Tune in to the Weissbach show today at 5:30 PM on AM 570 to hear me (The Tim) discuss the local real estate market with host Peter Weissbach. See Tuesday’s post for a little more info on Weissbach’s program.

If you’re at a computer, you can listen online here.

Update: If you missed the program, here’s the audio.

[See post to listen to audio]

Thanks again to Peter for having me on!

Tune in to the Weissbach show today [this Thursday] at 5:30 PM on AM 570 to hear me (The Tim) discuss the local real estate market with host Peter Weissbach.

Almost all the local radio hosts I listen to have recently been hawking real estate “investment” opportunities (especially a particular “resort” in Eastern WA) and/or pushing mortgages with “rates are about to go up” scare-talk. I don’t believe I’ve heard Weissbach join in on that nonsense. On the contrary, I have specifically heard him denounce the misplaced notion that buying a home is somehow the path to riches.

Weissbach’s program is always entertaining and unfortunately only lasts an hour, so I am grateful that he has invited me on. I’m looking forward to joining Peter today, and hope you all tune in. [Thursday] AM 570, 5:30 PM. If you’re at a computer, you can listen online here.

Hopefully things should be fully operational again by the end of Saturday with minimal disruption, but be aware that it may take some time for your internet provider’s DNS servers to update to the new site host.

Update: If you’re reading this update, then you are viewing the site on its new host. Everything should be up and running. Let me know if you experience any difficulties. Thanks!

Exciting Independence Weekend Contest!

Whoever guesses the closest lat-long coordinates to the location where the above picture was taken wins a Made in Washington gift bag with some MarketSpice tea, a Fran’s chocolate bar, some Cabernet chocolate cherries, Biringer’s lemon tea cookies, and an Almond Roca.

One entry per person, leave your guess in the comments along with a valid email address so I can contact you if you win. Contest closes at midnight Monday morning / Sunday night.

Have a great weekend everybody!

Update: Congratulations to Joe @ comment #4, whose guess was just 16 feet from the correct location! Incredible. If I didn’t know better, I’d think he somehow cheated. Here’s a map of all your guesses, with the correct answer marked in green:

View Seattle Bubble Independence Weekend Contest Results in a larger map

DATE & TIME: Tuesday April 21st at 7:00 PM
PLACE: Third Place Books (Lake Forest Park at the corner of Bothell Way (522) and Ballinger Way (104))

Parking is plentiful and free both below at the main entrance and above behind the building. We will be meeting in the commons area near the main stage. We’ll be sure to put some sort of “Seattle Bubble” sign up again on our tables.

See you there!

First-time home buyers would get their $8,000 tax credit as a state loan at closing, under a measure the state Senate Ways and Means Committee approved Wednesday night.

The federal government is offering the credit to first-time buyers who buy a home through November, but won’t pay the credit until after buyers file this year’s tax return. Under the new budget amendment, which State Treasurer James McIntire wrote, buyers would get the money as a loan at closing, meaning they could use the money for down payments, then pay it back when they got their tax refund.

As you could probably guess, this is being pushed for by the Washington Realtors and Lennox Scott.

As it is currently executed, the $8,000 first-time homebuyer tax credit is not able to influence the price of homes that are purchased, since it is not received until up to a year after the actual home purchase was made.

If the state starts handing out the $8,000 during the purchase, that money is immediately tied into the house. With homes continuing to depreciate (at an increasing rate), by the time the actual credit is received from the IRS and paid back to the state, the equity will likely be gone. $8,000 down the drain.

In contrast, if the homebuyer is forced to practice the lost art of delayed gratification, when they receive their $8,000 government handout in 2010, they will be able to invest it, maybe buy some furniture, or—here’s a crazy idea—save it.

Also, who knows what the homebuyer’s situation will be by the time they actually file their 2009 taxes next year? What if they end up owing some money, and they don’t get the full $8,000 from the IRS in an actual check? If they pre-used that money to buy a bigger/better house than they otherwise would have been able to, it is unlikely they will have saved much in the interim to be able to pay back the state. Or what if the homeowner loses their job? If they had not pre-spent the $8,000, it could have been used to tide them over for a few months on their shiny new mortgage.

All in all, this is a terrible idea. Shame on the Washington Realtors (the organization, not necessarily the individuals) and Lennox Scott for encouraging more of the same the type of irresponsibility that got us into this mess in the first place.

(Aubrey Cohen, Seattle Real Estate News, 2009.04.17)

Here are the details:

DATE & TIME: Tuesday April 21st at 7:00 PM
PLACE: Third Place Books (Lake Forest Park at the corner of Bothell Way (522) and Ballinger Way (104))

Parking is plentiful and free both below at the main entrance and above behind the building. We will be meeting in the commons area near the main stage. We’ll be sure to put some sort of “Seattle Bubble” sign up again on our tables. Call 206.313.1914 if you need help or can’t find us.

Here’s Google Street View of the spot, just because I can:

Again, this is just an informal get-together with no official agenda, just to meet up and hang out. Third Place Books is a more open space than where we met last time, so it shouldn’t feel near as cramped. Also, there is a little food court there, but be aware the most restaurants at the commons stop serving around 8:00-8:30 PM. So if you are hoping to buy food, you should plan to arrive by about 7:30 PM.

I’ll be there, as it’s practically right in my backyard.

Hit the forums for more details. Unfortunately I will not be able to attend, due to prior commitments at church.

Also, I’m updating the theme to the latest version. You can now reply to comments directly.

Current known issues:

• Forums totally broken.
• Inventory tracker not updating.
• “Recent On-Topic Forum Posts” sidebar widget is experiencing technical difficulties.

*Slaps forehead*

Somehow my server PHP version got switched to 4, which killed first the two functions in the list above. It has been switched back to 5, and things appears to be working now. Please let me know if you encounter any issues.

DATE & TIME: Tuesday January 20th at 6:00 PM
PLACE: Kate’s Pub (Wallingford; located near I-5 and many bus routes)
RSVP: Optional; E-mail eli [at] eligoldberg [dot] com and we’ll save you a spot.

Our table will have an improvised “Seattle Housing Bubble” sign. Call 206.313.1914 if you need help or can’t find us.

See you there!

Well, an intrepid reader got tired of waiting for me to put something together, and has planned the first Seattle Bubble meetup for next week. Here are the details:

DATE & TIME: Tuesday January 20th at 6:00 PM
PLACE: Kate’s Pub (Wallingford; located near I-5 and many bus routes)
RSVP: Optional; E-mail eli [at] eligoldberg [dot] com and we’ll save you a spot.

Our table will have an improvised “Seattle Housing Bubble” sign. Call 206.313.1914 if you need help or can’t find us.

Here’s Google Street View of the spot, just because I can:

And as long as I’m getting all Google-riffic, here’s a link to allow you to add it easily to your Google Calendar:

It’s just an informal get-together with no official agenda, just to meet up and hang out. Thanks to Eli for setting this up. I’ll be there.

‘Twas the night before Christmas, when all thro’ the land
Not a creature was stirring, not even Suzanne;

Bad mortgages hung by the treasury with care,
In hopes that Hank Paulson soon would be there;

The realtors were nestled all snug in their beds,
While visions of six percent danc’d in their heads…

No substantive post today. For those that choose to stop by, enjoy this open thread, and this majestic photograph of Crystal, the pretty pink pony, Seattle’s real estate mascot.

Merry Christmas from Seattle Bubble!

No post today. Consider this an open thread for any of you that are hanging around here today.

Photo taken August 10, 2006

So far I have sent requests to:

• Todd Britsch of New Home Trends
• Dick Beeson, Windermere broker and NWMLS director
• Matthew Gardner, local economist
• Dick Conway, local economist
• Dan Klusman, Master Builders Association (RightTimetoBuy.org)
• J. Lennox Scott, CEO of John L. Scott

Unfortunately, Lennox’s Director of PR has already denied my interview request with him.

If you have any additional individuals that you think we should interview, let me know in the comments. Furthermore, if you have specific questions you would like to see asked, leave those in the comments as well. I can’t promise that I’ll ask every question that is posted, but I will do my best to include the most relevant and interesting ones in the interviews.

General questions for any and all of the interviewed industry insiders are acceptable, as are specific questions for one particular person. I’d like to expand the conversation and give the “other side” a fair shake.

I just wanted to take a moment to extend a big thank you to everyone that donated. Your financial contributions allow me to continue operating this site, providing an independent alternative for real estate news and analysis in the Seattle area.

I look forward to rolling out the exciting things I have planned for Seattle Bubble in the coming months, and I greatly appreciate your continued assistance.

Thanks everyone!

Unfortunately, in recent weeks a handful of people have been coming in here and leaving comments that are quite clearly intended to antagonize, anger, and upset others.  You can thank this small group of people for ruining the hands-off policy for everybody.

So, starting now and for the foreseeable future, this is the comment policy that will be enforced on Seattle Bubble.

If your comment contains any of the following, it will be either edited or deleted:

• name-calling
• blatant antagonism
• swearing

Antagonism is obviously subjective, but I will probably more readily delete a comment that seems like it might be antagonistic than leave it up.

Also, from now on, no commercial links may be left in the body of the comment.  If you want to fill in your business link in the comment form where it says “website,” feel free to do that, and it will be linked to your name.  But posts with links to a business in the body of the comment will be edited or deleted.  If you want to advertise your business on Seattle Bubble, you need to pay just like everyone else.

Commenters that repeatedly choose to violate these simple rules will be banned.

Feel free to express whatever opinion you want, but find a way to express it that doesn’t come across like a jerk. I gladly welcome dissenting opinions, but I do not welcome rude and hostile trolls.  The comment section of Seattle Bubble is intended to be a place for productive discussion of the posts.  It is not some sort of internet fight club.  If you want to sling insults at people, go find some other forum.

March 4 2009 Addendum: Please keep comments on-topic relative to the post that you are commenting on. For off-topic comments, please use the provided open threads and the forums. Off-topic comments may be deleted or moved to the current open thread.

Here’s an open thread.  Feel free to discuss whatever you want.

At 4:00 today I’ll be joining Dustin and the Rain City Guide crew for a live podcast sort of thing that they’re calling Rain City Radio.

You can join in on the conversation via chat or call-in by going here, or via the embedded widget on this post (if I did it right).  If you can’t listen live, you can listen to the recorded call there later.

Update: That was fun. You should be able to use the widget on this post to listen to the recording. Here are a few of the posts I mentioned in the call:

• King County Home Prices: 1946-2007
• King County Affordability: 1950-2007
• Buy Now, or Wait it Out?
• Pink Ponies on the Forums

So, I created my own map based on some more detailed pdf versions of the maps that I was pointed toward by Greg Perry (thanks Greg!).

I’ve finally finished drawing all the perimeters, and before I do much more work on it, I thought I’d solicit some feedback from you. So what do you think? What would be the best way to display this? What features does the map need? Any and all relevant feedback is appreciated.

Also, I haven’t posted regarding the Fundraising Drive lately, and as a result donations have somewhat slowed. Thanks to the 54 people that have contributed so far, we’re nearly 50% of the way there. Thank you everyone!

Please consider donating if you have not already. Your money helps make Seattle Bubble a better resource for everyone. Thank you!

Time for another update on the fundraising drive. So far 39 people have donated a total of $885, putting us over 1/3 of the way to the goal. Thank you for your generosity!

If just 65 more people were to donate $25 each, the goal would be reached. Please consider making a donation if you have not already. If you have—thank you again.

Someone left the following comment on the previous fundraising post:

I’ve wondered how you monetize your detailed, quantitative knowledge of the real estate market once the local market passes its bottom. Seattle Bubble, by the nature of its title is a bit time limited.

That’s a great question, and it’s something I’ve definitely been thinking about. When Seattle Bubble launched in late 2005, the purpose of the site was to explore the housing bubble and how it related to the local real estate market. Since then, I feel like the site has grown into much more than that, and become more of a general news and analysis source for the local residential real estate market.

I think this is a service that has a place even after the housing bubble has played itself out, and as I have said, I intend to continue growing the site and making it an even better resource to that end. That being said, I am interested in more feedback regarding the name of the site. Technically speaking, it would be a piece of cake to re-name the site and automatically redirect visitors to a new domain, but is that really necessary? Does the name of the site really matter if the content is quality? What’s a “Zillow” or a “Redfin”?

I’d like to hear your thoughts on the “branding” of the site, keeping in mind the goal of where I’d like to bring the site over the next few years (which I described in the initial fundraising post).  If you have any good name ideas, feel free to list them here as well.  Thanks!

Well, after two days of the fundraising drive, we’re over 19% toward the $2,500 goal. I’d like to extend a big thank you to the 22 donors so far. I greatly appreciate your generosity.

The level of contributions is more or less in line with any similarly sized drive, as far as I can tell, but I will admit that 22 people doesn’t seem like very many when you consider that over 3,000 people read Seattle Bubble each of the last two days. (This is the obligatory guilt-trip part of the fundraising drive.)

Remember that your contributions help allow me to dedicate more time to bringing continuous improvements to Seattle Bubble. We’re talking extra content, spiffy tools, and useful resources. You are helping to evolve Seattle Bubble into an even more useful and valuable tool for the local housing market.

Just 100 people (less than 4 percent of the usual weekday readership) contributing $25 would be enough to achieve the entire goal. Of course, I completely understand that donating to a free website is not likely to be high on most people’s to-do list, which is why most public TV and radio pledge weeks take forever to reach their goals as well, despite having far, far, more viewers/listeners than a niche website like this. That being said, every donation is appreciated, and brings us that much closer to reaching the goal. Even $10 lets me know that you appreciate the effort that I am putting in daily to bring you the latest comprehensive look at the local housing market.

Thanks for your support.

As you may or may not know, Seattle Bubble is one of a handful of projects that now make up my full-time job. Since dedicating a larger amount of time to improve and expand Seattle Bubble, I have been able to greatly improve the aesthetics, add useful widgets like “recent forum posts” on the sidebar, and create more in-depth and interesting posts.

However, as the housing market returns to sanity, my work here is only just beginning.

So, I’m taking a page out of the public TV playbook, and running a donation drive this week. The goal is pretty modest: $2,500. Considering that a popular local political blog was recently able to raise $6,000 in a week, I think this is a wholly realistic goal.

I would like Seattle Bubble to become so much more than just real estate news and discussion. We’ve already got a lot of useful resources here for anyone that wants to research the local housing market, but I want to give you more. Here’s a sampling of what I’ve got cooking for Seattle Bubble:

• Comprehensive checklists for home buyers and sellers
• Simple to use and easy to interpret market statistics (i.e. – not just the usual static graphs and charts)
• Interactive maps (in-progress sneak preview)
• Succinct quarterly market newsletters

In order to do all these things, I need to keep growing the income generated by Seattle Bubble. So I’m coming to you, the readers with a request for a few bucks. If you would like to support what we’re doing here, there are a number of ways you can donate.

If you’d like to donate up to $25, I recommend the under-utilized Bulls, Bears, and Ponies gimmick.

Alternatively, for donations of $10 to $250 (in round increments), you can use this handy-dandy button here:

For anyone generous/crazy enough to want to give more than that, you can enter any amount you like through PayPal here.

If you want something more tangible in return for your money, consider buying some advertising on Seattle Bubble. Our rates range from $65 to $200 a month, and we are fairly flexible in how we display the ads. Please read through the advertising page and contact us through the link there for more information.

Please consider donating to Seattle Bubble to help this become an even better resource to educate and empower regular people that just want to make the most out of buying or selling a home.

As is the custom with donation drives, I’ll be popping in throughout the week with updates and a renewed request for your support. Rest assured, this will not mean a reduction in the number of quality on-topic posts you get in the mean time. I’ll keep bringing you the latest news on Seattle’s housing market whether you choose to support me financially or not.

Thank you in advance for your consideration and generosity.

I also highly recommend checking out the forums, where lots of interesting discussions take place daily.

One of the segments later this week will feature me gabbing with co-host Jim Dever about Seattle Bubble and the local market. I’ll probably post that particular segment on here once it airs.

P.S. (If the King 5 website tries to get you to register to view any of the above links, just remove the “http://www.king5.com/sharedcontent/membership/join.jsp?fw=” part from the address bar and try again.)

Update: I’ll be on tomorrow night. In the promo after tonight’s show they plugged my segment with the line “he’s the Seattle Real Estate guru who doesn’t even own a house!” That’s amusing to me, because I have never, nor would I ever refer to myself as a “real estate guru.”

I’d like to take a moment to announce a fun new gimmick that I’ve created for donating to Seattle Bubble: Bulls, Bears, and Ponies. A lot of people have given some money to Seattle Bubble, and your donations are greatly appreciated. However, until now there has been no way to get a little recognition for your contribution to keeping this site running.

That’s where Bulls, Bears, and Ponies come in. It’s just a fun little way for me to say “thank you” to people that donate to Seattle Bubble. When you donate through the Bulls, Bears, Ponies page, you’ll get your very own little icon over on the sidebar under the advertising block, with whatever message you choose. It will even link to a site if you like.

For the full details, check out the Bulls, Bears, Ponies page. Have a great weekend everyone.

First off I want to thank Dylan W. and the Seattle Metroblogging crew for putting on this tournament. It was a fun way to learn about new and interesting blogs that I haven’t previously known about. I enjoyed the good-natured contests against Eugene Cho and versus food blog Accidental Hedonist, and through the contest was introduced to the delightful Vintage Seattle.

Unfortunately, the good-natured competition of the tournament was poisoned in the quarter-final round as the match between Huskies Fan and Lookout Landing degraded into a contest of who could cheat the best. When both blogs were allowed to continue to the semi-finals against Seattle Bubble, I had hoped that the over-the-top cheating would be left behind in the quarter-finals, and that we could have a fun, easy-going, and above-the-board competition like those we experienced in the previous rounds.

Regrettably, as the saying goes, bad company corrupts good morals. I don’t know who was responsible for kicking off the cheating in this round, but it would appear that both sides are equally guilty of some serious monkey business in the semi-finals. It seems likely that there were no more than a handful of cheating individuals on either side of this match, but even one determined cheater is enough to ruin the contest for everyone. Previous rounds were entertaining and fun, but with all the cheating and personal attacks that have been flying around, this round has been about as enjoyable as a fistfight.

Therefore, for the sanity of our readers, and in the interest of fairness to the blogs in the Coyote bracket that appear to be keeping with the spirit of the competition, I am withdrawing Seattle Bubble from the tournament. I have removed the poll from our sidebar and the vote links from the top of all our pages, and will no longer promote the contest on Seattle Bubble. It’s simply not worth putting this much effort into a competition that has clearly degraded into a cheat-fest, and would end up being decided by who has the most people pouring in multiple votes in the final hours of the contest.

Thanks again to Rain City Guide and Seattle Real Estate Professionals for their support, and thanks to everyone that voted in any of the rounds of this tournament. It’s been fun.

As of this post, it’s a dead heat, with Seattle Bubble trailing by one vote, 924 to 925. Many thanks to everyone who has voted so far, and special thanks to Rain City Guide and Seattle Real Estate Professionals for the plugs.

The Lookout Landing crowd seems to think that they will get a surge of votes this evening surrounding the Mariner’s first game, so we need your vote now more than ever.

If you’re reading this on a computer that displays poll options instead of poll results over on the right sidebar, then click the little bullet next to “Seattle Bubble” and click “Vote.” I’m talking to you too, RSS subscribers. Take five seconds to load either Seattle Bubble or the contest page, and vote for us.

This concludes today’s episode of “Shameless Begging.” We now return you to your regularly scheduled programming.

[Update:] Seattle Bubble has withdrawn.

To make it even easier to help us win this round, I’ve embedded the poll at the top of the sidebar to the right. You can also go to the official poll site here. Either way, I hope you take the brief moment to support the best real estate blog in town. Let’s win this thing!

Here are some direct quotes from recent comments or emails:

• “…add more buyer support with consumer input.”
• “…take this blog in a new, constructive direction.”
• “…collect and publish some very useful statistics in King County that no one currently is putting together.”
• “…the mocking tone of most of the conversations here…how are you going to address that for new customers?”
• “Your site is rapidly becoming useless. Now that the repeatedly prognosticated fall has happened you have nothing to say of any value.”

Some of these are helpful, and in addition to this week’s poll, are helping me get a better idea of the direction people would like to see Seattle Bubble move. In order to solicit more feedback (hopefully of the constructive variety), I’m opening this post up for you to air your thoughts. If you just need to vent, that’s fine, but what I’m really interested in are your thoughts on how this site can become a better resource to anyone that is interested in real estate in the greater Seattle area.

If all you have is love and compliments, save those for another post, or feel free to express your gratitude in the form of a (non-tax-deductible) donation. Let’s keep the comments to this post on the topic of how Seattle Bubble can improve. Thanks in advance for your thoughts.

• Where does The Tim find the time to do all this?
• Why are you adding advertising now, after two years of being ad-free?
• Also, why do I have this strange urge to spend all my evenings watching “Short Circuit”?

Well, I don’t think I can really help you with that last one (let’s try to stay on-topic), but hopefully this post will sufficiently address the first two.

Here’s the short version:
As of January 28th, Tim Ellis is self-employed, and Seattle Bubble is one part of the plan to make enough money to pay the bills.

Here’s the long version:
I’ve had a growing list of projects mulling about in my head, and although I enjoy electrical engineering and had nothing against my employer, I have always had a strong desire to be self-employed. Given my present financial situation of zero debt, low living expenses (including no rent, as my wife and I are caretakers on an unused property), no kids (yet), and enough liquid savings to last over two years with zero income, it is hard to imagine a better time in my life to chase this particular dream. So, upon returning from our big giant road trip, I put in the two week notice at work, and as of January 28th, I am now an employee of Me, Myself, and I, Inc.

Although Seattle Bubble is not the entirety of my plan to generate an income, it is an important element. What this means is that you’ll be seeing some advertising, but you’ll also be seeing more frequent updates, additional content, and a quicker responses to your questions and concerns. I intend to do my best to keep Seattle Bubble interesting and relevant, even as the housing market finally comes down from its recent ridiculous highs. In addition to the advertising, I’m considering a few other ways of making some money off of Seattle Bubble, including sales of stickers and/or t-shirts, some sort of premium content (over and above what is already being offered—nothing currently free would become for-pay), and of course there’s always the big DONATE link at the top.

But that’s not all…
Now you may be asking: “So, if Seattle Bubble isn’t the whole plan, how do you intend to make enough money to get by in Seattle?”

That’s a great question. To answer that, I’d like to direct you to my brand new blog: Thatch Mound. Thatch Mound is the “parent company” that I have created to serve as an umbrella over all of the projects I’ll be working on. In the blog I’ll be giving a first-hand account of my experiences as I build the business from the ground up. I hope you’ll find it interesting enough to visit regularly and see how things unfold.

So that’s what’s going on, that’s the big secret. As for the ads on Seattle Bubble, I realize that they’re probably poorly targeted, and they may be a bit annoying (though I’ve tried to avoid making them invasive), but hopefully they don’t detract from the quality content that we work hard to bring you here. If they really bother you a lot, I recommend using Firefox with the Adblock Plus add-on. Ta-da, ads gone.

I appreciate any financial support you care to send via the donate option, and for those of you that have already generously donated, thank you. I’ll set you up with some free t-shirts or subscription content when those things are added in the near future.

Now go visit Thatch Mound, and tell all your entrepreneurial-minded friends about it, too.

If you have any problems, comments, compliments, or any other thoughts about the new layout, please air them here, or send me an email.

Of course, I don’t want to go to a bunch of effort to plan something if nobody would even really be interested in showing up. So I’m posting this to gauge your interest in this sort of thing. If you would be so kind, I’d appreciate it if you would leave a comment stating whether you would come to a Seattle Bubble meetup, what day of the week / time works best for you, and any location suggestions you might have.

Depending on how much interest there is, I’ll try to throw something together for next month.

With that in mind, please take a few moments to look through the terms below and give us some feedback. If we left anything important out or got something wrong, please let us know in the comments below. Also, if you have any suggestions on ways to format it to make things easier to find, feel free to share that as well.

Please limit discussion on this thread to comments specifically related to the glossary. If you would like to discuss other topics, use the forum. Thanks!

Question: I have been seeing stories in the news about the housing bubble around the country, with some areas seeing a drop in prices now that the big boom is over. Do you think that will happen here in the Seattle area too?D.K., Lynnwood

Answer: …Last year at this time, I went out on a limb and said that I felt that the local housing market was peaking. I thought that home prices would max out during the spring home-buying season and then level off. Home prices actually continued to increase through late summer, but the housing market has definitely cooled off in the last three months, as I had expected.

This week, the Northwest Multiple Listing Service released home sale stats for November and you can see that a trend is emerging. There were 35 percent more homes for sale last month than there were in November 2005. At the same time, there were 11 percent fewer homes sold in November compared with November 2005.
…
So I suspect that next spring when most sellers put their homes on the market, we will see a big increase in the inventory of homes of sale. And unless there is a large pool of prospective buyers out there, we will probably see the home market swing toward a buyer’s market where there are more homes for sale than buyers. That’s good news for home buyers who have been frustrated by skyrocketing home prices over the past few years, but not such good news for homeowners who need to sell soon.

As I said above, prices will likely flatten out and possibly decline slightly, but traditionally we don’t have the kind of home price “crash” that happens in boom-and-bust housing markets such as San Diego, Las Vegas and Phoenix.

Of course, we also traditionally don’t have the kind of home price “spike” that we have had in the last three years, where the median home price shot up nearly 50%.

He goes on to explain the possibility that speculators fleeing the market will further drive prices down. Much to my amazement, rather than repeating the oft-heard (but never backed up) claim that the Seattle market doesn’t have many investors, he admits that their potential affect on the Seattle market is largely unknown.

I don’t recall seeing (and couldn’t locate) an article published “last year at this time” where he claims to have predicted Seattle’s housing market peak. If anyone knows where to find a link to that, please post it in the comments. [Update: Thanks to Megan the Librarian below for pointing out the November 2005 article Mr. Tytler references above.]

Kudos to Mr. Tytler for pointing out the obvious trend and its likely result.

(Steve Tytler, Everett Herald, 12.10.2006)

[Update: I'm now 28, and working full-time for myself. Check out the project blog Thatch Mound for more details.] I’m 25 years old, living in the Seattle area (North King County), and have been working as an electrical engineer (no, not an electrician) in South Snohomish County since I earned a Bachelor’s degree in EE from Seattle Pacific University in 2002. I do not currently own any property, though I would of course love to. I currently live in a small house (actually a converted garage) with my wife, dog, four ferrets, and an aquarium full of water critters.

Throughout early 2005, my wife and I spent some time “window shopping” for houses, and became increasingly discouraged as we watched prices become more and more unreasonable. In addition, as we window-shopped I did a lot of reading and research. The more I read about housing and real estate in general, the more stories I noticed speculating that there was a bubble. I decided to start this blog as a way to collect these stories for my own future reference as well as to generate discussion among other interested parties. I figured that in a region with over two million people, a decent number of them might be just as interested as I am in the subject.

Given all that I have read as well as what I have observed, I do believe there is a speculative bubble in real estate right now. I don’t know it for sure and I could be convinced otherwise, but that’s where I stand right now. I believe that the present real estate bubble is due to a combination of factors, among which are:

• lowest interest rates in history persisting for years
• lenders falling over themselves to hand out home loans to anyone and everyone
• people burned by the stock market moving to real estate as an investment

One thing I do know for certain is that the recent trend of rapidly increasing property values (double-digit increases year-on-year) cannot possibly continue indefinitely. If it did, eventually everyone would be priced out of real estate. There has to be a slow-down sometime, and I think it’s coming fairly soon (within the next 3-5 years). I don’t know if it will take the form of a leveling off of values, or a slow decrease, or a sudden decrease (bubble bursting), but I know it is coming.

Therefore, since the only way my wife and I could afford a home that is even halfway decent right now would be to make use of “creative financing,” and there is at least a chance that real estate is due for a “price correction” soon, we have decided that it is not in our best interests to “invest” in a home at this time. Consider these scenarios:

If we buy a decent house right now through “creative financing” and interest rates go up, we’ll be unable to afford to keep making payments, and forced to sell the house. No big deal if prices just level off, but we would be in a really bad way if prices drop.If we buy a house with 20% down and a fixed-rate mortgage, and interest rates go up and prices drop, we’re not in danger of not making payments, but we could end up essentially stuck holding onto a mediocre house until prices go back up.

If we hold off buying and prices just level off, we’ve still saved a bunch of money and are able to afford a lot nicer place than we can right now.

If we hold off buying during this real estate frenzy, and prices dramatically drop in a few years, then we’ll be able to take the money we’ve saved in the mean time and buy a nice house.

Given the options and the uncertainty of the current market, not buying right now seems to be the best choice for us. So that’s where I’m coming from. What about you? Do you currently own property, are you holding out, or just not interested? Have you recently bought a home, or are you buying properties as investments? What do you think about the possible risks?

• Does a real estate/housing bubble exist?
• If not, why not?
• If so, why?
• If so, when/how will it end?
• etc…

Many other informative blogs and sites exist to discuss the bubble in general or specific to other locales. I highly recommend you educate yourself through the links in the sidebar. To be honest, the main reason I’m starting this blog is to collect information for my own interest, and I just figured that if I’m this interested in the subject, maybe some other people in the area are too. I hope you find this to be a useful resource.