Seattle Bubble

Just a quick note to remind you that Seattle Bubble advanced to round 2 of the little blog tournament they’ve got going on over at Metroblogging Seattle. They put us up against last year’s winner, but so far we’re actually slightly in the lead. Voting closes Sunday, so a little boost going into the weekend would be nice. So if you would be so kind, how about taking a few (more) seconds to vote for Seattle Bubble (again)?

Also worth noting is the brief interview they did with me over email. It’s probably nothing new to anyone that’s been around here for a while, but I thought I’d point it out.

Update: Huzzah, Seattle Bubble wins again!  Now go vote in round 3, the quarter finals!

Observant readers of Seattle Bubble have noticed that the last few weeks have brought some fairly major changes—a new, cleaner layout for the blog, avatars in the comments, a redesign of the forum to match the blog, a fancy new sidebar section: “Recent Forum Posts,” the addition of tags to stories, and oh yeah… ads. This may lead readers to ask a few questions:

• 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.

Apparently Seattle Bubble is involved in some sort of contest over at Metroblogging Seattle. At the moment it looks like we’re getting trounced. [Update: Now we're the ones doing the trouncing, thanks!]  Maybe if you care about that sort of thing you could take a few seconds to go vote. Not that I have any idea what winning would get us, but it would be nice not to come in dead last I think.

I’d like to take a little time to address a few things that keep coming up here and elsewhere in online real estate conversations that are starting to bug me. So that’s what I’m going to do.

Doom and Gloom Apocalypse Fun Time

First up is the incessant refrain that anyone predicting a decline in house prices is forecasting “doom and gloom” and/or a “housing apocalypse.” How do lower prices translate to “doom and gloom”? Isn’t it a good thing that people will actually be able to afford to buy a house without entering into a self-destructive financial death trap? Are falling gas prices “doom and gloom”? What about falling flat-screen TV prices?

When the cost of something falls, it is a good thing that leads to greater affordability and frees up money for people to spend on other things. Apparently I’ve got it backward. To me, a rapid escalation of prices leading people to make extremely risky financial decisions and putting them in a situation where all they can afford to do is pay the mortgage (if that) is “doom and gloom.”

Convenient Opinion Boxes
This is one I see a lot on blogs, and I’m sure I’m even guilty of it as well: stereotyping opinions. For example, someone comments that they don’t think prices will fall 20% next year, so someone else labels them as a “housing cheerleader” that doesn’t think prices will fall at all, ever. Or on the other side, someone remarks that they expect prices will continue to drop for the next year and therefore don’t intend to buy right now, and the response is something to the effect of “renting forever is stupid.”

The fact is, you can’t put people’s opinions into convenient boxes. The fact that I don’t intend to buy a house right now does not imply that I think nobody should ever buy a house. Likewise, someone who doesn’t have a problem buying now doesn’t necessarily think prices will keep going up.

Let’s try to avoid making assumptions about people’s opinions based on one or two comments. The discussion is much more productive when we actually address what people are really saying, not what we imagine they might say if they were a certain “type of person” that we assume them to be.

“Won’t you feel silly…”
Lastly, it has been said that if prices “only fall 20%,” won’t I feel so silly, because that would put them back at 2005 levels, which is when I started the blog, tee hee hee.

Of course I won’t feel silly. First off, what did I say when I started the blog? Did I claim that prices were going to plummet from their current levels? Did I predict fifty cents on the 2005 dollar? Nope.

Here’s what I did say:

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.

By not buying a home in 2005, I have been able to pay all my debt (which was 90%+ school loans), purchase two cars with cash, give generously to charity, and build up a decent amount of savings—retirement, stocks, and enough liquid cash to live over a year with zero income. Why would I feel silly about that?

Furthermore, prices retracting to their 2005 levels in 2008 does not really mean that prices were “flat.” When you account for inflation, it’s actually a decline. In fact, according to the Bureau of Labor Statistics inflation calculator, just to keep up with inflation, a home in 2007 would have to sell for 7.6% more than it did in 2005. You can’t ignore three years of wage increases and savings built up by renting.

That being said, my guess is that prices will fall by at least 20%. I suspect that they will fall further, but even if 20% off the peak is the lowest they go, it still makes far more sense to buy at 20% off the peak with sound financing in 2008 than it would have to buy for the same price with a shaky loan in 2005.

Back to Business
So there you go. Now that I’ve gotten those things off my chest, we can get back to the business of bashing real estate agents and mocking home sellers. (It’s a joke, people.)

Sorry, I got nothin’ today. So instead of a real post, here are some links to recent posts on other local real estate blogs that you might be interested in reading and commenting on. What with 50-100 comments on most posts here lately, I thought maybe we could spread the comment love around a bit. Enjoy, and be nice.

On Rain City Guide by Jim Reppond: The Sky is Falling! The Sky is Falling!

Yes, real estate is somewhat cyclical. And at times there are market fluctuations. But the human tendency to gravitate towards fear, as well as to not look at things in historical perspective, makes people think things are much more dramatic and dire than they are in reality, IMO.

Hey, wait a minute, that post looks familiar… I love it when the real estate sales offices circulate informal talking points memos like these.

On Redfin Seattle Sweet Digs by Katrina Munsell: Can Price Drops Give you Carpal Tunnel Syndrome?

That’s exactly what I was thinking as I was compiling this week’s list of Eastside price drops greater than $25,000. If this trend keeps up, I’ll be able to tell you pretty darn soon.

On Urbnlivn by Matt Goyer: You weren’t featured in the Seattle Times

There’s a number of condo projects that email me every week about how they were featured in the Seattle Times when in fact all they did was buy advertising in the Seattle Times.

On Home Forum Extra by Becky Bisbee: National outlook gloomy for 2008

At the National Association of Realtors convention here, the big question on everyone’s mind is: When will the real-estate market rebound?Economist John Tuccillo is predicting the end of 2008 or beginning of 2009 for the nation as a whole.

However the Virginia-based consultant and former NAR chief economist stressed that “there are hundreds of thousands of real-estate markets, so it doesn’t matter what the national picture is.”

What really matters to buyers and sellers is what’s occurring in their own area.

On Open House by Devona Wells: California baby selling local mortgages

Two of my co-workers received an ad in the mail last week in an envelope that is white, slightly over-sized and addressed in black ink using a pretty, occasion-type font. It would be easy to mistake the presentation for a wedding invite.Open it, however, and there’s a picture of a cute baby gazing at you from the cover of a card. A birth announcement? No, an attempt at mortgage marketing.

On SeattleBubble? by Tim Dunn:

…oh wait, blog-spamming realtor Tim Dunn hasn’t posted since September. I wonder why?

Update: In response to a comment on his most recent post, Mr. Dunn indicates that he hasn’t posted lately because he has been “very ill.” I would like to extend my best wishes of a speedy recovery to Mr. Dunn. That is all.

FYI, Seattle P-I real estate reporter Aubrey Cohen has entered the blogging fray. Check out his new P-I-sponsored blog: Seattle Real Estate News.

Such a creative name. (I kid, I kid.)

Seriously though, I applaud Aubrey for engaging the readers in the more open, discussion-oriented format that blogging provides. Hopefully he will get some good ground-level feedback that will help him continue to improve his reporting as the Seattle real estate market enters this interesting transitional time. In my experience blogging, I’ve found that you can learn a lot more from the feedback of informed readers than you can by reading just press releases and newspaper articles.

Let’s welcome Aubrey to the blogging party. I encourage everybody to head over to his blog and leave some comments. Just do me a favor and keep it productive and civil, mmm-kay? Thanks.