Press Optimism Beginning To Fade?

With the lull that has set in on housing this winter in the Seattle area, the news reports about the dead time are almost more interesting than the housing news itself. For example, take the four stories in today’s papers about December’s housing numbers. Here are the headlines:

Housing prices keep rising as sales slow
     Elizabeth Rhodes, Seattle Times
Home sales are cooling with the weather
     Kristen Millares Bolt, Seattle P-I
Area home sales taper off
     Mike Benbow, Everett Herald
Home sales fall, but prices up
     Barbara Clements, Tacoma News-Tribune

Surprisingly, two out of the four local papers actually have headlines that are more negative than positive, one is fairly neutral, and only one is still stubbornly upbeat. This is quite a turn from the usual “everything’s going great” face that they all seem to put on. Could this be a sign that there are finally some cracks appearing in the Seattle real estate market? From the P-I:

It was a banner year for real estate prices in the Puget Sound area, and December was no exception, according to statistics released Thursday by the Northwest Multiple Listing Service.

But a drop in pending sales — offers made and accepted, but not yet closed — across 16 of the counties measured by the listing service indicates that people are pulling back from the real estate market. It’s the beginning of a cool-down.

Clearly no bubble is bursting, real estate experts agree. Rather, there is a slowdown in the market that will eventually put a damper on home-sale price increases, even as the demand for homes continues to outstrip the supply of them.

I love the logic that because clearly things are “cooling down” slowly right now, that means that there definitely won’t be a “bursting bubble” effect at all. I’m not saying there will be (all I know for sure is that recent price gains cannot possibly continue), but I think that the logic presented by the “real estate experts” is rather suspect.

(Elizabeth Rhodes, Seattle Times, 01.06.2006)
(Kristen Millares Bolt, Seattle P-I, 01.06.2006)
(Mike Benbow, Everett Herald, 01.06.2006)
(Barbara Clements, Tacoma News-Tribune, 01.06.2006)

0.00 avg. rating (0% score) - 0 votes

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    Anonymous says:

    And the house I’ve been tracking in N. Seattle for the past 2 months continues to drop in price!!!!

  2. 2
    aloha_mr_hand says:

    Hopefully the prices will drop in Pierce County soon. I’d like to buy a place in 2007.

    Thanks for the blog!

  3. 3
    Anonymous says:

    “Could this be a sign that cracks are appearing?”….
    The cracks were there months ago- they are just gettting too wide and deep to ignore or put a good face on. Things must be getting really bad!-(or really good!)
    Watch this baby tumble!

  4. 4
    Dukes says:

    I have been writing realtors here in the Seattle area who are trying to market homes to flippers. The latest is this house that someone bought for 503K in March 05, now they are trying to sell it for 729K – truly disgusting.

    Here is the web site of “Connie” –

    She is exactly the type of woman that is driving this thing by advising clients to max prices. I wrote her a scathing letter about the latest flip attempt, if and when she replies it should be fun. If you want to laugh, go to the link and check out her “bio” – this chick is trying way so hard it cracks me up.

  5. 5
    Anonymous says:

    seeing that woman’s site….honestly, it makes me want to cry. I watched flipping real estate agent flippers decimate whole blocks of solid community when this whole mess started several years back. These people represent the worst that humanity has to offer.
    And, as an aside, our neighborhood-terminator-“real estate agent” was also a native Seattleite. Will people please stop blaming every mess on Californians? Please?

  6. 6
    Anonymous says:

    Anyone hear the interview on CNBC last night with a rep. of Coldwell Banker? Interesting spin on the future of the RE market: He said “it’s going to be a buyers market because of so much inventory available . Just don’t expect any appreciation for a year or 2 (!!!)” WOW!

  7. 7
    Anonymous says:

    Why is flipping houses bad? “Decimate” a community? It takes two to tango. Somebody has to be willing to buy and another willing to sell. Everyone involved takes risks, just like trading stocks. If flipping houses is bad, speculation in the stock market is bad too.

  8. 8
    Anonymous says:

    You’re right- the buyers are just as much to blame. Hopefully, most of them have been weeded out now and those who are still wanting to buy will have the patience to wait til the prices go thru the floor.
    Anyone who has any doubts about just how far Seattle prices will have to fall to get back into “sane” territory, check out this listing:
    MLS#26000601, conveniently located in the trashed out section of the Roosevelt District, right under I-5.

  9. 9
    Anonymous says:

    HELLO!!?!? People do not live in their stock portfolios. There is a world of difference between speculating in the stock market and speculating in RE. If you haven’t that out yet, what’s it gonna take? Perhaps watching as people get thrown out on the street when they’ve gone bankrupt trying to pay for a house they can’t afford? I know, I know, you can look the other way and pretend it’s not happening but that won’t change the fact that there is a difference. Let’s get speculation out of RE and back into stocks where it belongs. This has got to be the stupidest, most unproductive bubble we’ve ever had.

  10. 10
    Anonymous says:

    Aloha Mr. Hand-
    Rest assured and have no fear-these prices are coming down everywhere. Let’s all just agree on one thing: never ever get involved in a bidding war. All it does is push prices up and ruin it for everyone. Have we learned our lesson here?
    Here’s the way to buy a house: Take the sellers asking price , consider it and make an offer that is lower. If they say no, walk away. There will be PLENTY of houses out there to choose from.
    I am going to look up old sales records for the homes I visit before I go in. I’ll check out how much they paid for the place originally and take that into consideration before making my offer.
    Folks, it’s all in our hands now. Let’s make sure this madness never happens again in our lifetimes.
    2007 is when all those trillions of dollars in mortgages readjust so you, Aloha, should be hitting the market at an optimal time.

  11. 11
    Eleua says:

    My wife and I have been asking each other how the RE market will unfold. Here is what we came up with:

    We live in the Puget Sound region, and it is still quite bubbly. Most of the buyers in our area (Bainbridge Island, Poulsbo) are either active duty military, or California ex-pats/refugees.

    Q1-06: Denial of housing softening. Most will not sell. Weak hands are not yet nervous. Those interested in selling are looking to spring.

    Q2-06: Inventory starts to build. Prices inch up on declining sales. Not as many Californians marching up here with a pile of equity money as last year. No fear, yet.

    Q3-06: National economy starts to tank, and FEDGOV can’t hide it anymore. Iran involved in military conflict with Isreal/US. Congressional elections heat up. Reports of slow sales spring hit the wire. People pull houses off market to wait until next year. General uneasiness, but no fear.

    Q4-06: California has fear. BOS-NYC-WAS corridor has fear. Florida has fear. NV-AZ have fear. Seattle still in denial. “Investors” really upset they could not rent out their homes – blame war/Bush/GOP.

    Q1-07: Dollar in freefall. Economy tanking in Pacific NW. Notices of Default hit records in PNW.

    Q2-07: Massive inventory build. NO BUYERS! Sheriff sales spike, which drives even more inventory to market. Sellers scared. Buyers even more scared. Massive wave of RE agent/mortgage broker suicides.

    Q3-07: CNBC pulled off air. HGTV off air. Panic in full bloom as the long, dark, wet winter is on the horizon. Sheriff becomes the highest volume RE seller in the county. Prices are 40% off the peak, and headded lower. People drink Folgers.

    Q4-07: Reports come in about how young families thought they were buying the dip, and caught a falling knife. More panic. All home equity wiped out. No consumer spending. High unemployment. NO BUYERS! Sheriff selling property below 1992 prices. No one admits to voting for GWB. Bubble era RE agents move to Texas. Bubble era appraisal agents raped in prison. Bubble era mortgage brokers recovering from gunshot wounds.

    Final count: PNW RE selling at 60-80% discount off of peak. People think you are a moron if you buy (much like they think of you if you rent in ’05).

  12. 12
    Anonymous says:

    The only difference between speculating in RE and stocks is the size of the trade. If you borrow too much and go broke, you can’t blame the real estate agents or mortgage brokers for your miscalculation or downright stupidity.

    eleua, you forgot to put in a global nuclear war somewhere in your timeline.

    People are either too bullish or too bearish on RE. When you get too caught up on something, be it politics or religion or this, you lose perspective. The truth is often somewhere in between.

  13. 13
    Anonymous says:

    Oh NO!!!!! Anything! But don’t make me drink Folgers!!
    Euelea- I’m ok w/ your evaluation in general, but I really think the panic and price drops are already starting in Seattle.

  14. 14
    Dukes says:

    She wrote me back…, here is our exchange in full…

    Hello Ms. Blumenthal. I was looking at your house on Halladay Street #914. I am shocked at the greed that I see present here, I am interested in buying a house in Queen Anne, but as I do a little research I see that this house was bought in March of this year for 503K, and you and your seller are trying to mark this house up over 200K in 9 months????? Am I seeing this right? How, in anything that is just and fair can you justify doing this? I will be buying a house in Queen Anne, but I refuse to line the pockets of a greedy flipper. If you are interested in becoming a buyers agent for me in the future, I will keep your email – but this is insane and not justifiable. Heck this is worse than Orange County, CA.

    Thank you for the email. I can see how one would think that just by looking at the numbers. Have you had a chance to see the interiors of the house and the before and after pictures? I can assure you that no surface in that house was left untouched, the basements was finished, all the materials and craftsmanship are done to the highest standards. If you would like to stop by tomorrow, I am having an open house from 1-4. I would like to meet you and talk a little more about maybe what you are looking for.
    Best Regards,Connie

    Me: (again)
    First, thank you for your reply. I did take a look at before and after pictures and I will grant that they did redo the house, but certainly not to the tune of 223K. The way that I see it we are in a slowing real estate cycle and anyone who is purchasing now is simply playing the greater fool. Appreciation in double digits is over, and in my opinion, we are about to see price declines as additional homes enter the market. This is already happening in CA, NJ, NY, VA, DC etc…Seattle is not immune to this although so far it has been late to the new trend. It saddens me to see what real estate has become, this is no reflection on you, I checked out your web site and I am certain you are a professional. What saddens me is what I call the “greed” factor in people. My thinking is something like this: “Why should I purchase a home from someone who is obviously a greedy flipper? Why should I pay them 223K on this house for holding it for 9 months? It isn’t right and from my experience with real estate cycles whenever we see unmitigated greed to this extent we are due for a strong correction.

    I hope to be in contact with you in the future, if I have a chance I may walk over to the open house today. Once again, thank you for your reply – I do believe that realtors at this stage of the game must start recommending price reductions to listing clients.

    Connie: (again)
    You sound like a very interesting and intelligent person and someone that I would enjoy a conversation with. I’m not sure what field your in and if your days are in an office, but my time is flexible, and if you would be available for coffee and would like to meet, let me know.

    Best Regards,


    Pretty interesting exchange I think, I may stop by her open house today…

  15. 15
    Anonymous says:

    First of all, well done Dukes. Please keep us posted on your noble efforts at making the insane see common sense.
    Now, on to something else that is very very important to all of us would-be future home buyers (ie. those of us who believe in 20% down, minimum and a (preferably) 15 year mortgage:
    Please check out the Northern New Jersey Bubble link that Tim has, in his infinite wisdom, provided for us here. Check the price drops over the last few weeks. You will be astounded.
    I know that NJ has a horrible reputation the world over as a crappy place to live. But for those who have never been, you need to know that the area he is talking about is one of the nicer areas of this whole country. I went last year for the first time and surprise does not even begin to describe it.
    Imagine a beautiful, well established town center surrounded by lovely neighborhoods of well-built solid homes,sidewalks and tree-lined streets. Imagine pockets of forests and parks popping up here and there, everywhere. Then add to that an architectural gem of a railroad station, immaculately clean, with trains going in to midtown Manhattan every 45 min, nearly 24 hours a day. Then add to that bus service that is so frequent into Manhattan that , as a Seattleite, it makes your head spin. For under 2 bucks you can get to the big city in 45 min.
    I am telling you for sure that if prices can drop in that area there is absolutely no doubt that they can drop here, just as far, or farther.

  16. 16
    Dukes says:


    Just so you know, I grew up in NJ, as a matter of fact, I have basically lived my entire life there, both my first house there etc…

    NJ has many, many wonderful places to live. I grew up next to the Atlantic Ocean near one of the many beach towns there.

    You are right, the price drops now being seen there will be seen here.

    Seattle is interesting to me because people live in a fog up here, that is why trends take longer to hit here. I think of it as a type of Seattle bubble mentality, we are isolated up here and so many are not plugged in to trends around the country.

    But in CA, NY, NJ, DC, VA, FL – these people keep their eyes open, so they are flooding inventory on the market. I have noticed a shift here, it is slowly happening, in a few months it should be more palpable.

  17. 17
    Dukes says:

    Sorry, “both” in the first paragraph should read “bought”…

  18. 18
    Anonymous says:

    I agree, I also have clearly seen that the trend has shifted from “bid ’em up” to “hmm…maybe we have to drop our price a tad..” This shift, tho many would like to downplay it, is signicant as heck. I look forward, in the not-so-distant future, to the remarkable quick slide downward that NJ is experiencing.

    I even wonder if perhaps it hasn’t already begun here and we just don’t have anybody with the know-how and time to organize the data and get it out there for the public to see.

    Takers anyone??!!?

  19. 19
    Anonymous says:

    “Bubble Markets Inventory Tracking” has added Seattle to it’s site.

    Check it out at:

  20. 20
    Eleua says:

    Drinking Folgers is certainly a sign that a full-blown flop-sweat panic is in bloom…

    I don’t track the Seattle Metro area all that closely. I watch Braindead Island, and Poulsbo. As of now, there is absolutely no panic. I would say that it is still a strong seller market. There just isn’t much for sale, yet people are still marching up here with all their California equity and bidding up prices.

    Braindead Island is, for all practicality, California’s 59th county.

    It will pay the piper in a huge way. Once Californians become trapped in their bubble, and can’t sell, Braindead Island will be in a freefall.

    Bank on it.

  21. 21
    Anonymous says:

    Well, I think were still dealing with equity coming in from other locations “flight to quality” so to speak. I have a feeling though that by mid summer, the slowdown will be obvious.

  22. 22
    marin_explorer says:

    Imo, Connie pretty much typifies those upbeat (and perhaps overly optimistic) attitudes you see in metro areas during boom times. Maybe her optimism will carry her through the inevitable downside?

    For what it’s worth, see strikes me as pretty diplomatic in her responses. That’s far better than the sharp attacks we’ve received from realtors and media to reports on our local market.

    Someone made a great point…you can’t attribute all the hype to Californians. That’s a worn, lame excuse that’s been overused for decades.

  23. 23

    […] June 2006, about a year before Seattle’s peak pricing (but eight months after sales began declining year-over-year). By this time most of the rest of the country had figured out the boom was over, but remember, […]

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.