Seattle Bubble

It looks like we may not get to have a 2007 Street of (Materialistic) Dreams follow-up post this year like we had for 2006, since the homes have apparently been torched.

KING 5 / AP

Several homes were destroyed by a series of fires early this morning in a Street of Dreams neighborhood near Maltby in Snohomish County.
…
The fires, first reported about 4 a.m., were left to burn through the morning because firefighters were concerned about possible booby traps.

More than four hours after the fires were reported, the houses continued to burn and smolder.
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Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives are investigating, according to Snohomish County District Seven Chief Rick Eastman.
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Eastman said one is a total loss, and two homes are substantially damaged. He says fires were set at a total of six homes.

Due to a spray-painted message left on a sheet at the scene, the immediate theory is that the “eco-terrorist” group Earth Liberation Front (ELF) is responsible for the fire.

Here’s another interesting fact worth mentioning that was left out of the Seattle Times story and tacked on to the very end of the P-I story:

None of the five showcase homes from the Street of Dreams last summer had been sold, said Grey Lundberg, a builder of one of the houses.

As some folks have pointed out in the forum discussion about these fires, whether the ELF was responsible or not, having the unsold homes burn might actually be better for the builders than having them sit unsold for who knows how long while the local housing market continues to decline. Personally, I doubt the builders are responsible, but who really knows in today’s environment.

(Associated Press, Seattle Times, 03.03.2008)
(Elizabeth M. Gillespie, Seattle P-I, 03.03.2008)

Click to enlarge - © Tim S. Kane 2007

It’s drizzling, my body is extremely sore from digging post holes for 1,600 lineal feet of fencing and I’ve got about 40 feet to go, so I’ll take this opportunity for my Seinfeld (mostly about nothing) market commentary. And before you all laugh at me as a homeowner dumping money into my fence, I’m saving over $10K in labor. And no, I’m not getting ready to sell. Ok, so it’s taken me all of July to do it. Oh, it’s Aug. 3rd?

• Anyway, so my wife is fixing her hair this morning and says: “what the heck is going on with all these lenders going out of business?” No, it’s not that she is unaware of the situation, far from it, but more so it was a remark of “this is crazy.”

• Late last year and early this year we had escrow transactions fail to fund with some lenders that are now RIP. I don’t know if too many people were paying attention like I was, but that was a clear indication to me that something was wrong, back then. A while back chief RCG mortgage correspondent, Rhonda Porter and I discussed New Century and her conversation with an New Century Account Exec. indicating that all was well. We both know the result.

• Many of the readers on this board are significantly more astute in investing in the stock market than I, and some may be experienced at shorting stocks. Personally, I’ve got less than 5% in the market because I equate investing in the stock market in some cases like gambling. I never win in gambling. Ever.

  That said, I would watch the action of title companies with closer scrutiny. Because of the market turmoil there has been an upward increase in title claims due to ….drum roll…fraud, etc… That hurts earnings. Furthermore, I get the sense that a major title insurance player could merge or gobble up another. Consolidation is highly active in this environment and was during the last downturn.

• Speaking of home improvement, one of the best ways I know of to hedge against a market downturn is to learn how to do improvements to your house, as a do-it-yourselfer. Owning can be expensive with unknown things cropping up: heating system, drive by mail box bashers, plumbing issues, you name it. I’ve saved tens (more, but I can’t publish it here because it is a closely held secret) of thousands because I rarely pay retail labor costs. Sure I’ve made costly mistakes, but I’ve saved much more.

• The refinancing gravy train has slowed down. A lot. LOT.

• I have access to Street Of Dreams discount ticket coupons ($3 off) for WEEKDAY only visits. I thought it was really good this year with lot of emphasis on woodwork (the good houses) which is my style being that I grew up in a 1906 Craftsman on Capitol Hill in Seattle. The show is through August 19th. If you’d like a coupon, please e-mail me at tim@legacyescrow.net and I’ll get them into the mail to you.

Have a good weekend and I’ll see you at the Red Sox game tomorrow. It’s my son Andrew’s ninth B-day tomorrow and if you wish him happy birthday here at Seattle Bubble, he’d get a kick out it thinking he’s famous.

- S-Crow

There’s lots of blah, blah, blah going on about the latest Street of (Materialistic) Dreams, where every-day commoners like you and I can pay $18 to tour a bunch of over-the-top abodes. The local press seems to have stars in their eyes, and spends most of their time talking about all the low-flow toilets, and Energy Star-qualified appliances and how isn’t it just marvelously eco-friendly that the 4,000 square foot homes are “built green.” Bo-ring.

In a bit of a twist, let’s ignore this year’s dog an pony show, and take a few moments to go back to 2006’s Street of (Materialistic Pink Pony) Dreams, which I actually had the misfortune of personally attending. The first thing that comes to mind when I recall walking through these homes was the surprisingly cheap feel of the finish work. We visited near the end of the run, so by this time, thousands of people had traipsed through the halls of these houses, opening and closing every door and cupboard more times in four weeks than would usually be experienced in a year. In a way it was like an accelerated wear process. Closet doors were jamming, knobs were loose, hallway doors didn’t sit quite straight… in general it was quite unsightly. Plus there were a number of things that didn’t even have to do with wear, such as poorly-painted trim lines and wood trim that didn’t quite match up correctly. I’m sure that they went back through the homes after the tour dates were over and fixed most of these things, but seeing them near the end of the tour was like getting a preview of what things would look like after five years of normal use. For multi-million-dollar mansions, you think they would have sprung for better hinges and rails.

Another thing that struck me as odd was the wine cellars. Not that the houses had wine cellars at all, but just how ridiculously huge some of them were. In the house with the largest wine cellar (Hillcrest Farm), I estimated that there was space for 1,646 bottles of wine. Is it just me, or does that seem a bit unnecessary, even for the Street of (Materialistic Uber-Excess) Dreams?

Also amusing were the houses that had “secret” doors to hidden rooms. I personally think that hidden rooms and secret doors are fun, but wouldn’t the kind of person buying a $3,000,000 home be a bit above such trifles? Besides, what is the point of a secret room when it’s been on display to the (entrance-fee-paying) public for four weeks? Not very secret anymore.

Here’s a random review of the six featured houses from last year’s Street of (Materialistic Gluttonous) Dreams, including square feet, sold status, price, and # of TVs in the staged house.

Verandah Bay
Size: 7,150 sqft on 6.89 acres
Status: Sold October 2006
Price: $3,625,000
Buyer(s): Christopher Wilcox
# of TVs: 8

Kensington Manor
Size: 6,110 sqft on 5.00 acres
Status: Sold May 2007
Price: $3,575,000
Buyer(s): Duane & Heather Baker
# of TVs: 6
Other notes: Builder still listed as the taxpayer. Possibly due to recency of sale?

The Retreat
Size: 9,000 sqft on 5.05 acres
Status: Still Unsold, on the Market
Price: $5,695,000 (asking)
Buyer(s): N/A
# of TVs: 17
Other notes: This was the most extravagant home in the show (pictured above), with an enormous pool, a “secret cave,” and a huge outdoor entertaining area. The builder (Parmenter Homes) is stuck paying $42,000 per year in taxes until they can unload this beast.

Casa Montecito
Size: 6,950 sqft on 5.15 acres
Status: Sold April 2007
Price: $3,400,000
Buyer(s): Scott & Kelly Bingham
# of TVs: 4
Other notes: Builder still listed as the taxpayer. Possibly due to recency of sale? Pictured at right.

Hillcrest Farm
Size: 7,220 sqft on 5.46 acres
Status: Still Unsold, on the Market
Price: $4,395,000 (asking)
Buyer(s): N/A
# of TVs: 9
Other notes: The builder (Design Guild Homes) is presently stuck paying $43,000 per year in taxes on this one. Pictured below-right.

Twin Cedars Lodge
Size: 5,030 sqft on 6.69 acres
Status: Kept by Builder
Price: N/A
Buyer(s): Philip & Jan Bononcini
# of TVs: 5
Other notes: The Bononcini’s were the owners of the entire plot of land that all six homes were built on until they parted it out in 2005 to the individual builders. They paid a total of $1,750,000 from 1998 to 2004 for the land that the 2006 SoD was built on. They made a total of $4,605,000 by parting the other five lots out to the builders. Since this was the least audacious home in the show, with the largest and most private plot of land, I’m assuming that they kept this one as their family home, paid for using the $2 million (plus) profit from the land sales. Nice move.

I’m not particularly interested in taking in this year’s show, certainly not for the $18 cost of admission. But, if anyone out there really wants a Seattle Bubble report on the 2007 Street of (Materialistic Uncontrollable Drooling) Dreams, you can pay my admission with a PayPal donation, and I’ll make the time.