along with a couple broader index funds I feel ok no matter what happens. All of which are extremely liquid with the exception of my house, but honestly, houses in Seattle might as well trade with the liquidity of a stock (for now).

    How are you personally building your portfolio to reflect your own views? Are you levered long CDS? Some other vehicle to short housing?

  58. 58

    RE: Taleah C. @ 51

    1) You should sell vs keep it given appreciation is primarily in the land value. Given builders likely won’t want that lot size, unless they can pick up a next door neighbor at the same time, holding it for appreciation running a negative cash flow, not a good idea. The high home price includes a significant % of that price for land value. Land technically has no value if the builders don’t want it.

    2) Best day to list it is Feb 1. It’s the day there is the highest backlog of buyers, but early enough not to have any strong competition from new year added inventory yet. Also if it takes awhile to sell you are still in the zone season-wise.

    3) MOST IMPORTANTLY you have what is called “a condo alternative” so you need to get in front of the eyes of the condo vs SFH buyers. SFH buyers will say it is too small. Builders will say the house is a great teardown project, but the land is too small. It’s like Goldilocks and the Three Bears. The right “fit” will be the person who can afford a condo and not a house, and be thrilled they can get a house for a condo price. There should be a way to list it as BOTH a condo and a single family so that the condo buyers will also get an instant alert for your property. Usually the agent has to pay an extra $50 or so for that. A lot of builders do that, most notably Toll/Camwest. I haven’t seen it very recently, but I didn’t see anything changing the ability to do it either.

    4) As you know, you have no margin for error. You already have your one allowed weakness in land size, so your online presentation needs to be stellar as does your in person presentation. This market is not as forgiving as people are saying it is.

    No smells. Great pictures. Unfettered access. Don’t over price it. Pay for the “double” listing as both a condo and house. Stage it upscale like a condo vs “homey” like an old house.

    It still may take a bit longer, depending on price. Sounds like you pulled more cash out since you bought it to make repairs/improvements? Is your current mortgage higher than the mortgage was on the day you bought it? Important as it is easy to get underwater on these as they appraise for more than they sell for, same as zestimates and other online valuation systems. They don’t discount enough for the land when comparing a builders don’t want it to a builders do want it. Run your numbers at 8% to 10% gross per year when choosing the list price vs the area %. My concern is your negative cash flow to rent vs sell is because you added debt to it after you bought it and they over appraised it when they did the cash out after purchase loan. So fill me in on that. Should still be ok if that was early enough on vs yesterday.

  59. 59
    Bubble Trouble says:

    By Taleah C. @ 51:

    RE: Ardell DellaLoggia @ 41

    Isn’t the principle of landlording to cash flow? Or just bank on appreciation in an already overzealous market, ohhh this is hard.

    If you can’t cash flow, sell. Simple as that.

  60. 60

    By Bubble Trouble @ 56:

    By Taleah C. @ 51:

    RE: Ardell DellaLoggia @ 41

    Isn’t the principle of landlording to cash flow? Or just bank on appreciation in an already overzealous market, ohhh this is hard.

    If you can’t cash flow, sell. Simple as that.

    I think that is overly simplistic, and may ignore the benefits of depreciation and interest deductions if not done properly.

  61. 61

    Mortgage Interest Tax Deduction on Jumbo Loans in Seattle Area

    Affected [as of the 11/2/2017 GOP House Plan] future sales of City Homes as follows:

    “Limits the mortgage interest deduction for new home loans to the first $500,000 of the loan, instead of the current $1 million limit. Eliminates the deduction for second homes…”

    Sorry Eric; your flipper loans flopped if you didn’t pay CASH.

  62. 62
    Green-Horn says:

    RE: Taleah C. @ 51

    If you plan to return to the area, it might be very much worth considering a way to hold a foothold on the puget sound property market escalator. If your location is as close to the light-rail as you say, it’s going to be very very popular when that amenity is finally available. If you were able to rent it furnished would you be able to demand more rent? Maybe worth a little negative cash flow to save on moving and storage?

    Another consideration: if you’ve got a good mortgage rate locked down. Even if the regional market were to stagnate, rates are sure to increase.

    The most compelling argument to sell, besides getting your hands on the equity, would be to get peace of mind of not having to manage the rental.

    Good luck!

  63. 63
    Anonymous Coward says:

    By Bubble Trouble @ 56:

    By Taleah C. @ 51:

    RE: Ardell DellaLoggia @ 41

    Isn’t the principle of landlording to cash flow? Or just bank on appreciation in an already overzealous market, ohhh this is hard.

    If you can’t cash flow, sell. Simple as that.

    No, it’s not so simple. Taleah C said they were planning to move back in a couple of years and going to buy again. Where are they going to live between getting off the airplane and moving into the new house? Are they going to try and buy sight-unseen with a closing date two days after they land at SEA? Are they going to rent? How are they going to find a place they like and sign a lease while still overseas?

    It was these questions that caused us to keep our house when we did an expat assignment starting in 2012. On paper we were a couple hundred bucks cash flow negative. But we didn’t want panic buy a new house from the inventory available the first week we got back. In retrospect, given the tax write offs and appreciation while we were gone, we ended up far ahead financially and were able to wait and buy what we wanted for a fair price. Don’t discount the risk you’re adding to your return housing situation…

  64. 64
    Erik says:

    Cheesecake Factory meets Seattle Bubble first week in December!!!

    I live in Seattle, Ardell is in Kirkland, Tim is in Everett, S-crow in Snohomish, Kary in Renton, and Ray Pepper is in Pierce county. There is a diverse mix of locations across the puget sound.

    Please suggest a Cheesecake Factory to meet at. I don’t mind driving, but I think others do. Chime in if you are interested and let me know which Cheesecake Factory you want to meet at.

  65. 65
    Deerhawke says:

    RE: Taleah C. @ 5

    First the disclaimer. Free advice is worth every penny you pay for it. My advice is that if you want to keep a place holder in this economy so that you can come back here, you should rent it out.

    If it is more likely that you are going to relocate to somewhere else, then you might want to sell it.

    But it might still be a better idea to hold. Yes, negative monthly cash flow while you are away is a hassle, but that is hundreds of dollars. The appreciation on your house might well be high single digits or low double digits per year. Potentially tens of thousands of dollars. The negative cash flow is a rounding error in comparison.

    Back in the late 80’s, when I was in grad school, my wife and I bought an apartment in New York. We had someone manage it while we went to Tokyo so I could do a Fulbright. This meant we had a small negative monthly cash flow. When we came back to the US (and moved to Seattle instead of moving back to New York) we sold it. The increase in the price during the time we held it more than compensated us for the small amount we lost in monthly cash flow.

  66. 66
    ARDELL DellaLoggia says:

    RE: Anonymous Coward @ 60

    She said 4 to 5 years…to start a family. House is too small for that. 5 years of $700 negative cash flow is $42,000. She’d be better off in a short term rental when she gets back.

  67. 67
    ARDELL DellaLoggia says:

    RE: Deerhawke @ 62

    It’s an 800 SF house on a 2,200 SF lot in SF5000 zone In Northgate. Would you buy that?

  68. 68
    Anonymous Coward says:

    By Taleah C. @ 52:

    We’re not that exciting haha. We were blessed with good timing and stocks, childfree for now, my husband can work remotely from anywhere with wifi…which leaves me planning of heading Far East for some vlogging and adventures. Then after a few years, come back to the Sound to start a little family.

    And if you sell, where are you planning to sleep at night from when you get off the airplane until you move your stuff into the house in which you intend to raise your little family? Thinking through how to answer that question is what induced us hold and rent even with a negative cash flow.

    Also, when you do your math on the finances related to this adventure, don’t forget that there’s a difference between “cash flow negative” and “net loss”. So long as the renter is covering ITI (interest, taxes, and insurance); maintenance; and the property management fees, you’re not necessarily operating at a loss because your “principal” payment just gets converted into equity. In this scenario, it is possible to be cash flow negative while your net worth is still increasing.

  69. 69
    Anonymous Coward says:

    By ARDELL DellaLoggia @ 63:

    RE: Anonymous Coward @ 60

    She said 4 to 5 years…to start a family. House is too small for that. 5 years of $700 negative cash flow is $42,000. She’d be better off in a short term rental when she gets back.

    800 sq feet is plenty big to start a family. It’s only two small if you assume she’s going to come back 8mo pregnant with triplets. I’m going to bet the plan is move back and then get pregnant. In which case, you’re looking at ~1 year before kid #1 arrives. While 800sq ft 2/1 isn’t exactly luxury living with one kid, it’s big enough for an infant. So they won’t even *really* outgrow the place until two years later when kid #1 is a toddler and kid #2 arrives. Aka three years after they get back. So if they keep it, they probably lose a lot less money than is implied by “cash flow negative $X/mo”, and they gain a lot more flexibility/less stress on the back end of their travels.

  70. 70
    Green-Horn says:

    Bubble Bubble, Bubble trouble…

    What do you all think of this analysis?
    http://www.freddiemac.com/research/insight/20171109_next_house_price_bubble.html

    Seattle is not even counted among the areas flashing a warning of affordability in terms of Price to Income.

    Also this makes Seattle look less bubbly than other markets:
    https://mhanson.com/wp-content/uploads/2017/11/HOUSEHOLD-INCOME-MUST-INCREASE-new-1024×668.png

    from

    https://mhanson.com/wp-content/uploads/2017/11/HOUSEHOLD-INCOME-MUST-INCREASE-new-1024×668.png

    This was surprising to me.
    Plausible?

  71. 71
    Green-Horn says:

    By Anonymous Coward @ 65:

    Also, when you do your math on the finances related to this adventure, don’t forget that there’s a difference between “cash flow negative” and “net loss”. So long as the renter is covering ITI (interest, taxes, and insurance); maintenance; and the property management fees, you’re not necessarily operating at a loss because your “principal” payment just gets converted into equity. In this scenario, it is possible to be cash flow negative while your net worth is still increasing.

    ^^^This ^^^

    If after calculations, your tenant is covering all ITI costs and paying down at least a little bit of the principal, it’s adding to your net worth and gradually reducing your debt at the cost of a some modest risk and the inconvenience of management. Instead of viewing the negative cash flow as an expense, consider it forced savings being put into the equity of your property.

  72. 72
    Minnie says:

    Is Taleah’s situation (and most of the responses) a good example of why we have an inventory shortage? I’d say yes, it is. Right now, everyone thinks they are sitting on a goldmine.

    Taleah, at some point you just have to trust your gut. When I read your post, I thought your mind was made up and you were asking for advice and reassurance on selling it. Now it seems you are torn about whether to keep it or sell it. To me, it sounds like you want to keep it.

    I think that there’s a lot of financial stuff you should think about and perhaps discuss with a financial advisor. No one on here can give you sound advice without knowing that.

    In thinking about keeping your home and renting it, ask yourself these questions:

    1 – Is this your “forever home”? Can you see yourself in this home long-term and if and when you come back to Seattle, would you like to return to it and live in it?

    2- If there was a recession and the value dropped (say, 20%) would you still love it? Make sure that YOU like the home….not just the IDEA of owning a home in Seattle.

    3- Are you OK with some extra wear-and-tear on your home? Renters do not take as good of care of a home as an owner, even with a good property management company. I have heard some horror stories from friends of mine, first hand stories.

    4 – Does your home need any major repairs or maintenance within the next few years? Furnace, roof, sewer line, hot water heater, appliances? If it does, are you prepared to address these issues?

    The problem is, no one can tell the future and no one has a crystal ball. But if you see yourself in your home long-term, it might make sense to rent it.

    You probably already know this, but it costs you money to sell because you will be paying your agent fees, excise tax and escrow. It’s about 8% (don’t quote me on that, there are tools online to check this). So – if you have a monthly “loss” of $700 over 3 years, that’s $25,200. If you sold your home for $315K, you would be paying $25,200 in taxes, fees and commissions (assuming 8%).

  73. 73
    Green-Horn says:

    By ARDELL DellaLoggia @ 63:

    RE: Anonymous Coward @ 60

    She said 4 to 5 years…to start a family. House is too small for that. 5 years of $700 negative cash flow is $42,000. She’d be better off in a short term rental when she gets back.

    Also nobody’s mentioned the round-trip transaction costs of sale and repurchase of a new property after her return to the area.

    What would that amount to?
    ~10% of $500K? ~ $50K?

  74. 74
    Eastsider says:

    RE: Anonymous Coward @ 65

    I doubt the “principal” payment amounts to much in the early years of a mortgage loan.

    Many people owned (second) homes prior to the last bubble with negative cash flow. When the market turned, most lost their homes. I would certainly not buy a property with negative cash flow in this market as an “investment.”

  75. 75
    Anonymous Coward says:

    By Minnie @ 69:

    if you have a monthly “loss” of $700 over 3 years, that’s $25,200.

    No. That’s an expense, but it’s not a loss. The loss is difference between the rental income and the sum of the monthly expenses (ITI, maintenance and property management fees) plus the decrease in the value of the property.* The big assumption here is that they have room in their budget to contribute $700/mo towards their existing mortgage. If that’s $700/mo more on the credit card, then we’re done and they need to sell because they can’t afford to hold.

    *I’m leaving tax implications and opportunity costs relative to alternative investments for the existing equity (after deducting transaction costs, etc) and future savings as an exercise for the reader.

  76. 76
    Eastsider says:

    RE: Minnie @ 69 – Very sensible advice. The only thing I would add is that if they plan to move up to a different home, they can’t avoid the transaction costs.

    I also think they understand the cost of maintaining the old dwelling. That is on top of the $700 and can be expensive. There is no way around it.

  77. 77
    Anonymous Coward says:

    By Eastsider @ 71:

    I doubt the “principal” payment amounts to much in the early years of a mortgage loan.

    If they’re still on the original loan, the principal should be ~20% of their monthly payment. But my point is really twofold:
    1. The time to plan your return is before you leave, not once you’re overseas. Every strategy has risks, financial and personal (stress, emotions, etc) and trade-offs. I can’t say what’s going to be the optimal strategy for Taleah. But I can help make sure she’s thoughtfully considering all the risks* so that she and her family can be confident they’re making a decision with which they’re comfortable.
    2. For those doing the temporary overseas assignment thing, make sure you do your math right: both in terms of net worth and in terms of monthly budget.

    *If she wants to be really thorough, she needs to consider what happens on the upside and the downside and to have a plan that works for both. Which is to say, she needs to run the numbers for how are they going to afford the move up house. And they need to run the numbers for all four scenarios: sell now and buy in 5 years when housing is XX% higher, sell now and buy in 5 years when housing is XX% lower, hold and sell in 5 years when housing is XX% higher, and hold and sell in 5 years when housing is XX% lower. Personally, it was a lot easier to make the math work to buy the new house if we *lost* significant equity in the old house while we were gone than it was to make the math work if we sold and the housing market appreciated considerably while we were gone (because the down payment requirement gets so d_mn high). And it can get really high, really fast not because they need to put down 20%, but because they’ll need to put enough down to get the monthly payment to be less than $X,XXX/mo.

  78. 78
    uwp says:

    If you wouldn’t buy the home right now at market prices and rent it out, why would you keep it? I understand there are transaction costs, but there will always be transaction costs whether you sell now, or in the future.

    A small house on a tiny lot that sat on the market in 2014 (before inventory totally dried up, but not exactly a time when the Seattle market was slow), sounds like a prime candidate for selling into a white-hot market when buyers are in a frenzy and waiving everything.

    Plus the fact that the rent wouldn’t cover the expenses, this isn’t your “forever home,” and you’ll be out of the country, this seems like a no-brainer to me.

    There you go Justme, me telling someone to sell.

    On a side note: I can’t believe a purchase from 3 years ago is $700/month cash flow negative with the way rent is in this town.

  79. 79
    Green-Horn says:

    Lots of really good advice being shared here.

    Yet nobody has addressed the question of opportunity cost of various investment vehicles.
    Perhaps the question of comparing different investment options is not relevant the home seller is going to break even and not walk away with a significant check from closing.

    Assume the home seller walks away with a good bundle, where should she put it?

    Stocks, foreign or domestic?
    Gold?
    Bonds?
    Bitcoin?
    Beanie Babies?
    Cash?
    Property?

    If it’s a horse race, which one will run fastest over the next 4 -5 years? Choosing any one of these is speculation in any case. To cash out and sell now is merely speculating that cash will perform better than the Seattle real estate market. Possible?
    Of course. Likely? I’ll leave that up to the experts…

    Which of these vehicles looks 1) more secure 2) promising a better return than her property 3) provides the right balance of these two depending on her appetite for risk?

    This is a question she needs to ask.

  80. 80
    Doug says:

    RE: Green-Horn @ 76 – Long beanie babies!

  81. 81
    ess says:

    By Doug @ 77:

    RE: Green-Horn @ 76 – Long beanie babies!

    We had a wholesale business that serviced independent pharmacies and gift shops. For the younger crowd, an independent pharmacy or gift shop was a type of business that once existed before Amazon took over the world. During the height of the Beanie Babie craze, we were unable to see some of our accounts as a result of a Beanie Baby delivery. Tulip, meet Beanie.

    RE: Green-Horn @ 76

    And don’t forget the elephant that is on the horizon, and might show up in the room sooner than later – possible state capital gains tax for Washington state now that we are going to have both a Democratic legislature and governor. That has to figure in the equation for every real estate investor that is thinking of owning rental property.

  82. 82
    kenmorem says:

    By Green-Horn @ 76:

    Which of these vehicles looks 1) more secure 2) promising a better return than her property 3) provides the right balance of these two depending on her appetite for risk?

    This is a question she needs to ask.

    cash = -2% and liquid.
    house with downturn and no renters = -30% and no one to pay your mortgage while you’re living abroad not making much $$$

    By ess @ 78:

    By Doug @ 77:

    RE: Green-Horn @ 76 – Long beanie babies!

    And don’t forget the elephant that is on the horizon, and might show up in the room sooner than later – possible state capital gains tax for Washington state now that we are going to have both a Democratic legislature and governor. That has to figure in the equation for every real estate investor that is thinking of owning rental property.

    capital gains, on rental income???

  83. 83
    QA Observer says:

    By Green-Horn @ 67:

    Bubble Bubble, Bubble trouble…

    What do you all think of this analysis?
    http://www.freddiemac.com/research/insight/20171109_next_house_price_bubble.html

    Seattle is not even counted among the areas flashing a warning of affordability in terms of Price to Income.

    Any one of those scenarios are depressing. I feel like #2 is most plausible with the stagnant wages of the middle class.

  84. 84

    By softwarengineer @ 58:

    Mortgage Interest Tax Deduction on Jumbo Loans in Seattle Area

    Affected [as of the 11/2/2017 GOP House Plan] future sales of City Homes as follows:

    “Limits the mortgage interest deduction for new home loans to the first $500,000 of the loan, instead of the current $1 million limit. Eliminates the deduction for second homes…”

    Sorry Eric; your flipper loans flopped if you didn’t pay CASH.

    Again, this doesn’t apply to business or investment debt, only debt on personal assets. AND, unlike the MID, the first dollar of interest expense offsets gross income.

  85. 85

    I had the unpleasant experience of trying to commute from the north end of Seattle to the south during the early commute. I was heading down 99 and Google Maps was telling me to head over to I-5 at Mercer, and then even earlier at whatever that second exit is after the Aurora Bridge (Westlake??). I wasn’t going to do it, because I hate Mercer, but when I saw the backup before leaving the bridge I gave it a shot.

    I never expected the work on the Mercer Mess to do much for eastbound traffic because it’s still feeding into the same bottleneck, but after today I came to the conclusion that whatever marginal gains Seattle DOT’s stats show may be due to DOT setting the light timing to screw those coming into Mercer from side roads to improve the times going down Mercer. I quickly gave up on that and then headed to Denny, then to Boren, which leads into Rainier, for a relatively good commute home.

    But that’s not the reason for writing. The reason is that I barely recognized much of what I was driving through. I knew South Lake Union was different, and had already seen a lot of that (although I did see a lot of construction workers, so it’s obviously still changing). What I wasn’t expecting was Boren to be so much different. About the only thing improved was the area through Columbia City, where making the road one lane each direction surprisingly seemed to help traffic.

    After seeing all this growth I can see why Amazon is looking for someplace else to expand. I really don’t see how the core of Seattle can handle the growth that they are anticipating, or that Seattle is particularly good at managing the growth which has occurred. But if Amazon was going to double the size of its office staff here it would be a real mess.

  86. 86
    Bubble Trouble says:

    By QA Observer @ 79:

    By Green-Horn @ 67:

    Bubble Bubble, Bubble trouble…

    What do you all think of this analysis?
    http://www.freddiemac.com/research/insight/20171109_next_house_price_bubble.html

    Seattle is not even counted among the areas flashing a warning of affordability in terms of Price to Income.

    Any one of those scenarios are depressing. I feel like #2 is most plausible with the stagnant wages of the middle class.

    These same analysts said all is well, don’t worry man, in 2006/7. I wouldn’t trust them to tell me water is wet. Remember these govt buffoons also said health care costs would fall by 20% after Obamacare was enacted.

  87. 87
    Bubble Trouble says:

    By Anonymous Coward @ 60:

    By Bubble Trouble @ 56:

    By Taleah C. @ 51:

    RE: Ardell DellaLoggia @ 41

    Isn’t the principle of landlording to cash flow? Or just bank on appreciation in an already overzealous market, ohhh this is hard.

    If you can’t cash flow, sell. Simple as that.

    No, it’s not so simple. Taleah C said they were planning to move back in a couple of years and going to buy again. Where are they going to live between getting off the airplane and moving into the new house? Are they going to try and buy sight-unseen with a closing date two days after they land at SEA? Are they going to rent? How are they going to find a place they like and sign a lease while still overseas?

    You have heard the concept of short term rentals, yes? And you have heard of the internet I assume? LOL

    I’ve moved a few times in the last 15 years. And on several occasions I rented something sight unseen. It’s really not that big a deal. On one occasion I had the landlord walk around the property while Skyping so I could get a sense of the entire area.

    This happens all the time.

    Oh and how in the world can you sign a lease overseas? If only someone could invent a way to transmit a document electronically, which can then be signed and transmitted back. Or better yet, I hear some whiz kid in Sunnyvale is working on this concept of – and I know this is radical – ELECTRONIC SIGNATURE. It’s very hush hush, top secret stuff, I’ve probably given away too much already.

    Join us in the 21st century if you will.

    To the owner of the home in question: what you have to decide is a few things

    1. Do you want the headache of owning a house that is 10K miles away from you. And even though you have a management property involved, you will still have headaches and expenses. More expenses that you plan for. It’s always more. I have several rentals and the expenses are never the best case scenario.

    2. Cash flow positive is the gold standard so to speak of rental units. If you can’t be positive, it’s a bad investment. That’s the rule of thumb and there’s a good reason for it. Adding in principal payment is debatable. On a pure accounting basis it counts. But realistically it shouldn’t count.

    3. You are banking on appreciation for another 4 years (or however long you want to be out). That’s a pretty risky bet given where we are in the bubble/bust cycle.

    4. Say in 2 years you want to sell. You think having a rental 10K miles away is tough? Try selling a home from 10K miles away….that’s tough.

    5. Another risk you’re taking is life changes in 4 years. You may decide you don’t want to come back here. There are a million things that can happen in 4 years.

    Best thing to do is sell, take the money and run and sleep well at night, with no risk.

  88. 88

    By Bubble Trouble @ 82:

    These same analysts said all is well, don’t worry man, in 2006/7. I wouldn’t trust them to tell me water is wet. Remember these govt buffoons also said health care costs would fall by 20% after Obamacare was enacted.

    I don’t remember that, but anyone who said that was an outright liar. Obamacare did next to nothing to reduce costs, and the idea that bringing additional insurers into the “marketplace” would help was just complete nonsense. The cost of insurance is rather regulated and based primarily on the cost of claims. Without controlling the cost of services and drugs, claims were not going to go down, and thus insurance premiums were not going to decline. In a regulated market, if anything fewer insurers would lead to lower costs due to greater efficiencies (both within the insurers and at the provider level).

  89. 89

    RE: Minnie @ 69
    Yes Minnie

    A honest laundry list of home transition costs….that’s why I stay put, BTW even billionaire Buffet agrees….he still lives in his old house and he got rich with that conservative attitude. Buffet loves his 2006 Cadillac too :-)

  90. 90

    RE: Kary L. Krismer @ 83
    Trump and Obama Both Have Healthcare Skeletons in Closet They Won’t Admit [I Don’t Blame Them BTW, Its HORRIFYING]

    Its embarrassing like indicting Hillary for major federal computer infractions.

    But alas, the truth can set us free too…the current Medicare/Medicaid plans incorporate cost limits that bankrupts “most” doctors that accept Part B Medicare [office visits]. IOWs [retired folks already know what I’m saying], your local doctor won’t be in like Kent, try downtown Seattle or Tacoma. The waits are HORRIFYING at these scarce unit Medicare facilities. IOWs, without an approx. $2000/mo Private Plan like Blue Cross, you’re shafted after you retire.

  91. 91
    Bubble Trouble says:

    All I want is to go back to what I had before….ultra cheap, no frills health insurance. I don’t need maternity coverage, I don’t need chiropractic coverage, I don’t need birth control, I don’t need any of that nonsense that I am forced to pay for under Obamacare.

    I don’t expect my car insurance company to pay for oil changes and new brakes. I have car insurance in case I get into a serious accident. That’s how health insurance shoud work. I’ll pay for my own flu shots and annual check ups and if I need to go to the urgent care for the flu. Insurance should be there only for the big stuff, the health equivalent of getting into a head on collision.

    It’s insane though how entitled the country has become. I was checking out Glassdoor about a company I may work for. One of the complains was that the health insurance, sucks, it’s awful, worst ever. What was so bad about it? You had a GHASP!!! $40 co-pay. My God, $40….this company is literally worse than Hitler!!!

  92. 92

    By Bubble Trouble @ 86:

    All I want is to go back to what I had before….ultra cheap, no frills health insurance. I don’t need maternity coverage, I don’t need chiropractic coverage, I don’t need birth control, I don’t need any of that nonsense that I am forced to pay for under Obamacare.

    Beyond that though, Obamacare likely doesn’t really protect you well when you do have something serious happen, because when you do have something serious happen you’re now more likely to be locked into one set of providers instead of being able to search around for who does whatever it is you need best (e.g. heart surgery, cancer treatment, etc.) If you’re lucky you’ll be diagnosed near the end of open enrollment and then only have to wait a few weeks to start treatment under a regular policy (e.g. Premera), and screw over the people already signed up under that policy the next year. Legalized fraud!

    And that is probably now also even more likely to be true with employer paid plans. A lot of the bad things of Obamacare only impact those buying insurance in the individual market, but I suspect the higher costs have driven a change to limited provider plans in the employer market too.

    So basically it’s just expensive insurance that covers a bunch of things you’ll never want or use, and then fails you when you really need it.

  93. 93
    Eastsider says:

    RE: Kary L. Krismer @ 87 – I bet most employees have no clue that their pay would be a lot higher without the spiraling healthcare cost. Employers should itemize healthcare cost as a deduction on paycheck. Many people making $40k would be surprised that they would have earned $60k before the mandatory deduction. Prior to Obamacare, healthcare cost is probably half of what it is today. These employees are missing $10k in wages due to OC. Then we can have a policy discussion instead of FUD perpetrated by our politicians and MSM.

  94. 94

    RE: Eastsider @ 88 – And even those who do realize would still choose to get too much insurance! Let’s say someone is willing to pay $300 a month for insurance. Because that is not taxed, if they somehow had a choice they could have their employer pay up to almost $400 if their tax rate is 30%.

    It’s really the same issue is the MID. Because mortgage interest is deductible, some people are willing to pay more for a property than if it were not deductible. Because people are not taxed on the cost of health insurance, they will be perfectly happy getting more insurance than what they would want it they weren’t taxed. One drives up the cost of houses and one drives up the cost of medical services and drugs.

  95. 95
    Bubble Trouble says:

    By Eastsider @ 88:

    RE: Kary L. Krismer @ 87 – I bet most employees have no clue that their pay would be a lot higher without the spiraling healthcare cost. Employers should itemize healthcare cost as a deduction on paycheck. Many people making $40k would be surprised that they would have earned $60k before the mandatory deduction. Prior to Obamacare, healthcare cost is probably half of what it is today. These employees are missing $10k in wages due to OC. Then we can have a policy discussion instead of FUD perpetrated by our politicians and MSM.

    BINGO.

    Employees don’t realize that every $1 of employee expenses that an employer has is $1 the employer doesn’t have to pay in salaries. About 15 years ago, I lived in Nevada. And at the time there was a proposal to introduce a new payroll tax on employers. I can’t remember the amount but it was pretty significant, I want to say 1.5%. And most people I talked to were fine with it,m after all my evil no good employer will pay for it, so what do I care? When I pointed out that if the employer has to pay an extra 1.5% next year in taxes, that’s 1.5% less the employer has to give you in the form of a raise or bonus……a lightbulb went off. But unless there is someone there to light that bulb, the masses never figure it out. Which is why taxing evil rich corporations is always popular.

    And I believe W2 forms now show the cost of employer provided health insurance. I don’t know if it’s mandated or optional, but there is a spot for it. At some point, in 2019 (I think) is when the Obamacare tax on Cadillac Plans kicks in. So whatever that number is, if it’s above a certain threshold….the IRS wants a cut.

  96. 96
    Green-Horn says:

    By Eastsider @ 88:

    RE: Kary L. Krismer @ 87 – I bet most employees have no clue that their pay would be a lot higher without the spiraling healthcare cost. Employers should itemize healthcare cost as a deduction on paycheck. Many people making $40k would be surprised that they would have earned $60k before the mandatory deduction. Prior to Obamacare, healthcare cost is probably half of what it is today. These employees are missing $10k in wages due to OC. Then we can have a policy discussion instead of FUD perpetrated by our politicians and MSM.

    RE: Eastsider @ 88

    Exactly this.

    Voters say they want honest politicians, but voters are lying.
    Transparency & honesty are so rare because we voters can’t handle the truth. Hence the costs are concealed like that. From healthcare we demand an all-you-can-eat buffet with no inconvenient charges for seconds (from our insurer). We demand somebody else pays our entry fee (in most cases our employer.) Then we complain when lobster and filet mignon aren’t offered and demand them.

    Voters demand solidarity (I have no problem with that) but then they also demand that solidarity is without cost or sacrifice. (Very generous, fellow citizens) So there should be no surprise that politicians deliver the demanded “solidarity” but do their best to conceal its costs. Unfortunately all the Rube Goldberg of interventions are much less effective, less efficient and more expensive as well as with more serious (and unforeseen) side effects than a plan that was honest with citizens who accept and declare how much solidarity they’re willing to afford and then policy makers deliver the best possible results from that contribution.

    So we get charades and feigned outrage when some policy maker gaffes and is honest to admit what they’re doing, like what happened to Jonathan Gruber when he let the cat out of the bag about the deceptions that Team Obama used to make Obamacare more palatable. Of course it’s horse manure, but I have more contempt for us voters and for our apparently insatiable appetite for that kind horse manure. We just can’t handle an honest and transparent accounting of things. So we finagle and hide and deceive ourselves.

    If we want solidarity, we should be proud of it, and sacrifice our contribution with open eyes. If we feel we’ve shared enough and don’t want to sacrifice any more, that’s fine too, but we need to harden our hearts and carry on. Instead we demand the costs be passed on to somebody else, often the “evil” rich, corporations, banks, insurers or in our case, real estate developers… also with tragic frequency to the helpless next generation that doesn’t yet get any say about that debt that we’re leaving to them.

  97. 97
    Eastsider says:

    RE: Bubble Trouble @ 90 – What really drives me nuts is the lie by those politicians using universal healthcare to gain support from ‘stupid’ (per Jonathan Gruber) voters. When California was given a chance to vote for a single player healthcare bill, its legislators turned it down. Yet the same politicians keep using universal healthcare to punish their political opponents. It worked in Venezuela. It works in Seattle. And DC is next…

  98. 98
    ess says:

    Just when you think the local real estate market is going to slow down, the paper has to publish this!

    In case you missed it

    https://www.seattletimes.com/business/real-estate/chinas-real-estate-agents-explain-why-they-love-seattle-and-if-they-think-foreign-homebuying-will-keep-surging/

  99. 99
    ess says:

    RE: Eastsider @ 92

    Gruber was instrumental in changing the nature of the US health care system. But yet – I bet not ten in one hundred Americans could correctly identify him if asked.

  100. 100
    wreckingbull says:

    RE: Kary L. Krismer @ 87 – It’s a mess. In my county, on the exchange, there is once choice – Kaiser Permanente, an HMO. Because it is an HMO, it means you must use their own facilities and doctors, period, end of story.

    All the other insurance companies have thrown in the towel and given up, and buyers on the exchange have ONE CHOICE. The whole point of the exchange was to encourage choices and competition (or at least that was the shtick)

    Here is where it gets really sad – there are no Kaiser Permenente doctors or facilities here. KP can still apparently sell HMO plans in an area they don’t service. Let this sink in a bit. No doctors or facilities here can be utilized with a plan purchased on the exchange.

    It’s embarrassing. We (politicians AND voters) should be ashamed.

  101. 101
    QA Observer says:

    By ess @ 93:

    Just when you think the local real estate market is going to slow down, the paper has to publish this!

    In case you missed it

    https://www.seattletimes.com/business/real-estate/chinas-real-estate-agents-explain-why-they-love-seattle-and-if-they-think-foreign-homebuying-will-keep-surging/

    Seattle RE is a great area to launder money.

  102. 102

    RE: QA Observer @ 96 – I suspect you’re joking, but I’ve always wondered about that. How would you possibly launder money in the real estate transaction? Escrows do not take cash (and if they did it would be reported), so it would need to be run through a bank, which means it would need to be laundered in some other manner. I suppose you could contact an owner directly and pay cash in exchange for a deed, but I don’t know who would do that.

    About the best you can do is hide ownership by using corporations/partnerships/trusts.

  103. 103
    whatsmyname says:

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

    Tim, How can you say this? You’ve got three arrows up, and three arrows down. That says “balanced market”. If that’s not evidence enough, most of the posters are finding political concerns more compelling than real estate. Congratulations everybody! We got there.

  104. 104

    By whatsmyname @ 98:

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

    Tim, How can you say this? You’ve got three arrows up, and three arrows down.

    Good catch, but the better question might be why is there even an up or down arrow for buyers on closed and pending sales? That’s not really a huge factor for buyers, other than it might someday lead to more inventory. But inventory is already a category. Sales are a factor for sellers, so I don’t think it should entirely go away, but just leaving the buyer side blank might make more sense.

    Stated differently, not everything that is good (or bad) for sellers is bad (or good) for buyers.

  105. 105
    Shark77 says:

    I think supply will only increase when hiring levels off encouraging people to seek jobs out of the area. I’m curious if anyone has data over time that shows how many buyers are relocations to the area vs homeowners buying again in the local area.

  106. 106
    Bubble Trouble says:

    By wreckingbull @ 95:

    RE: Kary L. Krismer @ 87 – It’s a mess. In my county, on the exchange, there is once choice – Kaiser Permanente, an HMO. Because it is an HMO, it means you must use their own facilities and doctors, period, end of story.

    All the other insurance companies have thrown in the towel and given up, and buyers on the exchange have ONE CHOICE. The whole point of the exchange was to encourage choices and competition (or at least that was the shtick)

    Here is where it gets really sad – there are no Kaiser Permenente doctors or facilities here. KP can still apparently sell HMO plans in an area they don’t service. Let this sink in a bit. No doctors or facilities here can be utilized with a plan purchased on the exchange.

    It’s embarrassing. We (politicians AND voters) should be ashamed.

    This is a feature, not a bug. The end goal of Obamacare was to destroy private insurance. The spineless GOP had a chance to save it, but they blew it. Within 5 years we will have nationalized health insurance. Get ready for Canadian like service, with 20 week waits to see a specialist and 40 week waits for surgery. Take a couple of Advil and hope for the best.

    But hey, it’s FREEEEEEEEE!!!! (never mind the 50% income tax rates or that a gallon of gas is $4. It’s FREEEEEEE)

    https://www.fraserinstitute.org/studies/waiting-your-turn-wait-times-for-health-care-in-canada-2016

    ” Specialist physicians surveyed report a median waiting time of 20.0 weeks between referral from a general practitioner and receipt of treatment—longer than the wait of 18.3 weeks reported in 2015. This year’s wait time—the longest ever recorded in this survey’s history—is 115% longer than in 1993, when it was just 9.3 weeks.
    Patients also experience significant waiting times for various diagnostic technologies across the provinces. This year, Canadians could expect to wait 3.7 weeks for a computed tomography (CT) scan, 11.1 weeks for a magnetic resonance imaging (MRI) scan, and 4.0 weeks for an ultrasound.”

    11 weeks for an MRI. That’s what “free” health care means. Last time I needed an MRI I waited about 11 hours.

  107. 107
    wreckingbull says:

    RE: Bubble Trouble @ 101 – I more or less agree. Obamacare is so bad and twisted that you would have to purposefully try to create such a screw-up. That purpose very well may have been to destroy the possibility of private insurance in this country. There is no turning back. It will indeed be Medicaid for all in the not-too-distant future.

  108. 108

    By wreckingbull @ 102:

    RE: Bubble Trouble @ 101 – I more or less agree. Obamacare is so bad and twisted that you would have to purposefully try to create such a screw-up.

    You’re underestimating the stupidity of people in Congress. Most of their proposed fixes don’t make any sense either. They really don’t have a clue.

  109. 109
    ARDELL DellaLoggia says:

    Favor needed if anyone is in math mode this morning. I’m away from the computer emptying that house I just sold. Need the marginal tax % for $200k gross income now renting using standard deduction for $35,000 per year deduction of interest and RE taxes if they buy. Also how does that change if the 3 tier vs 5 kicks in under the proposed tax change. Married couple, no other dependents.

    Thanks!

  110. 110
    Eastsider says:

    RE: wreckingbull @ 102 – In King County, there are now 4 insurers on the exchange, down from 7. Among them, they offer 22 exchange plans, down from 68. They no longer offer a PPO plan, i.e. you no longer have a choice in doctors and you receive basically no coverage outside the network/area. I can’t imagine the ‘choice’ available in other less populated counties. Unfortunately this death spiral does not affect the majority on employer plans. The self employed are totally screwed, especially those who receive no ‘subsidies’. Bill Clinton gets it. Trump gets it.

  111. 111
    wreckingbull says:

    RE: Eastsider @ 105 – Those who gush about Obamacare are those who have employer-provided insurance or qualify for the Medicaid expansion – “Apple Health” in our state. You are correct – people who actually have to buy their own health plans are totally screwed. I am now hearing about families of four having $2K/month bills for crappy silver plans.

  112. 112

    By wreckingbull @ 106:

    I am now hearing about families of four having $2K/month bills for crappy silver plans.

    Why would they buy a Silver plan rather than Bronze? Maybe if you had kids that go to the doctor a lot it might make sense, but otherwise . . .. Or if you’re not used to not having employer plans, and go to the doctor every time you get a cold . . .. But otherwise it would not make economic sense for most people to buy anything more than Bronze, IMHO.

    RE: wreckingbull @ 106 – By Eastsider @ 105:

    Bill Clinton gets it. Trump gets it.

    Bill gets it, Trump is just speaking to the base. Most the stuff he says on the topic is nonsense.

  113. 113
    redmondjp says:

    RE: Kary L. Krismer @ 107 – You should really lay off the Trump-bashing there Kary, as you have a lot in common with him. Trump is to Twitter as you are to SeattleBubble.

  114. 114
    Eastsider says:

    RE: Kary L. Krismer @ 107 – The Kaiser Permanente Bronze plan on the exchange has a deductible of over $7k for a healthy 25yr old male. Why should he pay the premium for a plan that is of little value to him? Instead, he should be getting a catastrophic plan that costs much less prior to ‘great’ and ‘affordable’ Obamacare plans. OC plans are unaffordable without subsidies. Trump gets it because he wants to get rid of the mandate. Bill gets it because he knows people are being screwed over. The MSM in bed with Democrats have sold you a bill of goods. They refuse to do any story on failings of OC period.

  115. 115
    Eastsider says:

    RE: softwarengineer @ 58

    Some light reading… lol

    Seattle too expensive? Try moving to a Kansas mansion
    https://mynorthwest.com/813144/seattle-kansas-mansion/

  116. 116

    By redmondjp @ 108:

    RE: Kary L. Krismer @ 107 – You should really lay off the Trump-bashing there Kary, as you have a lot in common with him. Trump is to Twitter as you are to SeattleBubble.

    I suspect my percentage of SB posts greatly exceeds Trumps percentage of Twitter posts by a “huge” magnitude. ;-)

  117. 117
    wreckingbull says:

    RE: Kary L. Krismer @ 107 – I don’t know, Kary, as I don’t decide other peoples health insurance choices.

    I will say this: The same bronze plan is probably only several hundred dollars cheaper per month, and has twice the deductible Also, only silver plans qualify for cost sharing, which can make a huge difference for a struggling middle class family.

    So there is an answer why choosing a bronze plan would not fix everything.

  118. 118

    RE: wreckingbull @ 112 – Oh, the cost sharing thing might be it. I’ve always had to pay full boat, so I don’t know about the detail on those, but I do recall that if you’re getting significant credits you also get better insurance because they presume you probably can’t pay the large out of pockets.

  119. 119
    Justme says:

    RE: wreckingbull @ 112

    >>only silver plans qualify for cost sharing

    It should be noted that what is known as “cost sharing” is equivalent to what is known as “enhanced silver plans”. The following references sort of clarify that fact.

    https://www.healthcare.gov/glossary/cost-sharing-reduction/
    https://enhanced-silver.com/enhanced-silver-cost-sharing-reductions/

    The term “cost sharing” I think is bit confusing. It could easily be confused with “insurance premium tax credit”, which is the main subsidy mechanism of Obamacare/ACA. I find it more informative to talk about “Enhanced Silver plans” rather than cost sharing.

    Your point, then, can be rephrased as “there exists Enhanced Silver plans, but no Enhanced Bronze (or Gold or Platinum) plans.

    Anyway, I’m not writing this to nitpick. I simply found the terminology confusing, and decided to look up what it all means.

  120. 120

    RE: Justme @ 114 – Thanks, I don’t think I read enough of that to totally understand it, but it does explain how there can be a “crappy Silver plan.” (Wreckingball’s claim.)

  121. 121

    RE: wreckingbull @ 106
    Medicaid Apple Plan is a Joke

    Covers opioids, abortions and anchor babies….that’s the big stuff that grabs almost all the disabled and elderly doctor visit insurance….ABSOLUTELY ruined it for our disabled folks. Ask my autistic son, who thank God still can get Blue Cross from me.

  122. 122
    Bubble Trouble says:

    By Eastsider @ 105:

    RE: wreckingbull @ 102 – The self employed are totally screwed, especially those who receive no ‘subsidies’. Bill Clinton gets it. Trump gets it.

    Obamacare might as well be called the “Kill The Self Employed” bill. Because eventually it will be impossible to buy health insurance as self employed. So the options will be go w/o or give up being self employed.

    Trump kinda gets it I think. But with the spineless, useless Ryan/McConnell running things, it’s moot.

  123. 123
    Bubble Trouble says:

    By Kary L. Krismer @ 115:

    RE: Justme @ 114 – Thanks, I don’t think I read enough of that to totally understand it, but it does explain how there can be a “crappy Silver plan.” (Wreckingball’s claim.)

    Trick question. They are ALL crappy. Obamacare ruined the entire private insurance industry.

  124. 124
    Eastsider says:

    By Bubble Trouble @ 117:

    Obamacare might as well be called the “Kill The Self Employed” bill.

    On the exchange, the premium for a Premera Silver plan for a 50yr old self-employed insurance agent making $60k with a spouse and a 20yr old child in King County is $12k. And it comes with a $9k deductible.

    Every self employed in his/her 50s and early 60s is looking forward to the day he/she becomes eligible for Medicare. Obamacare is seriously impoverishing these families.

  125. 125
    whatsmyname says:

    By Bubble Trouble @ 117:

    Obamacare might as well be called the “Kill The Self Employed” bill. Because eventually it will be impossible to buy health insurance as self employed. So the options will be go w/o or give up being self employed.

    Was the old system called the “Kill the working poor and persons with pre-existing conditions”?

    Their problem was just as real, lacking only the “eventually” qualifier. Your problem is that like them, you are a minority population. As a country we’ve historically been willing to see some go without to make things cheaper for the rest. If that sounds cold, it is. But it’s not new; it’s just who.

  126. 126
    First Time Buyer says:

    I am looking to buy home in Redmond/Sammamish for the past few months and I am seeing that the market has become crazy in the last 2 weeks. Is this because of less number of homes in Nov or something else like interest rate or tax reform? I couldn’t buy in summer as I was looking for a little newer home like less than 20 year old and most of them that were available for sale were older than that. Now that it has become frenzy am not sure if I should buy something for much higher price than I would have paid in summer.

  127. 127
    Eastsider says:

    RE: whatsmyname @ 120 – Here is a Seattle times article from a few days ago on closing of the pediatric-center building at UW dental school.

    “At least some of the money woes have been created by the school’s role as a kind of safety net, providing dental work to low-income patients on Medicaid as part of its teaching mission.
    Because Medicaid reimbursements do not fully cover the cost of care, as the volume of Medicaid patients seeking out the dental school increased, so did the deficit.”

    https://www.seattletimes.com/seattle-news/education/to-chip-away-at-36-million-deficit-uw-dental-school-to-close-pediatric-center-building/

    As a result of the deficit, UW may shut down or suspend new admissions for some residency program for dental students. We are now worse off as we are potentially losing future dentists. If ‘free’ is so great, Venezuela will not be in the death spiral today.

  128. 128
    whatsmyname says:

    RE: Eastsider @ 121 – You’re working very hard to miss the point of my post – which was an observation on how things work, not a recommendation.

    But if you are determined to change the subject to medicaid and free care, it does perhaps make sense to ensure that you are paying for yours. Is there even a discussion to be had here?

  129. 129
    Eastsider says:

    RE: whatsmyname @ 122 – I was merely adding to the discussion. Cheers.

  130. 130
    whatsmyname says:

    RE: Eastsider @ 123 – Cheers to you, and sorry about the second paragraph. It is a perfectly good topic independently. I should point out that the article says the idea of reducing enrollment got the “thumbs down”. It would be nice if they were specific about how big the medicaid impact was. It would be worth knowing. It sounds big.

  131. 131

    By whatsmyname @ 120:

    By Bubble Trouble @ 117:

    Obamacare might as well be called the “Kill The Self Employed” bill. Because eventually it will be impossible to buy health insurance as self employed. So the options will be go w/o or give up being self employed.

    Was the old system called the “Kill the working poor and persons with pre-existing conditions”?

    Their problem was just as real, lacking only the “eventually” qualifier. Your problem is that like them, you are a minority population. As a country we’ve historically been willing to see some go without to make things cheaper for the rest. If that sounds cold, it is. But it’s not new; it’s just who.

    The problem wasn’t fixing the problem, but how the problem was fixed. The cost is being laid on a very small percentage of the population–well less than 10%, and not necessarily the richest 10%, but also not the poorest.

    It would be much fairer to lay the cost more broadly based on the existing income tax system, rather than just partially on the existing income tax system (1099 but not W-2).

  132. 132

    By Eastsider @ 121:

    “At least some of the money woes have been created by the school’s role as a kind of safety net, providing dental work to low-income patients on Medicaid as part of its teaching mission.
    Because Medicaid reimbursements do not fully cover the cost of care, as the volume of Medicaid patients seeking out the dental school increased, so did the deficit.”

    https://www.seattletimes.com/seattle-news/education/to-chip-away-at-36-million-deficit-uw-dental-school-to-close-pediatric-center-building/

    That’s pretty shocking if it’s correct. The Medicaid reimbursement is so low that money is lost even if most the labor is free? Has Medicaid become a program where not only are they asking for doctors and dentists to work for less, but instead to work for free while also to digging into their pockets and make charitable contributions?

    Hopefully this is just something where Medicaid isn’t willing to pay anything for the services performed by a student.

  133. 133
    Justme says:

    RE: Kary L. Krismer @ 126

    I know nothing about the so-called Center for Pediatric Dentistry. But my impression is that a large part of the reason for the skyrocketing cost of medical care is that various medical providers are building or leasing or remodeling some incredibly fancy and expensive buildings to house their facilities. The case of the UW dental school may very well be such a case.

  134. 134

    RE: First Time Buyer @ 126

    It’s not more frenzied in those areas than it was in Spring and Summer. It is just not less frenzied as normally might be expected this time of year. Perhaps the Christmas Holidays will be an exception, but then most people would wait until after the 5th or so of the new year to list vs listing in the middle of Christmas and New Years, unless they have no choice for some reason.

    Discovery Elementary, as example, has pretty much been on the same path for sometime now. The least frenzied would likely be Mead area.

  135. 135
    First Time Buyer says:

    RE: Ardell DellaLoggia @ 134
    Education hill homes built in 1970s were sitting for a while in summer but similar houses in the same neighborhood had multiple tours yesterday even without open house. My Agent says that the similar house that sold for less than 700K in July would go above 800K now. This is for 1700 sqft split entry home.

  136. 136
    ess says:

    impact of tax plan on housing.

    Of course – most proposed legislation doesn’t pass in its initial form – if at all.

    But if this is the case – not only is it bad news for homeowners – but bad news for renters as there will be more renters in the market competing for less rental units, and especially smallish single family homes.

    As they say – we will have to wait and see……..

    https://www.marketwatch.com/story/republican-tax-plans-will-make-it-less-beneficial-to-own-a-home-analysis-finds-2017-11-13

  137. 137
    Rupert D says:

    Thanks for providing the link to the Freddie Mac Housing bubble analysis. Its always good to read research as opposed to personal opinions. I think the analysis is good and explains why Seattle (and San Fran) markets are different than other major cities. I think the majority of people posting on this site have never lived anywhere else but Seattle as they typically have no context on how little buildable land really inhibits the natural market forces that otherwise would increase the supply of housing stock and keep price increases down to a more typical level seen in other parts of the country. RE: Green-Horn @ 70

  138. 138
    Bubble Trouble says:

    By whatsmyname @ 125:

    By Bubble Trouble @ 117:

    Obamacare might as well be called the “Kill The Self Employed” bill. Because eventually it will be impossible to buy health insurance as self employed. So the options will be go w/o or give up being self employed.

    Was the old system called the “Kill the working poor and persons with pre-existing conditions”?

    Their problem was just as real, lacking only the “eventually” qualifier. Your problem is that like them, you are a minority population. As a country we’ve historically been willing to see some go without to make things cheaper for the rest. If that sounds cold, it is. But it’s not new; it’s just who.

    You think the group market hasn’t been affected? LOL. Try again. It has hurt the self employed more, but every one is hurting because of this monstrosity.

    And it’s not that small a number:

    A Pew Research Center report last year found that 14.6 million people, or about 10 percent of the active workforce in 2014, were self-employed. Those self-employed people had an additional 29.4 million people working for them; together, they accounted for 44 million jobs, or 30% of the national workforce.Sep 1, 2016

    This is the Democrat dream of course to kill off the self employed. Bring everyone into the collective.

  139. 139
    Bubble Trouble says:

    By Justme @ 133:

    RE: Kary L. Krismer @ 126

    I know nothing about the so-called Center for Pediatric Dentistry. But my impression is that a large part of the reason for the skyrocketing cost of medical care is that various medical providers are building or leasing or remodeling some incredibly fancy and expensive buildings to house their facilities. The case of the UW dental school may very well be such a case.

    So Obamacare, frivolous lawsuits, Medicare/Medicaid fraud, millions of illegals receiving free care, an aging population, millions of obese Americans…..not at all the problem. Turns out it was renovation costs at the doctor’s office.

  140. 140

    RE: First Time Buyer @ 135

    That varies based on which elementary school because there is a bit of a funnel in that older section and 4 different schools involved. One listed at $655k just went Pending Inspection after 3 weeks, so…there’s that. As to a house costing more now than 4 months or more ago, yes, as each home sells for more than the last in an upward market. Most always if it is one of the preferred schools, it will sell for more than the last one. If there were 5 “last ones” sold since Spring-Summer then the price is cumulatively higher.

  141. 141
  142. 142
    Bubble Trouble says:

    By Ardell DellaLoggia @ 140:

    RE: First Time Buyer @ 135

    That varies based on which elementary school because there is a bit of a funnel in that older section and 4 different schools involved. One listed at $655k just went Pending Inspection after 3 weeks, so…there’s that. As to a house costing more now than 4 months or more ago, yes, as each home sells for more than the last in an upward market. Most always if it is one of the preferred schools, it will sell for more than the last one. If there were 5 “last ones” sold since Spring-Summer then the price is cumulatively higher.

    3 Weeks seems like a long time given the stories of 15 offers within 24 hours we were hearing over the summer. And I don’t mean hearing from you, just generally speaking.

  143. 143
    whatsmyname says:

    RE: Bubble Trouble @ 138 – Of course I know that the group market is affected. I’m buying insurance for four. It didn’t seem worth mentioning in context of your fears of extinction for the self-employed.

    I am interested to learn more about how employees of the self-employed are themselves self-employed.

  144. 144
    ARDELL DellaLoggia says:

    RE: Bubble Trouble @ 142

    I’ve had them recently but it has to be the right school mix. Also we were talking about older houses. My last one like that in so-so schools bid up $55,000 with only 3 offers. 40 showings, but the newer houses in top schools get the bigger “frenzied” results. It’s not uniformly robust. Though almost everything sells. My most recent one sold more than $100k over practically overnight. So no differently from Spring Summer. I don’t plan to list anything until next year at this point. It’s way past end of season, though I did a buyer offer tonight on New construction on the Seattle side. Sellers should wait if they can until after the first of the year. Thanksgiving through New Years should be quiet time for the most part.

  145. 145
    ARDELL DellaLoggia says:

    RE: First Time Buyer @ 141

    Rockwell’s always been the top of the 4. Mann second, Redmond used to be fourth but is now third and then Einstein. The new school up on 172nd will shake things up a bit for the newer homes in Education Hill built in the last bubble. I don’t think they’ve finalized the boundary for it yet. The two front running proposals are interesting.

  146. 146
    Bubble Trouble says:

    By whatsmyname @ 143:

    RE: Bubble Trouble @ 138 – Of course I know that the group market is affected. I’m buying insurance for four. It didn’t seem worth mentioning in context of your fears of extinction for the self-employed.

    I am interested to learn more about how employees of the self-employed are themselves self-employed.

    Fair enough. But I think you realize that the masses don’t understand that Obamacare affects them. They think oh, it’s just the exchanges, so I’m not on the exchange, hence it doesn’t affect me. When in fact if you visited the doctor in the United States, in the past 5 years, Obamacare has affected you. And for the worse.

    As to self employed people working for the self employed.; I am self employed, I sub contract work out to 5 other people, those 5 people are self employed as well, but they work for me. It’s a very common thing.

  147. 147
    Bubble Trouble says:

    By ARDELL DellaLoggia @ 144:

    RE: Bubble Trouble @ 142

    I’ve had them recently but it has to be the right school mix. Also we were talking about older houses. My last one like that in so-so schools bid up $55,000 with only 3 offers. 40 showings, but the newer houses in top schools get the bigger “frenzied” results. It’s not uniformly robust. Though almost everything sells. My most recent one sold more than $100k over practically overnight. So no differently from Spring Summer. I don’t plan to list anything until next year at this point. It’s way past end of season, though I did a buyer offer tonight on New construction on the Seattle side. Sellers should wait if they can until after the first of the year. Thanksgiving through New Years should be quiet time for the most part.

    I know that the “common wisdom” is school district trumps everything else. My kids are in private school, so school quality is not really an issue for me. But I know most people wet their pants if they see a school with a “7” rating. OMG my little Dakotah and Broolynne will be going to school with deplorable peasants!!!! LOL.

    But it sounds like what you’re saying is even the crappiest house in a good school district will sell before a good house in a so-so district. Does it really make THAT much of a difference?

    And I always find that funny. Because with the money saved by buying a cheaper home in a meh school district, parents could send their kids to a much better private school than the “good” public school they’re paying a premium for.

  148. 148

    By whatsmyname @ 143:

    RE: Bubble Trouble @ 138 – Of course I know that the group market is affected. I’m buying insurance for four. It didn’t seem worth mentioning in context of your fears of extinction for the self-employed.

    I am interested to learn more about how employees of the self-employed are themselves self-employed.

    First, the employer group market is much larger, and has been dealing with pre-existing conditions for years if not decades. So the impact of Obamacare was much less–mainly dealing with extended coverage issues and no lifetime maximums. That lead to price increases, but I don’t believe they were anywhere near what the individual market has had.

    Second, I might be wrong on this, but I don’t believe that small employers are required to provide health insurance for their employees, so the employees would effectively be in the same group of insured as the self-employed. They also might not work enough hours.

  149. 149

    By Bubble Trouble @ 146:

    Fair enough. But I think you realize that the masses don’t understand that Obamacare affects them. They think oh, it’s just the exchanges, so I’m not on the exchange, hence it doesn’t affect me. When in fact if you visited the doctor in the United States, in the past 5 years, Obamacare has affected you. And for the worse.

    Even the annual physicals have become a joke. You basically talk to a doctor for 10-20 minutes. Oh boy! Oh, and they listen to your heart, maybe, and might even look in your ears and mouth. The charge for that if not insured? Over $400. The charge for that if you are insured–over $4,000 (the cost of insurance for a year if that’s all you ever use it for during the year).

    Gone are the days where they would routinely test your blood, urine, etc., although you can ask for such things if you’re so inclined. Now that annual physicals need to be covered by insurance, the physicals cover less.

  150. 150
    Bubble Trouble says:

    Kary,

    You’re falling into the “it doesn’t affect me because I’m not on the exchange” trap. It affects you. It affects everyone. Obamacare isn’t just an exchange. It’s 2000 pages of regulation that affects every policy sold in the country, whether group, individual, on the exchange, off the exchange, whatever. Every policy has to provide the 10 “essential” benefits, both group and individual.

    It also affects every medical provider. An example is the requirement to digitize medical records. Think of the cost of doing that. Billions of dollars. Guess who pays for it? Hint: It’s not the doctors themselves, they just pass the cost on.

    You;re right about #2. Employers with fewer than 50 employees don’t have to provide insurance. But most do.

  151. 151
    ess says:

    RE: Bubble Trouble @ 150

    You;re right about #2. Employers with fewer than 50 employees don’t have to provide insurance. But most do.

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

    I know of one large employer (as someone I know works for them), that predominately hires new employees for less than 30 hours a week. Why? Because as you know, an employer does not have to provide insurance for an employee that is not “full time”, which by Obamacare regulations is approximately 30 hours or more a week. This works out nicely in the service and retail industry where there is need for increased employees for only parts of the day or week.

    Which in turns becomes a subsidy for companies paid for by the taxpayer. Many of these companies pay such low wages that the less than 30 an hour a week employee turns to the health care exchanges to obtain medical insurance. Those employees are heavily subsidized by the American taxpayer, and the employer gets a medical insurance pass.

  152. 152

    RE: Bubble Trouble @ 150 – I’m not sure what post you’re referring to, because I am on the Exchange. I’ve mentioned things about employer coverage too, but it’s been years since I’ve been on an employer plan.

    I wrote about being on the Exchange earlier. Since Obamacare fully went into effect: 1. I had to sign up for a more restrictive PPO insurance policy (UW Provider) to keep my rate increase in the area of about $100 a month; 2. Then the next year to get that same coverage I had to join the Exchange; 3. Now this year coming up that carrier and that coverage no longer exists on or off the Exchange and the closest thing to it is over $300 a month more than what I’ve been paying, so now I’ll be having to go the HMO route, giving up my doctors.

  153. 153

    RE: Bubble Trouble @ 147

    Used to be “good school district” was the catch phrase. But these days with schools ranked individually, people focus on both district and the individual rankings of the schools. That is a big change that sites like GreatSchoolsdotorg added to the housing scene, and Redfin displaying those rankings on their site is really how it became so very important. It’s staring people in the face. Hard to ignore.

    And yes, you are correct about the 6/7 rank. 8,9 or 10 preferred. Some actually want all 3 schools to be a 10, but usually they are not well informed buyers given ranks change pretty easily and often.

    In stable areas around the Country where people are pretty much staying where they are and just moving to a different house, they don’t even look at school issues. They are more about staying in the same school they are already in. But in areas like ours where the majority of home buyers are from someplace else, out of State and out of Country, what else do they have to go on? They are coming in with no info except what they can gather on the internet, for the most part. So those rankings become sacrosanct.

    Even when people don’t have children or send them to private school, appreciation tends to be higher where there are the best schools and lower where there are the worst schools. So even if all they want is to make money on their house, or have a buffer in the event of decline, schools still matter…a lot.

    Not for a single person buying a near to work downtown condo, of course, but even investors like to buy where they can get the highest rent prices. More an issue for the 3 bedrooms or more places than the 1 and 2 bedroom places.

    To get a low enough price to pay for private school, as you said, you have to go where crime stats are too high. So it usually doesn’t work that way.

  154. 154
    uwp says:

    RE: Ardell DellaLoggia @ 153 – “To get a low enough price to pay for private school, as you said, you have to go where crime stats are too high.”

    Yes. Cheap house in a bad district to save for private school is penny-wise, pound foolish.
    What is tuition for private school now? What will it be in 5 years. How many kids do you have? How many years will they be in school? Can you get a 3.5% interest rate tax-deductible loan for private school tuition?

    Also, it’s not like the extra you pay for the house in the good district goes away.
    You get it back, and then some, when you sell (hopefully).

  155. 155
    ronp says:

    RE: Timbo @ 56 – there is a federal gas tax too (out of state freight) , bike riders all own cars (pay taxes on those) and bike weights are insignificant to road wear. we need more bike riders and bike lanes.

    gas externalities mean it should cost more http://www.lung.org/local-content/_content-items/about-us/media/press-releases/ca-report-zero-emission-2016.html?referrer=https://www.google.com/

  156. 156

    Apparently Seattle is going to pass on lowering rents by instantly creating about 2,500 more rentals and instead going to tax AirBNB type rentals.

    https://seattle.curbed.com/2017/11/13/16646732/seattle-airbnb-vacation-rental-tax

    So we know their priorities. First and foremost they like taxes. After that comes tenants and the homeless.

  157. 157
    ronp says:

    RE: Bubble Trouble @ 138 – dude, you are totally drinking the fox news koolaid.

    You need to inform yourself about how the rest of the world does health insurance and how undoing the ACA without thinking it through will result in kicking people off insurance, increase costs to everyone.

    “ACA reduced the number of bankruptcy filings. In 2010, 1.5 million people filed. That dropped to 770,846 by 2016. The ACA forced insurance companies to cover all costs by eliminating annual and lifetime limits.”
    “Obamacare’s strategy is working to slow the increase of health care costs. Between 1990 and 2008, health spending rose 7.2 percent a year. After the exchanges opened in 2014, spending on health care rose more slowly. It grew 5.3 percent in 2014 and 5.8 percent in 2015. ” Yes, looking worse in 2016-18.

    “A new Kaiser Family Foundation analysis finds that more than half (54% or 5.9 million) of the 10.7 million people who are uninsured and eligible to purchase an Affordable Care Act marketplace plan in 2018 could pay less in premiums for health insurance than they would owe as an individual mandate tax penalty for lacking coverage.

    Within that 5.8 million, about 4.5 million (42% of the total) could obtain a bronze-level plan at no cost in 2018, after taking income-related premium tax credits into account, the analysis finds.”

    More needs to be done, but blaming the ACA for any insurance problem in the USA is politically biased and not reflective of the pre-ACA situation which was even worse with millions uninsured.

  158. 158

    RE: ronp @ 157 – I can’t tell if you’re being sarcastic. What does Obamacare have to do with the way the rest of the world does insurance? Is there another country with a similar system to ours? And do you really believe that the difference in bankruptcies between 2010 and 2015 is primarily due to Obamacare? Care to factor in the difference in the economy between those two points?

    And speaking of gaps in coverage, why is there a gap in your covering health care expenses going up between 2008 and 2014? That’s seemingly lacking even though the same economic factors that were at play during that period also undoubtedly helped to hold down costs. But in any case, there’s nothing you can point to that would credit Obamacare with a lowering of healthcare costs. To the extent it happened it was in spite of Obamacare, not because of it.

    Finally, not sure what the point is of looking at the number of people who could get insurance for less than the tax penalty. One of the huge problems with Obamacare is the penalty is way too low, causing healthy people to forego insurance. But that people would rather be subject to an uncollectable tax penalty than buy insurance that typically only pays for an annual physical isn’t surprising. Those stats show that people are acting rationally (ignoring the risk that they are taking of having something catastrophic happen not near an open enrollment period).

  159. 159
    ess says:

    By Kary L. Krismer @ 156:

    Apparently Seattle is going to pass on lowering rents by instantly creating about 2,500 more rentals and instead going to tax AirBNB type rentals.

    https://seattle.curbed.com/2017/11/13/16646732/seattle-airbnb-vacation-rental-tax

    So we know their priorities. First and foremost they like taxes. After that comes tenants and the homeless.

    The tax and added expense of administering this program will be passed on to the consumer. The consumer in turn may spend less money at Seattle attractions, buy less gifts, take less taxis and ferries, eat out less, or they may decrease the number of days they stay (or pick another destination altogether) to offset the increased costs. Hotels are very expensive in Seattle – it is understandable there is a flourishing Air BnB business. Once again the private sector will lose.

  160. 160
    greg says:

    RE: ronp @ 157

    ronp you are wasting your time. They know nothing about the many and varied very successful healthcare models outside of the USA. and what is more, they don’t want to. They would rather pay 3 times as much, get lousy periodic coverage, deal with all sorts of hassles than admit they got it wrong.

    the only people who would be harmed by a national plan, are the folks who profit from the status quo, and they donate billions to maintain the status quo.

    ACA would work great if the GOP would take their collective boot off of it for a just a year or two. They have done everything humanly possible to discredit it, damage it, defund it. from lawsuits to refusing free money… the Rs have done everything to make sure it cost more and does less.

    In the end we will move to a national healthcare plan, but the old Rs will block it as long as they can.

  161. 161
    Anonymous Coward says:

    By greg @ 160:

    RE: ronp @ 157
    They know nothing about the many and varied very successful healthcare models outside of the USA.

    Since this is becoming the healthcarebubble.com/blog… How many beds/ post-partum room are there in the maternity wards of your favorite healthcare model outside the US? How many beds/post-partum room are there in US hospitals? How does changing who pays for the 1 person/room standard yield the cost savings of having a standard of 6-8 people/room*? And how does changing who pays for the power everything patient beds yield the cost savings of having manual beds? Sure we could scrap a bunch of sunk capital costs, write them off, and remodel our hospitals with more efficient layouts and cheaper equipment… How much money do you think that’s going to save and over what time frame?

    *with a communal bathroom down the hall serving multiple rooms….

  162. 162
  163. 163
    uwp says:

    By greg @ 160:

    RE:

    ACA would work great if the GOP would take their collective boot off of it for a just a year or two. They have done everything humanly possible to discredit it, damage it, defund it. from lawsuits to refusing free money… the Rs have done everything to make sure it cost more and does less.

    But if they stop sabotaging government, how will they be able to tell their constituents that government is ruining their lives?

  164. 164

    By greg @ 160:

    RE: ronp @ 157

    ronp you are wasting your time. They know nothing about the many and varied very successful healthcare models outside of the USA. and what is more, they don’t want to.

    You don’t know what you’re talking about. No one has said anything bad about the models outside of the US (until the later post by AC). And if you think that Obamacare would work great but for ___________, you clearly don’t understand insurance, markets or healthcare. It was doomed from the start, but unfortunately the supporters of Obamacare are going to make claims like yours, that it’s only doing poorly due to opposition.

  165. 165
    Justme says:

    Obamacare?? We really need to get seattlebubble back on track. Look at the bright side. We already have excessive debt, massively overvalued corporations, and the Fed unwinding QE AND raising interest rates at the same time. If that is not enough to puncture the Seattle bubble, surely Obamacare will take care of it!

    (Yes, this is just a bit of pointed humor, don’t take the obamacare part too literally)

  166. 166
    redmondjp says:

    By greg @ 160:

    RE: ronp @ 157

    ronp you are wasting your time. They know nothing about the many and varied very successful healthcare models outside of the USA. and what is more, they don’t want to. They would rather pay 3 times as much, get lousy periodic coverage, deal with all sorts of hassles than admit they got it wrong.

    the only people who would be harmed by a national plan, are the folks who profit from the status quo, and they donate billions to maintain the status quo.

    ACA would work great if the GOP would take their collective boot off of it for a just a year or two. They have done everything humanly possible to discredit it, damage it, defund it. from lawsuits to refusing free money… the Rs have done everything to make sure it cost more and does less.

    In the end we will move to a national healthcare plan, but the old Rs will block it as long as they can.

    You are so completely clueless there, Greg.

    It was doomed to fail from the start BY DESIGN – just ask Obamacare architect Jonathan Gruber who openly admits this. They all knew that the American public wouldn’t accept single-payer right away, so they devised Obamacare to fill in the gap, eventually making things so bad that people will gladly accept single payer in the end.

    And any plan that relies upon unconstitutional executive-order-mandated subsidy payments in order to survive is seriously flawed. And then Trump gets flak for trying to undo an unconstitutional executive order (the president can’t obligate our tax money – that’s the job of congress)?

    Wake up and stop believing the propaganda!

  167. 167
    Eastsider says:

    By redmondjp @ 166:

    Wake up and stop believing the propaganda!

    I find it interesting that someone brought up the analysis by Kaiser Family Foundation earlier. KFF donates to democratic candidates overwhelmingly. Their analysis is surely ‘non-biased’. /sarc

  168. 168
    Bubble Trouble says:

    “ACA would work great if the GOP would take their collective boot off of it for a just a year or two. They have done everything humanly possible to discredit it, damage it, defund it. from lawsuits to refusing free money… the Rs have done everything to make sure it cost more and does less.”

    Priceless. The thing that was created by Democrats and run by Democrats for 5 years is collapsing because of Republicans. LOL.

    Now back to reality….I am going to pay $1000 a month with a $12,000 deductible. 5 years ago my plan was $450/mo with a $2500 deductible. This is the reality your party created. You can spin all you want, it has been an unmitigated disaster in any and all possible ways.

  169. 169
    Bubble Trouble says:

    “ACA reduced the number of bankruptcy filings. In 2010, 1.5 million people filed. That dropped to 770,846 by 2016.”

    Gee you don’t think the fact that the economy in 2016 was in much better shape had anything to do with that do you? Nah. Has to be Obamacare. You guys get more and more desperate trying to defend this turd.

    And you want a study…OK here’s a study…

    https://www.americanactionforum.org/research/update-obamacares-impact-small-business-wages-employment/

    “Research from the American Action Forum (AAF) finds regulations from the Affordable Care Act (ACA) are driving up health care premiums and are costing small business employees at least $19 billion in lost wages annually. These figures varied by state, but in 2015 the ACA cost year-round workers $2,095, $2,134, and $2,260 in Ohio, New York, and North Dakota, respectively. Premium increases, a prospect regulators predicted when issuing the first ACA regulations, also significantly diminished the number of business establishments and jobs nationwide. Across the country, small businesses (20-99 workers) lost 295,030 jobs”

    Hooray!!!

  170. 170
    Bubble Trouble says:

    By Eastsider @ 167:

    By redmondjp @ 166:

    Wake up and stop believing the propaganda!

    I find it interesting that someone brought up the analysis by Kaiser Family Foundation earlier. KFF donates to democratic candidates overwhelmingly. Their analysis is surely ‘non-biased’. /sarc

    Liberals actually are gullible enough to believe everything. Gruber was 100% correct.

  171. 171
    Bubble Trouble says:

    By Kary L. Krismer @ 152:

    RE: Bubble Trouble @ 150 – I’m not sure what post you’re referring to, because I am on the Exchange. I’ve mentioned things about employer coverage too, but it’s been years since I’ve been on an employer plan.

    I wrote about being on the Exchange earlier. Since Obamacare fully went into effect: 1. I had to sign up for a more restrictive PPO insurance policy (UW Provider) to keep my rate increase in the area of about $100 a month; 2. Then the next year to get that same coverage I had to join the Exchange; 3. Now this year coming up that carrier and that coverage no longer exists on or off the Exchange and the closest thing to it is over $300 a month more than what I’ve been paying, so now I’ll be having to go the HMO route, giving up my doctors.

    Stop complaining. A study said it’s awesome and if you disagree you’re just stupid and don’t understand the awesomeness of Obama-Power. Don’t believe your own personal experineces. Those are meaningless. Instead listen to your betters in the MSM (who have never had to buy insurance on their own) and Democrat funded “public policy research groups” who would never tell al lie.
    – Liberals Since 2013

  172. 172

    I can’t believe that the Republicans are still proposing to do away with the individual mandate as part of the tax bill. First that’s unbelievable because they don’t seem to understand that without a lot of people enrolling for insurance Obamacare will get even worse, and that’s not good for anyone (until it collapses). Second it’s unbelievable that none of the Democrats seem to realize that without the individual mandate that Obamacare is unconstitutional–it only got past the Supreme Court based on the power of government to tax! I wonder if the Republicans are thinking along those lines.

  173. 173
    Eastsider says:

    By Bubble Trouble @ 168:

    Now back to reality….I am going to pay $1000 a month with a $12,000 deductible. 5 years ago my plan was $450/mo with a $2500 deductible. This is the reality your party created. You can spin all you want, it has been an unmitigated disaster in any and all possible ways.

    I look forward to the day IRS imposes tax on employer provided ‘Cadillac’ health plans. Many union families will face a $4k tax bill. But of course it is Republicans’ fault!

  174. 174
    Eastsider says:

    By Kary L. Krismer @ 172:

    I can’t believe that the Republicans are still proposing to do away with the individual mandate as part of the tax bill. First that’s unbelievable because they don’t seem to understand that without a lot of people enrolling for insurance Obamacare will get even worse, and that’s not good for anyone (until it collapses). Second it’s unbelievable that none of the Democrats seem to realize that without the individual mandate that Obamacare is unconstitutional–it only got past the Supreme Court based on the power of government to tax! I wonder if the Republicans are thinking along those lines.

    There are about 11 million enrollees in Obamacare plans in a country of over 300 million. That is under 3.5% of US population. If getting rid of the mandate for the 1% of the population who pay far more than full-freight will result in the collapse of Obamacare, I say go ahead!

  175. 175

    By Eastsider @ 174:

    By Kary L. Krismer @ 172:

    I can’t believe that the Republicans are still proposing to do away with the individual mandate as part of the tax bill. First that’s unbelievable because they don’t seem to understand that without a lot of people enrolling for insurance Obamacare will get even worse, and that’s not good for anyone (until it collapses). Second it’s unbelievable that none of the Democrats seem to realize that without the individual mandate that Obamacare is unconstitutional–it only got past the Supreme Court based on the power of government to tax! I wonder if the Republicans are thinking along those lines.

    There are about 11 million enrollees in Obamacare plans in a country of over 300 million. That is under 3.5% of US population. If getting rid of the mandate for the 1% of the population who pay far more than full-freight will result in the collapse of Obamacare, I say go ahead!

    I think that number may be a bit low–perhaps being only those being subsidized. But by collapse I mean the hard working self employed people of this country will no longer be able to buy health insurance because the federal government will be dictating what it needs to be and insurers will be unwilling to provide it. That’s what happened 15-20 years ago when the State of Washington tried to make pre-existing conditions illegal in the private insurance market. The insurers eventually pulled out.

    But I was planning on looking up the number because last night’s Blackish was pointing out that there are over 2M people in prison, and I think it was something like 56M people with criminal records. Comparing those numbers to the number of people who are buying insurance themselves makes is rather clear how small the market is (or maybe how much this country likes to lock up people for drug offenses).

  176. 176

    Here’s an odd little article from Nathan Robinson on the effect of rich people in neighborhoods and AirBNB, etc.

    https://www.currentaffairs.org/2017/11/the-wealth-made-city

    Surprisingly it’s about New Orleans, which isn’t exactly the city I think of when I think of wealth.

  177. 177

    RE: Kary L. Krismer @ 176
    The Rich Elite Made Those Dinky Loud Colored Shacks Valuable?

    “Over-priced junk” is good if its in my assessed neighborhood…

    One of the “fluorescent green” dinky shacks looks like a duplex too….LOL

  178. 178

    Since we’re talking so much about Obamacare, I found this site useful for the premium credits, although I’m not sure it’s 100% accurate.

    https://www.healthinsurance.org/obamacare/subsidy-calculator/

    Washington’s site has nothing on this, and apparently you’re just supposed to fill in different income levels into your application to see what the credit would be at those different income levels. But apparently if you try too many numbers they’ll make you prove your income!

    Filling in my information the income cutoff seems to be $65,000. $1,000 below that and I would get an annual credit of just over $4,000 a year (presumably total for the both of us), and with half that income the credit would roughly double.

    And this site also shows the penalty you have to pay if you don’t have insurance. At that income level it’s only about $1,600, and that is one reason why Obamacare isn’t working. An uncollectible penalty which doesn’t even cover three months of premiums isn’t going to get a lot of people to sign up for insurance.

  179. 179

    RE: Kary L. Krismer @ 178
    The New Tax Plan Would Eliminate the Health Care Mandate

    Meaning, we could buy or not buy without IRS intrusion.

    It basically pulls the plug out of Obamacare….

  180. 180
    uwp says:

    In more RE focused news, it seems like SFH inventory is slowly drifting closer to last year’s numbers. It’s gone from ~20% less this summer, to 15% less in September/October, and now around 10% less(per sidebar tracker).

    Perhaps next year might be the first in a while where inventory is better than the previous year.
    Maybe.

  181. 181

    RE: uwp @ 180 – Given how bad last Dec 1 was, I’m not sure that being slightly better would be that significant!

    FWIW, on the searches I do regularly I’ve noticed a significant downturn in the number of new listings the last 2-3 weeks, but most those searches are for either specific things or relatively small areas. None are broad based searches.

  182. 182
    Blake says:

    By Kary L. Krismer @ 172:

    I can’t believe that the Republicans are still proposing to do away with the individual mandate as part of the tax bill. First that’s unbelievable because they don’t seem to understand that without a lot of people enrolling for insurance Obamacare will get even worse, and that’s not good for anyone (until it collapses).

    I am endlessly impressed by the stupidity of Trump and the Repubs. ObamaCare was collapsing on its own due to its faulty design and the Repubs could have just stood by an watched. Now they are pulling the plug and sinking it and THEY WILL BE BLAMED! Ha hah… idiots. There are going to be millions of angry voters at the polls next year!

    I also hope they pass their rotten tax cut package. They’ve been touting their own propaganda about each family getting $4,000, which is total BS and only raises expectations. Most people will get pennies while the 1% and 0.1% get millions. And it will add another $1.7 TRILLION to the deficit in the next 10 years. Always a big Repuglican priority and always popular with the voters. LMFAO!!
    https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1deficitsanddebt.pdf
    Cuts to Medicare and Medicaid too… why don’t they go after the “third rail” Social Security too?

    (I keep reminding all my friends and family that we should be thankful that Trump and the Republican leadership in Congress are completely incompetent and incredibly stupid! They are doing a lot of damage, but it could be so much worse. 37% approval for Trump and 16% for Congress and that’s when the economy is good! Imagine where their ratings will be next year if the Fed keeps raising interest rates and brings on a recession?)

  183. 183
    ronp says:

    RE: greg @ 160 – Yeah, I could not take the Rush Limbaugh ignorance level so I had to comment! Yes I am biased too, but at least I can source some real statistics and real technical data. Trouble bubble is just venting spleen. :)

  184. 184
    ronp says:

    I predict the slow down has arrived. Trumpcession is (nearly) on like donkey kong. SFH price increase in King County next year will be 3.5%. Then five years of sub-3% increases. Then another slight bubble.

    US health care will still cost more than any other country but lots of people kicked off their ACA plans when the Republican tax bill passes.

  185. 185
    redmondjp says:

    By ronp @ 184:

    I predict the slow down has arrived. Trumpcession is (nearly) on like donkey kong. SFH price increase in King County next year will be 3.5%. Then five years of sub-3% increases. Then another slight bubble.

    US health care will still cost more than any other country but lots of people kicked off their ACA plans when the Republican tax bill passes.

    Oh Ron, you really should smoke some weed and chill out. Nobody will be kicked off any plan. But people may decide to not have health insurance. Oh, the horror!

  186. 186

    By redmondjp @ 185:

    Oh Ron, you really should smoke some weed and chill out. Nobody will be kicked off any plan. But people may decide to not have health insurance. Oh, the horror!

    In Ron’s defense, the press is reporting people no longer being forced to buy coverage as people losing coverage.

    And in related news, the CBO is saying this change will cause the cost of insurance to increase by 10% over the next several years. My smartass response would be that only going up 10% would be a huge improvement. My serious response is I don’t think the CBO has a very good record of predicting these things and that the real increase will probably be much higher (as have been the past real increases).

  187. 187

    RE: Kary L. Krismer @ 186
    My Private Insurance Plan is Only Set for Only a 2018 3% Increase

    But I have a nation wide employer based plan with competition and healthy folk on it.

    IOWs….its the opposite of Obamacare.

  188. 188
    Deerhawke says:

    Blah blah blah Obamacare blah blah blah health care blah blah blah Kary venting about his insurance premiums blah blah blah Bubble Trouble troll spewing Trump brown-brained talking points trying to make converts among the ignorant blah blah blah Kary complaining about blah blah blah and blah blah blah and on and on for about the last 100 posts and last several days.

    Kary get over it and move on.

    Ardell, thank you for staying on topic.

    Justme @ 165. I am amazed we have something we agree on.

    Time to move back to this site being about real estate in the Puget Sound region.

  189. 189

    RE: Deerhawke @ 188 – In case you haven’t noticed, I’m not the only one talking about Obamacare. The reason this is of interest right now is it’s the enrollment period for people with their own insurance, and they are being screwed. The other reason it’s of interest is it’s now being tied into the tax proposals

    Also, in case you haven’t noticed, I’m not stopping anyone from posting on any topic.

    Also in case you haven’t figured it out, you don’t have to read things I write.

    Now quit wasting our time with your worthless ignorant opinions.

  190. 190
    Blake says:

    By Kary L. Krismer @ 189:

    RE: Deerhawke @ 188
    Now quit wasting our time with your worthless ignorant opinions.

    Oh come on Kary… Deerhawke and you are some of the only people here that I regularly read because you both (usually) provide some real facts and information and not just knee-jerk ideological drivel!

    Yes, we’ve kicked the dying ObamaCare horse enough already, but healthcare costs ARE a terrible problem for our country that will continue to bankrupt millions of citizens and drain our treasury, while millions of the poor and sick get NO care… that is “rationing” (based on income) and shameful for one of the richest societies in world history. AND our healthcare and insurance system is incredibly inefficient, wasting at least 15% on admin and overhead. US healthcare spending is $3.2 trillion per year, so that works out to an extra $500 billion per year or 2.7% of our GDP on paperwork!!!

    FACT: No private insurance company makes money insuring sick people with chronic conditions and the very poor. The only way it can work is if healthier people subsidize the costs of care for the infirm and destitute. If any of you can’t understand that then you do not understand how insurance works!

  191. 191
    kenmorem says:

    By Blake @ 190:

    By Kary L. Krismer @ 189:

    RE: Deerhawke @ 188
    Now quit wasting our time with your worthless ignorant opinions.

    FACT: No private insurance company makes money insuring sick people with chronic conditions and the very poor. The only way it can work is if healthier people subsidize the costs of care for the infirm and destitute. If any of you can’t understand that then you do not understand how insurance works!

    don’t worry. this is ‘merica. pull yerselves up by yer bootstraps. medical coverage is for the weak. kary is the hardest working REA in the world, and he should actually be getting 10% fees, not 6%.

  192. 192

    By Blake @ 190:

    FACT: No private insurance company makes money insuring sick people with chronic conditions and the very poor. The only way it can work is if healthier people subsidize the costs of care for the infirm and destitute. If any of you can’t understand that then you do not understand how insurance works!

    Yep.

    Aetna projected around $225 million in losses from its exchange plan businesses this year following a loss of $700 million for 2014 through 2016.

    https://www.reuters.com/article/us-aetna-obamacare/aetna-fully-exits-obamacare-exchanges-with-pull-out-in-two-states-idUSKBN1862XK

    Which is why they pulled out entirely.

  193. 193
    Blake says:

    RE: Kary L. Krismer @ 192
    That’s why I thought ObamaCare would go down in flames. They had to get millions of young, healthy Americans to enroll and – SURPRISE – they didn’t! The pool of enrollees is too sick and that’s why premiums are going through the roof. Crash and burn!!
    and… It’s all Trump’s fault! ;-)
    (snark)

  194. 194
    ess says:

    While health insurance is not the primary topic of this website, it is of interest because I think premiums and payments, especially for the individual market are going to be so high that sooner or later they impact everything, including the real estate market. It probably is right up there with student loans why people can’t afford to buy a residence.

    And I assume that premiums are also going up for those who “obtain” health insurance through their employment. I remind all that health insurance, as well as all salary and benefits are a function of the employee producing enough on the job to justify the expense of his or her employment. The employer doesn’t “give” anything. and when the employee doesn’t justify the expense of his or her employment – hello unemployment office. Thus rising insurance premiums, even for those who “get it” at work, just limits the amount of income that person may earn if premiums weren’t so high for everyone.

    And as an aside, my principle and interest payment on my residence was higher than my monthly medical insurance premium. Those two switched places in terms of which was more expensive some years ago, which I noted as an ominous sign even back then. These days it is much worse.

  195. 195
    Blake says:

    By ess @ 194:

    My principle and interest payment on my residence was higher than my monthly medical insurance premium. Those two switched places in terms of which was more expensive some years ago, which I noted as an ominous sign even back then. These days it is much worse.

    Holy sheeet! That’s ominous and you make a good point about the cost of healthcare being a drag on the economy. People are also spending less at restaurants and malls. Household income has not nearly kept up with the cost of living in this country… especially in places like Seattle.

  196. 196

    By ess @ 194:

    And I assume that premiums are also going up for those who “obtain” health insurance through their employment.

    My only reference on that is for my dad where the same coverage next year on his federal retirement coverage would have been 17% more, which is only about a third of the percentage increase I had for the same coverage. Fortunately he had other options to save money too. I’m not sure why his would have gone up so much.

  197. 197
    Saffy The Pook says:

    By Deerhawke @ 188:

    Blah blah blah Obamacare blah blah blah health care blah blah blah Kary venting about his insurance premiums blah blah blah Bubble Trouble troll spewing Trump brown-brained talking points trying to make converts among the ignorant blah blah blah Kary complaining about blah blah blah and blah blah blah and on and on for about the last 100 posts and last several days.

    Kary get over it and move on.

    Ardell, thank you for staying on topic.

    Justme @ 165. I am amazed we have something we agree on.

    Time to move back to this site being about real estate in the Puget Sound region.

    Amen! If it weren’t for you, Ardell, Boater, and a few others I’d delete my Pink Pony bookmark.

  198. 198
    ess says:

    https://www.marketwatch.com/story/renting-is-better-than-owning-to-build-wealth-if-youre-disciplined-to-invest-as-well-2017-11-17

    The latest salvo in the rent vs. owning real estate debate. The only problem is the issue of being disciplined to actually save. Don’t know how many renters are able to save in the amounts that suggest renting is a better outcome than owning. Owning one’s own residence is a great forced savings mechanism, assuming all the equity isn’t refinanced for other goodies. But we reside in a hyper consumer oriented society where everyone has to own the latest version of everything, at the expense of saving anything. Many tenants are living paycheck to paycheck, and their lifestyles would require dramatic alteration to change that basic economic factor.

  199. 199

    RE: ess @ 198 – You’re right but I would add we live in an economy dependent on spending, and largely spending on stuff we really don’t need and which won’t last. I really wonder where that is going to lead us. We’ve become the grasshopper in the grasshopper and ant story.

  200. 200

    RE: Kary L. Krismer @ 189
    Yes Kary

    Haughty/Rude Open Border Progressives Love to Claim They’re Victims

    They even complain if they don’t like an email from an educated “true news” source that disrupts their politics and blames the sender for being rude? How about send it automatically to the trash bin instead and stop being an obnoxious unprofessional creep? IOWs trash it and shut up.

    This is the kind of stuff we talk about in Toastmasters BTW.

  201. 201

    RE: Kary L. Krismer @ 196
    I Read Recently

    Most fed employees choose Blue Cross, tell him that plan may have higher premiums than a HMO, but ya get to pick any specialist “low co-pay” doctor anywhere without GP referral. Federal Blue Cross went up only $17/mo BTW out of dad’s pocket.

    IOWs it will save much time and money.

  202. 202

    RE: Kary L. Krismer @ 199
    The Grasshopper”New Seattle Home” Building Material We Now Use:

    Ground up branches and tiny tree trunk saw dust mixed with glue, “glueboard”;…instead of floor planks and solid wood exterior panels…LOL

    Sheet rock made with Chinese toxic poisons to breath later [the same toxic garbage they put in the dog food?]….

    Housing Developments where all the cheap material giant “energy eater” new homes are “pastel tan” colored on postage stamp lots 5 feet from your neighbor…

    Giant “Seattle area” Property Tax increases every year and King County now adds more to your water and sewer charges [just because]….ohhhhh….$300 car tabs for the train to nowhere….

  203. 203
    ess says:

    By Kary L. Krismer @ 199:

    RE: ess @ 198 – You’re right but I would add we live in an economy dependent on spending, and largely spending on stuff we really don’t need and which won’t last. I really wonder where that is going to lead us. We’ve become the grasshopper in the grasshopper and ant story.

    And the real estate remodeling craze is a prime example for that. Exhibit A – remodeled kitchens and bathrooms. It has always amazed me that perfectly good and functioning kitchens and baths are replaced, the cost running tens of thousands of dollars, because they are “outdated”. My kitchen has the original counters and cabinets. I don’t think replacing it would improve the quality of my cooking any, but it would certainly decrease the quality of my savings account.

  204. 204

    By ess @ 203:

    By Kary L. Krismer @ 199:

    RE: ess @ 198 – You’re right but I would add we live in an economy dependent on spending, and largely spending on stuff we really don’t need and which won’t last. I really wonder where that is going to lead us. We’ve become the grasshopper in the grasshopper and ant story.

    And the real estate remodeling craze is a prime example for that. Exhibit A – remodeled kitchens and bathrooms. It has always amazed me that perfectly good and functioning kitchens and baths are replaced, the cost running tens of thousands of dollars, because they are “outdated”. My kitchen has the original counters and cabinets. I don’t think replacing it would improve the quality of my cooking any, but it would certainly decrease the quality of my savings account.

    I once listed a 16 year old above median house where a younger couple walked in during an open house and commented that the kitchen would need to be remodeled. The kitchen was in pristine condition, so it was seemingly the age of the kitchen they objected to. Apparently functionally obsolete at only 16.

    That said, I can see that significantly older is often dated, particularly if the design was trendy (e.g. stuff in the 70s). If it wasn’t particularly high quality to begin with, I don’t see a big issue replacing it, but you’re right that the functionality won’t improve (unless maybe the bathroom remodel includes adding a bidet). But unfortunately some very nice high quality wood gets thrown out just because it’s dated.

  205. 205

    Just an eye opener of sorts. I’m helping my sister with getting her house ready for market. I’ll fly out there after the holidays. I helped her buy it in 1993 for $193,000 and it’s a little over double. Great area. Great Schools. I’m looking at this one near here and there has been hardly any price movement since 2011.

    https://www.redfin.com/PA/Lansdale/1710-Meadow-Glen-Dr-19446/home/38859669

    The one above near her sold in 2011 for $425,000 and then in 2015 for $435,000 and the Zillow and Redfin Zesti-Esti-mates have it at about the same price today.

    Compare that to the listing I just sold that tripled since 2002.

    A little perspective.

  206. 206

    RE: Saffy The Pook @ 197

    Thanks! I read the comments pretty religiously, but pass when I see healthcare. But the comment that someone’s healthcare was more than their house payment was disturbing and an eye opener. Still not quite as alarming as childcare costs!

    The old 28%/36% mortgage math needs to be redone from scratch to include these things plus internet and cell phone and cable costs.

    My sister that I mentioned above has been a mortgage underwriter and volunteer budget planner for the poor for decades. I’ll have to see what she’s using for budgets for mortgage purposes these days.

  207. 207
    Anonymous Coward says:

    RE: ess @ 198 – The other problem is that it would appear they did the stupid/easy analysis and only looked at appreciation of $X dollars used for a down payment vs the same amount invested. They didn’t consider that your prinicpal payments stop after 30 years, but your rent doesn’t. If they had done the much more complicated math, they would’ve included it and not thrown it out and included only some silly % chart that doesn’t really tell any one anything about how they did their math…

  208. 208
    N says:

    By Ardell DellaLoggia @ 206:

    RE: Saffy The Pook @ 197

    Thanks! I read the comments pretty religiously, but pass when I see healthcare. But the comment that someone’s healthcare was more than their house payment was disturbing and an eye opener. Still not quite as alarming as childcare costs!

    The old 28%/36% mortgage math needs to be redone from scratch to include these things plus internet and cell phone and cable costs.

    My sister that I mentioned above has been a mortgage underwriter and volunteer budget planner for the poor for decades. I’ll have to see what she’s using for budgets for mortgage purposes these days.

    Honestly, if the majority of this country paid the full cost of their insurance rather than getting it subsidized as a benefit through their employer (which causes it’s own problems because insurance companies don’t treat you like a customer as the real customer is our employer) I’d bet a large portion of families in this country would have higher med insurance than mortgages.

    The number I heard recently was that nearly 70% of people receive coverage through an employer, either directly or through a spouse or family member’s employer.

  209. 209
    N says:

    @ 207 Anonymous Coward:
    The rent may continue after 30 years but don’t forget all the other costs over the years in maintaining a house + property taxes and insurance won’t stay static.

    Around here if you assume $100k down payment that’s a pretty good start to that investment fund plus all the rent savings over the years plus no $50k kitchen remodel, updating windows, plumbing, roofs etc that would creep up towards the initial cost of the house you paid. Another words, your investment in the house is just beginning with the purchase. By the way, that $100k would turn into $1.1M in 30 years at 8% assuming you added nothing else to it.

    If a case was to be made for home ownership from an investment point of view it would start with leverage, assuming you view that as a favorable thing.

  210. 210

    By N @ 208:

    Honestly, if the majority of this country paid the full cost of their insurance rather than getting it subsidized as a benefit through their employer (which causes it’s own problems because insurance companies don’t treat you like a customer as the real customer is our employer) I’d bet a large portion of families in this country would have higher med insurance than mortgages.

    Well, it depends. You’re probably right if it involves the low deductible plans most employers provide, but few people would probably buy those plans if they used their own dollars because it typically doesn’t make sense. Kaiser is one of the few places I’ve found that still publishes rates for various ages all on one page, and here’s their rates for the Bronze plan. One thing I didn’t notice until now is that their rates for King County are lower than for the rest of the state. I wonder if that’s true for the traditional insurers too?

    https://wa.kaiserpermanente.org/static/individual-family/pdf/2018/bronze-rates.pdf

  211. 211
    N says:

    @ Kary 210:
    Good point, although with that Kaiser Bronze your still at $850 a month for a family of four. I will say there is definitely a shift with many employers offering and/or pushing high deductible plans now a days as well.

    And the low deductible plans at most work places aren’t what they were 10 years ago. Often times deductibles still run in the $750-$1,000 per person range with 20% coinsurance thereafter. As they increase each year it makes the high deductible plans with lower upfront costs that much more attractive.

  212. 212

    You all need to watch KOMO tonight on Seattle’s income tax court fight. The opponents are pretty strong in their criticism, but Seattle’s attorney actually argued that if people don’t like Seattle’s tax they should move to Bellevue! I find that particularly appalling.

    On a positive note, KOMO made it clear that there are both constitutional and statutory problems with the tax. Usually they leave out the statute, which is fairly clear.

    http://app.leg.wa.gov/RCW/default.aspx?cite=36.65.030

    Tax on net income prohibited.
    A county, city, or city-county shall not levy a tax on net income.

    Apparently that language is too complex for the education and intelligence leve

  213. 213

    RE: Kary L. Krismer @ 212 – Here’s a link to the story:
    http://komonews.com/news/local/judge-to-rule-by-thanksgiving-on-seattles-controversial-income-tax-law

    In his final summation, Lawrence said those who benefit from working and living in Seattle should be taxed for that privilege and living in Seattle is a choice.
    “If they don’t like the tax consequences that Seattle has chosen to do an income tax, they can move to Bellevue,” Lawrence told the court.

  214. 214

    RE: ess @ 203
    Actually Remodeling Kitchens and Bathrooms Can Add the Most Value On Sale

    But its like half the amount it costs you, IOWs, its kind of like typical new car devaluation off the lot.

    I saw yesterday 2017 new Jeeps that were $30K MSRP on sale for $18K…..another devalued new car off the lot.

  215. 215
    ess says:

    By Anonymous Coward @ 207:

    RE: ess @ 198 – The other problem is that it would appear they did the stupid/easy analysis and only looked at appreciation of $X dollars used for a down payment vs the same amount invested. They didn’t consider that your prinicpal payments stop after 30 years, but your rent doesn’t. If they had done the much more complicated math, they would’ve included it and not thrown it out and included only some silly % chart that doesn’t really tell any one anything about how they did their math…

    I understand your point. Lot of moving parts to a complex issue that weren’t considered.

    Another variable not included is the ability to make extra principle payments, often with inflated dollars, to decrease the length of a thirty year mortgage.

    Not everyone makes a killing in real estate. At cocktail parties, those who bought real estate that didn’t perform well, or even declined over time, are not going to be front and center discussing their real estate deals. I know one individual (long time ago) that lost money on a Green Lake property. I also know of individuals who lost money on their homes in the Vancouver BC metropolitan area when the market declined dramatically in the late 70s – early 80s. These days the general belief is that no one can ever lose money in those markets. There are going to be surprised individuals if and when the Seattle market declines ten percent or more in the future!

    Perhaps a more useful gauge is to determine the net worth of renters vs owners after X amount of years. But even that isn’t useful, as there are so many other variables to make that comparison suspect.

    All in all, I believe that it comes down to the issue of forced savings. It is much easier to clear one’s mutual fund account for some goodie than to refinance a house for extra money. The US is a nation of spenders – not savers, and to assume that renters will apply all monies saved on buying and owning a residence to long term investments is in my opinion more fantasy than reality.

  216. 216
    whatsmyname says:

    By N @ 209:

    @ 207 Anonymous Coward:
    The rent may continue after 30 years but don’t forget all the other costs over the years in maintaining a house + property taxes and insurance won’t stay static.

    You know what else won’t stay static? Your rent. I’d rather take a percent-of-your-choice bump in my t+i than that same bump in a rent payment of 4 or 5 or more times that.

    What’s more, this is not only about the rents after 30 years. I’ve been in my house about half that time. I know about 2 inferior houses in the neighborhood that are rentals. Their rents are respectively $1,000+ and $1,300 a month more than my payments. That pays for a whole lot more remodeling and maintenance than I do. Short term after the purchase, the payments are higher than rent. But that can and likely will change.

    here if you assume $100k down payment that’s a pretty good start to that investment fund plus all the rent savings over the years plus no $50k kitchen remodel, updating windows, plumbing, roofs etc that would creep up towards the initial cost of the house you paid. Another words, your investment in the house is just beginning with the purchase.

    Will you keep moving to newer and better rentals to make this a like-on-like comparison? I think we already covered rent savings.

    By the way, that $100k would turn into $1.1M in 30 years at 8% assuming you added nothing else to it.

    That’s awesome. Do you have a place to put $100k at 8% for 30 years? Also btw, the $500k house taking the $100,00 investment implicit in your example could match that result at approximately 3%. You don’t even want to know where that goes at 8%, although it’s not too hard to figure out.

    Great thing about this life; we get to pick our poison.

  217. 217
    ess says:

    RE: softwarengineer @ 214

    That is correct – kitchens and baths are a losing proposition in terms of return on investment.
    From what I have read – the best investment in the long run is insulation.

  218. 218
    whatsmyname says:

    By Kary L. Krismer @ 213:

    RE: Kary L. Krismer @ 212 – Here’s a link to the story:
    http://komonews.com/news/local/judge-to-rule-by-thanksgiving-on-seattles-controversial-income-tax-law

    In his final summation, Lawrence said those who benefit from working and living in Seattle should be taxed for that privilege and living in Seattle is a choice.
    “If they don’t like the tax consequences that Seattle has chosen to do an income tax, they can move to Bellevue,” Lawrence told the court.

    He’s almost begging us to conclude that if the Seattle City Council doesn’t like the consequences of constitutional limitations, they can move to, I don’t know, Saudi Arabia?

  219. 219
    Hugh Dominic says:

    By Kary L. Krismer @ 212:

    You all need to watch KOMO tonight on Seattle’s income tax court fight. The opponents are pretty strong in their criticism, but Seattle’s attorney actually argued that if people don’t like Seattle’s tax they should move to Bellevue! I find that particularly appalling.

    On a positive note, KOMO made it clear that there are both constitutional and statutory problems with the tax. Usually they leave out the statute, which is fairly clear.

    http://app.leg.wa.gov/RCW/default.aspx?cite=36.65.030

    Tax on net income prohibited.
    A county, city, or city-county shall not levy a tax on net income.

    Apparently that language is too complex for the education and intelligence leve

    The Seattle income tax is on gross income.

  220. 220

    By Hugh Dominic @ 219:

    The Seattle income tax is on gross income.

    Nope, that’s just another of their frivolous arguments. It’s based a definition of “total income” which refers to line 22 of 1040, which above that line has business income, which is net income. Not to mention capital gains and losses, which are also not based on gross income, and rental income, which is not based on gross, etc.

    See the top of page 6 of this link, and any 1040 return.

    http://sawant.seattle.gov/wp-content/uploads/2017/06/Ordinance-6-9-17v2.pdf

    But a tax on gross income would really kill individual retailers, particularly if they were single, due to the low margins retailers generally generate.

    BTW, they also appear to not tax at all people who file as head of household or qualified widower. Apparently they didn’t really spend much time looking at tax returns.

  221. 221
    ronp says:

    RE: ess @ 215 – No doubt a mortgage can really help in forcing savings, but they have to live in their house for a significant period of time, transaction costs are high too. Many rural and exurban areas don’t appreciate much as well. So the people who are really motivated to invest monthly in stock index funds and hold them for a long period should do just fine compared to home buyers. Those people are few and far between, and the reason we have social security and other similar policies is because people are not so smart about saving for retirement.

  222. 222

    RE: ronp @ 221 – I would also add that current tax law encourages people to encumber their homes–which is counter-productive to saving for retirement. That’s particularly true of allowing deduction of interest on a HELOC of up to $100,000.

    Here’s an interesting article from 2011 which discusses the history of deducting interest, including the Tax Reform Act of 1986 limiting the MID to $1,000,000 of qualified debt.

    https://www.deseretnews.com/article/700200108/Eliminating-the-mother-of-all-tax-deductions.html

    They noted that in comparing other countries, those having the deduction doesn’t increase the number or amount of mortgages taken, but that at least one other country without a MID the mortgages were paid off faster.

    Three other points. 1. Apparently the 1986 act was bi-partisan–quite a change from today. 2. The $1M limit in 1986 was probably over $2M in today’s dollars, and prices were much lower, so the limit didn’t really affect many people. 3. The proposed $500,000 limit would affect a lot more people, but not people you would consider poor by any means. And the proposed increased standard deduction of over $24,000 for married couples would eat up pretty much all of the interest paid on a $500,000 mortgage at today’s rates. So it would basically merely allow other things to be deducted.

  223. 223

    On the topic of 1986 dollars, one of my favorite Gary Shandling jokes was from his appearance on Saturday Night Live in 1987.

    So, the final person I bounced this idea off – I’ve been looking for a house in L.A., and I’m thinking this week I’ve gotta do “Saturday Night Live”, what kind of monologue do I want to do. I said to the realtor who showed me the house. Now, I’ve never bought a house before. She shows me a house, $350,000 on a hill, two bedrooms, she tells me it has a great view. For $350,000, I’d better open up the curtains and see breasts against the window.

    $350,000 for a house with a view in L.A.? I wonder if he was just out of touch with values, or if that’s really what they were going for then.

    http://www.nbc.com/saturday-night-live/video/garry-shandling-monologue/n9604?snl=1

  224. 224
    Hugh Dominic says:

    RE: Kary L. Krismer @ 220 – Ha you are right. These people are fools.

  225. 225

    RE: Hugh Dominic @ 224 – Well I guess for $30,000 Seattle really couldn’t expect the law firm they hired to actually read an entire 1040 return. /sarc

    In June, Holmes’ office signed a separate $30,000 contract with Pacifica for work on drawing up the tax measure.

    https://www.seattletimes.com/seattle-news/politics/seattle-to-pay-up-to-250000-for-legal-help-in-defending-new-city-income-tax/

    I’d say more, but I wouldn’t want to give Seattle any free advice on how to do it right.

  226. 226
    ess says:

    RE: Kary L. Krismer @ 223

    These days, the only way one can tell that joke without being excoriated is if the view is of chicken breasts. And even that would upset the animal lovers.

  227. 227
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 223

    Reminds me of Bosch. Depends on what the view is. Ocean (peek, slice, white water, etc.) or territorial? But that price looks a bit high for 1986 or at least way up from the 70’s when they were much cheaper.

  228. 228
    Timbo says:

    RE: ronp @ 155

    Federal taxes are irrelevant to this discussion– in E WA U.S. route 2, 395, and 195 are all federal highways with heavy freight traffic that should have been four laned two decades ago but state funding priorities, and the agencies taxing us, remain focused west of the mountains. Hence we have WADOT proposing roundabouts on 395 in Deer Park. I’d like to see them utilize such a solution at 1-90 and I-405 and see how long these idiots keep their jobs.

    The assumption that urban bike riders all have cars is pure fiction.

  229. 229
    Timbo says:

    RE: ronp @ 157

    What a joke.

    Obamacare is nothing more than accounting gimics, shifting Medicaid recipients onto Obamacare– and for the rest of folks, even with IRS non participation penalty awards, enrollment crashed to barely 11 million who remained enrolled last year.
    Many areas, especially rural ones, are devoid of any health insurer exchange options or are now served by only one choice.

    This entire neo liberal experiment is a fiasco– basically a very expensive paper shuffling documentation exercise– sure, Wahoo! you now have an insurance card– on paper. Complete with massive deductibles, limited coverage, high co pays, and sky rocketing premiums, Its very worthless paper.

    The only folks who still support this fiasco are those who either were already on Medicaid, or those who don’t have to access the exchanges because they have employer sponsored coverages.

    But yeah, be comforted by the bogus claim 22 million people have insurance now that didn’t have it before, as we continue to prop up corporate welfare– one medical insurance carrier after another.

  230. 230

    RE: Timbo @ 229 – Part of the problem with Obamacare (and Obamacare surveys) is it’s different things to different people. For people who are employees and get coverage through their employer it means relatively little (depending on how much of the extra cost gets passed along), assuming they didn’t get their hours cut. For people who were previously uninsured and added to Medicare, it’s probably a lot better than what they had. For people who wanted coverage and are getting large subsidies, they probably like it a lot. But those of us who had insurance before and are not getting subsidized, it’s been a disaster. For me it’s now the third different plan (ignoring minor technical changes forced by the law), I became forced to see a more limited set of doctors and now forced to go see entirely different doctors, and coverage is much more expensive (although about $10-20 a year of that would have occurred due to increase in age).

    But my point is Obamacare is different things to different people, and that different in opinion is based on personal circumstances.

  231. 231

    This slowing income growth for the Seattle area is interesting. Any guesses why? Mine would be maybe the measurement isn’t that accurate. Or maybe 2015 was an unusually high year (I always hate reporting which only gives two data points).

    https://www.seattletimes.com/business/economy/metro-seattles-personal-income-growth-slowed-in-2016

  232. 232
    Hugh Dominic says:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

  233. 233

    By ARDELL DellaLoggia @ 227:

    But that price looks a bit high for 1986 or at least way up from the 70’s when they were much cheaper.

    In the early 70s you could buy a halfway decent small house in Seattle for around $50k, but it was probably at least 2x that amount by the mid-80s.

    But he did specify it was a two bedroom, and maybe it was even a condo. Or maybe he just didn’t want the number in his joke to be too high of a number for fear that would reflect on him and take away from the joke. Still it does show that in the mid-80s people probably considered $350,000 to be a lot of money for a home.

  234. 234
    Justme says:

    By Hugh Dominic @ 232:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

    Do tell, Hugh. What is happening?

  235. 235

    RE: Justme @ 234
    Amazon Hiring Short-term Jobs Now

    So last the next several months Seattle “jobless” folks can stand on their feet all day [with little or no bathroom breaks] at Amazon warehouses and thank Boeing outsourcing for horrible low wages at Amazon.

    HQ2 to move perhaps to Kansas City where low wages stretch anyway?

  236. 236
    redmondjp says:

    RE: softwarengineer @ 235 – There is a new Amazon fulfillment center along my lunchtime walking route. There is a huge line of private vehicles stretching all through the parking lot, as the cars go into the building and pick up the packages for their route.

    This new ‘gig’ economy is awesome! Now anybody with a smartphone and a car can deliver packages, woo-hoo!

  237. 237

    RE: redmondjp @ 236 – I wonder how many have the proper rider on their insurance (I would assume it’s the same as doing Uber, but maybe not), and whether Amazon makes them add it as an additional insured?

  238. 238
    redmondjp says:

    RE: Kary L. Krismer @ 237 – All good questions – there was a really good article online about this last week (and now of course I can’t find it), but here is some recent news regarding this practice:

    https://www.workdayminnesota.org/articles/workers-raise-concerns-about-wage-theft-amazon-subcontractors

    Also is the concern that some independent contractors may report that a package has been delivered, when in reality they just took it home instead. Then you can blame a porch package thief, right?

  239. 239
    Bubble Trouble says:

    By softwarengineer @ 235:

    RE: Justme @ 234
    Amazon Hiring Short-term Jobs Now

    So last the next several months Seattle “jobless” folks can stand on their feet all day [with little or no bathroom breaks] at Amazon warehouses and thank Boeing outsourcing for horrible low wages at Amazon.

    HQ2 to move perhaps to Kansas City where low wages stretch anyway?

    Nonsense. I have been assured by smart leftists that manufacturing jobs are not what we want. We only want “service” jobs. And since they are leftists and smart they can’t be wrong.

  240. 240
    Bubble Trouble says:

    By Timbo @ 228:

    RE: ronp @ 155

    Federal taxes are irrelevant to this discussion– in E WA U.S. route 2, 395, and 195 are all federal highways with heavy freight traffic that should have been four laned two decades ago but state funding priorities, and the agencies taxing us, remain focused west of the mountains. Hence we have WADOT proposing roundabouts on 395 in Deer Park. I’d like to see them utilize such a solution at 1-90 and I-405 and see how long these idiots keep their jobs.

    The assumption that urban bike riders all have cars is pure fiction.

    Anyone who lives east of the mountains is a deplorable. They are lucky to even have a 1 lane road. The funding needs to be focused on bike lanes, bus lanes and green spaces in Seattle….where the sexy people live. Those sub-humans east of the mountains just need to shut up and send their taxes over here.

  241. 241
    Bubble Trouble says:

    By Hugh Dominic @ 219:

    By Kary L. Krismer @ 212:

    On a positive note, KOMO made it clear that there are both constitutional and statutory problems with the tax. Usually they leave out the statute, which is fairly clear.

    http://app.leg.wa.gov/RCW/default.aspx?cite=36.65.030

    LOL. As if a pesky thing like the constitution/statute will get in the way of a Democrat’s wet dream of an income tax in WA. The supreme court will rubber stamp it. Only hope is that it goes to SCOTUS.

  242. 242
    Sid says:

    By Hugh Dominic @ 232:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

    Fake news.

  243. 243
    redmondjp says:

    By Sid @ 242:

    By Hugh Dominic @ 232:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

    Fake news.

    Wait long enough and it will be true.

    David Cassidy died. It may be fake news today, but not so tomorrow. See how that works?

  244. 244

    Here’s an article on the cost of new mobile homes–double-wides. Sort of some rather surprising if not eye-opening numbers. If they can get $250,000 for a new double-wide, how is it even possible to buy a house on land anywhere for $300,000?

    The article raises other questions for me. Is replacement cost insurance not available on mobile homes–are they insured based on depreciated value like most cars? Or does it maybe matter if they are attached to the ground and converted to realty, or left as personalty? If the only insurance available is based on depreciated value, then that would be a huge disadvantage, particularly in hurricane and tornado areas.

    https://www.bloomberg.com/news/features/2017-11-21/mobile-homes-are-so-expensive-now-hurricane-victims-can-t-afford-them

  245. 245

    RE: redmondjp @ 236
    Ya Also Need Money

    But fulfillment warehouses with slave workers are better built where workers can afford the rent, not Seattle BTW.

  246. 246

    RE: Kary L. Krismer @ 244
    Earthquake Preventive Pilings on Mobile Homes

    Can withstand a much higher Seattle Area Richter Scale Catastrophic Event than crumbling cement foundations.

    $250K is high for a mobile home, but a better earthquake insurance than the expensive stick homes with cement foundations. Ask a good home inspector if ya don’t believe me.

    Seattle doesn’t believe in science that differs from their political pocketbooks.

  247. 247
    whatsmyname says:

    By redmondjp @ 243:

    By Sid @ 242:

    By Hugh Dominic @ 232:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

    Fake news.

    Wait long enough and it will be true.

    David Cassidy died. It may be fake news today, but not so tomorrow. See how that works?

    2018 will be done in a little more than 13 months. If you have to wait longer than that, it will not be true.

  248. 248
    Brendan says:

    RE: Kary L. Krismer @ 85
    Actually, those two roads were built by different agencies. Mercer is owned and was designed by the state i.e. WSDOT.

    The road through columbia city is owned by the city and the new design is according to Seattle DOT. They actually do traffic studies and figured out that 2 lane roads with a dedicated turn lane is faster than a 4 lane road without one.

    On the other hand WSDOT’s general solution to traffic is just to add more lanes… and ignore the fact that the road just turns into a parking lot because of bottlenecks down the line. They are also responsible for the new 99 tunnel and the new alaskan way design.

    They also did retime the lights to make it harder to get across mercer just as you suspected…

  249. 249
    ronp says:

    RE: Timbo @ 228 – yes, those roads need improving as well, but the bulk of the revenue for rural roads comes from the west, at least according to this older article (probably even more imbalanced now) http://www.thestranger.com/seattle/welfare-state/Content?oid=6686284 .

    Federal fuel taxes raised $35.2 billion in Fiscal Year 2014 and a lot of that money goes to rural roads and highways.

    We need a carbon tax to spend more on infrastructure, support wind and solar, help farmers deal with climate change, build protected urban bike lanes, etc.

  250. 250
    ronp says:

    RE: Bubble Trouble @ 240 – Nothing wrong at all with living in the country, rural people can be sexier and more sustainable than urban people, no doubt.

    Limited choice of private schools out there though.

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