Seattle Bubble

News & discussion about real estate & the housing bubble in the Seattle area.

Seattle Bubble - News & discussion about real estate & the housing bubble in the Seattle area.

Entries Tagged as 'News'

Weekly Twitter Digest (Link Roundup) for 2009-11-07

By The Tim on November 7th, 2009 at 5:00 AM · No Comments

  • Seattle has its very own foreclosure tour. http://is.gd/4JmKk #
  • The only people who believe NAR's "pending sales" measure has any relation to reality are the willfully ignorant. http://is.gd/4LeQO #
  • Seattle City Council unanimously approves "backyard cottages" http://is.gd/4LDaT #
  • Wow, weird. RT @mattgoyer: New blog post: Moda Repossessed? http://bit.ly/24T0rB #
  • Apparently Seattle Bubble placed 16th out of the "top 75 Seattle Media Websites" for 2009. http://is.gd/4Mi1C HT @moniguzman #
  • Seattle Times:Seattle overwhelmingly passes affordable-housing levy – http://is.gd/4N6PB #
  • Microsoft cuts 800 more jobs, moving beyond the 5,000 announced in Jan. http://is.gd/4N9DW #
  • CBIC, a Seattle-based insurer of contractors, making big cutbacks with a combination of layoffs, pay cuts, and schedule cuts. #
  • Seattle Bubble's 0×10000th comment! http://tinyurl.com/ye8rdj2 #
  • King5: Neighbors left with dirty work in foreclosed homes http://is.gd/4Nwh4 #
  • RT @mattgoyer: Redfin Delivers Near-Real-Time Sales Records for 1.4 Million Homes, Integrates Social Media: http://bit.ly/40wLbm #
  • Seattle Weekly: Condo Demand? Not So Great. But the Homeless Are a Booming Market http://is.gd/4O1eM #
  • $45 billion more in deficit spending. $33b homebuilder tax break, $10b homebuyer tax credit, $2.4b unemployment. WTH. http://is.gd/4O9wa #
  • All the cool details about Redfin's sweet upgrade that shows full info on recently-sold properties: http://is.gd/4Oae4 #
  • NWMLS October data post updated with charts: http://is.gd/4OnOH #
  • U-6 Unemployment at 17.5%. As in nearly 1 in every 5 workers in the USA are unemployed or underemployed. Yikes. #
  • RT @mikesimonsen: How Washington is encouraging big risk on high LTV jumbos. From the @AltosResearch blog. http://bit.ly/4zaDQg #

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October Reporting Roundup: Happy Fun Tax Credit Party Time!

By The Tim on November 6th, 2009 at 8:00 AM · 39 Comments

Time for the monthly reporting roundup, where I read all the local paper rehashes of the NWMLS press release so you don’t have to.

Here’s a link to this month’s NWMLS press release: Tax credit spurs big surge in Western Washington home sales

Before we get into the roundup, I’d like to take a moment to quote an excerpt from the monthly NWMLS data post from May, which was titled Huge Gap Opening Between Pending and Closed Sales (a subject that I first brought to your attention in August of last year).

The disconnect between pending sales and closed sales grows ever larger. … Something is becoming extremely fishy about the pending sales data.

…it is good to keep in mind when you start reading news reports in the coming weeks about the market supposedly picking back up. It’s an illusion.

Here’s a graphical representation of the 2009 sales illusion:

2009 Pending and Closed King Co. SFH Sales

Pending sales peaked at 2,447 in June, while so far closed sales have not made it higher than 1,758—a nearly 30% discrepancy. So far this year there have been at total of 20,025 pending SFH sales in King County, but only 12,986 actual closed sales. In other words, more than a third (35%) of pending sales have yet to materialize into closed sales. That difference is typically well under 10%.

Find me a newspaper that reported this growing issue last August.

Click below for this month’s roundup of gawking at the tax credit.

[Read more →]

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Weekly Twitter Digest (Link Roundup) for 2009-10-31

By The Tim on October 31st, 2009 at 6:00 AM · 6 Comments

  • Part 1 of another story on how WaMu killed itself. http://is.gd/4B1Yc Is it just me or does Killinger look a bit like Willem Dafoe? #
  • Is Seattle losing recent competitions for new Aerospace jobs in part due to high real estate prices? http://is.gd/4BbR9 #
  • Up north: Banks foreclosing on Whatcom County's unsold condo projects – http://is.gd/4BbVB #
  • Part 2 of the Seattle Times' latest WaMu post-mortem piece. http://is.gd/4CT80 (focuses on the designed-to-fail Option-ARM) #
  • Interesting commentary on the phony recovery over at The Housing Bubble Blog http://thehousingbubbleblog.com/?p=5702 #
  • Looks like a convoluted, idiotic, and expensive expansion of the homebuyer tax credit may be "a done deal." http://is.gd/4F67o #
  • Looks to me like Boeing's eventual departure from the Puget Sound is basically a done deal at this point. http://is.gd/4FuAS #
  • Third quarter issue of Sound Housing Quarterly is live! http://housingquarterly.com/ #
  • Major lawsuit against WaMu execs cleared to move forward http://is.gd/4G5WT #
  • Obama: "The deficit is not big enough yet. Plz expand by another $10 billion or so. kthxbai!" http://is.gd/4HkT7 #
  • Kendra "Bubbles are for Bathtubs" Todd was on the Kirby Wilbur show this morning. Apparently she has moved to Seattle. #
  • Interesting… Google jumps into mortgages and real estate http://is.gd/4HPIY #
  • Seattle Times: Loss of new 787 line may hurt Snohomish County housing market http://is.gd/4Ik8n Yeah, it just "may." #
  • RT @Redfin: Broker to Congress: Don’t Extend the Credit (Just Keep Rates Low): http://bit.ly/4mu2A5 #

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Boeing Still by Far the Biggest Player in the Puget Sound Economy

By The Tim on October 28th, 2009 at 1:30 PM · 111 Comments

Quick note on the potential impact of a long-term departure of Boeing from the Puget Sound.

The Seattle-area economy is definitely more diverse than it was in the ’70s, but Boeing still dominates the employment base by the numbers.

A 2003 table from the Greater Seattle Chamber of Commerce shows Boeing employing more people than the next six-largest Puget Sound companies combined (Port of Seattle, Alaska Air, Microsoft, UW, Safeway, and the VA).

Here’s a crude visual of the size of Puget Sound’s top 10 employers based on the Chamber’s 2003 data linked above:

Top 10 Puget Sound Employers (2003)

Here is some more recent data on Boeing, Microsoft, and Amazon (which was listed by the Chamber of Commerce as the 9th-largest local employer as of 2003).

Total Puget Sound Jobs
Boeing: 73,357 (46% of total headcount)
Microsoft: 40,224 (44% of total headcount)
Amazon: 10,850 (assuming 50% of total headcount)

And keep in mind that the numbers listed above are only those directly employed by Boeing itself. Many thousands more local jobs are directly tied to Boeing in companies that supply Boeing with parts and services.

In short, there’s clearly a lot at stake for the local economy (and by extension the local housing market) when it comes to Boeing’s long-term plans.

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Weekly Twitter Digest (Link Roundup) for 2009-10-24

By The Tim on October 24th, 2009 at 6:00 AM · 9 Comments

  • 5,000-acre flopped development in Pierce made front-page news in the Tacoma News Tribune today: Chapter 11 for Cascadia http://is.gd/4oCjp #
  • PSBJ: Mastro Properties is in worse financial condition than “many creditors imagined." http://is.gd/4oHFI #
  • New Seattle web-based news outlet The SunBreak takes a look at Seattle's commercial real estate mess: http://is.gd/4oIvA #
  • What the heck? Moody’s purged execs who questioned ratings: http://is.gd/4pxW4 Stop the looting & start prosecuting! #
  • Real estate professional social network ActiveRain "shrinking and growing at the same time." http://is.gd/4sNWb #
  • Senate plans to sneak through extension of the wasteful $8,000 homebuyer tax credit on an unemployment bill. http://is.gd/4sRgk #
  • Seattle Bubble welcomes new advertiser 500 Realty. http://www.500realty.net/ #
  • Only 0×38D more comments to go before Seattle Bubble breaks the 0×10000 comments mark! #

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Extension to Fraud-Laced $8k Homebuyer Tax Credit to Piggy-Back on Unemployment Bill?

By The Tim on October 21st, 2009 at 6:00 AM · 38 Comments

Here’s a pair of somewhat conflicting stories about the push to extend and expand the inefficient, expensive, economically stupid $8,000 first-time homebuyer tax credit.

From the real estate news source Inman News: Final push for tax credit

Real estate industry trade groups are mounting a final push for an extension of the first-time homebuyer tax credit, with Sen. Johnny Isakson planning to tie the issue to an extension of unemployment benefits.
…
In testimony before the Senate Banking Committee today, Isakson, R-Ga., said he plans to introduce an amendment to legislation extending unemployment benefits that would make the current $8,000 tax credit available until June 30.

Isakson’s amendment would raise the income limits for the credit to $150,000 for individuals and $300,000 for a couples. The existing tax credit can’t be claimed by individuals making more than $95,000 or couples with adjusted incomes of more than $170,000.
…
The estimated cost of his latest proposal would be $16.7 billion over five years, Isakson said, citing the Joint Committee on Taxation.

So apparently the latest plan is to pull a common DC trick and tack the bill onto something else that would be political suicide to vote against. This disgusting ploy usually works, and if they pull off adding it to the unemployment bill, it is almost guaranteed to be passed. Also, considering that the current credit is probably going to cost in excess of $15 billion versus an original estimate of $6.6 billion, it seems likely that if passed, this proposal would cost us another $30 billion or more that we don’t have.

Next up we have a different outlook on the credit, via Calculated Risk: Home Buyer Tax Credit DOA?

From Reuters: White House skeptical on renewing home buyers credit
…
And more from Reuters on the widespread fraud: IRS warned again of U.S. homebuyer credit fraud
…
From Diana Olick at CNBC: HUD Hints on Home Buyer Tax Credit . Olick reviews Donovan’s testimony and writes:

[T]hat sounded more like a “No” to me than a “Yes.”

And Rex Nutting at MarketWatch reviews many of the arguments against the tax credit: Kill the wasteful home-buyer tax credit

Note in the second story CR points out that the IRS “has opened 107,000 civil cases related to the credit.” If we go by the NAR estimate that around 1.9 million buyers “will take advantage of the $8,000 tax credit this year,” the 107,000 civil cases represent a potential fraud rate of over 5%. Who could have guessed that when the government starts handing out free money, people would race to game the system?

I apologize for the overload of posts recently regarding the $8,000 tax credit, but I feel strongly this is an important issue related to real estate. The tax credit is wasting money, harming potential buyers by hampering the natural correction of the market, and helping to push the rental vacancy rate higher, which causes further pain for local and regional banks. The government needs to stop trying to prop up a broken market and let home prices fully correct.

Here is the contact info for our senators. I encourage you to call or fax them and encourage them to vote against any form of extension, renewal, or expansion of this wasteful and counter-productive spending spree.

Patty Murray
Phone: 202.224.2621
Fax: 202.224.0238

Maria Cantwell
Phone: 202.224.3441
Fax: 202.228.0514

[This story was corrected on 10/20 at 11:00 AM to indicate that the 107,000 civil cases opened by the IRS represent potential fraud, not necessarily actual fraud.]

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