“We don’t want to panic. We need to be brave.”

Maybe I’m just in a “mood” this morning, but this story in today’s Tacoma News Tribune really cracked me up.

A morning of housing pep talks greeted builders, real estate agents and government folks Thursday: Build green. Be brave. If Coeur d’Alene, Idaho, can go urban, so can you.Economist Glenn Crellin, director of the Washington Center for Real Estate Research, kicked things off at the 2007 Housing Forum at the Rhodes Center in Tacoma with a slew of statistics to illustrate a healthy Puget Sound-area market, especially compared with some states.

“My bottom line is we don’t want to panic. We need to be brave. Real estate markets will see some softness, but they’re not going to disintegrate,” he said.

If we just close our eyes and wish hard enough, we can keep our housing market strong! Be strong, everybody! Wish hard!

Crellin, who last year bought a second home in North Carolina, did acknowledge the shrinking number of South Sound residents who can afford to buy. Crellin’s Charlotte town home cost less than $210,000, with upgrades.” It would be nice if we could import that kind of market” here, he said.

Funny you should say that, Mr. Crellin… I wonder how we could possibly end up with cheaper houses in the Puget Sound… Hmm… That’s a tough one.

(Devona Wells, Tacoma News Tribune, 05.25.2007)

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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.

24 comments:

  1. 1
    Terry says:

    Tim,

    I know! I know!

    Inflated real estate prices need to come down, right? Am I right?

  2. 2
    Crashcadia says:

    Sales down
    Inventory up
    Interest rates up
    Sub prime lending fading away.

    All small compared to the economic wave of recession
    that will leave debtors bent over the aft end of a sinking ship, bringing new meaning to the phrase going green. Bravery that relies on debt slavery is no way to run a ship.

  3. 3
    CCG says:

    Yet another front-page advertisement for condos in today’s rag. Is it me or are they flogging a lot harder than last year?

  4. 4
    Mike2 says:

    Weird. I wonder if it’s starting to dawn on any of these guys that having the average Joe’s financial stability this wrapped up in the value of his home is really risky.

  5. 5
    Johny says:

    I have been wondering why the median prices have been rising even though inventory is climbing and sales are slowing. Heres a quote from the LA times that might explain one reason.

    “But the rise in the median price wasn’t necessarily a sign of market strength. Instead, the figure rose primarily because fewer lower-prices houses were selling as a result of the implosion of the sub-prime mortgage business, which catered primarily to buyers with poor credit.

    “Although the median price of a home in California continues to rise, this reflects the falloff in sales in the lower-priced markets of the state, where new-home inventories and foreclosures are competing with the existing-home market,” said Leslie Appleton-Young, chief economist for the real estate association, in a statement.”

  6. 6
    Terry says:

    Johny,

    How median price statistics can be misleading has been cussed and discussed many times on this blog. Here is one example:
    http://seattlebubble.com/forum/viewtopic.php?t=174

  7. 7
    Ouch says:

    If things are going so great here in the PNW, why is there any need to be “brave”? Presumably these are the experts who have their fingertips on the pulse of the area, so what the heck are they worrying about? Don’t they know that we’re special – or haven’t they heard about the pink ponies?

  8. 8
    Terry says:

    “Although the median price of a home in California continues to rise, this reflects the falloff in sales in the lower-priced markets of the state…

    It is interesting to note that someone from the real estate industry being so honest about median price statistics. A year ago they would have screaming that increasing median price statistics were proof positive that the entire market was still appreciating.

  9. 9
    Terry says:

    More info on how median price stats can be misleading

    The Follies of Measuring Home Prices

    http://www.voiceofsandiego.org/articles/2007/05/03/toscano/918toscano050107.txt

    Hidden” Home Price Decline In Silicon Valley

    …despite drops in volume and price there can be a gain in the median price if the mix of home sales changes significantly from a year ago in favor of the high-priced areas…

    http://patrick.net/housing/contrib/HiddenPriceDecline_SiliconValley_041507.htm?ref=patrick.net

  10. 10
    Terry says:

    At least Mr. Crellin is consistant. He has always maintained that Seattle has an affordability problem, but then he keeps on saying that Seattle’s economy will keep real estate prices propped up. Okay… If there is an affordability problem, who is going to buy these overpriced homes, despite whatever the economy is doing? I don’t understand….

  11. 11
    david losh says:

    Happy Birthday Tim!
    Here’s the thing about the Pacific Northwest. We are a stupid backwater set of towns in a prime financial location. The old boys play this region like a violin. We’re not in good hands but we are being massaged.
    The rest of the country has it’s own issues. You’re absolutely right that prices have outstripped the ability to pay. This here internet thing is probably the biggest swindle in the world. Promises were made that never materialized. The Fed created a false sense of security by lowering interest rates that made the housing market seem like a good investment instrument. It’s not an investment unless you play the game well and most people who bought weren’t playing, they were palyed like the good consumers they are.
    Never mind let’s talk about the Pacific North West.
    Here the supply of housing has been artificially kept low to drive up demand. Scarcity means higher prices.
    Boeing and Microsoft are a thing of the past. Do you have an engineering degree? Can you not afford to own a home as an architect, tech support person, or lawyer? Are there no good jobs out there for you bunch of over educated, whining, something for nothing dillatantes?
    Why is it a person from Viet Nam can come here with nothing and make twenty million dollars in ten years? Why are there thousands of people paying cash for new homes across the region? Why aren’t those same people buying the crap town houses? The real question is why are the yuppies buying into this con job?
    What used to be called the under ground economy here in the Pacific Northwest is coming to the surface. There is no matching the hard working, low overhead, savvy investor that is the Asian community. OK I said it.
    The reason you white guys can’t figure anything out is because you were promised the life of your fathers. Your fathers and your father’s fathers worked for a living and you don’t. You don’t want to work, you’re whiners.
    Does a house cost a half a million dollars and you don’t want to work three jobs, take in boarders, and eat rice with beans? No, of course not, you want to whine about how you can’t get ahead in todays complicated economy. It’s all about the stock market this, and the devaluation of the dollar that. It’s complicated right?
    I barely made it through high school. I’m a drug addict and alcoholic. I work every day, somtimes at back breaking tasks because I’m so stupid. I also have no unfulfilled dreams or goals. My little companies feed seven families. I’ve made and spent, given away, or squandered several small fortunes in my life time. I go where I want, when I want, and say what I want because I can afford it.
    I did it by being in the real estate business.
    I really enjoy this blog. There’s a lot of truth in what you guys are saying. The thing is that you are not targeting the true essense of what is going on in our market place.
    We need more housing units, thousands if not millions. They should be cheap because that is the price point. The great unwashed hoards are at our Northern border and no amount of legislation will keep them out. They have suit cases full of dollars that end up here in Seattle Washington. Those dollars can either stay here or move on to Los Angeles. Are we welcoming those dollars or shutting them out?

  12. 12
    Peckhammer says:

    Brave? That’s for all those yuppies who were talked into paying too much for a crack-house conversion in the central district.

    Drive-by shootings have become a regular occurrence. The police department has received calls from Central Area residents who are afraid to leave their homes at night because of the guns and gangs.

    There is a bright side: Yuppy residents finally have a use for those KitchenAid 4.5-Inch Dupont Delrin handled Santoku knives they got at the office holiday party!

  13. 13
    wreckingbull says:

    Hey Losh,

    You are not thinking. The reason most people at this blog are calling BS on today’s housing prices is because we have worked so damn hard for our savings. Spend a little time at the King County records dept and you will see that as a trend, real estate is being purchased with more leverage than ever, not cash. Take your bigotry elsewhere. It just makes you look like a fool.

  14. 14
    mike2 says:

    Losh is quite the embassador.

  15. 15
    BanteringBear says:

    “The reason you white guys can’t figure anything out is because you were promised the life of your fathers. Your fathers and your father’s fathers worked for a living and you don’t…I barely made it through high school. I’m a drug addict and alcoholic. I work every day, somtimes at back breaking tasks because I’m so stupid. I also have no unfulfilled dreams or goals. My little companies feed seven families. I’ve made and spent, given away, or squandered several small fortunes in my life time. I go where I want, when I want, and say what I want because I can afford it…I did it by being in the real estate business.”

    Unbelievable. It sounds like you need some serious therapy. Not only for your addictions, but your bigotry as well. You struck out big time in this rant. As a “white guy” I work very hard, and am doing just fine. As for you, well, it was only with the help of the FED, and lenders, that clowns like you were empowered. The painful price we all will pay for the current unhealth of the housing market, and the economy as a whole will forever live as an argument and example for why we should never hand out easy money, especially to folks like yourself. I can only imagine what untruths your loan apps and tax returns would reveal to the discerning eye. Good luck bozo.

  16. 16
    deejayoh says:

    Losh,
    Please check growth in housing stock vs. population for the past 5, 10 or 15 years. I am not going to do it for you. You don’t know what you are talking about, and you sound like a fool

  17. 17
    Terry says:

    Wow!

    Mr. Losh shouldn’t be so shy. He ought to say what he really thinks!

  18. 18
    Peckhammer says:

    “The reason you white guys can’t figure anything out is because you were promised the life of your fathers. “

    Someone’s been reading the Seattle Times…

    “American men in their 30s today are worse off than their fathers’ generation, a reversal from a decade ago, when sons generally were better off than their fathers, a new study finds.

    The study also says the typical American family’s income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.

    The findings suggest “the up escalator that has historically ensured that each generation would do better than the last may not be working very well,” says the study, released Friday.”

  19. 19

    YO Losh,

    You sound like one of those sour-grape Aztlan hispanic morons. I’m sure lots of Asians are smart and harder-working, but maybe you should read the reports of how
    the entire Chinese population is driving their own market up through wild speculation. I’m sure plenty of Asians are leveraged to the gills in the US RE market, too. What I dont get is why anyone would spend California coast prices for RE in a town that has about two months of sun per year. A lot of people are learning this Memorial Day along with the 4th of July that Seattle is a city that will rain on your parade and your bbq. The wheels are coming off the tracks everywhere, and yeah, the people can actually work will be the ones, while the speculators, even the racist Asian ones, will be eating
    a dirt lunch.

  20. 20
    John says:

    Losh’s got a point. Owning real estates is like a competition. The entrance fee is being set higher and higher. Who can save the most money the fastest? If owning a home is #1 priority, then cut all the fat in the monthly expenses. No more dining out, no more drinks after work, no more movies, no more cable tv. You will probably be miserable but you will have your down payment in no time.

  21. 21
    kpom says:

    Down payment? What’s a down payment?

  22. 22
    historian says:

    Down payments are a historical artifact from the time when shelter structures did not mint their own cash. They were necessary for ancient generations such as our parents, who had to compete hard in the marketplace to earn a living wage, much less save enough to buy a modest house to live on. In those unenlightened times, each paycheck was precious, and property had to offer serious value to be worth making the sacrifice.

    Not applicable to today’s easy money environment, so never mind the “down payment” talk. Now, unlike then, we have “lenders” who exist to provide us with a constant and neverending flow of money from china. These “lenders” do this completely out of self-sacrifice, and have only our best interests at heart.

    Also back in those days, human beings were smaller, which is why it was possible to raise a full family in a house with fewer than four bathrooms and, shockingly, 0 bank-financed hot tubs. This is also no longer applicable to people today

  23. 23
    finance says:

    When I went to WSU I met Glenn Crellin and talked to some of his researchers. They did a historical prediction model showing how accurate he was to his predictions and was very close (or much better than the avg Real Estate projections). Overall he does have a degree of credibilitiy…that has to be taken into account.

  24. 24
    Shawn says:

    Ancient proverb says, “When someone says ‘don’t panic’ one should consider panicking.”

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