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
    Matthew says:


    Been a long time since I’ve seen an all green column for inventory. But yet the column to the far right seems to be very red. No spring bounce this year?

    Seattle seems to be flatlined. I don’t think that anyone will be pulling the paddles of life this spring!

  2. 2
  3. 3
    Jazen says:

    Oh and in reply to your comment, don’t you worry, “seattle is different”.

  4. 4
    meshugy says:

    No spring bounce this year?

    Hi Mathhew,

    Actually inventory is still historically low:

    Feb 2002 KC active listings: 6925
    Feb 2003 KC active listings: 8358
    Feb 2004 KC active listings: 6688
    Feb 2007 KC active listings: 6124

    Inventory was way higher in previous years, and prices still went up. I don’t think we’re even close…we need at least double the current inventory for a crash.

    Not to mention pending sales are up 7.66%.

  5. 5
    Eleua says:


    Feb 05, and Feb 06 data are conspicuously absent.

  6. 6
    Eleua says:

    Mish has a great piece on just how dumb the RE bulls are. Why is it that bad housing data take them by surprise.

    He also gives a great overview of supply and demand for housing:

    Understanding Demand – 3 Questions

    Who wants a house that does not have one?
    Who wants a house that can afford one?
    Who does not have a house and is willing to pay substantially more than rental prices for one?

    Understanding Supply – 2 Questions

    How many have a house they can not afford?
    How many have a house they soon will not be able to afford?

  7. 7
    meshugy says:

    Feb 05, and Feb 06 data are

    Of course….those were the hottest years on record. Of course inventory was lower. But you have to look at the bigger picture…I think you’ll agree that just because inventory is higher then a record setting year, it doesn’t mean there will be a crash. It has to be higher then just about anything we’ve seen previously in the last decade or two. If you look back at the records, inventory has been much higher, sometimes double current #s, but there was no crash.

    If we were headed for a troubled Spring selling season, I’d expect to see inventory in the 8,000-10,000 range. Low 6,000 is still very, very low.

  8. 8
    meshugy says:

    Mish has a great piece on just how dumb the RE bulls are.

    However, his argument doesn’t apply to our region.

    He says:

    Two Key Facts

    1. Demand is weak and is going to get weaker.

    But pending sales were up 7.66% for Res sales. Up over 40%% for new homes…demand is actually increasing in the PNW.

    2. Supply is high and is going to get higher.

    See above….from a historical perspective we still have very low inventory.

  9. 9
    Richard says:

    Yet again, Meshugy references 2 years of local economic recession as representing “normal” market conditions.

    I suppose the strength of the local gypsy music market in ’02 and ’03 lead him to underestimate the overall severity of that recession.

  10. 10
    darth_s says:

    WOW, it seems that MeshInfo is trying desperately to prop up the Seattle bubble all by himself with all kinds of bogus, cherry picked, and distorted data. I just wonder how many fools he can deceive.

  11. 11
    Matthew says:


    2002-2004 Seattle was still recovering from the .com blow-out.

  12. 12
    wreckingbull says:

    Hey babyshug,

    Can I borrow your cherry picker this weekend? I need to paint my Dad’s barn and I hate ladders.

  13. 13
    meshugy says:

    Can I borrow your cherry picker this weekend?

    Hmmm…I think I’m having Deja Vu. Oh yeah, I remember. You guys made all these same arguments last year at this time, prediciting a market crash in 2006….and look what happened: we had double digit appreciation in 2006! So you all eneded up with egg in your face….maybe you should be a little more modest this time around?

    Sorry guys, you’re going to have to better to convince me of a crash. Personal attacks simply won’t do it.

    Lets look at the data:

    Historically low inventory: check
    Increasing Demand: check
    Strong Fundamentals: check

    Chance of real estate crash: unlikely

  14. 14
    Eastside RE Shopper says:

    Interesting talk about the bubble on msnbc:


  15. 15
    synthetik says:

    $1000 Wager for Charity, uncheck.

  16. 16
    synthetik says:

    eastside, here is a snippet from that, thanks:

    I want to talk to the consumers who are confident. Tell me, do they interview only those who make $100K per year or more and who base their confidence on their stock portfolio? My husband and I are not confident in this economy. Between the two of us, we had a $1000 a year (not a week or a month) pay raise this past year and that was before taxes were taken out. The cost of running our house and caring for 2 children keeps digging more and more into our paycheck and we’ve given up cell phones, downsized cars and begun carpooling just to make ends meet. We’ve gotten rid of our credit cards and are grateful to have a fixed-rate mortgage but when I see what is left of my pay raise go just to my part-time day care . . .

  17. 17
    meshugy says:

    $1000 Wager for Charity, uncheck.

    We’re on for that…but you have to stop hiding first.

  18. 18
    Deejayoh says:


    You might go back and read the Seattle Bubble Timelines thread from “this time last year” and then maybe tone down the bombastic statements like “You guys made all these same arguments last year at this time, prediciting a market crash in 2006”

    The only one predicting a crash was Eleua – who isn’t even on this thread.

    Gist of the thread was that we will see declines in 2007. Your statement: “Tim, I think your prediction is right on.”

    So who are you disagreeing with?

  19. 19
    Puget Sounder says:

    Chance of real estate crash: unlikely”

    Did you forget the fact that lending standards are tightening, reducing the pool of buyers who are able to pay $500k for an 80 year old 3 br/1 ba 1200 sf house in Ballard?

  20. 20
    Matthew says:


    what real estate company do you work for?

  21. 21
    Michael says:

    The great class stratification will continue here on the West Coast–meaning people will be separated into the “ownership” class and the non-ownership class (of which I am also). This means that those with RE will see their wealth continue to double, triple or quadruple while the non-particpants will continue to struggle and survive only on meager salaries as corporations continue to put downward pressure on wages. Seattle is transitioning into a power-house city much as San Francisco/Silicon Valley did. That is why every Seattle RE owners will be able to thrive while non-participants will be forced out.

  22. 22
    Eleua says:

    From the the Seattle Bubble Timeline thread of 4/25/06, here are my comments.

    It would appear that I was one year early. If you look at my ’06 predictions, and what is happening in ’07, it is pretty close.

    So, yes, I was predicting that ’07 would be worse than it is. In my defense, I would say that the year is still young.

    Calling the top of any bubble is a low probability event. I never factored in that such an over-educated, hip-n-trendy place like Seattle would be stupid enough to look at the mess around them and think they are immune.

    Yes, Shug, you have me here.

    If you read my comment posted at 10:59, you will find that it is dead-on-balls accurate.

    Sorry to pat myself on the back. The fact that this blog even exists in the face of a non-stop barrage of media releases about how flippin’ special we all are, and how RE never goes down, is pretty amazing.

    Any idiot can look out their window or pick up today’s paper and see what is happening. The people on this blog are attempting to read next year’s paper.

  23. 23
    Eleua says:


    Your prediction is a steaming pile of BS. There is no ownership class. It is a debt class, and debtors are ultimately serfs.

    Just because someone has the trappings of a high lifestyle, does not mean they have any substance.

    Repeat this 1000X:

    Debt is the opposite of wealth.

    Sorry, I’m really fired up today.

  24. 24
    Brat says:

    We plan on putting our home on the market next year (assuming that real estate values don’t tank). Talked to one full fee realtor so far. When discussing marketing she said she advertises homes like ours in a luxury homes magazine, in addition to MLS and the like. Tell me, just how often do purchasers find their home through such magazines (aka, rags)?

  25. 25
    Alan says:

    I agree that inventory numbers are not high enough to make prices drop right now. I think that is a good argument from Meshugy. He should however post 2005 and 2006 instead of trying to hide it. If inventory for those years is even lower then simply state that those were record appreciation years and that you expect stronger than 2002-2004 appreciation for 2007. Hiding it weakens his argument.

    I am not convinced about the increase in pending sales. My theory is that credit tightening slowed down closings. The pending numbers are artificially high and the closed numbers are artificially low. February increase in demand can also be attributed to seasonal activity. How does February demand compare to demand in February 2002-2004? I am hoping the March numbers provide more insight.

    In the supply case Meshugy compares to apples and in the demand case he compares to oranges.

  26. 26
    Jackson Wallace says:

    Yes, Seattle was still recovering from the dot-com crash until 2004. A LOT of those 60-90k a year jobs just went up in smoke. The economy was teetering, and SEA RE was a lot cheaper, but then Greenspan to the rescue, and the following appreciation we have seen for the last three years. Three years is not that long a period of time, though it has felt like it.

    Washington is near the top of states with large percentages of resetting ARMs and alt-A loans, so those should become evident. Seattle is prob also strong because of migration, but Boeing isnt hiring that many people to work on the 787, and the second the national economy turns down, then so will ours. Once the CA blowout really gets going, which is looking more inevitable by the day, you can bet a lot of money up here will dry up. Plus fewer people will be able to move around.

    Everything depends on how bad the economy gets. The dot.com blowout didnt originate in Seattle, but on Wall Street. Remember that, RE pushers. Seattle IS vulnerable to outside factors. It was only 4-5 short years ago, and it will be again.

  27. 27
    meshugy says:

    He should however post 2005 and 2006 instead of trying to hide it. If inventory for those years is even lower then simply state that those were record appreciation years and that you expect stronger than 2002-2004 appreciation for 2007. Hiding it weakens his argument.

    Hi Alan…I wasn’t trying to hide anything. I was just posting data from more stable years to show how high inventory can get without a crash. I was assuming that everyone knows that 2005 and 2006 had record low inventory.

    In the future I’ll just post’em all.

  28. 28
    meshugy says:

    Yes, Shug, you have me here.

    Thanks for admitting that, I respect someone who can admit when they’re wrong. Although you’re right, we won’t know if you’re really long till later in the year.

    But it’s the guys who cut and run from this blog that made the most audacious predictions:

    Remember Seattle Price drop? Here’s his prediction from 04/06:

    But I do think the gains of 04/05 will be wiped off the top pretty quickly. Like within a year.

    Not only did we keep the gains of 05, it’s almost April 07 and we still have double digit appreciation! Boy, was he wrong.

    Here’s my prediction from 2006:

    We’ll see a return to 3%-6% YOY appreciation (lately we’ve been seeing 10%-20%). This will probably start to happen in 2007, and really flatten by 2008.

    We’re actually doing better then I thought….but I still think we’ll be back to single digit appreciation soon.

  29. 29
    MisterBubble says:

    I agree with you, for once, Meshugy — we’ll see a return to single digit appreciation for SFH, this summer.

    Right before appreciation stagnates, that is.

    It’s called an inflection point. As I’ve already predicted, I think that condos will turn south first (this year), with SFH to follow in 2008. The drops will be mild, at first. Only once the national economy hits the skids will the local price drops become really pronounced.

    After that? Look out below. Musicians don’t do well in recessionary economies.

  30. 30
    meshugy says:

    Musicians don’t do well in recessionary economies.

    Actually, the Great Depression was one of the best times for music over the last 100 years! Someone has to entertain and inspire all the unemployed, bored, downtrodden, masses!

  31. 31
    synthetik says:

    Just make sure you have a dancing monkey and a hat we can toss spare change into shug…

  32. 32
    synthetik says:

    We plan on putting our home on the market next year (assuming that real estate values don’t tank).

    Spoken like a TRUE FB!

  33. 33
    synthetik says:

    I think Shug’ was also one of those band members on the Titantic that kept playing too.

  34. 34
    EconE says:

    Someone has to entertain and inspire all the unemployed, bored, downtrodden, masses!

    someone will…but probably someone I have already heard of…I dunno…Dylan? Jack White?

    Shug McBeats? Never heard of him.

    brother…can you spare a dime?

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