I’ve been working on a glossary to help newcomers (and old-timers) that may be confused by some of the terms, people, or places we frequently refer to here on Seattle Bubble. Once this page is refined somewhat, it will become a permanent link at the top, alongside the forum and the library.
With that in mind, please take a few moments to look through the terms below and give us some feedback. If we left anything important out or got something wrong, please let us know in the comments below. Also, if you have any suggestions on ways to format it to make things easier to find, feel free to share that as well.
Please limit discussion on this thread to comments specifically related to the glossary. If you would like to discuss other topics, use the forum. Thanks!
|80/20:||A home loan arrangement that was common during the housing boom, in which two loans were taken out by a home buyer: one for 80% of the value of the home, and another for the remaining 20%. While the terms on the 20% loan were generally not very favorable, this arrangement allowed the borrower to pay loan interest rather than PMI, which was not tax deductible.|
|affordability:||A way of looking at home prices relative to incomes and interest rates. Housing is generally said to be “affordable” if the monthly PITI payments do not exceed 30% of one’s gross monthly income.As an aggregate statistic for an area, affordability is calculated by comparing the median income to the median home price. An affordability of 100 or greater indicates that the median home is affordable to a family with the median income. The affordability of every region tends to vary inversely based on the desirability of the locale. For instance, Seattle’s affordability will be lower than Topeka, but higher than San Francisco.|
|adjustable rate mortgage:||A type of home loan in which the interest rate may change or “adjust” after some period of time, usually in the upward direction. ARM rates usually start off at a lower point than fixed-rate loans.|
|ARM:||See adjustable rate mortgage.|
|Aubrey Cohen:||The Seattle P-I real estate reporter. Mr. Cohen’s articles generally tend to be less biased than those penned by Elizabeth Rhodes of the Times.|
|bailout:||Refers to the possibility of the government intervening in the collapse of the housing bubble by providing financial assistance to distressed home buyers and/or financial institutions.|
|Ballard:||A north Seattle neighborhood that received a lot of media attention at the height of Seattle’s real estate boom throughout 2006. On Seattle Bubble, Ballard frequently was referred to in a sarcastic sense as a sort of mystically special place where the laws of real estate do not apply.
See also: Pink Ponies
|behind the cycle:||The observation that the real estate market in Seattle (and most of the Northwest) tends to lag the rest of the country by about a year. This phenomenon has been discussed at length on Seattle Bubble but no specific cause has been found.|
|Bill Virgin:||An opinion columnist for the Seattle P-I who occasionally addresses the local real estate market, generally agreeing with the sentiments expressed at Seattle Bubble.|
|Boeing:||As a major Seattle-area employer, airline manufacturer Boeing often comes up in discussions about the real estate market. Generally they are used as an example of the Seattle-area’s strong economy, and reason that the real estate market will not weaken.
See also: Microsoft
|bubble:||In general terms, an economic bubble is when the price of a commodity rises to a price much higher than what would be supported by the underlying fundamentals. For housing, these fundamentals would be things such as incomes, historic price-to-rent ratios, and mortgage payments.In terms of this site, the “bubble” can be seen as having dual meaning, also referring to an imaginary “bubble” of protection that separates the Seattle housing market from the rest of the nation.|
|Case-Shiller:||Karl Case and Robert Shiller have devised a way of tracking home prices by looking only at repeat sales of the same homes. Their index is referred to as the S&P / Case-Shiller Home Price Index, often CSI for short. The index is tracked for twenty cities across the country, of which Seattle is one. More information about the Case-Shiller Home Price Index can be found here.|
|Devona Wells:||A writer for the Tacoma News-Tribune that frequently reports on the real estate market. She also maintains a real estate blog about the market in Tacoma.|
|Distressed Seller’s Index:||An arbitrary, non-scientific index invented by Seattle Bubble to track the general direction of the level of urgency in home listings.|
|DSI:||See Distressed Seller’s Index.|
|Elizabeth Rhodes:||The Seattle Times business reporter who writes most of their articles on the real estate market. Her articles generally cast the real estate market in as positive a light as possible, though she has frequently denied being biased by the fact that the clear majority of the Times’ income (and therefore her salary) is derived from real estate advertising (most often home and condo developers).|
|FB:||An abbreviation for F***ed Borrower. Presumably comes from a housing-specific re-application of the term popularized by the dot-com bust website F***ed Company.|
|FSBO:||For Sale By Owner – The process of selling one’s house without the assistance of a paid real estate agent. Also used to refer to the house itself that is for sale by owner.|
|Glenn Crellin:||As the Director of the WCRER, Glenn is frequently quoted in local articles about the housing market in Seattle and Washington State. Usually expresses a positive outlook on the market.|
|liar loans:||Usually refers to a type of home loan called a “no-doc loan” that was common during the real estate boom. “No-doc” refers to the fact that no documentation is required to verify income. The widespread misused of no-doc loans allowed people like Casey Serin to buy homes they clearly could not afford.|
|Mark Trahant:||An opinion columnist for the Seattle P-I who occasionally addresses the local real estate market, generally agreeing with the sentiments expressed at Seattle Bubble.|
|Matthew Gardner:||Seattle-area “land-use economist” who is frequently quoted in local articles relating to the real estate market. Generally has a positive outlook on housing.|
|Microsoft:||As a major Seattle-area employer, software and hardware maker Microsoft often comes up in discussions about the real estate market. Generally they are used as an example of the Seattle-area’s strong economy, and reason that the real estate market will not weaken.
See also: Boeing
|Mike Benbow:||A writer for the Everett Herald that frequently reports on the real estate market.|
|MLS:||See Multiple Listing Service|
|MOM (or M2M):||Stands for month-over-month, referring to looking at a data point in contrast to the same data for the previous month. Susceptible to seasonal fluctuations.|
|Moody’s:||A private data-crunching company that is frequently quoted in real estate articles by CNN, Forbes, and Fortune. Often provides predictions about the future direction of real estate markets, which may vary wildly from month to month.|
|Multiple Listing Service:||A privately-run fee-based database of real estate listings. Full access to the database is granted only to licensed real estate professionals who pay a regular fee for membership. The public can generally view the basic information about home listings within the MLS through individual brokerage (e.g. – Windermere or John L. Scott) or compilation (e.g. – Ziprealty, Estately) websites.|
|Northwest Multiple Listing Service:||The MLS which covers most of Western Washington State.|
|NWMLS:||See Northwest Multiple Listing Service|
|Office of Federal Housing Enterprise Oversight:||A federal entity that studies housing and releases their own home price index, similar to the CSI. Their stated mission is to “promote housing and a strong national housing finance system.”|
|OFHEO:||See Office of Federal Housing Enterprise Oversight|
|pink ponies:||A running gag / inside joke on Seattle Bubble that refers to the mistaken belief of many Seattle residents that the Seattle area is somehow special, unique, and immune to any of the woes that may effect the rest of the housing markets across the nation. The origin of the joke is a series of comments by an individual posting under the name Chris. The first of such posts was this:
More information can be found on the forum here.
|PITI:||Principal, Interest, Taxes, and Insurance. Refers to the total payment one generally makes each month on their home loan.|
|PMI:||See Private Mortgage Insurance|
|priced out forever:||Refers to the faulty belief that home price increases will indefinitely outpace wage increases, thus leading individuals to become permanently unable to afford to buy a home. This concept is discussed in depth at the Seattle Bubble sister site Priced Out Forever.|
|Private Mortgage Insurance:||When a home loan is written for more than 80% of the value of the home (i.e. – the down payment was less than 20%), the lender generally requires the borrower to pay private mortgage insurance. The cost of this insurance varies based on a Risk Index calculated for individual cities by a company called The PMI Group, Inc..|
|Rain City Guide:||A Seattle-area blog focused on the local real estate market, written by a cooperative group consisting primarily of people directly employed in the real estate industry (e.g. – real estate agents, mortgage professionals, etc.). As of the most recent statistics available, Rain City Guide is Seattle’s second most-popular real estate blog, after Seattle Bubble.|
|real estate agent:||An individual that sells the service of assisting buyers and/or sellers of homes.
See also: Realtor™.
|real estate professional:||An individual whose occupation is in some way related to the buying and selling of real estate. Examples include real estate agents, mortgage brokers, real estate lawyers, escrow officers, etc.|
|Realtor™:||Technically, the term Realtor™ is only properly used to describe a real estate agent who is a member of the trade group known as the National Association of Realtors™. However, in common language, much like the words Kleenex™ or Band-Aid™, Realtor™ has come to be used in a more generic sense to refer to anyone acting as a real estate agent.|
|Redfin:||A web-based company that started in Seattle and offers discounted services to home sellers and buyers. Generally looked down upon and derided by traditional real estate professionals, often to the point that they will not even refer to it by name.|
|repartmenting:||The act of a condo project reverting to apartments. Usually referring to a building that was originally apartments, was being converted to condos, then went back to apartments. Also sometimes used to refer to new construction condos switching to apartments.|
|Seattle is special:||A running gag / inside joke on Seattle Bubble that refers to the mistaken belief of many Seattle residents that the Seattle area is somehow special, unique, and immune to any of the woes that may effect the rest of the housing markets across the nation.
See also: Pink Ponies
|Steve Tytler:||Occasional real estate columnist for the Everett Herald, also the owner of Best Mortgage. Steve is the most bearish regularly-printed real estate professional in the Seattle area, and has frequently predicted that prices will drop up to 20% off the peak, level off for “a few years,” then begin rising again.|
|Suzanne researched this:||A now-famous line uttered in a Century 21 commercial titled “The Debate” that has become the poster-child of the housing bubble. See the commercial on YouTube here. Also be sure to check out this related post.|
|Urbnlivn:||A Seattle-area blog focused on the condo market, specifically in Seattle proper. Urbnlivn proprietor Matt Goyer is presently an employee of Redfin.|
|Washington Center for Real Estate Research:||A group based in Pullman, WA at Washington State University that, as the name implies, researches the Washington State housing market. Portions of their funding for specific studies come from industry associations such as the Washington Realtors™. Generally their outlook on housing is positive.|
|WCRER:||See Washington Center for Real Estate Research|
|Williams Marketing:||A condo marketing company that is frequently quoted by the Seattle P-I in articles about the local housing market.|
|YOY (or Y2Y):||Stands for year-over-year, referring to looking at a data point in contrast to the same data for the same month in the previous year. Factors out any potential seasonal effects that are common in looking at real estate statistics, but is slower to show change than MOM.|
|Zillow:||A free online real estate valuation estimate tool. Also a Seattle-based company.|