Meet Tom Layson, Windermere agent, and check out his post that showed up in my rss subscription to Google blog search results for "Seattle Bubble."
1. Redfin
This cut-rate real estate agency has now hired "The Tim" to write and produce content for it. Tim was the creator of the Seattle Bubble blog which got real big, and has now burst. Such an irony. Why did it burst? Because nobody would support an anti-real estate ownership product. So now, Tim has sold out, and is writing for Redfin who will have one helluva' time balancing Tim's great analytical skills and their desire to race to the bottom in the real estate game, and his well known anti-ownership bias. What a weird marriage. But you know something, a pay check is a pay check. My point is this: There's nothing wrong with selling, but I just don't get selling things you don't believe in, or spent a career trying to take down. There is just zero credibility there.
Tom must have a funny definition of "burst," because Seattle Bubble is getting more traffic than ever (and still growing). Also, as I stated from the very beginning, the entire reason I started this site is because:
I do not currently own any property, though I would of course love to.
Wow, that Tom Layson really has me figured out. Heh.
Nonsense posts like this totally make my day. Thanks, Tom!
1. Redfin
So now, Tim has sold out, and is writing for Redfin who will have one helluva' time balancing Tim's great analytical skills and their desire to race to the bottom in the real estate game
This quote in particular stood out to me because it's doubly incorrect. Seattle Bubble has long been a proponent of Redfin and similar services as alternatives to the monopolistic-one-price-fits-all services offered by Realtors (TM, R, C, patent pending, now defunct) in the past. Second, Redfin is hardly in what I would call a race to the bottom. They recognized there is a (potentially huge) niche in the real estate market for a service that allows someone to look through homes for themselves online with tons of useful information, and that said service could be provided at a significant discount to the more traditional services being offered.
That's hardly a race to the bottom, it's innovation and for Tom Layson, it's terrifying.
Yeah, I realized after exchanging a few comments with him on his blog that what it really boils down to is that he hates Redfin (challenging the 6% model) and isn't too fond of me either (encouraging consumers to think instead of just swallowing realtor sales pitches), and the combination of the two just got him all riled up.
The RE industry(ie agents like Tom L) is making the same mistakes the Music industry made. You can't stop technology innovation from happening. Furthermore, the RE industry should embrace change and evolve with the times otherwise, well, you know the story.
In a funny way, Realtors and OPEC have the same problem. You've got a product people want, you've created a monopoly to ensure your profits, and things are looking up. Then, the market spikes in a manner outside of your control (even if it profits you in the short term) and suddenly everyone is looking for alternatives to your product.
OPEC, at least has long recognized that too high of oil prices are actually a bad thing (smother the world's economy, and drive people to burn coal in their cars I guess). The Realtors apparently were not as bright. They thought the 6% gravy train was written by the finger of God into the side of a mountain in the Himalayan Mountains or something.
Meanwhile, 6% might have been fair when a median house cost 2.2x median income, but once prices rose to 8x median income their prices were at least three times too high.
Ref Tom Layson; Judging by how many people responded to his blog comments, I am guessing that your nod on SB was probably the best thing for his numbers in a while...
I was also interested that it was not obvious on his site anywhere that he has any affiliation with RE.
He made a good point and followed it up with considered response. radfun is a huge corporate enterprise. You are schilling for Prudential, Coldwell Banker, or RE Max, when you start selling radfun.
Big business has wanted the radfun model for years and now it's here. Those snippets of code for searches and interactive real estate play will be bought by some one, or maybe not. It has been for sale, from what I hear for about a year and a half. They may have missed the window of opportunity.
Meanwhile, 6% might have been fair when a median house cost 2.2x median income, but once prices rose to 8x median income their prices were at least three times too high.
When I lived in Indiana, I never thought the 6% was unreasonable. The city wasn't covered by RedFin or any of the other online tools, so access to the MLS was harder. Most houses sold for $100-150k, so each RE agent was getting $3000-4500 (less agency fees and what not), often for several weeks of work sorting through hundreds and hundreds of similar homes. The good agents still did well for themselves (as they should) but the hacks didn't last long because you needed to be closing at least 1 or 2 houses every month.
Out here, it was staggering with the number of houses selling for $500k-1M, where a single sale could probably get you through 3-6 months, that agents still wanted 6%. And with the amount of online info, it seemed like the buyers (at least the ones I knew) were doing half the work before even talking to an agent.
Remember, the 6% commission to real estate agents is the backbone of our economy! No other payment in our economy really creates jobs! (Well, real estate agent jobs...)
Wow, reading the comments on that RCG post, it sounds like the old Ardell is back. She apparently doesn't give an RA about the economy or anything outside her area again.
She has suddenly gone from being pretty reasonable to drinking pure, fortified, 100% real-estate KoolAid. I suspect it's personal - she probably is in big trouble if she can't sell her house at something close to asking, so the market is about to rapidly recover because it has to, from A's point of view.
One thing that explains the bitterness that a number of real estate agents are manifesting lately is that a lot of RE agents plowed all their profits during the bubble back into highly leveraged RE investments. It's not just that their incomes have gone to zero, but they suddenly find themselves feeding unsalable alligators, and are running out of resources to do so. No wonder they're cranky and think that the entire economy revolves around them.
She has suddenly gone from being pretty reasonable to drinking pure, fortified, 100% real-estate KoolAid. I suspect it's personal - she probably is in big trouble if she can't sell her house at something close to asking, so the market is about to rapidly recover because it has to, from A's point of view.
She's already resigned herself to foreclosure, according to what she told me Wednesday night.
I said then that I didn't give a RA about banks because there was no saving them.
:roll:
It's good to have the old Ardell back. Irritable, delusional, irrational, dismissive. I wonder if we'll get another good "I don't get a RA about banks" quote out of this thread. I nominate:
What's so surprising to me is she seems to have done a complete 180 in one post. The argumentative and defensive attitude is more reminicent of recent threads at SREP than what she's been posting the last few months. She even clawed at Jillayne. Something happened or changed, and I find it hard to believe it was just the results of her Sunday night stats and a proposed $15k tax credit. Maybe Kary's incessant thickheadedness over there finally won her over, or at least convinced her to sample the koolaid again.
She is really trumpeting her own horn on this one and allowing ZERO comments that she perceives to be "fly by".
What's the matter Ardell? Someone not going to buy your overpriced Kirkland short sale until the market is "at bottom"?
And here I was thinking she was finally starting to "get it"...
Maybe she (or her SO, daughters, etc.) put an offer in through her for a lowball price and the seller took it and now she is trying to convince herself or them that the value can't possibly go any lower.
Good luck with that Ardell, you're still a RE shill who hasn't been in the business long enough to see what a REAL downturn looks like.
I may not be as pessimistic as Sniglet, but I do believe 1995-1999 pricing is likely all over the West Coast.
In addition to the example I've given Jen, I'm seeing a $1.6M selling at $975,000 and a $1.35M selling at $865,000. Short sale/foreclosure. Kirkland. Between 35% and 40% off peak. The one I'm calling $1.6 was next to one that sold for $1.7M. The one I'm calling $1.35M is based on what the previous owner paid. So they are not made up "peak" numbers.
It is VERY dangerous to make an assumption of a "bottom" based on a percentage off of prior sale and/or based upon what the prior owner paid.
Just because someone overpaid the first time does NOT mean it's a good deal now.
Anyone who thinks Kirkland ever had a long term potential for million dollar homes was drinking the kool aid to being with.
I grew up there, Kirkland used to be a middle class enclave and will revert.
When I see regular 70's split levels and mock Tudors in Kirkland going for $200K then I'll think a bottom has been reached.
I grew up there, Kirkland used to be a middle class enclave and will revert.
When I see regular 70's split levels and mock Tudors in Kirkland going for $200K then I'll think a bottom has been reached.
Downtown Bellevue and Redmond are not going to revert to the middle class suburbs they were in the 70's, and so I would not expect prices in nearby areas to go back either. A lot of infrastructure has been built there and will continue to be. That is valuable to be close to.
At comment #11 she says that when the trend is two or three people agreeing on pricing at a given price level, that price level has hit bottom. This may or may not be reasonable. But was she saying this *before* these two or three people started agreeing? If not, it sounds suspect, like she's making it up as she goes along. Also, does she mean "price level" or "price point"? The former term leaves some wiggle room, especially if you don't define specifically what the levels are.
The Ardell in this post is not Ardell the straight-talking broad I got to know and like over the last several months. Come back, Ardell! I miss you.
Downtown Bellevue and Redmond are not going to revert to the middle class suburbs they were in the 70's, and so I would not expect prices in nearby areas to go back either. A lot of infrastructure has been built there and will continue to be. That is valuable to be close to.
Where did I mention Bellevue or Redmond?
If you think Bellevue is going to be the next San Jose, or Redmond for that matter, because of a few high rises (Bellevue) and a cheesy mall (Redmond), then you are missing the point.
It's still urban sprawl, strip malls, Starbucks, and Olive Gardens...
Wait until the restaurants and malls start emptying further.
I haven't been to RTC in ages. Are there empty stores there now? I went to Celtic Bayou for lunch the other day (not too far way), and was amazed at the number of empty shops in that small shopping center. I think we counted 4 vacant and 3 occupied.
I haven't been to RTC in ages. Are there empty stores there now? I went to Celtic Bayou for lunch the other day (not too far way), and was amazed at the number of empty shops in that small shopping center. I think we counted 4 vacant and 3 occupied.
If you haven't been to the mall lately - I think the thing that will amaze you is that the parking lots are all full. Northgate, Southcenter, Bellevue Square. Every time I drive by one of these places, I am astonished at how many people it appears are there.
I don't know if they are buying, but they sure as hell are shopping! Maybe it's like some sort of "ghost limb" phenomenon - where people still go to the mall because they have no idea what else to do.
There is a mall near where I live that has the following Anchors left: Kohl's, Burlington Coat Factory, Babies R Us, and Bass Pro.
Guitar Center just closed there, there are three empty anchors and a slew of empty fronts. We are talking maybe 15% of the store fronts are open. They have turned one whole space where three or four shops were into a indoor mini golf.
Bass and Kohl's are rumored to be leaving.
The only thing keeping the doors open at this point, from what I can see, are the TWO movieplexes and a nightclub.
There has been talk of tearing it down and turning it into Sec. 8 housing, but it straddles two cities' borders so...
I think the West Coast is going to get decimated as people elect to move to cheaper housing in flyover country. The weather may not be as nice, but an extra grand per month to spend will convince some to move back to their hometowns.
If you haven't been to the mall lately - I think the thing that will amaze you is that the parking lots are all full. Northgate, Southcenter, Bellevue Square. Every time I drive by one of these places, I am astonished at how many people it appears are there.
I don't know if they are buying, but they sure as hell are shopping! Maybe it's like some sort of "ghost limb" phenomenon - where people still go to the mall because they have no idea what else to do.
Agreed. Except, a weird thing happens. Head inside (if you can find parking) and it feels like a ghost town. I think what you are seeing is "deal seekers".
Business X is shutting down -> 20% off everything??? => Gotta go look now!!!!! => Full parking lot, empty mall except for store X.
At least, that's my guess. Otherwise I can't figure out what's going on. The only other option is that shopping without buying is "cheap entertainment" if you enjoy the shopping process. Spend $20 for two at the movies, or watch your girlfriend try on shoes for two hours for free.
Final note, we're in a world of extremes now. Either a shop is empty or it's packed. You can hardly go anywhere and get a normal experience today.
The reality is that it really isn't particularly bad here... yet.
6.3% unemployment for the total MSA, and most of that up-tick driven by construction, which I'm guessing is focused more in Snoho and Pierce than King.
Sure, psychologically people are starting to pull back, and when the layoffs start in earnest at Microsoft, Boeing and Starbucks, will see a larger impact.
But in general, people still have money to spend. They're just not sure if they should.
BTW, despite Leanne's hysterical rant the other day really, really freaking me out, I'm buying a house. We're over-paying, but it's pretty close to exactly what we were looking for - fantastic view lot in-city with a so-so house that is very livable now, but with lot's of potential for improvement.
A year of living out of boxes is the most I could do and still keep my family sane.
...BTW, despite Leanne's hysterical rant the other day...
Actually, it seems it may be more reasonable then she first sounded.. though still a little out there.. after 3 pages of comments it seems it's this:
- Real Estate sales volume (houses, land, commercial, etc) drive jobs.
- Price is not critical.
In other words when she talks about "saving" real estate / housing, all she means in that the sales volume comes back up.. not that prices remain stable, or go back to what they were in the boom times.
It still seems pretty self serving (as volume makes up an agents pay check), but more reasonable then I had though her argument was when it all started.
In a related note, anyone have any idea where I'd find data on sales volume since about 1900? or even say 1950 or 1970? I'd like to see if that overlayed with recessions data to look for any correlation.
If you haven't been to the mall lately - I think the thing that will amaze you is that the parking lots are all full. Northgate, Southcenter, Bellevue Square. Every time I drive by one of these places, I am astonished at how many people it appears are there.
I don't know if they are buying, but they sure as hell are shopping! Maybe it's like some sort of "ghost limb" phenomenon - where people still go to the mall because they have no idea what else to do.
Full lots means nothing, it doesn't mean people are buying. Use the bags coming out of the mall as a measurement, and you'll see that we are hurting.
Just as fast as all this infrastructure went up, it can all go back down. Look at the mass exodus at Redmond Town Center. The school closures in Seattle. Look at all the vacant and/or revolving store fronts in any town.
I think the West Coast is going to get decimated as people elect to move to cheaper housing in flyover country. The weather may not be as nice, but an extra grand per month to spend will convince some to move back to their hometowns.
I just flew back in from flyover country yesterday and couldn't agree with you more. I saw lakefront homes or city view homes that would be million dollar homes in Seattle listed at 250K. Granted this is on the outskirts of major cities (Dallas / Houston), but at least I'm able to go 30 miles in 30 minutes at rush hour, as opposed to 30 miles over an hour and a half here. Yes, I know there's pros and cons in every city in this country, but the South is looking more and more attractive every day.
Oh, and I just basked in 70 degree sunshine over the past two weeks and will take that any day over the cold and rain. Yeah, the summers are rough, but at least the winters aren't! The economy seems to be stronger down there than Seattle. There isn't a prevailing pessimistic mood. Maybe it's because they didn't have double digit appreciation every year and get HELOC's out the a.
Comments
Meet Tom Layson, Windermere agent, and check out his post that showed up in my rss subscription to Google blog search results for "Seattle Bubble." Tom must have a funny definition of "burst," because Seattle Bubble is getting more traffic than ever (and still growing). Also, as I stated from the very beginning, the entire reason I started this site is because: Wow, that Tom Layson really has me figured out. Heh.
Nonsense posts like this totally make my day. Thanks, Tom!
This quote in particular stood out to me because it's doubly incorrect. Seattle Bubble has long been a proponent of Redfin and similar services as alternatives to the monopolistic-one-price-fits-all services offered by Realtors (TM, R, C, patent pending, now defunct) in the past. Second, Redfin is hardly in what I would call a race to the bottom. They recognized there is a (potentially huge) niche in the real estate market for a service that allows someone to look through homes for themselves online with tons of useful information, and that said service could be provided at a significant discount to the more traditional services being offered.
That's hardly a race to the bottom, it's innovation and for Tom Layson, it's terrifying.
http://en.wikipedia.org/wiki/Disintermediation
The RE industry(ie agents like Tom L) is making the same mistakes the Music industry made. You can't stop technology innovation from happening. Furthermore, the RE industry should embrace change and evolve with the times otherwise, well, you know the story.
In a funny way, Realtors and OPEC have the same problem. You've got a product people want, you've created a monopoly to ensure your profits, and things are looking up. Then, the market spikes in a manner outside of your control (even if it profits you in the short term) and suddenly everyone is looking for alternatives to your product.
OPEC, at least has long recognized that too high of oil prices are actually a bad thing (smother the world's economy, and drive people to burn coal in their cars I guess). The Realtors apparently were not as bright. They thought the 6% gravy train was written by the finger of God into the side of a mountain in the Himalayan Mountains or something.
Meanwhile, 6% might have been fair when a median house cost 2.2x median income, but once prices rose to 8x median income their prices were at least three times too high.
I was also interested that it was not obvious on his site anywhere that he has any affiliation with RE.
He made a good point and followed it up with considered response. radfun is a huge corporate enterprise. You are schilling for Prudential, Coldwell Banker, or RE Max, when you start selling radfun.
Big business has wanted the radfun model for years and now it's here. Those snippets of code for searches and interactive real estate play will be bought by some one, or maybe not. It has been for sale, from what I hear for about a year and a half. They may have missed the window of opportunity.
When I lived in Indiana, I never thought the 6% was unreasonable. The city wasn't covered by RedFin or any of the other online tools, so access to the MLS was harder. Most houses sold for $100-150k, so each RE agent was getting $3000-4500 (less agency fees and what not), often for several weeks of work sorting through hundreds and hundreds of similar homes. The good agents still did well for themselves (as they should) but the hacks didn't last long because you needed to be closing at least 1 or 2 houses every month.
Out here, it was staggering with the number of houses selling for $500k-1M, where a single sale could probably get you through 3-6 months, that agents still wanted 6%. And with the amount of online info, it seemed like the buyers (at least the ones I knew) were doing half the work before even talking to an agent.
She has suddenly gone from being pretty reasonable to drinking pure, fortified, 100% real-estate KoolAid. I suspect it's personal - she probably is in big trouble if she can't sell her house at something close to asking, so the market is about to rapidly recover because it has to, from A's point of view.
One thing that explains the bitterness that a number of real estate agents are manifesting lately is that a lot of RE agents plowed all their profits during the bubble back into highly leveraged RE investments. It's not just that their incomes have gone to zero, but they suddenly find themselves feeding unsalable alligators, and are running out of resources to do so. No wonder they're cranky and think that the entire economy revolves around them.
It's good to have the old Ardell back. Irritable, delusional, irrational, dismissive. I wonder if we'll get another good "I don't get a RA about banks" quote out of this thread. I nominate:
She is really trumpeting her own horn on this one and allowing ZERO comments that she perceives to be "fly by".
What's the matter Ardell? Someone not going to buy your overpriced Kirkland short sale until the market is "at bottom"?
And here I was thinking she was finally starting to "get it"...
Maybe she (or her SO, daughters, etc.) put an offer in through her for a lowball price and the seller took it and now she is trying to convince herself or them that the value can't possibly go any lower.
Good luck with that Ardell, you're still a RE shill who hasn't been in the business long enough to see what a REAL downturn looks like.
I may not be as pessimistic as Sniglet, but I do believe 1995-1999 pricing is likely all over the West Coast.
Check out her latest:
http://www.raincityguide.com/2009/02/07 ... ent-334026
It is VERY dangerous to make an assumption of a "bottom" based on a percentage off of prior sale and/or based upon what the prior owner paid.
Just because someone overpaid the first time does NOT mean it's a good deal now.
Anyone who thinks Kirkland ever had a long term potential for million dollar homes was drinking the kool aid to being with.
I grew up there, Kirkland used to be a middle class enclave and will revert.
When I see regular 70's split levels and mock Tudors in Kirkland going for $200K then I'll think a bottom has been reached.
Downtown Bellevue and Redmond are not going to revert to the middle class suburbs they were in the 70's, and so I would not expect prices in nearby areas to go back either. A lot of infrastructure has been built there and will continue to be. That is valuable to be close to.
The Ardell in this post is not Ardell the straight-talking broad I got to know and like over the last several months. Come back, Ardell! I miss you.
Where did I mention Bellevue or Redmond?
If you think Bellevue is going to be the next San Jose, or Redmond for that matter, because of a few high rises (Bellevue) and a cheesy mall (Redmond), then you are missing the point.
It's still urban sprawl, strip malls, Starbucks, and Olive Gardens...
Wait until the restaurants and malls start emptying further.
If you haven't been to the mall lately - I think the thing that will amaze you is that the parking lots are all full. Northgate, Southcenter, Bellevue Square. Every time I drive by one of these places, I am astonished at how many people it appears are there.
I don't know if they are buying, but they sure as hell are shopping! Maybe it's like some sort of "ghost limb" phenomenon - where people still go to the mall because they have no idea what else to do.
Guitar Center just closed there, there are three empty anchors and a slew of empty fronts. We are talking maybe 15% of the store fronts are open. They have turned one whole space where three or four shops were into a indoor mini golf.
Bass and Kohl's are rumored to be leaving.
The only thing keeping the doors open at this point, from what I can see, are the TWO movieplexes and a nightclub.
There has been talk of tearing it down and turning it into Sec. 8 housing, but it straddles two cities' borders so...
I think the West Coast is going to get decimated as people elect to move to cheaper housing in flyover country. The weather may not be as nice, but an extra grand per month to spend will convince some to move back to their hometowns.
Agreed. Except, a weird thing happens. Head inside (if you can find parking) and it feels like a ghost town. I think what you are seeing is "deal seekers".
Business X is shutting down -> 20% off everything??? => Gotta go look now!!!!! => Full parking lot, empty mall except for store X.
At least, that's my guess. Otherwise I can't figure out what's going on. The only other option is that shopping without buying is "cheap entertainment" if you enjoy the shopping process. Spend $20 for two at the movies, or watch your girlfriend try on shoes for two hours for free.
Final note, we're in a world of extremes now. Either a shop is empty or it's packed. You can hardly go anywhere and get a normal experience today.
6.3% unemployment for the total MSA, and most of that up-tick driven by construction, which I'm guessing is focused more in Snoho and Pierce than King.
Sure, psychologically people are starting to pull back, and when the layoffs start in earnest at Microsoft, Boeing and Starbucks, will see a larger impact.
But in general, people still have money to spend. They're just not sure if they should.
A year of living out of boxes is the most I could do and still keep my family sane.
Now we just gotta keep them jobs!
Actually, it seems it may be more reasonable then she first sounded.. though still a little out there.. after 3 pages of comments it seems it's this:
- Real Estate sales volume (houses, land, commercial, etc) drive jobs.
- Price is not critical.
In other words when she talks about "saving" real estate / housing, all she means in that the sales volume comes back up.. not that prices remain stable, or go back to what they were in the boom times.
It still seems pretty self serving (as volume makes up an agents pay check), but more reasonable then I had though her argument was when it all started.
In a related note, anyone have any idea where I'd find data on sales volume since about 1900? or even say 1950 or 1970? I'd like to see if that overlayed with recessions data to look for any correlation.
Full lots means nothing, it doesn't mean people are buying. Use the bags coming out of the mall as a measurement, and you'll see that we are hurting.
Just as fast as all this infrastructure went up, it can all go back down. Look at the mass exodus at Redmond Town Center. The school closures in Seattle. Look at all the vacant and/or revolving store fronts in any town.
I just flew back in from flyover country yesterday and couldn't agree with you more. I saw lakefront homes or city view homes that would be million dollar homes in Seattle listed at 250K. Granted this is on the outskirts of major cities (Dallas / Houston), but at least I'm able to go 30 miles in 30 minutes at rush hour, as opposed to 30 miles over an hour and a half here. Yes, I know there's pros and cons in every city in this country, but the South is looking more and more attractive every day.
Oh, and I just basked in 70 degree sunshine over the past two weeks and will take that any day over the cold and rain. Yeah, the summers are rough, but at least the winters aren't! The economy seems to be stronger down there than Seattle. There isn't a prevailing pessimistic mood. Maybe it's because they didn't have double digit appreciation every year and get HELOC's out the a.