A Few Properties Still Seeing Multiple Bids

I wonder if Aubrey Cohen is getting story ideas from reading Seattle Bubble? In the big front page feature article in today’s P-I, Aubrey takes a look at something a that a few home seekers commenting here have talked about: the continued competition for homes in a handful of certain price ranges and neighborhoods.

Erin and Andy Mathias started looking for a new house around the start of the year on the north side of Seattle because it was convenient to work, shopping, parks and other amenities.

They found a good selection, but at least as much competition for anything decent in their price range, up to $350,000.

“We would see a listing the day it came out, try and see the house either that day or the following day, have our Realtor check into it and there were already multiple offers on the table,” Erin Mathias said. “It became a little frustrating after a while.”

Although the Seattle-area real estate market has slowed, buyers still don’t have the advantage over sellers in such areas as North Seattle, West Seattle, Capitol Hill, Lake Forest Park and East Bellevue.

This phenomenon can be seen in the stories from home-seeking commenters here, as well as in our monthly neighborhood months of supply updates.

The article mostly focuses on the few areas around Seattle where sellers still have the slight upper hand, but it does admit that this has become the exception rather than the rule.

Some homes still are selling above asking price with multiple offers, without contingencies for financing or inspection. But those with less-ideal prices and conditions are sitting much longer than they would have a year ago, even in popular neighborhoods.

Despite their relative strength, North Seattle neighborhood inventories over the past seven months have doubled, on average, from the same months a year earlier.

If that sounds familiar, it might be because I said the same exact thing two weeks ago in the March Neighborhood Months of Supply Update. Of course, I didn’t have a spiffy color-coded map to illustrate my point. But don’t worry, we will soon.

(Aubrey Cohen, Seattle P-I, 05.01.2008)

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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.

121 comments:

  1. 1
    Bella says:

    I see that the couple they are talking about are looking in maybe Phinney Ridge (near the zoo?) which has totally amazing houses, and unless we are talking about the zoo right next to Aurora, is not going to have much in that price range, so I am not surprised that are multiple bidders!

    I have been keeping track of a similar price range in the Ballard area since about the beginning of the year. There were almost no listings worth considering a few months ago, but as of a couple of months ago, more starting showing up. Over the past two months, the prices on several I have been watching have been reduced, and all that I was watching are still on the market. For a long while, there weren’t any new listings of note, but just this week, I noticed a few more had popped up.

    I have not seen any listings in the area they are talking about for that price – unless they are two blocks from Aurora. I suppose if I were younger and didn’t have a kid, I’d consider something two blocks from Aurora, and just start a blog about getting propositioned and about what I overheard the hookers talking about at the coffee shop :D

  2. 2

    “just start a blog about getting propositioned and about what I overheard the hookers talking about at the coffee shop ”

    For some odd reason the real estate ads for houses around there never mention that.

  3. 3

    ONE OR TWO HOUSES IS A SAMPLE JOKE

    OK, if one house makes a point, here’s a $400K house in Renton the owner told me about, that went on the market the last year [sat unsold for a year], got reduced in price by 20% twice and still won’t sell during this time. She tells me the higher end ($400K) homes have NO QUALIFIED BUYERS. She still owns it as a single home owner…she’s looking for a husband….lol

    Hmmmm….that -3 YOY figure Tim uses sounds like a complete joke. Try -20-30 YOY from my example….

  4. 4
    Tsuru says:

    We are just starting to see the knifecatchers come out in force around here. This is why prices are “sticky” on the way down – the suckers have to come out and be fleeced until there are none left. When there’s none left, prices ratchet down and the next wave of knifecatchers comes running out to be fleeced. Repeat.

  5. 5
    Lionel says:

    You truly would have to be an imbecile to jump into the market now. A few doors down from me in Bryant a house virtually identical (same builder, same layout) to the one I’m renting for 1800 sold for 670. It was a couple who cashed out of Mass. and paid cash (which is fine for them). Coincidentally on the Irvine blog, a house for that amount is listed and the following breakdown is given: Downpayment required 172K; income requirement 215K. I can tell you from meeting my neighbors that that hardly comports with the neighnorhood’s demographics. In fact, I recently picked up a Seattle Metropolitan magazine that listed median household incomes for various areas and Ravenna was listed at around 55K (essentially a teacher’s salary). I realize it’s an imperfect measure, but that median doesn’t come close to supporting the house prices around here. I’m new to Seattle, so some of these median household incomes surprised me. Nearby in Laurelhurst, which I’d thought of as very wealthy, has a median of around 95K, which is respectable, but hardly wealthy. Meanwhile I’ve seen houses there sell for a million or so. If you’re patient and smart about this, house prices will come crashing down. If my rent is any indication of the reality of what people can actually afford, the couple who bought the house a few doors down overpaid by a staggering amount. In fact, I broached this subject with another couple, who bought next door to me, and despite having bought in 2003, were fearful they had overpaid.

  6. 6
    Moe Ronn - Realitor® says:

    I think it has more to do with the $350K range being the upper limit for most middle-income families. Hence, there are quite a few competing for those properties right now. However, I believe, as well as many of you, that in about two and half years the selection will be much larger.

  7. 7
    SeattleMoose says:

    Dead Cat Bounce = RE Pounce (Rah Rah Sis Boom Bah!!!!)

  8. 8
    david losh says:

    My wife and i were talking about this today. We have two friends who have sold houses these past few weeks for what I thought was for too much money, but the houses sold quickly.

    The real discussion was a Real Estate agent friend of ours who put a house on the market near Green Lake with offers to be reviewed on Tuesday April 29th. The price was close to market value and it did come on my hot sheet as pending yesterday.

    These are strange times for sure.

  9. 9
    goin' for it says:

    Anyone else see this yet?

    http://www.bid-to-own.com/

    Whats this?! A house auction in our very own “its different here” Seattle? (OK, it is Renton)

    I love this quote from the website ” This is not a HUD or foreclosure auction ” Ok, I get that you’re not in foreclosure YET but why the heck are you having a sealed bid auction instead of just selling them normally?

    Anybody have input on this? Am I missing something?

  10. 10
    EconE says:

    I’m seeing homes listed in Los Angeles now on Redfin where the prices were so low that I was in disbelief. After clicking on the link I saw that the homes were actually up for auction and the listed price was just the “starting bid”. It’s no wonder that the REIC down there is cheering about “multiple bids” coming in on houses.

    I don’t expect it to be any different here within the next year.

  11. 11
    george says:

    Home-buying mania is nearly done, but inventory numbers talk.

  12. 12
    softwarengineer says:

    2% MONEY MARKET

    Everything is plummetting right now except gas and food. That $95K or $55K household incomes are way too high by the way, you need to scrape away the top 10% household incomes to get to the real estate market, almost all the top ten percent already bought or have enough brains to stay out. They aren’t buyers.

    Try an average $40-45K for the bottom 90% of Seattle household incomes. That’s your potential wantabe buyers.

    Ohhhh….the banks are tightening up, but not $350K homes for average buyers, try “your yearly income” for average buyers; like it was in 1990’s Bubble. Here’s the proof:

    “…”In a normal housing market, we have ratios that you qualify for a certain amount of house at your income level,” says Anthony Sanders, a professor of finance at Arizona State University. “Since banks have tightened credit, we’re starting to revert back to those lending standards, and prices are going back to reflecting a ratio of income and median house value.”….”

    The rest of the story:

    http://promo.realestate.yahoo.com/promo/how-low-will-real-estate-go.html

  13. 13
    johnnybigspenda says:

    now that you mention it, I noticed the inventory number has dropped from a peak of around 12,500 to about 11,800 currently. I thought it would continue to go up and up actually. (does this mean they sold 700 houses recently?)

  14. 14
    bbraddock says:

    A lot of multiple offer situations are coming from properties that are in good neighborhoods and priced below comparable listings. I’ve seen one in Laurelhurst and one in Hawthorne Hills recently and both looked at offers a week after listing. I know that the second sold with three offers, including one with a pre-inspection which ended up not being accepted because of price. The eventual buyer paid more than list, but nothing near what I would have expected a year ago.

    That said, multiple offers aren’t necessarily a sign of a strong or improving market. They’re also a product of pricing strategy. If a car dealer lists a vehicle at 2/3 of bluebook, he’s bound to get lots of interest and several offers. That doesn’t mean that autosales are strong, or that he’ll get what he considers full value. But that also doesn’t preclude him from saying he’s received multple offers and a lot of interest to generate demand. (Take a good house in a good neighborhood, price it $50-75K below current market, and you have a similar situation.)

    I gotta say that I’m so surprised at what some agents are saying about this market. One agent with a listing in View Ridge told me that many deals were falling through not because of financing problems, but because of young and inexerienced buyers agents who don’t know how to close a deal, especially at inspection. When did this become all about closing deals? Isn’t it all about people getting a fair price for a home in current market conditions? This tells you a lot about what has made home sales tick recently. (By the way, there are a lot of honest and trustworthy agents out there.) If this agent had one word of advice for her buying clients, it would probably be …

    “plastics…”

    Johnny, some of the decrease in inventory comes from homes that are not selling and being taken off the market.

    [Okay, The Tim, I’ve finally joined the ranks of the mighty Seattle Bubblites. I feel a weight lifted … LOL]

  15. 15
    Garth says:

    The fact that the through February Case-Shiller index is only down 2.7% year over year and includes pierce and snohomish counties makes it pretty clear that prices in Seattle zipcodes are not off much if at all.

    When did this become all about closing deals?

    When was it not? There is no SEC for real estate, only the NAR and there is no financial incentive for anyone to effectively counter them.

    The MSM is not reporting the sky is falling in Seattle, because so far it has not been. Until there is at least a 10% decline they can call a “downturn” or the 20% required for a bubble the mainstream press and population is unlikely to dismiss nearly 40 years of advertising, sales data, empirical data and personal relationships.

    If we have a period like San Diego and Las Vegas are going through right now where 40% of their sales are short and foreclosure sales, the mainstream opinion can be changed.

  16. 16
    whats my name says:

    “The fact that the through February Case-Shiller index is only down 2.7% year over year and includes pierce and snohomish counties makes it pretty clear that prices in Seattle zipcodes are not off much if at all.”

    Isn’t Case-Shiller also discounted for inflation?

  17. 17
    david losh says:

    “because of young and inexerienced buyers agents who don’t know how to close a deal.”

    I would never put a buyer into a multiple offer situation. There are way too many properties on the market where a seller will take an offer. Last year a buyer of mine paid $500K for a property listed for $650K.

    There are plenty of deals to be done, but both buyers and agents don’t want to work the deal.

    Buyers and agents are equally to blame. Shopping on the internet has gotten to be the norm. Agents call me up to ask about listing I have and I ask “have you seen the property?” The answer is “No, but I’ve seen the pictures on line.” More to the point the buyer saw the pictures on line and called an agent to call me.

    After a property has been on the market for a month it’s old news. Agents wait for the almighty price reduction so they have something to talk with buyers about.

    Buyers panic. In fact through the entire run up in pricimg good properties sat on the market while the sellers were punished for not giving up those price reductions.

    Many people paid too much when they didn’t have to, it’s the same today. The easy, squeezy deal has gotten to be business as usual.

  18. 18
    Greg Perry says:

    As noted in a few comments here, multiple offers can be created by strategy (listing an artificially low price soliciting bids).

    Multiple offers can happen in ANY market with a well priced, well placed emotionally compelling house.

    Mostly multiple offers happen when the supply/demand favors Sellers. Absorption rates currently show that most Seattle NWMLS Areas are firmly in Balanced territory (3-6months inventory) overall, with many Areas price ranges under $500K as Sellers markets (under 3 months inventory). The last 2 weeks particularly have shown increased sales activity in the Seattle Areas. Buyers should expect competition for compelling homes in the lower price ranges in good Seattle neighborhoods and negotiate accordingly if they want the house.

    Most Eastside Zones are still in Buyer’s market territory, with pockets of Balanced Markets and just a few Seller’s markets (when looked at by price range). While sales activity isn’t dropping, it isn’t increasing as much on the Eastside as the Seattle markets. High end sales on the Eastside are particularly slow.

    A good agent negotiates for their client’s best opportunity. To do so, the agent must have a deep understanding of the market forces where the Buyer is offering.

    Even in the hottest of markets, a house will not sell if it is grossly overpriced for the location and condition.

  19. 19
    biliruben says:

    We got multiple offers last week.

    The key is to study the comps very carefully. The pattern that emerged in my segment after last summer was that houses were listing like it was May 2007, sitting on the market, and going through a series of cuts until they received an offer a few months later 10-15% below the original list.

    So we priced at the top of what people were ending up paying, but 10% below last spring. We also got the house in impeccable shape.

    It worked. We attracted 2 strong offers from down-sizers looking for a beautiful no-hassle, smaller home, with no contingencies, an escalator, and they waived inspection. So we got over what other folks got who had sat on the market for months, over list, and we sold before the 1st open house.

    There are at least 3 properties that are larger, in just as nice condition, and priced below ours (now, not initially) that have gone stale and are continuing to sit. Our house is pretty unique, so the comps aren’t perfect, but I think that we did the right thing, and it’s a huge relief to get out of the market quickly.

  20. 20
    Greg Perry says:

    Bili,
    Congrats

    Perfect strategy.

    I’ll almost guarentee you that you netted far more than you would have had you try to test it too high letting the market time build.
    And….you got a clean deal.

  21. 21
    Lanny Poffo says:

    Hey the map in the Times article reminds me of a Forum post a while back about the “real bay area”.

    http://seattlebubble.com/forum/viewtopic.php?f=1&t=1023&p=8002&hilit=real+bay+area#p8002

    Maybe it is time to start tracking the “real Puget Sound”.

    Lanny

  22. 22
    Everett_Tom says:

    The fact that the through February Case-Shiller index is only down 2.7% year over year and includes pierce and snohomish counties makes it pretty clear that prices in Seattle zipcodes are not off much if at all.

    As of Feb, yep.. it certainly looks that way.. ( NWMLS Feb by county and MWMLS Mar by county )

    But if Case-Shiller follows the NWMLS next month, that’ll go away….

    (but you can always hold on to the neighborhood data after that…)

  23. 23
    seattleite says:

    So what should be the ideal rent to value ratio for a property. Right now, rent is $1 sqft. Is that too low? If you get $2000 for a 2000 sqft house will that be a good deal vs paying 500K for it?

  24. 24
    softwarengineer says:

    TIGHTENED BANKING STANDARDS

    Hold on to your bubble brain hats bloggers; the attack of the giant bank ants has hit Seattle. The $350K middle class house refernced above is no more, if the $55K and even $95K avg household incomes bloggers reference above hold water [I think they’re way too high, likely artificially propped up by averaging a small percentage of really high household incomes]; that’s the mean value house we qualify for, see the proof:

    “….”In a normal housing market, we have ratios that you qualify for a certain amount of house at your income level,” says Anthony Sanders, a professor of finance at Arizona State University. “Since banks have tightened credit, we’re starting to revert back to those lending standards, and prices are going back to reflecting a ratio of income and median house value.”…”

    The rest of yesterday’s news URL:

    http://realestate.yahoo.com/promo/how-low-will-real-estate-go.html;_ylt=AuT1tkvtECtDbK_FNR9qAYPT4JF4

  25. 25
    Garth says:

    Everett_Tom,

    Thanks for the links, but it is possible to read the blog and not become a bubblehead :)

    I think what tim said in the neighborhood data post is pretty close to what I said above.

    The Seattle city limits as a whole are definitely still the worst place for buyers

    I live in 710, and two houses near me have sold for 600 and 700 in the last month. One sold so fast it never hit the internet and the real estate sign was up one day, the other sold with multiple offers after being on the market for one day. Both are nice, but neither is a mansion.

  26. 26
    Everett_Tom says:

    Thanks for the links, but it is possible to read the blog and not become a bubblehead :)

    Quite True.

    Sorry about the Snarky tone of the last one, I had just wanted to point out that what you’d posted was consistent with the data from NWMLS .. and somehow the pre-coffee me got a bit carried away.

  27. 27
    economist says:

    The fact that the through February Case-Shiller index is only down 2.7% year over year and includes pierce and snohomish counties makes it pretty clear that prices in Seattle zipcodes are not off much if at all.

    That’s YOY from Feb 2007 to Feb 2008. Seattle didn’t peak until summer 2007, and is down today from Feb 2008.

    Got math skills?

  28. 28
    biliruben says:

    Hey Garth – could you posts the addresses? I’m looking starting to look in 710 in that price range.

    I’m curious if I completely missed those.

  29. 29
    SeattleMoose says:

    What am I missing here? Why would anyone buy a house whose value is only guaranteed to go down for years?

    Nobody is ever forced to buy a home so this is all free will.

    Wherever they went to school….they should go and get their money back.

  30. 30
    Garth says:

    SeattleMoose,

    I understand the economic arguments, but the reality is the the general population does not always act, vote or spend in their own interest. However logical and correct you believe you statements to be, your chances of convincing the majority of the population that your opinion is right and everybody else is wrong by insulting their intelligence and education are pretty small.

    Bill,

    I can email them to you if you want, they are neighbors and I am not sure I would want them posting my address on a blog so I don’t think I want to post them publicly.

  31. 31
    EconE says:

    I call bullshit on anybody that mentions houses yet won’t throw up the info.

    Every house that has been listed here in any thread has been “somebody’s neighbor” nobody’s asking who bought or what their blood type is…only for proof of these supposed sales.

  32. 32
    EconE says:

    I call bullshit on anybody that mentions houses yet won’t throw up the info.

    Every house that has been listed here in any thread has been “somebody’s neighbor”.

    Nobody’s asking who bought or what their blood type is…only for proof of these supposed sales.

  33. 33
    TJ_98370 says:

    An interesting trend is developing in my neighborhood. The most recent properties to sell near my residence sold for less than county assessed value! One sold in January 2008 for 92% assessed value and another sold in February 2008 for 96% assessed value.

    The last 10 sales in my immediate area from Novemebr 2007 to the present have averaged 108% of assessed value. Historical sales prices going back to January 2000 have been running at about 132% of county assessed value. Of course the county doubling assessed land values since 2006 probably has alot to do with it.

  34. 34
    george says:

    EconE. I agree! Personal tall tales about the housing market bouncing back? Bah!

    I don’t see it in the Seattle Times or the PI, but more and more properties are listing below where they would have listed last year, even in the supposedly solid neighborhoods. Why is that?

    Smart owners and realtors can see the writing on the wall. YOY down. More houses on the market every month. Recession building. It doesn’t take a rocket scientist to see where this is headed.

    Smart sellers have a chance to get out now near the top if they price it right. Or to get greedy and take the risk of chasing the market to the bottom for some time. Two choices.

  35. 35

    “Why would anyone buy a house whose value is only guaranteed to go down for years?”

    I’m not saying that prices are about to start going up, and in fact feel fairly confident that they won’t, but, you can actually guarantee that prices are going to continue to fall “for years?” You must be pretty powerful.

  36. 36
    Rentersarelosers says:

    I really get a kick out of you homeowner wannabees.

    You live in your bug infested apartments with noisy neighbours and ever increasing rents and whine that home prices are still high.

    I am a homeowner and can tell you that I would buy right now. The deals are out there. If you all had any cajones, you could swing yourself a real good deal right now.

    But, the majority of you have been renters for many years, and will be forever if you don’t act quick.

    Interest rates are going up, the FED cut 3 points over the past couple of months and interest rates have started to climb back up.

    You call me what you want, but you all got your noses pushed up on the window looking in on homeownership. Fact is, you are all a bunch of whiney losers, destined to be renters forever.

    Cheers!

  37. 37
    david losh says:

    as you’ve read here recently some people want or need to buy near a school they want. people who talk neighborhoods are usually family types.

    a seller of mine called me today to ask if they should lower the price of a condo unit i have listed on Capital Hill. he called me!

    many sellers are seeing the presidential election as a stumbling block for selling next year so they want to sell now.

  38. 38
    TJ_98370 says:

    …..I am a homeowner and can tell you that I would buy right now. The deals are out there. If you all had any cajones, you could swing yourself a real good deal right now……

    Whoa Rentersarelosers …..

    If you have any “cajones” you would tell us something about yourself. If you don’t respond I guess we will have to assume you have been castrated. If the little head isn’t affecting your thinking perhaps you should consider the possibility that you are suffering from a case of cognitive dissonance

    Cognitive dissonance

    Rave on eunuch!

  39. 39
    Rentersarelosers says:

    I bought my first home in the late 70’s with a 12% 1st and a 17% second mortgage, made a 50% profit on that home in 5 years, moved on to several more homes. Now on my 5th house and have over 1/2 mil in equity. I never put more than 20% down. You renters can do all the calculations you want that your money can earn more on a CD or on the stock market, but you know darn well, you just won’t do it. You will never invest in your future by putting the equivalent of what you would invest in your own homes, and profit handsomely.

    You renters are losers and will land up with nothing at the end of the road.

  40. 40
    economist says:

    Interest rates are going up, the FED cut 3 points over the past couple of months and interest rates have started to climb back up.

    Which means prices have to come down.

    Got cash?

  41. 41
    Rentersarelosers says:

    The younger generation has a “sense of entitlement” you don’t want to sacrifice.
    You think you all deserve to live in mansions, get paid over 100k on your jobs as a “starting salary”

    You all are about to get a dose of reality.

    “Tim” thinks he can time the real estate market! I have news for “Tim”.

    I have been real active in the Stock market for the past 20 years and the last 5 with with the absolute best tools on the market today including Articificial Intellenge and Neural Network algorithms, and I can tell you that I make money but “it ain’t easy” to time the markets, and that goes for Real Estate as well. All the charts and graphs are fine for entertainment, but you will wake up one morning and wonder what the heck happened? Where have the deals gone to?

    But then again, Tim lives in a little apartment and I live in a large home with good equity, and get to play the markets.

    Best advice: Buy your own home as soon as you possibly can, work hard and pay your bills in full on time.

  42. 42
    Rentersarelosers says:

    Which means prices have to come down.

    Got cash?
    ……………………………………………………

    Plenty, And there will be a rush to buy as interest rates start to climb.

    Been there, seen it.

  43. 43
    q says:

    If you have a half a million in equity and you kill the markets with your trading scheme, why do you care what we think?

    I’ve owned two houses and lost money on both, after accounting for maintenance and realtor fees. I showed up to closing with three grand to get out of my second house, in fact(In Austin, TX). It is sometimes a bitter pill to watch people cash out because they had bought a few years prior (when I was still in college), but I’ve never been in the right place at the right time for real estate (despite my efforts, a rock crushers was erected near my second house…bye bye equity).

    And 100k salaries aughta be buying 300k houses, no more.

  44. 44
    TJ_98370 says:

    …..I bought my first home in the late 70’s with a 12% 1st and a 17% second mortgage, made a 50% profit on that home in 5 years, moved on to several more homes. Now on my 5th house and have over 1/2 mil in equity……

    Rentersarelosers – You’ve been investing in real estate since the late 70’s and only have 1/2 mil equity? Wow, you must have made some bad investments. Sorry- your credibility is severely lacking. You’re also not using verbiage that I would expect from someone that would at least be in their late fifties.

    What’s your game, dude?

  45. 45
    TJ_98370 says:

    Rentersarelosers = bullsh*t alert

  46. 46
    Rentersarelosers says:

    You’ve been investing in real estate since the late 70’s and only have 1/2 mil equity? Wow, you must have made some bad investments. Sorry- your credibility is severely lacking. You’re also not using verbiage that I would expect from someone that would at least be in their late fifties.
    ……………………….

    That’s a 1/2 mil in home equity genius. Doesn’t take into consideration 401k’s, Stock market trading accounts savings etc…,

    What’s my game? Nothing! Just sick and tired of your “entitlement generation” and you so called smart “dudes” trying to predict the bottom of the real estate market while you live in bug infested aparttments at $1500 – 2000 grand a month.

  47. 47
    Rentersarelosers says:

    45 TJ_98370 = loser alert

  48. 48
    Rentersarelosers says:

    If you have a half a million in equity and you kill the markets with your trading scheme, why do you care what we think?

    ………………………………….

    Because I care and want the next generation to enjoy their lives, not analyze it to death. A home is more than a financial investment, it’s a lifestyle, it’s security, it’s an investment in your future that you will never have as a renter.

  49. 49
    TJ_98370 says:

    45 TJ_98370 = loser alert

    Rentersarelosers – to pretend to be somebody you’re not – are you compensating for lack of “cajones”?

    Find a Local Psychiatrist

  50. 50
    Alan says:

    I owned for nine years (two properties in two different cities). I saw 2% annual appreciation on one property and 0.4% annual appreciation on the other. I just had bad timing and a lack of experience to pick the best location. My upper stretch limit of affordability is around $350k. I’ll wait for a few more years to find something I would be happy in long term and then I’ll just accept that ten years of experience writing software just doesn’t make me economically competetive in this part of the country and will move somewhere else.

    But hey, congratuations, RAL. It sounds like you’ve been one of the lucky ones.

  51. 51
    deepcgi says:

    Rentersarelosers: You realize that home equity evaporates in a crash, right? You realize that homes in Houston, Texas and Kyushu Japan are currently priced the same as they were 20 years ago? You realize real estate is crashing in Spain, England, Australia, New Zealand and Italy, right? You realize that I signed a new year lease last week on a 2500 sq. ft house on the Eastside for 1750, right? You realize that your real estate may not appreciate again for 15 years, right?

  52. 52
    BitterInBallard says:

    Rentersarelosers:

    …I have been real active in the Stock market for the past 20 years and the last 5 with with the absolute best tools on the market today including Articificial Intellenge and Neural Network algorithms, and I can tell you that I make money but “it ain’t easy” to time the markets, and that goes for Real Estate as well…

    So I guess you work for a quant shop. 20 years? You’re either CIO or SPM, most likely with an MBA. Congratulations. You’re in the top 2% of the intelligence bell curve. With your compensation and market knowledge, you should be making money hand over fist at all points in the cycle. You’re also financially savvy… much more so than the other 98% of humanity. We don’t have the tools, education and ability to compete with you as real estate investors.

    … If you all had any cajones, you could swing yourself a real good deal right now…

    That’s the thing; the other 98% of us don’t have the cajones to go out on a limb. We’re risk-averse and scared of market timing. I don’t want to risk my family’s financial future on what looks like a bad investment. Right now, my NET monthly housing expenditure is ~$1000/mo less as a renter. That’s money in the 401k and Roth IRA bank. It seems to me that dividend yields and muni rates are competitive with the rental returns of an investment property. Meanwhile, the capital appreciation potential seems much higher in financial as opposed to real assets. Why buy a house in Ballard when I’m renting the one next door? It seems like buying now will hurt my cash flow and my balance sheet. I’m confident that I will be a competitive renter for the forseeable future. Even if market rents rise, I won’t be priced out for quite some time. The only scenario where I lose requires market rents to rapidly appreciate upwards to the match tax-adjusted ownership costs, while ownership costs simultaneously rise at a rate higher than the rate of my income growth. Frankly, the risk of this scenario seems small. I prefer to bear this risk rather than the risk of buying now, with the cash flow and liquidity consequences that entails.

    It is probably difficult for you to relate to me, given your nature as a successful, intelligent financial player. You forget that you function at a level far above most of the people you pass on the street. So please, be kind when you dispense your advice. Try to conceal your arrogance and disdain. If you had a fiduciary duty to me, would you really recommend that I make an investment that was so far out of my league?

  53. 53
    wreckingbull says:

    I enjoy engaging the trolls, but when they are paste-eaters like this one, it just takes the fun away. Someone needs to convince Meshugy to come back.

  54. 54
    Rentersarelosers says:

    You’ve been investing in real estate since the late 70’s and only have 1/2 mil equity? Wow, you must have made some bad investments. Sorry- your credibility is severely lacking.
    …………………………………………………

    Do you realize that my initial investment was only about $15 k? I never put another dime into a home, when sold moved on to the next one and used the built up equity as a down payment.

    Except for the first home (always the hardest and a sacrifice, something your generation isn’t prepared to take on) Monthly mortgage and taxes was always basically equivalent to rent.

    Show me how you can turn $15k into $ 500k in 25-30 years using your investing ideas. Any takers?

    For the person that just signed a lease for $1750/month, my condolences, thats dough right out the window. Real Estate has done very well over the years in most places (including Seattle).

  55. 55
    Cougar says:

    #48

    A home is more than a financial investment, it’s a lifestyle, (keeping up with the Jones’s) it’s security, (the honeydo maintenance list) it’s an investment in your future that you will never have as a renter (owning a home is a forced savings account, disciplined money management creates wealth).

    Tim reports the housing market as it is and does it very well. In the last 5 years many people got caught up in the housing frenzy and are now unable to live any lifestyle.

  56. 56
    Peter Taylor says:

    I have been real active in the Stock market for the past 20 years and the last 5 with with the absolute best tools on the market today including Articificial Intellenge and Neural Network algorithms

    Someone fell for the e*Trade advertising. “Neural network” algorithms? Everyone knows that you need to re-route the encryption algorithms if you want to time the bottom. Sheesh.

  57. 57
    matthew says:

    RAL,

    You could have turned 15k into 500k in a day if you had bought BSC puts…..

    But hey, keep buying up Seattle real estate right now….. someone has to be the greater fool.

  58. 58
    EconE says:

    “Renters are Losers”….

    1/2 Mil in Equity from investing in RE since the 70’s?

    And that’s with multiple homes?

    You either buy REALLY REALLY REALLY horrible RE

    Or maybe you’ve been sucking on the HELOC tittie so hard that you’re gonna need a pacifier for the withdrawals.

  59. 59
    Mikal says:

    Mathew,
    Should have would have could have. You could say that about any investment. Real estate isn’t just about money. Now I don’t know if you guys factor in inflation with your housing figures. My payment in 15 years will still be the same while your rent will have increased. The guy your lambasting has been a bit harsh, but you all do sound a bit bitter on your end.

  60. 60
    david losh says:

    ok, i do love this blog.

    Everyone knows that you need to re-route the encryption algorithms if you want to time the bottom. Sheesh.

    the guy’s saying he only puts twenty per cent down so he must bank the rest to do what he wants. with the personal residence tax exemption it’s possible to add 15% by trading up or down in real estate every two years.

  61. 61
    matthew says:

    BTW, who hasn’t bought a house in the Seattle area in the 1970’s and is not up 500k in equity???

    My parents bought a house in the Tri-Cities in 1989-1990 and are up over 200k in equity right now.

    BFD. Trying to make 500k sound like he is the next Trump.

    My old college roomate bragged about his San Diego condo and how he was up nearly 150k in 1.5 years. Guess what? The guy is underwater and unemployed.

    Think that scenario won’t happen here?

    SOLD TO YOU!

  62. 62
    Dave0 says:

    Interest rates are going up, the FED cut 3 points over the past couple of months and interest rates have started to climb back up.

    HAHAHA… this is completely backwords! When the FED cuts rates it causes interest rates to go down! Learn some basic economics buddy.

  63. 63
    matthew says:

    Dave0,

    I think he was referring to mortgage rates not the prime rate.

  64. 64
    Dave0 says:

    I have been real active in the Stock market for the past 20 years and the last 5 with with the absolute best tools on the market today including Articificial Intellenge and Neural Network algorithms, and I can tell you that I make money but “it ain’t easy” to time the markets, and that goes for Real Estate as well.

    The argument that has always been used by realtors for why there is no real estate bubble that will burst is that real estate markets move slower than stock markets, which is true. What takes a day in the stock market takes a month in real estate. What takes a month in the stock market takes a year in real estate. The flip side to this is that real estate, as a result, is easier to time. In the stock market you truely can “wake up one morning and wonder what the heck happened” but in the real estate market this won’t happen, unless you stop paying attention for a month.

  65. 65
    Dave0 says:

    smart “dudes” trying to predict the bottom of the real estate market while you live in bug infested aparttments at $1500 – 2000 grand a month.

    Oh and by the way, I happen to live in a house in a nice neighborhood (by Greenlake), without any bug investations, and pay less than $500.month.

  66. 66
    Rentersarelosers says:

    BTW, who hasn’t bought a house in the Seattle area in the 1970’s and is not up 500k in equity???
    ………………………………………….

    Not in Seattle, lived in several locations across the country.

    My posts are not meant to provide a basis for how well one individual has done.

    It is meant to provide some long term experience and perspective to purchasing one of life’s basic needs, “shelter” and how it can benifit you financially in the LONG term.

    You can find justifications for not buying now and for buying now, but the fact is renting will bring you nothing financially and thats a FACT. I couldn’t imagine paying 1750 per month ($21,000 per year) in rent with absolutely no income tax deductions for mortgage interest and property taxes etc. It is a losers game in the long run.

    The wealthiest Americans are homeowners, not renters and that’s a FACT.

    Now, you can talk about foreclosures and buyers underwater, but the fact is anyone that bought a home with little down and took an ARM when 30 year rates were and still are at historic lows needs to have their heads examined, or didn’t belong in the home in the first place and had nothing to lose by going for the “deal”. They walk away and go back to that apartment or mobile home if it didn’t work out. Sorry, I have no sympathy for them.

    Prudent buyers with 20% + down and 30 year mortgages, while they are experiencing a temporary dip in home prices, are not being foreclosed on for mortgage and valuation reasons. The housing market here will recover for the simple reason that in Seattle there is NO land left, and there is always someone that makes more dough than you willing to pay for the convenience of living in the metropolitan area.

  67. 67
    Rentersarelosers says:

    HAHAHA… this is completely backwords! When the FED cuts rates it causes interest rates to go down! Learn some basic economics buddy.
    …………………………

    DaveO,

    The 3 point FED Rate cut had no positive effect on mortgage rates, as a matter of fact long term mortgage rates are up and will continue to rise as the lenders anticipate soon to come FED rate hikes to combat inflation.

  68. 68
    EconE says:

    I can’t wait until mortgage rates hit double digits.

    CD’s will reward us savers handsomely also I presume.

    Yeah…I know…CD’s don’t pay very well…but as Groucho Marx once said…

    “If you have a lot of them they do”

    Now move along Mr. “I bought at the peak and haven’t learned how to troll a bubble blog properly”.

  69. 69
    Rentersarelosers says:

    Now move along Mr. “I bought at the peak and haven’t learned how to troll a bubble blog properly”.
    ………………….

    Bought at the peak? Was the mid 1990’s the peak?

    Troll a bubble blog? How about trying to bring a different perspective to a one sided blog?

    And by the way, as CD rates rise you should scale out of stocks and into CD’s. It’s all about risk/reward. Stocks generally don’t do well in a rising interest rate environment.

  70. 70
    Dave0 says:

    I think he was referring to mortgage rates not the prime rate.

    I know, but still fed rate cuts indirectly lower mortgage rates, not raise them. The net effect of the fed lowering the prime rate is it makes money cheaper to borrow across the economy as a whole.

    The 3 point FED Rate cut had no positive effect on mortgage rates, as a matter of fact long term mortgage rates are up and will continue to rise as the lenders anticipate soon to come FED rate hikes to combat inflation.

    I think the fact that the rate cut had no positive effect on mortgage rates is because there were other variables that came into play, such as the credit crisis hitting the financial markets hard right now. I’m not arguing that mortgage rates aren’t up, but saying they are up BECAUSE of the fed cutting rates is just funny.

  71. 71
    Rentersarelosers says:

    but saying they are up BECAUSE of the fed cutting rates is just funny.
    …………………………………

    That was not the intent of my statement and you know it.

    But continue to have your “Seattle Bubble Group Hug”.

    At least I have brought a different perspective and hopefully some of you in the younger generation will think about it for your longer term financial planning (and no, I am not talking about next week or next month)

  72. 72
    Dave0 says:

    Rentersarelosers, I appreciate the different perspective and welcome your comments. Strings like this are what makes this blog great. There aren’t too many places outside of college classroom where you can find meaningful discussions about fed rate cut effects and stock picking algorithms.

    I think about my long-term financial planning everyday. It’s just I’ve come to the conclusion that in the current market, I am better off renting for at least the next 12 months, after that who knows, it will depend on the state of the markets.

    I may have come off as mean, but so does the name “Rentersarelosers”. All I’m doing is counterbalancing your attacks. If you originally posted in a nicer way, I would have too.

  73. 73
    Rentersarelosers says:

    DaveO

    I meant no disrespect when I chose that handle, the intention was to indicate that renters are (financial) losers in the long run, homeowners are and will continue to be the (financial) winners.

  74. 74
    b says:

    Rentersarelosers –

    As someone who is investing for a long time surely you understand that markets change and there is no sure bet. Buying a home 30 years ago until today was a pretty good investment in retrospect, due to how the housing market has played out. Buying a home since around 2003/2004 looks like it will not be a good investment in retrospect, and might become a very bad investment over the next few years as least. Do you also believe that buying a stock at any time for any price is always a good investment because on average the S&P will return 7%+ in the long run? Would you make a 4x leveraged investment of several hundred thousand dollars based on that kind of thinking? That is basically what you are telling people here to do. Buy at any price because it is always the best thing ever! Do you realize how stupid that sounds?

  75. 75
    EconE says:

    Many of us *were* homeowners.

    We already “won” by selling.

    We invested the proceeds.

    Those investments did better than housing.

    There will come a time to be a homeowner again.

    Now is not that time.

  76. 76
    Moe Ronn - Realitor® says:

    The financial situation in which the US currently finds itself has no direct comparison is history to use for analysis of what may happen in the futre. That being said, one must rely on their wits and common sense to decide for themselves. Myself, I’m doing some counter-intuitive investing in preparation for having more capital for when I decide the housing market is favorable for a purchase. My moving-target date is not sooner than fall 2010/winter 2011 and quite likely farther out.

    It’s been asked many times before, but which do you think will happen first, your salary doubling or median house prices dropping by 40-50%?

  77. 77
    economist says:

    the intention was to indicate that renters are (financial) losers in the long run, homeowners are and will continue to be the (financial) winners.

    Buying an asset only makes you a winner in the long run if the price is reasonable. If you buy an asset at a greatly inflated price, you may never come out ahead in the long run. Like someone who bought CSCO in 2001.

    And no, “coming out ahead” does not mean selling something for a higher nominal return than you paid for it. It means the income from your asset exceeds financing costs over the long run.

  78. 78
    economist says:

    Correction, “higher nominal price”.

  79. 79

    rentersarelosers,
    If you’ve read this blog long enough, you’d realize that not all the posters here are renters living in bug infested apartments. There are a variety of ages and income levels here, and a lot of folks own homes.
    I completely agree with you that one is likely better off over a lifetime owning rather than being a lifelong renter.
    And many of the renters here do intend to buy within the next few years. I think you mistakenly see this blog as an advocacy for permanent renting…that’s just not the case.
    It’s more of a counter to the ” It’s a great time to buy” or “buy now or be priced out forever” lines which are perpetrated by my industry in all economic conditions..

  80. 80
    Bits_of_Real_Panther says:

    “I think you mistakenly see this blog as an advocacy for permanent renting…that’s just not the case”

    I’ll second that but with the caveat that the tone of the comments often put the Bitter in Bitter Renter until the worm turned a few months ago…. I will say that in Tim’s “Buy vs. Rent” comparisons he seems to be underestimating the income tax implications. At median income it doesn’t help much, certainly not enough to use it as a reason to take on a mortgage, but once you get to 30-40% above median income if you can’t take advantage of the mortgage interest deduction you are getting screwed by the IRS. It saves me about 4K annually for example

  81. 81
    vboring says:

    re: tax advantage underestimated in model

    this may be a good point. my income is modest enough and my primary investments are of the pre-tax persuasion, so my tax liability is minimal. the model is good for me as it stands.

    but the model should be as flexible and accurate as possible. how should it be modified to accommodate for people with higher tax liabilities?

  82. 82
    vboring says:

    a funny coincidence just occurred to me.

    the tax savings of $4k per year from the federal income tax deduction is roughly equal to the $4k in property taxes that the average homeowner in Seattle has to pay.

    what else is that $4k in property tax roughly equal to? two months worth of rent income one might expect from a $400k house.

  83. 83
    MacAttack says:

    How does anyone KNOW THERE WERE MULTIPLE OFFERS?

  84. 84
    b says:

    Bits –

    The problem is that the mortgage interest deduction has diminishing returns, while the other taxes you must pay (property and sales tax) for the RE will very likely increase over time. I do not know when the inflection point is, but for most people I think there is probably only a real tax advantage for maybe 5 years (highest interest payment years) before it becomes a tax burden overall.

  85. 85
    Alan says:

    It saves me about 4K annually for example

    Which comes out to 25 years of savings if I can avoid losing $100k on a purchase.

  86. 86
    NotaBull says:

    “At least I have brought a different perspective and hopefully some of you in the younger generation will think about it for your longer term financial planning (and no, I am not talking about next week or next month)”

    Mr “rentersarelosers”, this blog is highly tolerant of different viewpoints. Of course, there are exceptions, but the issue with YOU in particular is two-fold:

    1) You decided to call yourself “rentersarelosers”. This is like me, as a straight man, going to a blog for gay people and choosing a nickname like “gaypeoplesuck” and then complaining when they all react like I’m a dick. Pun intended.

    2) You made the classic mistake of thinking that there are only two possible choices. (a) Buy real estate IMMEDIATELY or (b) never buy real estate EVER, and become a permanent member of the renter sub-class. In fact there is a 3rd choice and that is ( c) rent for now, while saving money for a down-payment while watching houses go down in price, and THEN buy.

    I’d say that 90% of the renters on this site are in this third elusive category. They’re not against home ownership, and they want to buy sometime. Sure, some of them are entitled and whiny, but that’s the distinct minority.

    I own a place, BTW, but that doesn’t really matter. What matters is the ability to have civil discourse in a forum such as this. That takes a person of good character because, after all, it’s easy to turn up to an anonymous forum and act like an ass, as you did.

  87. 87
    johnnybigspenda says:

    WOAH… this thread is divergence from the collective hug that is the Seattle Bubble.

    Once in a while I like to take a step back to measure ‘sentiment’. If you take the aggregate of all the posts on the SB, this particular thread (and a couple of recent comments made on others) mark a divergence in sentiment of ‘the housing market will not appreciate in the forseeable future”.

    So, either this guy is *new* and is just acknowledging the bubble or he is bringing his experience and opinion to the table (which may have some level of reality).

    Just by the fact that he was so bitterly and actively refuted leads me to believe that the opinion on the SB has swung too far in one direction. (the koolaid has been ingested by all).

    Time to consider the possibilities… in stocks and realestate: when *everyone* agrees, its likely time to change your plan (or atleast evaluate the herd’s decision).

    An interesting point, which I had not yet begun to contemplate is the effect of interest rate hikes. I can see a .25% increase having a psychological effect on buyers… right now they have no urgency… they are in wait and see mode… I think ‘rentersarelosers’ is onto something there.

  88. 88
    b says:

    johnny –

    You are missing the bigger picture. Everyone may agree on this blog, but thats because it attracts people who agree with its thesis. I would venture to say that MOST regular people still believe that RE is in a temporary slump and that it will likely continue its upwards trajectory soon if it hasn’t already.

    The only thing higher interest rates will do is push down prices. Very few people buy the principle, they buy the payment. That is the reason we got into this mess in the first place, Burger King workers “affording” the payment on their neg-am option arm without any relation to the price paid. Higher rates mean lower prices on average.

  89. 89
    OriginalCin says:

    Short sales are taking over the market and it’s frustrating as hell. The first home I made an offer on ended up sitting on the bank’s desk for >2 months (subject to lender approval…one of these days) and ended up with 17 offers on it. Needless to say, I bailed on that one. It sold for 57,000 more than the listing price. The second home was competitive right away and there were 3 offers on it the same day I made my offer. Rather than be recklessly aggressive right from the start, I bailed on that one, too. Now my “favorites list” is constantly changing and some homes have been on the market for what seems like eons and have been on the yo-yo of “Active/STI/Pending” and back again over and over. It is most definitely the price range, as the further out you go from the city centers; the easier it is to find property. I can say, as a real-time witness as a buyer RIGHT NOW, almost every home in the aforementioned price ranges of 200-300K is a hot item. I’ve even seen literal dumps being bickered over for the size of its lot. But I’ve just made an offer on the third home in the last 5 months and hope that the third time is a charm. I’ve had to totally revamp my criteria and priorities, but it seems to have done the trick. Granted, I will have to sacrifice my walk to work for an hour-long commute to get the home I want for the price I want. Let’s just say my next market is for a fuel efficient car! If this third offer tanks, I will go back to the East Coast where 250,000 will buy me the plantation. :)

  90. 90
    johnnybigspenda says:

    b/

    I understand that this site attracts people who agree with its premise (and trolls).

    But, if the people who are typically on here (who are likely to be the MOST pessimistic) are even *thinking* about considering the possibility that the end may be in sight… that probably means that the people who are oblivious to the SeattleBubble (and its teachings) are even more hopeful about the future… I think we can see that in the little anecdotal stories about multiple offers on places in their price range that there is atleast some evidence that things could be changing.. I don’t want to mistake ‘hope’ for the usual spring time rush though.

  91. 91
    johnnybigspenda says:

    a .25% rate increase will have more effect on ‘urgency’ than it will on ‘affordability’… likely more demand will result to offset the demand that would have been lost due to the shift in price.

  92. 92
    Matthew says:

    The fact that the guy’s/lady’s handle is RENTERSARELOSERS shows that he has not come onto this blog to “add perspective” to the conversation.

    I wouldn’t go on Rain City Real Estate and with a name of “Real Estate Agents are Losers” and expect to be warmly received.

    The guy is obviously an antagonistic douchebag looking to pick a fight with the same tired talking points.

    “You are less of a human being because you rent. Renters can’t be rich, renters are poor, renters a lepers destined to wander the world while people stare at them in disgust”. blah blah blah.

    I make 6 figures, I’ve made an absolute killing taking the money I’ve saved by renting and shorting the financials. I intend on buying, I don’t intend to rent forever, but why buy right now when everything is going to be cheaper in a year or two? If that makes me an idiot or less of a human being than so be it, I don’t need to buy right now as a status symbol. And if some dbag wants to come on the blog and call me a “LOSER” BFD.

  93. 93
    Alan says:

    Granted, I will have to sacrifice my walk to work for an hour-long commute to get the home I want for the price I want.

    Why is buying that important to you?

  94. 94
    deepcgi says:

    All this shows is that the bitterness is reversing. Where daily real estate news once was the bane of renters everywhere, now the daily news is the bane of owners for the same reason. Fundamentally, I see no way for the tide to turn in an owner’s favor right now. Fed actions have had little effect on mortgage rates. The most they can hope for is rates holding steady, but with tightening credit, prices have to drop. Wage inflation can’t take up the slack fast enough, so we are looking at two more years of steady decline at least. But with personal savings being at an all time low, and baby boomers having tied up all of their money in Real Estate, there will be more sellers than buyers for many, many years.

    I was not exaggerating when describing 20 years of stagnant prices in Texas and Japan. My parents sold our home in Houston at the height of the early 80’s oil boom for about 225k. A developer bought the forest land around our house and built new homes there. The bottom fell out of the real estate market, and a good friend of mine (from Japan) bought one of the homes behind our old place for $45,000. It was a beautiful place, 3 bedrooms, cathedral ceilings. Today, on Zillow, my parent’s house is valued at 250,000. And this is 25 years later! That is what is coming. People on this blog are far too conservative in their estimates. The homes in this area could fall an additional 35 to 50 percent, followed by 20 to 25 years of slow recovery. If you have a condo, I wouldn’t want to think about how ugly it will be. No more land? Are you serious? Haven’t you seen how many condos they build on 10 square acres?

  95. 95
    Mikal says:

    Texas has always been boom or bust more so than anywhere because of oil. Maybe not so much now as they don’t pump as much. We have industry here. That mitigates many of the problems that other cities like Houston as they typically are a one trick pony. I’m sorry, one trick pink pony. The only thing that would push us over is if there is a global depression and then it won’t matter as we will all be looking for jobs. That said, we still haven’t hit bottom.

  96. 96
    david losh says:

    Wow, what a difference a day makes.

    rentersarelosers, I’m calling bullshit. I gave you a chance threw you a bone and you went on your way to nowhere. Why?

    There’s no perspective in your comments. i’m an ownership booster but you came here with buckus. the tax deduction only works in combination of the home office or other business deductions. it’s also a multiple property deduction to off set other income. real estate is a business kid.

    home ownership is something different.

    the interst thing is totally psychological in the long term commitment of home ownership is. yes the rate will rise to off set inflation but the inflation itself will drive up home prices, it’s kind of a wash.

    so i don’t get what your doing here but it’s not a perspective.

  97. 97
    RickB says:

    vboring said: “the tax savings of $4k per year from the federal income tax deduction is roughly equal to the $4k in property taxes that the average homeowner in Seattle has to pay.”

    Of course, local real estate tax is also deductible. Not that it puts that much more money back in your pocket…

    http://www.irs.gov/taxtopics/tc503.html

    -Rick

  98. 98
    economist says:

    I think you mistakenly see this blog as an advocacy for permanent renting…that’s just not the case.

    The problem with arguing with ideologues, be they Marxists or the “it’s always a good time to buy RE” crowd, is that they always assume you are an advocate of the opposing ideology. In the case of RE, “it’s never a good time to buy”.

    Because ideologues start with a fixed conclusion and select their evidence and twist their logic to support this, they can’t understand people who take a scientific approach, which looks at the facts first, applies unbiased logic, and then reaches a conclusion, which in the case of RE can mean it’s a good time buy or a good time to sell, based on the numbers.

    The Homeownership Ideologues

  99. 99
    OriginalCin says:

    Alan // May 5, 2008 at 5:19 pm

    Granted, I will have to sacrifice my walk to work for an hour-long commute to get the home I want for the price I want.

    Why is buying that important to you?

    —Well, I was rather happy being the mediocre renter of a city apartment building, but I just (finally) got full custody of my children and opted for a much bigger place with a yard, and more kids in the neighborhood, and better schools, and lower crime rates, and, and, and…the list goes on. And not to prove a point or anything, but I did feel as though I were just making generous donations to someone else’s mortgage payment by paying rent, as affordable as it was. Now I’m my own landlord and will…far more likely than not…have a much greater profit when I do decide to pack it up and fly South one winter.
    Some will argue that now is or is not the time to buy based on recession, pricing, inflation, foreclosure rates, etc. I, however, was in a “we’ve GOT to get the hell out of this cramped inner-city, one-bedroom apartment before we go ballistic and choke the life out of one another” situation. Since we pretty much had to move, I figured it might as well be into our own house. I’ve been told “It’s a buyer’s market! Just do it!” I think it’s a bit too MUCH of a buyer’s market for the type of home I’m looking for, so I stay on top of timelines, prices, offers and great deals because I have to.

  100. 100
    b says:

    johnny –

    The constant stream of statistics showing 40% of sales have disappeared is more than enough proof the market is not hopeful or returning to normal any time soon. There will always be knife catchers salivating and presenting multiple bids so they can lose their dream house in foreclosure, anecdotes are never helpful when trying to view the big picture.

  101. 101
    vboring says:

    OriginalCin,

    best of luck to you. i wouldn’t take the leap right now and i don’t see why you couldn’t just rent one of the many big suburban houses instead of buying, but whatever. maybe you’ll come out better in the long run.

    or maybe you’ll see your equity erased in two years when big suburban land values drop faster than close-in neighborhood prices (the way it has happened everywhere else).

    as long as it is affordable for you and you’re happy there, who cares what it is worth, i guess.

  102. 102
    b says:

    OriginalCin –

    You can rent a 3+ bedroom house in the burbs for half or less of the equivalent mortgage these days, just look on craigslist, they are not hard to find. I am sure your kids would rather have a father not stressed out about money than to have the shame of living in a rental house for 2-3 more years.

  103. 103
    OriginalCin says:

    I have crossed over, looked at, walked-through, and considered literally every house for sale in the NWMLS and at least half of those listed on craigslist and every other “for sale by owner” site within the last 6 solid months, within 50K of my price range and within a 30 mile radius. The house I’ve chosen to buy will put my mortgage payment at about equal to or less than what I have seen out there to rent that is of a percieved lesser quality. If the only negativity that I’ve been able to find AT ALL is a commute into and out of the city to work at a major metropolitan medical facility (being generic here), then so be it.
    As for “dad” being stressed about money…this is my own house with me (the ex-wife) as the only buyer on the sale agreement and will be bought with my own money. What he does with his money and whether it ends up stressing him or not is his business.
    There’s no shame in renting for 2 or 3 more years. I’ve been a renter in 7 states and 3 countries over the last 10 years, for Pete’s sake. It’s the only way to go when one is constantly going somewhere. The point being…I’m a buyer (like probably millions of other buyers) that is looking for a home to buy. I’m not in this for the implied boon that it may or may not be on my bank account, but for peace of mind, continuity and to get away from it all. I want and need a house no matter what the market is doing. If it is profitable for me right now…great! If it’s profitable to me later…great, too! If it costs me, it’ll hardly be the first OR last time I weighed the pros and cons and took the leap of faith to get what I thought I wanted.
    To actually touch on the topic at hand, though…I’ve seen firsthand the bidding wars still taking place on properties that seem to be within this price range and it could be that folks that want an upgrade (like me), see it as a great time to buy up. And it could be that those that want or need to downgrade into something cheaper or smaller are falling back into this demographic. This is the middle-ground, so to speak.

  104. 104
    EconE says:

    One has to wonder if OriginalCin, Jess and Angie are all “good buds”.

    You’ve (OC) got ALL the NAR talking points all the rhetoric and absolutely no facts to back it up.

    I believe that you’ve hit up EVERY possible topic in your posts.

    Your posts read like advertisements.

  105. 105
    Alan says:

    Good luck, OriginalCin.

    Personally, I can’t find something that rents for more than a mortgage. But then I’m not willing to exchange time with my family for a two hour round trip commute. I would rather move to a cheaper part of the country.

    But everyone has their own priorities and I wish you the best of luck.

  106. 106
    vboring says:

    EconE,

    there is no need to be rude.

    not everyone who disagrees with you is advertising something or good buds with a realtor. some people just have different opinions from you because they have a different perspective on things.

    the idea that there is competition for the cheapest houses isn’t exactly a great talking point for the RE industry.

  107. 107
    EconE says:

    The posts still read like advertisements.

    She was happy being a “mediocre renter”?

    Nothing but the latest brand of shill troll.

    Easy to spot.

  108. 108
    EconE says:

    And if you can’t put up the houses that get 17 bids to show these supposed properties then you are F.O.S.

  109. 109
    explorer says:

    Economist: “…Because ideologues start with a fixed conclusion and select their evidence and twist their logic to support this, they can’t understand people who take a scientific approach, which looks at the facts first, applies unbiased logic, and then reaches a conclusion, which in the case of RE can mean it’s a good time buy or a good time to sell, based on the numbers. The Homeownership Ideologues”

    Don’t they often become trolls on sites that somehow affront their sensibilites?

    In addition, there is wishful thinking, boosterism, and denial vs. dispassionate analysis of reality. I don’t read this blog for the former. The question of whose reality this is, is a valid one too.

    I would venture to guess Rentersarelosers would not be able to start from scratch and do the same things right here, right now, in Seattle. Especially since he is not even living here, and displays little knowledge of the area. One size does not fit all, but neither is anyone immune, no matter their perceived superiority.

  110. 110
    SeattleMoose says:

    “Nothing but the latest brand of shill troll”

    EconE…….spot on as usual.

  111. 111
    Everett_Tom says:

    Hey EconE,

    When I got here first, I had lot of the same kinds of ideas as OriginalCin. If I remember my argument was that I should buy because 1) we had(have!) a lot of pets, 2) my wife wanted to 3) we’d do the long term thing.

    The tact with which people pointed out my assumptions, caused me to take a closer look at the data presented here, and change my tune.

    In my case it did make more sense to rent based on what my wife and I are looking for. When people pointed out my mistaken assumptions they were firm, they weren’t insulting. It made a big difference.

    OriginalCin,

    Good luck with which choice you make.

  112. 112
    OriginalCin says:

    Since I’m the new troll under this bridge…What kinds of facts would you (or anyone) like for me to post? My name, address, gross anual income, ssn, etc, and the location/MLS number of every house I’ve looked at (it would be redundant to point out just how many that has been, but that would seem to be the name of this game) along with my banker/real estate agent information?
    If any of that would help to prove your point (which I can’t really pinpoint from here)and if you come with recommendations from others you may have helped with your infinite wisdom and perspective, then I will gladly share them with you personally.
    As for why I “picked sides”, as it would seem I’ve done just by choosing to buy rather than rent…it’s been a personal realization for me and a choice I’ve made and doesn’t even really apply to the topic at hand (which HAD been multiple bids on homes for sale in a particular price range). I had actually left the personalization out of it until directly asked WHY I was even buying in the first place. If considering the rhetoric (in include all possible *rational* debates) offends anyone, I apologize. What could I have been thinking?!
    As for me being a mediocre renter…considering the tone of many posts here, being a renter for a while seemed a pretty mediocre way of being (after considering both sides SUBJECTIVELY) and I was happy being it. I obviously wasn’t bashing renters, as I have been one. I wasn’t bashing buyers, as I’m one of them now, too. Maybe I should have been a little more one side of the fence or the other (rather than right down the middle), but that’s just me, I guess.
    By the way…thanks for the discussion. :)

  113. 113
    Sandy says:

    There is one benefit to buying that never goes away and that is actually owning your own home, preferably also the dirt underneath. There will always be some people for whom that is a very important thing. For others who need the numbers to make sense, right now is probably not a great time to buy still, but give it a year and things could be different.

    There is room for different people to have their own opinions.

    This message brought to you by your friendly local Realtor.

  114. 114
    Jess/pumpkin says:

    EconE // May 6, 2008 at 11:35 am

    “One has to wonder if OriginalCin, Jess and Angie are all “good buds”. You’ve (OC) got ALL the NAR talking points all the rhetoric and absolutely no facts to back it up. I believe that you’ve hit up EVERY possible topic in your posts. Your posts read like advertisements.”

    Wow, really EconE? First, it’s obvious that I’m not a realtor because I know how to spell. Second, anyone who has careful reading skills would be able to discern easily that I am not a realtor. Go back and find all of my posts (here and on the forum) — with all of my hand-wringing, worrying, whining, general freaking-out, and all of the free therapy I received on this blog from kindly folks who understand banking/economics/emotional security and can see shades of grey (but not from curmudgeonly old EconE and Mr. C. Fiction — and who else is extra snarky with a one-trick dog show on this blog? I’ll throw in Sniglet for good measure, too) — and you really wish to argue that I’m a NAR person with no facts? I never threw facts out there except what I witnessed as a buyer — in a “woman on the streets” sort of way. I even gave you the addresses of the two houses we did not get (I’m not sure where that thread is — on this blog or in the forum somewhere). I keep coming back to read Tim’s research because I’m a SB addict, but the abuse of those who struggle with the need/desire to own a home is too much. Empty refrains, that’s all it’s becoming. “Now is a great time to buy!” = “80% off!” — the same empty rhetoric told by an idiot, full of sound and fury signifying nothing.

  115. 115
    Jess/pumpkin says:

    No offense, Sandy; you know how to spell. So does Ira — most of the time.

  116. 116
    EconE says:

    I’m all for opinions, and can even relate to the emotional aspects of owning a home (I have owned and rented)…however, when posters (especially new ones) make statements regarding houses that are receiving multiple offers…I do not see it as unfair, nor an invasion of privacy to ask which houses are actually seeing these multiple offers.

    Nobody has asked for peoples “personal” information and I would not expect anybody to post the MLS# for a house that they are personally bidding on but if a house has supposedly been “lost to a bidding war” and has already been purchased I would like to see that house.

    Why?

    Well…I would like to see what kind of a house it is. What is the quality of the house? Is it one of the multitudes of moldy roofed houses with couches on the front porch, badly cracked retaining walls and weeds growing up from the walkway that you see in those “ever so desirable” locations such as Greenlake and Ballard?

    Or is it an impeccably remodeled house with a full Viking kitchen?

    What was the starting asking price of these houses?

    What did they end up selling for after the “bidding war”?

    I don’t want to hear that “houses” are selling. I want to know *which* houses are selling and have someone actually point out a house and explain why they felt that multiple bids were justified. I’m not saying that they aren’t out there but it would be nice if these claims were substantiated with the public information that is readily available to all of us.

    But of course…you’ll have trolls such as OC that throws out the “do you want my SSN#, income yada yada yada”

    No. Just the facts ma’am.

  117. 117
    EconE says:

    Jess…yes…you did post the houses after we pulled teeth.

    And I thanked you for it also.

  118. 118
    Jess/pumpkin says:

    Just more evidence of my lack of RE ties — I didn’t know how easily I could be identified if I posted houses for which our offers were rejected. I’m also not in banking nor work for the Big M. I work with books and students and ideas, and money only comes up when the budget is tightened (or a failing student wags his finger and yells about how he “pays my salary”).

  119. 119

    I’ve never seen Jess/Pumpkin as an apologist for the NAR. She has just been reporting her own experience, and if I remember correctly involved looking at houses that were close in /north Seattle. I see a lot of houses sell quickly there, if they’re priced right, charming, and in good shape.
    That doesn’t represent the whole Seattle area. Houses in Skyway or Auburn can stay on the market for many months.
    …And I’m a great speller, just a horrid typist.

  120. 120
    Matthew says:

    You think EconE is being rude? WTF is up with the passive aggressive PNW personalities that get their panties in a bunch over someone calling a spade a spade.

    I didn’t see him resorting to personal attacks. If you want to see rude head over to the market ticker forums or calculated risk… These trolls wouldn’t last 5 seconds at either place.

    The discussion on here is more civil than any forum I’ve been on.

  121. 121

    OriginalCin,
    There are quite a few properties under 300k in the 98178 zip code. They may not be your cup of tea, and some of them are downright horrible, but others are pretty nice, and staying on the market longer than similarly priced properties in other areas.

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