Housing Slowdown Begins to Trash Local Economy

It looks like the housing bust may have finally caught up to us up here in the Northwest. According to the latest data from the Employment Security Department, unemployment in the Seattle metro area jumped 7/10 of a point last month alone. Here’s an excerpt from the Seattle Times:

Unemployment in Washington state took its biggest jump in nearly 28 years last month, as employers cut payroll jobs for the third straight month.

The unemployment rate rose to 5.3 percent in May from 4.7 percent in April, after adjusting for seasonal variations, according to the state Employment Security Department. In the Seattle metro area, unemployment leapt seven-tenths of a percentage point last month, to 4.1 percent.

“This report may skewer the notion that Washington is immune to the downturn,” said Bill Conerly, an economist and business consultant in Portland. “The state has done better than the nation for a number of reasons, but immune — no.”

Dang. I guess everybody must have ignored Gregoire’s advice and bought into the self-fulfilling dire talk. We should have tried to believe harder.

The P-I also has a story on the spike.

The primary reason for the job numbers is the housing slowdown, which has turned the booming industry of construction into a lagging one and spills into other areas of the economy. Year-over-year construction employment fell in May, particularly in the residential sector. Financial services jobs are also taking a hit.

It sounds like they’re saying that the argument that a strong economy will prop up the housing market is backward, and in fact the housing market was propping up the economy. I believe that we have been warning of that since 2006:

So here’s my thesis: Jobs (at least partly) drive housing. The job situation in Washington (and the Seattle area) has been doing pretty well lately. However, a large amount of the job growth has been in housing-related industry. Therefore, when housing slows due to other forces (such as increasing interest rates or higher lending standards), the job market will slow, thus causing housing to slow further.

That sounds like exactly what’s happening right now. And before someone breaks out the “stopped clock” nonsense, note that in 2006 we didn’t say “the slowdown will happen this year,” we just warned that the economy was propped up on housing, and when housing slowed down, the economy would too.

As an added bonus, here’s one more local take on the spike.

Major cutbacks in the building industry in Snohomish County are blamed for a sharp increase in unemployment in May, the state Employment Security Department reported Tuesday.

Local unemployment increased from 3.6 percent in April to 4.6 percent last month.

“We dodged a bullet for quite a while,” said Donna Thompson, a regional labor economist with the department. “But unfortunately, it’s catching up with us.”

Thompson was talking about the national housing crisis.

Thompson said the local construction industry is doing poorly because of the slowdown in home sales. “There are a high number of homes that haven’t sold and are still in the market,” she said, noting that those homes need to be cleared out before builders can start on new ones.

Last month, the county lost 300 construction jobs. During the past year, it’s lost 3,300. “Construction workers are losing their jobs and it’s really having an effect,” Thompson said.

It sucks, but it’s not like we can say it comes as a surprise.

(Drew DeSilver, Seattle Times, 06.18.2008)
(Andrew James, Seattle P-I, 06.17.2008)
(Tim Ellis, Seattle Bubble, 05.17.2006)
(Mike Benbow, Everett Herald, 06.18.2008)

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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.

72 comments:

  1. 1
    vboring says:

    i think it should be reiterated that unemployment numbers do not even remotely represent the real loss of jobs in the construction industry, since so much of the work is done “off the books,” “on the down low”, or otherwise arranged “informally.”

    if you can prove that you’ve been working for the last few years, you can’t file for unemployment, so you don’t get counted.

    owners of small businesses, such as the majority of independent contractors, have a harder time filing for unemployment

    and people making money from “sweat equity” were never “employed,” so they will never technically be “unemployed”

    a better way to estimate would be to look at the number of new houses being built , estimate how many man-hours each takes and convert the decrease in number of houses being built into a decrease in the number of people needed in the construction industry. see how that compares to the 3,300 construction jobs lost last year.

  2. 2
    Garth says:

    From the construction standpoint, it works out to 500 net jobs lost.

    Residential construction fell by 900 jobs in May, further fallout from the housing slump; heavy and civil engineering, representing construction work on such things as roads and bridges, lost an additional 300. But nonresidential building continued to show resilience, with a 700-job gain.

    Jobs were gained in aerospace and software and lost in retail and construction, not too sure how that will trash the local economy.

  3. 3
    David McManus says:

    http://seattle.bizjournals.com/seattle/stories/2008/06/16/daily19.html?jst=b_ln_hl

    Can we get a top ten list of what to put in their building downtown?

    I know, I know, everything’s fine……buy, granite, stainless steel, always goes up, blah blah.

  4. 4

    REMEMBER, UNEMPLOYMENT RATES ARE JUST A LOW-BALL ESTIMATE OF THE REAL CALAMITY

    They exclude:

    give-ups
    P/T workers
    under-employed workers
    contract workers (realitors, building contractors, mortgage, etc)
    undocumented workers
    unemployed students/graduates

    They over-exagerate reality by:

    including the ones working 2-3 service jobs to survive, as 2-3 workers in error.

  5. 5
    vboring says:

    i understand that unemployment data in general is halfway between lies and damn lies, i just wanted to point out that unemployment data for the construction sector is even more problematic and prone to systemically underestimate the actual unemployment rate because of reasons specific to residential construction work

  6. 6
    Eleua says:

    Yup. Housing IS the economy. How anyone can think any different is truly a wonderment.

  7. 7
    jon says:

    Thousands of workers have been working hard building and financing more houses than we need. As such, their production value in the economy has been limited for some time now.

    Hopefully they will be idle only a short time before they find something else that has a greater benefit to the economy at this time. Rising Chinese wages and a low dollar mean manufacturing should be doing well here. The growth in non-construction jobs is a reflection of that.

  8. 8
    vboring says:

    Eleua!

    welcome back. how is your 80% off coming along?

    jon,

    somehow i doubt many of the 500 (reported) jobs lost in the local construction industry are moving into microsoft and amazon cubicles or even the boeing assembly floor.

    residential construction was one of the last areas that relatively low-skilled mostly-unqualified workers could still make a decent income.

  9. 9
    Eleua says:

    how is your 80% off coming along?

    We are working on it. The credit markets are grinding to a halt, the FED is 1/2 way to bankrupting itself, and the stock markets are freakishly overpriced.

    Some communities in California are already 30% off, and some are even worse. All this has happened without a true financial crisis and with the full weight of Uncle Sugar trying to backstop everything.

    Still stand by my 20c prediction.

    No, I’m not off my meds.

  10. 10
    Tsuru says:

    Rising Chinese wages and a low dollar mean manufacturing should be doing well here

    This is news to me – I wasn’t aware we had a large manufacturing base here in the Greater Seattle area. What is manufactured around here?

  11. 11
    The Tim says:

    What is manufactured around here?

    Airplanes and aerial work platforms. Not much else, as far as I know. Oh wait, also high-end workout equipment.

  12. 12
    Tsuru says:

    I didn’t know Genie was located here. Very useful products. I had to use a Genie lift to get a 120lb. CRT projector mounted on my ceiling.

    Precor is a surprise too.

    Thanks Tim.

  13. 13
    biliruben says:

    We manufacture median home prices. Out of whole cloth.

  14. 14
    The Tim says:

    Guess where I was employed before I decided to do this internet thing full-time at home?

  15. 15
    TJ_98370 says:

    What is manufactured around here?

    Kenworth

  16. 16
    Jimmythev says:

    David McManus… nice link… my prediction is Wamu will be out of biz by the end of 2009… am I the only one that thinks their exposure to HELOC’s and Alt A’s are going to be the downfall of this company…

  17. 17
    jon says:

    There is an industry level breakdown for Washington here:

    http://www.workforceexplorer.com/admin/uploadedPublications/1889_industry_current.xls

    Construction is a little smaller than manufacturing, and are both dwarfed by services.

  18. 18
    Everett_Tom says:

    Don’t forget electrical test equipment … at least some of it is still made here…

  19. 19

    DON’T THROW THE 767 AIRFRAME MANUFACTURING OUT JUST YET EITHER

    Did you hear, the GAO agreed with Boeing’s dispute on the $30B tanker order to Airbus today. Boeing get’s to likely try to bid for the AF contract again, it appears.

    Since I designed the master control drawing for manufacturing the 757/767 wing in 1978; this tickles my fancy, even though I’m not a Boeing employee anymore.

  20. 20
    b says:

    Jimmythev –

    No, the CDS market agrees with you. And I think end of 2009 might be optimistic, however they will probably get bought instead of fold outright.

  21. 21
    magnolia44 says:

    The TIm,

    Full time internet at home, with a site called Seattlebubble? Looks like another bubble in the making, good luck with that.

  22. 22
    The Tim says:

    magnolia44,

    Seattle Bubble is just one of my projects. Perhaps you would get more enjoyment out of The Naked Loon?

  23. 23
    John says:

    I can’t wait until the sh*t really hits the fan. Then there would be no more argument about whether it was a bubble or whether the crash is here. Local banks are going to get killed. I am pretty sure about that. Take a look at all the bank stocks. WaMu is just one of the many that will end up in the graveyard.

  24. 24
    mikal says:

    NBC news just had a story about the end of suburbia. The inner cities of Minneapolis and Boston have only dropped 2.5% while further out the drop is much higher. After interviewing many they conclude that it is gas prices. I love being right. The Naked Loon reminds me of Drew Carey doing the Price is Right.

  25. 25
    Ray Pepper says:

    CAN I BLAST SOMEONE/ENTITY PLEASE………………Just feel I need to unload..

    Most every blog I placed in the News Tribune this week has been deleted. In expressing my personal opinion as to why the NEWS TRIBUNE will NOT EVER run a story on why BUYERS NEED TO SAVE NOW MORE THEN EVER….
    And utilize Brokerages that ** GIVE ** TO THE CONSUMER (not extract) and how if they ever did run a story, the advertising on Sundays in the Real Estate section of the paper would collapse.

    My blogs have been deleted. No reponses given other then. “You know Ray editorial is different then Advertising”………I SAY BS!! Tell the truth to the PUBLIC!

    If someone is choosing to Buy in this recessionary environment EDUCATE THEM!! Is this NOT what the media and blogging is for? EVERY DAMN property on the MLS has money that is the BUYERS! Yet ..SSSSHHHHHHHHHHH

    “Ray you didn’t tell my clients what it is your company does”? I hear this statement most nearly everytime I get into offer/counteroffer with an Agent.

    Good GOD!

    Not telling the TRUTH in MEDIA is as bad as lying. Thank GOD I HAVE THE BUBBLE to get this off my chest!

    I feel a little better now…

    Thanks TIM!

    Ray Pepper
    Broker
    http://www.500Realty.net

  26. 26
    The Tim says:

    The Naked Loon reminds me of Drew Carey doing the Price is Right.

    I haven’t watched The Price is Right in years, but I am assuming that was meant to be an insult?

  27. 27
    TJ_98370 says:

    b & Jimmythev,

    I just bought a 1 year CD at WAMU. I’ll write a post on how to make a claim on FDIC insurance. :-)

  28. 28
    Joel says:

    magnolia’s last several comments have all been about him wishing for The Tim’s businesses to fail. Bitter much?

  29. 29
    TheHulk says:

    magnolia’s last several comments have all been about him wishing for The Tim’s businesses to fail.

    I have noticed this as well. It’s not even as if Tim is to be blamed for any of this so called downturn (crash is way more appropriate). The only thing Tim is doing is putting out facts, AND asking people to vet them if they don’t believe him.
    Magnolia what’s your bone with Tim dude?

    btw Tim, nice job integrating the area codes into the google maps thingy. Certainly looks cool.

  30. 30
    TJ_98370 says:

    ….Magnolia what’s your bone with Tim dude? ….

    Magnolia just bought a house, ’nuff said?

  31. 31
    jonness says:

    Hey Ray Pepper: What areas do you guys cover? Do you represent buyers in Olympia? I won’t be buying for a while, but when I do, I plan to find my own house. I’m really not looking to pay someone 3% of the home price just to do the paperwork. That’s just freaking crazy!

  32. 32
    magnolia44 says:

    lol

    I made a comment about the fundraiser and a comment about this website being a bubble. How is that wishing Tim to fail? Its a smart a$$ comment like the plenty that are made here daily. Lol… grow some skin jeez.

    As far as being bitter hardly, tim does have some good excel skills he will be plenty marketable if anything happens. lol

  33. 33
    magnolia44 says:

    BTW i clicked on Naked Loon once, didnt even go any further than that. The name nor the site seemed interesting after the initial click, but hey I am just one individual.

  34. 34
    Andy says:

    As an Olympia renter I can’t wait for the next state biennium’s budget figures to come out. I predict the Thurston County market is going to get pounded…bwahahahaha!

  35. 35
    Ray Pepper says:

    jonness we serve the entire state of Washington. But, remember as a Buyer you never pay. Its the sellers that pay the commission. *****They are paying dearly right now and will continue to for awhile………….

  36. 36
    John says:

    magnolia44, omg lol you rulez!!!!!1!!!1!!!!! lol

  37. 37
    Bes2wait says:

    More gloom and doom.

    Barclays North to close down

  38. 38
    Scotsman says:

    I like to ” Zillow ” the house we live in every couple of days. It’s estimated value has been dropping $500-1,000 per day for the last several months, and is now down exactly $100,000 from it’s peak. I’m glad we only rent it at this time.!

    Like Eleua and many others, I believe we’re only getting started. The economic foundation on which this country’s credit markets are based is beginning to crumble.

  39. 39
    deejayoh says:

    Every time Magnolia44 clicks on one of his sites and makes a snarky, Tim makes 25 cents :)

  40. 40
    mikal says:

    And in the end Scotsman, if it is really as bad as you hope, we will all be in a bread line with Eleua.

  41. 41
    b says:

    mikal –

    Why? Japan has managed to have 90% peak declines with only sluggish/stagnant growth. No bread lines or riots over there. California and Texas have both suffered huge declines in previous bubbles without breadlines or a depression. I certainly don’t think things will be economically great, but I also don’t think there are going to be breadlines because Ballard shitboxes sell for 80% off peak values.

  42. 42
    didn't just fall off the turnip truck says:

    b
    Japan hasn’t had issues because they are savers not debtors. They have a huge savings rate compared to the US. Additionally, have you spent time in Japan? The idea of a riot there is um … lets say unllikely …

  43. 43
    Matt says:

    This story simply can’t be true. I was told that:

    1) Seattle is the most special place in the world and everyone wants to live here and buy multiple investment properties. Even if prices double every 2 years, foreign investors will come in and just keep on buying forever because they think housing is a wonderful investment.

    2) Unemployment will never go up because 100% of the population works at MS or Boeing.

    3) Due to mountains and a low-height dome that completely surround the city, there is simply no more land available, and you hit the top of the dome if you build above 3 stories high.

    I think they meant:

    1) Many, not all, people would rather live in California or New York.

    2) The economy is going to $*(# and unemployment is going to skyrocket

    3) Most young people want to live in the city, so the ghettos are going to relocate to those million dollar homes out in the distant suburbs because there will be little demand for them.

    4) We’re going to watch house prices drop at least 30% in the next 2 years.

  44. 44
    jonness says:

    “jonness we serve the entire state of Washington. But, remember as a Buyer you never pay. Its the sellers that pay the commission. *****They are paying dearly right now and will continue to for awhile………….”

    Technically, it is said that the seller pays. But in a way it is the buyer who pays because he is the one who puts up the money. If I buy a house it’s immediately worth 6% less than I paid because in order to convert it to cash, I have to sell it. The seller simply increases the cost of the house by 6% in order to cover RE fees. Once the buyer puts up the money, the seller allocates the buyer’s money to the RE company and puts the rest in his pocket ( just as his money was given to the Realtors when he originally bought the home).

    Of course, you can look at it a multitude of ways. Another way is that one agent represents the seller and gets paid by the seller, and another agent represents the buyer and gets paid by the buyer. The way the money is transferred is a technicality, but ultimately the buyer puts up the cash and ends up with a home that is worth 6% less than he paid. The fact that it only bites him when he tries to sell is a technicality. The truth is that the buyer and the seller are the same person, and both of those people pay 3% each. Thus, it is my choice as a buyer to not pay the full 3%, and it is also my choice as a seller to not pay the full 3%. Whoever buys a house and then sells it to me is on his own when it comes to how much he wants to pay to buy and sell the home.

  45. 45
    Ben says:

    Ray – sorry to bust your chops, but leaving comments is not blogging. I keep trying to explain this to you. You will sound a lot smarter if you use the right terminology to describe what you are doing.

    I will say that from my perspective you have toned down the self promotion aspect of your comments here, and I appreciate that.

    P.S. Tim – not sure if you can control it, but the tab order on the page is goofy when leaving a comment. It always jumps to an ad at the top of the page instead of moving from Name -> Mail or Mail -> Website.

  46. 46
    Ray Pepper says:

    Ben…Sorry I’m not an expert blogger. I don’t need to sound smarter. Remember I’m just a “Bloviator”.

    Jonness agreed. I would like to emphasize this. Every property that is listed on the MLS has money that is the Buyers. Every damn one. The problem is very few realize its theres. Be happy you do. More WILL in time!

    Ray Pepper
    http://www.500Realty.net

  47. 47
    Ray Pepper says:

    and furthermore……………………………..”very few realize its theirs”…typo at 5am….btw TMA (Thornburg) is officially cooked….Just got the wire.

  48. 48

    Seattle’s housing growth is off the charts

    By Stuart Eskenazi (Seattle Times staff reporter)

    It should come as a surprise to no one that Seattle is growing fast.

    But this fast?

    In just over three years, Seattle already is halfway to reaching its targeted housing growth for 20 years.

    And a few sections of town — Ballard, Eastlake, the Central Area, Greenlake, Lower Queen Anne and downtown — already have exceeded their 20-year targets…. article continues…

    http://seattletimes.nwsource.com/html/localnews/2008003405_growth18m.html

  49. 49
    what goes up comes down says:

    mag 44,

    I wonder if the next house in your hood sales for as much as the last one you mentioned. Oh that is right we are just chicken littles — I think one of your posts in a different thread sarcastically said something about the sky is falling.

  50. 50
    NotaBull says:

    Ray said: “Ben…Sorry I’m not an expert blogger. ”

    No. You’re not any kind of blogger. You’re not:

    -An expert blogger
    -A bad blogger
    -A happy blogger
    -A purple blogger
    -A smelly blogger

    I too am not a blogger. I do not have a blog of my own. That’s how I know I’m not a blogger.

    OK?

  51. 51
    what goes up comes down says:

    Matt makes some good points it seems like it is a moving target with the pumpers. First the no land, second everyone wants to live here — mountains and water, next super employment — I wonder what will be the next reason real estate will never go down.

    Mikal why do you care if prices crash 10%, 20%, or 40% if you are in this for the long, long run things will come back it will just take a time.

    As long as people can afford to live somewhere and feed their family there will be no riots — why — because everyone is sold on the American dream — if you work hard enough you will get ahead. If you don’t get ahead then apparently you didn’t work hard enough. Now if people wake up and see that this is now basically a myth then maybe just maybe we might be in trouble, but as long as Americans can shop at WalMart and buy tons of cheap crap then everything will be A OKAY.

  52. 52
    vboring says:

    the ghostburb does seem to be a theme of the day – and one that makes a lot of sense to me as a long term trend – but i’m not convinced yet that close-in prices will remain elevated long term.

    just because the price collapses started in the previously rapidly growing suburbs, doesn’t mean that the price collapse won’t continue to migrate toward the city centers.

    rapid price declines are facilitated by foreclosures, but the eventual sustainable value of neighborhoods will have some relation to affordability and perceived value. the timing of these price declines is harder to predict.

  53. 53
    DW says:

    “Seattle’s housing growth is off the charts”

    I’m sure growth was “off the charts” in Miami and Las Vegas too!

  54. 54
    what goes up comes down says:

    Holy, crap that is the next Real Estate will never go down — close in neighbor hoods — it amazes me just 30 years ago it was cities became ghost towns because of white flight. This in city crap just makes me laugh HOW MANY people work in SEATTLE proper? Isn’t it funny when people talk strong employment they mention MS and Boeing — THEY forget to mention the people employed at those companys work WAY OUTSIDE SEATTLE in the disappearing burbs. What a joke.

  55. 55
    The Tim says:

    P.S. Tim – not sure if you can control it, but the tab order on the page is goofy when leaving a comment. It always jumps to an ad at the top of the page instead of moving from Name -> Mail or Mail -> Website.

    I have removed the offending ad.

  56. 56
    NotaBull says:

    Mag44 said: “I made a comment about the fundraiser and a comment about this website being a bubble. How is that wishing Tim to fail? Its a smart a$$ comment like the plenty that are made here daily. Lol… grow some skin jeez.”

    Your passive aggressive comments are littered with “good luck with that” and other dreadful and pitiful attempts to put people down. In that respect you’re no different to some others on this blog on the other side of the fence. It’s unfortunate that you’ve decided to have this kind of attitude.

  57. 57
    what goes up comes down says:

    I am curious when Mikal mentions gas prices being the reason in city areas won’t suffer it seems people don’t make the simple connection if it is because of gas prices wouldn’t Everett and Kent and Renton and Redmond be seeing the benefit — those are places that have the largest employers in the Seattle area. How many Boeing and MS people work down town?

  58. 58
    NotaBull says:

    “I am curious when Mikal mentions gas prices being the reason in city areas won’t suffer it seems people don’t make the simple connection if it is because of gas prices wouldn’t Everett and Kent and Renton and Redmond be seeing the benefit — those are places that have the largest employers in the Seattle area. How many Boeing and MS people work down town?”

    NO. Everyone works in downtown. EVERYONE. Each and every individual and family, therefore, wants to live in Ballard. ALL OF THEM!!!! Rid your mind of its curious nature and go and buy a townhouse in Ballard.

    On a serious note, the wife and I just moved out to near Redmond (Sammamish to be exact). We moved from Seattle. Her commute is now an easy 5 miles in each direction and she doesn’t have to deal with the 520 bridge.

    If I ever decided to work for the evil empire (Microsoft) then I could hop on the bus – that I can walk to – that goes right through the Redmond campus. Or I could get on one of those MS “Connector” buses I see driving around.

    So many that work in Seattle and live in Seattle see *all* the region’s jobs as being in Seattle. Therefore, anyone that doesn’t live in Seattle is just crazy and living in the “exurbs”.

  59. 59
    NoMoreWork says:

    All this doom and gloom with local economy, oil prices and such. Have we really forgot this is the same country Tom Vu made a fortune in and you can too!!

    http://www.youtube.com/watch?v=jYqDS9i8zJw

    You can make “millins” in real estate…

  60. 60
    TJ_98370 says:

    .
    Off topic, but Wow! I did not think this would actually ever really happen ….

    Former Bear Stearns Fund Managers Arrested by FBI

    June 19 (Bloomberg) — Bear Stearns Cos. former hedge fund managers Ralph Cioffi and Matthew Tannin were taken into custody at their homes this morning by FBI agents over their roles in the collapse of two funds that ignited the subprime mortgage crisis last year.

    The arrests are the first from a federal probe of possible fraud by banks and mortgage firms whose investments in subprime loans and securities plunged in value, causing losses that now total $396.6 billion. The U.S. Securities and Exchange Commission may sue the two men as early as today, claiming they committed fraud by falsely telling investors the funds they managed were sound, people with knowledge of the case said…..

  61. 61
    David McManus says:

    Just curious, but why can’t we thrown other individuals in jail for spreading bad information, like IDK…..realtors?!?

    Buy, buy, buy, great time to buy!!! Market’s never been hotter….buy, buy, buy!!!!

  62. 62
    Lake Hills Renter says:

    They’re just salesmen — it’s what salesmen do. Cars, houses, they’re all the same.

  63. 63
    jon says:

    “Hundreds of people have been arrested in a sweep by law enforcement officials targeting crooked mortgage brokers, real estate agents, and other industry officials, Justice Department officials said Thursday.”

    http://cnnwire.blogs.cnn.com/2008/06/19/hundreds-accused-of-mortgage-fraud-2/

  64. 64
    TJ_98370 says:

    From the same article I posted above –

    ….Indictments against Cioffi and Tannin might lead to a cascade of criminal cases and civil suits, said former prosecutor Robert Bunzel, a white-collar criminal defense lawyer in San Francisco.

    “The floodgates could open,” Bunzel said.

    In a separate move today, two government officials said more than 400 people have been charged in a U.S. Justice Department mortgage-fraud sweep…..

    Oh what fun! Now the really serious finger pointing begins between the investment bankers, mortgage brokers, loan originators, bank regulators, ratings agencies, investors, etc., etc,

  65. 65
    Ubersalad, Ph.D says:

    I posted the same thing on the forum. It’s interesting to see the spike in the amount of mortgage fraud. I bet most of them were probably doing the same thing they were doing pre-2007.

  66. 66
    TheHulk says:

    While I am sure *some* loan officers and realtors were to blame for the current housing mess, I am not so sure that I would let off majority of the people who bought a house during that time off the hook. If you are making the biggest purchase of your life you better well be darn sure what you are getting into.

    Now, an 80 year old granny who was steered into a reverse mortgage that just keeps screwing her (and the loan officer made a cool 30K). Please do throw the LO in jail and throw away the key. The same thing for the LO’s who accepted fake documentation, made non-english speaking people sign stuff they didn’t understand while raking in the moolah on the YSP. Do continue up the chain with the underwriters and the people who packaged these “joke loans” into CDOs and possibly bankrupted several pension funds in the process.

    But many many people were purely and simply motivated by greed. Don’t allow a single “second-home” investor to just walk away. A foreclosure even on a primary house should prevent that person from buying a house for a good 10 years. Period.

  67. 67
  68. 68
    Ubersalad, Ph.D says:

    They can do a re-make of “There Will Be Blood” with real estate market…it’ll be a hit!

  69. 69
    obelus says:

    Reported that WaMu is laying off 1200. This is nationwide (or more since the dateline says Bangalore) but I wonder how many are to be here in the area. “I thought Seattle was ‘specail’ and never had layoffs and RE prices always went up and up and up…..”

  70. 70
    Garth says:

    The times reported that headquarters would lose about 260 people.

  71. 71

    […] is using rather dated information, since the latest unemployment statistics for the Seattle area showed a sharp increase, which throws the trend-bucking idea out the […]

  72. 72

    […] last time we checked in on unemployment data for the Seattle area, local data was rapidly catching up to […]

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