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 'Virgin'

Poll: Will you miss the (printed) P-I?

By The Tim on March 15th, 2009 at 12:05 AM · 29 Comments

See the forums for a related discussion: What’s so great about daily print newspapers?

Update 03.16.09: Via Monica Guzman at the P-I:

Publisher Roger Oglesby just announced in the P-I newsroom: Tomorrow will be our last print edition, but seattlepi.com will live on.

Update 2: Aubrey Cohen will be staying on with the online-only P-I.

Update 3: Word comes via emails I received from Seattle Bubble favorites Bill Virgin and Mark Trahant that neither will be staying on with the online-only P-I. Their voices will be sorely missed.

Please vote in this poll using the sidebar.

Will you miss the (printed) P-I?

  • Yes (31%, 69 Votes)
  • No (69%, 155 Votes)

Total Voters: 224


This poll will be active and displayed on the sidebar through 03.21.2009.

→ 29 CommentsCategories: News · Polls
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Bill Virgin: Will Recession Hit Seattle Harder than Elsewhere?

By The Tim on February 3rd, 2009 at 11:00 AM · 37 Comments

Yet another great editorial from Bill Virgin: Once considered recession-proof, Seattle no longer is

Recessions, Seattle has long believed, were phenomena that happened to other, less fortunate, less blessed and, frankly, less gifted parts of the world.
…
Until now.

As recently as the first half of 2008, you could find plenty of people who believed that the old model would continue to hold, that Seattle would be largely immune to the slowdown afflicting the rest of the nation. A series of major layoff announcements by the high-profile big companies that were supposed to carry us through may have been enough to chase away such comforting notions. Diversity is a nice thing to have in an economy, but it’s not of much use when every sector is ailing and when every corner of the globe is in trouble.

As usual, I recommend you read the whole thing.

Bill has been one of the few local commentators that has consistently provided a voice of reason on the subject of the local housing market and economy—even during the boom years. It will be a real shame to lose Bill’s perspective if/when the P-I closes.

→ 37 CommentsCategories: News
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Virgin: Maybe no bottom in 2009 after all

By The Tim on January 13th, 2009 at 9:27 AM · 45 Comments

A couple weeks ago we mentioned a recent Bill Virgin column in which he sorta kinda called a bottom for housing (and the economy) in 2009. Well, a lot has changed in Bill’s world in the last few weeks, and his tune has changed slightly.

Forecast of short recession looks shaky

It is a sobering reminder of one’s insignificant place in the universe when news that one’s employer and one’s job are likely to evaporate in 60 days counts as no better than the third most significant local economic story of the day.
…
On the evening that news was breaking about the Seattle P-I’s demise, your business columnist was out on a speaking engagement at a meeting of a local business group, blithely propounding the view expressed two weeks ago in this space that 2009’s economic outlook is not hopeless, and that there are some reasons (lower energy costs, the eventual bottom to the housing market and bad assets in the banking system) to believe that the recession, as nasty as it is proving to be, may also be short-lived.

Of the three panelists discussing the economy, that was the most optimistic outlook. Asked when there might be signs of a turnaround, said columnist predicted they could appear as soon as late in the second quarter.

Given the events of the last few days, Mr. Business Columnist, care to revise or extend your remarks?

There’s always the temptation to succumb to the notion that a recession isn’t all that bad, as long as it’s not happening to you, but once the floodwaters of the economy hit one’s own doorstep, it graduates to status of depression.

Other news would certainly tend to suggest a rethinking of the optimistic forecast.

As usual, Bill’s column is a thoughtful and engaging summary of the current economic issues facing our region. Read the whole thing.

Three writers I’ll miss the most with the end of the P-I: Bill Virgin, Mark Trahant, and Aubrey Cohen. Why does the paper with all the good economic/real estate writers have to be the one going under?

(Bill Virgin, Seattle P-I, 01.12.2009)

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Pre-Weekend Potpourri: Microsoft Layoffs, Foreclosure Aid, Downfall

By The Tim on January 2nd, 2009 at 12:02 PM · 27 Comments

It’s a pretty slow news day today, what with most people still taking time off for the new year. So I thought this would be a good time to throw a bunch of smaller stories together into one post.

First off, let’s hit a topic that has been on a lot of people’s minds lately: Microsoft layoffs. An excellent post today on TechFlash from top MS-watcher Todd Bishop sums up the situation well:

Speculation about possible layoffs at Microsoft has been swirling for weeks now in the Seattle tech community and online. We’ve been digging for information on this for a while, talking to people inside Microsoft and others familiar the company. But so far, at least, we haven’t been able to get any reliable information or direct confirmation.

That doesn’t necessarily mean layoffs aren’t coming. We’re continuing to dig, and we welcome any and all tips. But it’s worth noting that none of the online reports so far seem to be based on first-hand knowledge.
…
If the company reduces its workforce, Microsoft’s contractors and vendors could be among the most vulnerable. The company doesn’t report those workers as part of its employment numbers, so the cutbacks wouldn’t be as public. The Seattle Times’ Ben Romano reported this week that he’s “heard from a handful of contractors whose contracts at Microsoft were abruptly cut short.”

In the end, Microsoft may try to cut expenses through something more nuanced than a huge layoff.

Next up, we’ve got P-I columnist Bill Virgin (who we have been a long-time fan of here at Seattle Bubble) almost kindof calling for a bottom in housing in 2009:

With so much bad economic news about so many sectors crammed into the fourth quarter of 2008, it’s easy to forget that in housing, the bad news started way back in 2007. Plunging housing starts, rising defaults and foreclosures, falling prices on existing-home sales — those reports have become almost routine by now.

As with banks, we’re now looking for the “some point” at which those trends lose steam. Just the length of housing’s decline would suggest that the sector’s forest fire (yes, we’re switching metaphors from our earlier water theme) has consumed most of the available kindling.

I think Bill’s “forest fire” analogy is a pretty good one, because whenever the fire finally does go out, it will take many, many years to see any significant regrowth of the “forest.”

Also interesting was this short AP blurb about foreclosure assistance heading to Washington State:

Washington will receive $28 million in federal home foreclosure aid.
…
The money will help local jurisdictions buy foreclosed homes, fix them up and resell them to low- and moderate-income buyers. The funds also may be used in down-payment assistance programs.

That actually sounds like a reasonable use of the money. Rather than pouring my taxpayer dollars into futile attempts to keep people in homes they should have never bought in the first place, we can let the foreclosure process take its natural course and help facilitate a move toward actual affordable housing.

…and finally, so maybe people will stop posting this over and over again in the forums and the comments, I’m front-paging this amusing video some clever chap put together using the “Downfall” captioning meme. Enjoy.

(Todd Bishop, TechFlash, 01.02.2009)
(Bill Virgin, Seattle P-I, 12.31.2008)
(Associated Press, Seattle P-I, 12.30.2008)

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Link Roundup: Incentives, Economic Woes, Alt-A, and More

By The Tim on August 4th, 2008 at 10:11 AM · 28 Comments

Here are a few stories from the last week or so that are worth pointing out.

First up a TV report from KOMO News: “Open House” — sign of the times in Snohomish County

Real estate agents in Snohomish County are now resorting to a “shock treatment” for slouching home sales in their area.

Realtors advertised more than 400 open houses over the weekend. Agents say they hope playing the numbers game adds-up to more home sales.

“It’s to get the public excited about all the great listings they can see out here today,” said Rich Williamson, President of the Snohomish County Association of Realtors. “It’s a chance to see more homes than they ever saw in one day or one weekend.”
…
Chris Lamoreaux says the housing market story is more than just numbers.

“We’re going fight the media that’s been negative about the housing market,” he said. “The real estate market in Snohomish County and the Puget Sound is excellent.”

That darn media, always being so negative about the housing market. I wonder if anyone can find me a quote from a real estate agent thanking the media for all the positive press when the housing market was gangbusters? Let me know if you come up with anything.

Moving to the opposite end of the Sound, down in Thurston county the “incentives” are flowing strong. The Olympian reports: Home sellers turn to incentives to draw buyers

A new Honda scooter, a trip to a Caribbean destination and a chance to win free gasoline are just some of the incentives that South Sound real-estate agents are using to entice prospective buyers in a slower housing market.

Some agents, though, are split on whether such incentives and other marketing efforts are worthwhile. Re/Max Four Seasons broker and owner Dean Stohl says the best approach for home sellers in this cooler housing climate is to think carefully about the sale.

“The most important ‘non-gimmick’ are sellers pricing the property competitively and making sure it is in ‘tip-top’ condition before putting it on the market,” he said.

Still, some agents are rolling out increasingly creative hooks to land that next sale because sales have cooled since the piping-hot years of 2005 and 2006.

Sounds like Dean Stohl has it figured out. Good luck to all those salesmen thinking that the prospect of paying 30 years of interest on a scooter will sell houses, though.

Another great column from the P-I’s Bill Virgin popped up last week as well: Economic woes could run deep in the region

As large and influential as those companies [Washington Mutual, Weyerhaeuser, Starbucks, Costco] are, there are less-visible layers of small and medium-sized companies that also keep the region’s economy moving.

Or not.

Those smaller outfits are dealing with the pressures and headaches of a slowing economy, some generated by the same factors plaguing large companies, others the result of cutbacks and retrenchments by larger companies with which those smaller firms do business.
…
“In today’s deteriorating economic climate, the ranks of companies feeling the pinch are growing,” writes Michael Newsome, a principal with Seattle-based investment banking firm Zachary Scott, in a recent newsletter. “Even in a fairly buoyant Northwest economy, we are entering a period of rationalization that will cut across industries. For a number of companies, depressed consumer confidence, ballooning energy costs, restricted credit access and, before long, higher interest rates will trigger sufficient financial distress to mandate restructurings and, in some cases, business sales or outright liquidations.

It’s nice to have at least one voice of realism in the local press. Too bad it seems like nobody is listening. Most people would rather believe that pink ponies will dance through the streets of Seattle forever and ever than consider the possibility that economic slowdown might actually affect us here.

Here’s one a few people pointed out. The latest top-ten list from Forbes’ Matt Woolsey is America’s Most Overpriced ZIP Codes. Guess who gets #3?

3. Seattle, Wash.

Downtown
ZIP code: 98104
Purchase-to-rent spread: 30.3

Until recently, Seattle has been held up as the example of a city immune to price drops as its market posted price increases from 2006 to early 2008. But as transaction volume has slipped and prices have flattened or fallen in many neighborhoods, the downtown area, near Pioneer Square, which experienced some of the most rapid price escalations during the boom, particularly in condos, appears vulnerable to correction.

Hooray for Seattle.

Lastly, here’s one from the national news scene. New York Times: Default rates for “alt-A” loans increasing

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.

Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

But I thought subprime was contained.

(Eric Schudiske, KOMO News, 07.28.2008)
(Rolf Boone, The Olympian, 08.04.2008)
(Bill Virgin, Seattle P-I, 07.30.2008)
(Matt Woolsey, Forbes.com, 07.29.2008)
(Vikas Bajaj, New York Times, 08.04.2008)

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Bill Virgin: Homeownership has been oversold

By The Tim on March 27th, 2008 at 12:00 PM · 44 Comments

Over at the P-I earlier this week, Bill Virgin chimed in on the housing mess again with yet another well-reasoned column: Homes are good investments, not slot machines or ATMs.

In the great American sport of finger pointing and blame shifting, a new villain has emerged to explain the mortgage-finance crisis.

The fault, it turns out, lies not with incompetent, deceptive lenders, naïve, speculating borrowers, greedy, reckless Wall Streeters, slumbering regulators, bubble-creator Alan Greenspan or all of the above.

Instead, the root cause is something far more fundamental: the American belief in the value of homeownership.

Or so says an emerging theory that argues that the attributes of owning a home have been, pardon the phrase, oversold, and had the U.S. not been so hellbent on getting people to buy, much of the current debacle could have been avoided.

So now is probably a useful time to review some basics about American attitudes toward homeownership, and whether they did, in fact, contribute to the economy-shaking mess we’re now in:

  1. Homeownership is good. Homeownership — for the individual and for society — works.
  2. What’s not so good, and what consequently hasn’t worked, are the methods for encouraging homeownership and the expectations of what ownership would accomplish financially for the buyers.

…
Homeownership was also considered a financial virtue, being one of the few ways average Americans could achieve long-term financial solvency. Once they saved up for a down payment on that starter home, they could use the equity they slowly built up, from their own payments, price appreciation and improvements to the property, to move up to larger or nicer homes, to maybe even — and here’s a novel concept today — to enjoy the income freed up by paying off the mortgage.

Which is about the point in our story where the trouble begins.
…
Eventually the markets will correct, although the price of that correction is likely to be steep in lost jobs, houses, savings and economic health. If our present calamity strips away the excesses and false assumptions, and returns an appreciation of the merits of home ownership, that might be one of the few good things to come out of this.

Bill continues to be one of the few in the local mainstream press that actually seems to get what’s really been going on, and where we’re headed as a result of this mess we’ve gotten ourselves into. As usual, you should read the whole article. Kudos to Bill.

(Bill Virgin, Seattle P-I, 03.24.2008)

→ 44 CommentsCategories: Opinion
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