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 'national'

Federal Government Shifting Focus to Rentals

By The Tim on August 17th, 2009 at 9:18 AM · 63 Comments

Sorry, this isn’t a Seattle-specific story, but it caught my attention this weekend as it seems like a major policy shift on the national level: President shifts focus to renting, not owning

The Obama administration, in a major shift on housing policy, is abandoning George W. Bush’s vision of creating an “ownership society” and instead plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units in American cities.

The idea is to pay for the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.

Analysts say the approach takes a wrecking ball to Bush’s heavy emphasis on encouraging homeownership as a way to create national wealth and provide upward mobility for low- and working-class families, especially minorities. Housing and Urban Development Secretary Shaun Donovan’s recalibration of federal housing policy, they said, shows that the Obama White House has acknowledged that not everyone can or should own a home.

So far, so good. I’m not personally a big fan of most of Obama’s policies to date, but this is a concept I can get behind (in principle, at least). The federal government played no small part in the inflation of the bubble with policies that encouraged home ownership above all else, even well before the Bush administration.

One quote in the article really grated on me, however:

“I’ve always said the American dream should be a home – not homeownership,” said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people.

Pardon me? I don’t think so.

Barney Frank in 2003:

So let me make it clear, I am a strong supporter of the role that Fannie Mae and Freddie Mac play in housing… I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals.

Barney Frank in 2005:

You’re not going to see the collapse that you see when people talk about a bubble and so those of us on our committee in particular will continue to push for home ownership.

So please, spare us the “I’ve always said” BS, Barney.

Hat tip: Market Ticker

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National Interactive “Stress Index” Map from AP

By The Tim on May 18th, 2009 at 11:31 AM · 33 Comments

The Associated press published an interesting interactive map recently that is worth checking out. They took a handful of economic measures such as the unemployment rate, the foreclosure rate, and the bankruptcy rate, and calculated an “Economic Stress Index” for every county in the country.

Here’s a snapshot of their March 2009 map (click to head to the AP’s interactive version):

AP Economic Stress Index

The Seattle area comes in better than much of the West Coast and the South, worse than much of the Midwest, and about on par with the Northeast.

Meanwhile, the Seattle Times surprisingly reprinted a Bloomberg piece this weekend titled Home prices may be lost for a generation:

We might be looking at a lost generation for U.S. home values.

Far too many analysts are calling a bottom to the housing market after home prices in 20 metropolitan areas declined at a slower pace, according to the recent Standard & Poor’s/Case-Shiller index.

Don’t be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story.

There definitely appears to be the beginnings of a mental shift going on in the country right now. Are we finally ridding ourselves of the notion that we—individuals, corporations, and governments—can live lifestyles beyond our means with no consequences? One can only hope.

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Seattle Housing Market vs. National Headlines

By The Tim on July 24th, 2008 at 1:21 PM · 55 Comments

One common refrain lately among real estate agents desperate to put a positive spin on the local market is that potential home buyers in the Seattle area are just being frightened by all the bad national news on the housing market. The local market is doing just fine, and would be even better if only everyone would stop paying attention to the national stories.

Well, let’s take a look at the latest national housing market data, and compare it to the Seattle area.

Associated Press: Existing home sales fall 2.6 percent in June

The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago.

The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago.

The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.

For the purposes of this post, we’ll use King County SFH + Condo statistics, since it is closest to what the national numbers are tracking. Let’s see whether Seattle’s housing market is in better or worse shape than the national market. We’ll see which market is in better shape in a number of categories, rating victories as “strong,” “weak,” or “neutral.”

Year-to-year sales were down 15.5% nationally. Locally, closed sales were down 40.9%. Ouch, that’s nearly three times the drop in the national numbers.
Advantage: National (strong)

Nationwide median prices were down year-to-year by 6.1%. In King County, prices were down 3.6% from last year, about half the drop, but still down, and only a few points different.
Advantage: Seattle (neutral)

At 4.49 million vs. last year’s 4.20 million, nationwide year-to-year inventory was up 6.9% in June. In King County, inventory was up 28.9% year-over-year. Seattle comes in with four times the increase.
Advantage: National (strong)

Nationwide “months of supply” (inventory divided by pending sales) was 11.1, versus King County’s 6.2. Both buyer’s markets, but Seattle is just barely in buyer’s territory.
Advantage: Seattle (neutral)

So, we’ve got Seattle on top in two categories, and the national market performing much better (or less crappy) in the other two. I’d call that a toss-up at best, with Seattle’s huge increases in inventory and decline in sales possibly ranking its market worse than the nationwide stats.

In other words, there’s little to no substance to arguments that the local market is doing better than what you read about in the national headlines. We’re certainly doing better so far than the worst-hit cities such as San Diego, Detroit, and Miami, but I don’t recall seeing many headlines about those cities in the Seattle media.

(Martin Crutsinger, Associated Press, 07.24.2008)

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Radar Logic: Seattle Going Into the Red

By The Tim on February 20th, 2008 at 10:52 AM · 19 Comments

Uh-oh, looks like Seattle is starting to get some negative national attention. As in, coverage that isn’t saying “wow, look what a strong, resilient housing market,” but rather “looks like Seattle’s housing market is poised to fall.”

Seattle, wake up and smell the coffee, your housing prices may be falling faster than foam on a latte.

Seattle, whose job growth from such companies as Boeing Co, Microsoft Corp, Google Inc and Starbucks Corp, is seeing the strength of its housing market eroding, Jonathan Miller, Radar Logic director of research, said on Tuesday at the Reuters Housing Summit.
…
Seattle has ranked about the top of all the U.S. housing markets over the past few years, Miller said. Prices have appreciated at about 12 percent to 16 percent yearly.

This past summer, the appreciation rate fell to 9 percent. Today its stands at about 1.5 percent. Meanwhile, the inventory of unsold homes in that market climbed at 40 percent over the last year.

“You can really see a top market like Seattle, which has been consistently performing well, going into the red,” said Miller.

It’s nice to hear something about Seattle’s housing market in the national media that isn’t of the “real estate party in Washington” variety. It’s true, things really are slowing down here. Prices have been falling since the summer, and not just in the usual seasonal way.

If you’re interested in checking out Radar Logic’s data, head over to their website, where you can generate nifty graphs of home prices and transaction volumes so you can see for yourself what Mr. Miller is talking about.

(Ilaina Jonas, Reuters, 02.19.2008)

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Peter Schiff Gets the Last Word (and the Last Laugh)

By The Tim on July 6th, 2007 at 8:33 AM · 18 Comments

Here’s a great video from YouTube that juxtaposes last year’s predictions about the housing market with this year’s news. It’s not Seattle-specific, but I thought it would be fun for a Friday. I’ll be back with the June reporting roundup (a.k.a., the NWMLS press release echo chamber) either later today or sometime tomorrow.

Hat tip: HousingPanic

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