Foreclosures, FHA, Commercial, & Countrywide

Here are a few recent stories that have been covered elsewhere and are worth at least mentioning here.

Latest foreclosure statistics: Seattle P-I, Foreclosures in Seattle higher, but much lower than nation’s

The Seattle area had about twice as many foreclosures in May as it did a year earlier but continued to have a far lower foreclosure rate than the country as a whole, according to new reports.

King and Snohomish counties had a combined 881 trustee-sale notices and bank repossessions in May, one for every 1,219 households, according to RealtyTrac, an Irvine, Calif., company that tracks foreclosures. The area’s rate put it 148th out of 229 metro areas the company ranks.

FHA tries to ride in to the rescue housing bubble (they’re a little late for that). Coverage:

The much-vaunted commercial real estate market is apparently showing signs of weakness as well: Seattle Times, Commercial real estate brokers worry about Seattle buildings

After climbing for years, are office lease rates in downtown Seattle getting ready to turn south?

Some commercial real-estate professionals think so.

More than 2 million square feet of new office space — the equivalent of 1 ½ Columbia Centers — will come on the market in greater downtown next year. Almost none of it is pre-leased.

And lastly, Christine Gregoire is taking her turn beating the dead horse that is Countrywide. Where was she when they were busily pumping the housing bubble up with all of these ridiculous loans? Not running for re-election, that’s where. Coverage:

Did I miss any recent stories that should have been included?

(Aubrey Cohen, Seattle P-I, 06.13.2008)
(Elizabeth Rhodes, Seattle Times, 06.13.2008)
(Aubrey Cohen, Seattle P-I, 06.16.2008)
(Eric Pryne, Seattle Times, 06.26.2008)
(Phuong Cat Le, Consumer Smarts (P-I Blog), 06.25.2008)
(Phuong Cat Le, Seattle P-I, 06.26.2008)
(Susan Kelleher, Seattle Times, 06.26.2008)
(Jillayne Schlicke, Rain City Guide, 06.25.2008)

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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.


  1. 1
    Markor says:

    I don’t expect Gregoire to know about every issue as it’s developing. She doing something about it now, election or not. Most governors, esp. those of a certain party, would have done nothing about it.

  2. 2
    obelus says:

    Here is a happy or dismaying article depending whether you own or not:

    Looks like we might have a half-price sale in Seattle area after all.

  3. 3
    David McManus says:

    I agree with Tim’s comment on RCG,

    Why isn’t she going after WAMU as well? The Tim is correct in saying she wasn’t doing crap while the bubble was inflating because she was trying to get elected and anyone doing anything perceived as being negative towards housing at that time probably wouldn’t have been elected. Then again, it’s debatable that she was elected, but I’ll save that for the forums.

    Have a good weekend everybody!

  4. 4

    I took a couple of commercial RE classes, and one was taught by the head of the local commercial lending department for Bank of America. She was great. After pointing out that investors look at commercial RE for higher CAP rates along with safety, and hat current CAP rates were under 3%, I asked why anybody would invest in commercial real estate with such low CAP rates. Her answer- ” Because they’re nuts.”

  5. 5
    Scotsman says:

    Gregoire was elected, it just took two, three, four tries to count the votes the way they needed to be counted!

    King County still hasn’t really fixed their elections dept. What adventures will this Fall bring?

  6. 6
    budbrad says:

    It’s not just commercial RE leasing. It’s the underlying finance that is crumbling.

    Just like the banks got hammered on mortgages, they are about to get creamed on commercial paper. The financial networks have been talking about it for weeks. That’s why Morgan Stanley is facing yet another downgrade.

    It’s coming in waves.

  7. 7


    An Initiative is hitting our State likely to correct the apparent voting anomalies. I’m a Democrat turned Independent and I smell a skunk with illegal and invalid votes too, especially when the victory was like 45 votes to my recollection.

    The Initiative will require drivers licenses and voting cards have valid social security numbers and citizenship (eVerification)……a no brainer in my book and horrifying if that isn’t the case anyway.

    No wonder we can’t go to Canada/Mexico anymore without a picture passport, our Wash St drivers license is a complete security joke.

  8. 8
    Sniglet says:

    How does the rate of foreclosure and default change in the Puget Sound vary from other regions when they began their downturns? Is our foreclosure rate growing slower than San Diego’s did a couple years ago?

  9. 9
  10. 10
    deejayoh says:

    Apples to Apples comparison of Seattle vs. San Diego and other CA locales is here on BMIT

  11. 11
    Scotsman says:

    The message seems to be getting out, as shown by the Post article and others, that there may be more to this downturn than initially thought. The American penchant for optimism and our “can do” attitude have to take a bit of a beating before people will look more closely at the reality of a situation. The reality has sunk in that there’s more going on here than just a little housing bubble, but I don’t think the majority grasp the severity of the bank’s structural weaknesses, and the extent to which the consumer is tapped out. For there to be a meaningful recovery people have to get out and produce and spend. When some one can tell me exactly how that will happen, and where the money will come from, I’ll listen. Until then, hang on for a long ride down.

  12. 12
    jon says:

    The banks may be melting down, but the economy stubbornly resists posting a negative quarter. Unless the unemployment rate rises sharply, it still looks like just some speculators on Wall St. and SoCal got burned, mostly in pockets of recent development. I’ve been through enough recessions to remember that they always look so bleak, and then a year later everything is fine.

  13. 13
    cheapseats says:

    Reference the inventory bar on the right, when I click the number it gives multiple columns, pardon the ignorance, but what does each column represent?

  14. 14
    Tozour says:

    Does anyone have a sound opinion concerning the idea that Private Equity firms may be allowed to invest and buy into positions within banks?

  15. 15
    The Tim says:

    cheapseats, the different columns are from three different public listing sources.


  16. 16
    uptown says:

    It would help if some read the article before they began their political ranting.

    Countrywide Home Loans is facing a $1 million fine and the loss of its mortgage business in Washington after a state agency determined that it charged minority borrowers more for its loans than it charged white borrowers in similar circumstances.

  17. 17
    Buceri says:

    Jon – I don’t think the US was so much part of a competing global economy in previous recessions as it is today. And as mentioned before, our GDP is now over 65% consumption. With the consumer confidence index at a 28% low……where will the consumption come from? The cheap US peso is making our Exports grow; but barely to keep us at a positive GDP. GM stock price at a 53 year low??? Ouch!!!
    Boeing will face cancellations; have no doubts!!! All US carriers are cutting flights (Delta changed my flights 3 times in many months prior to my trip to Seattle).

  18. 18
    mikal says:

    Buceri, I agree about alot of what you have said. However, there is a real market for fuel saving jets.

  19. 19
    matthew says:

    If you take the financials out of the S&P, the index is still down 11% on the year. Of the 106 positive companies in the S&P, over 60 of them are commodities.

    The American consumer is 70 percent of our GDP and they are completely tapped out. Without the stimulus check GDP most certainly would be negative right now. Incomes are up due to the stimulus package, but yet consumer spending was barely up. Why? J6P is paying down debt and spending his extra money on food and oil.

    The Fed is completely screwed. They have rising price inflation that can’t be stopped without raising interest rates. If they raise interest rates, they further screw housing and the financial sector. The ECB is almost certain to raise rates next week which will further weaken the dollar.

    We had a poll recently where over 50 percent of the people on this blog didn’t believe that the DOW would hit 10k in a years time. Yet since that poll we have already lost 1000k points and are a mere 1350k from reaching 10k already!

    Sorry, I don’t see the outcome looking peachy. Consumers are spending more money but maxing out their credit cards. Credit card balances have risen over 12% in the last couple of months, and are another impending disaster. The housing market has far from bottomed as witnessed by the recent Case Shiller and mortgage application data. This is going to be a long and deep recession if not a full blown depression, batten down the hatches and prepare for the worst.

  20. 20
    jon says:

    Previous recessions were accompanied by the fear that the US economy was losing its dominance, and there was a general sense that the future growth would be limited. In the early 80’s it was Japan, and in the early 90’s it was the trip dip recession that we just couldn’t seem to pull out of. The 2001 recession hit techs mostly, but there the threat was outsourcing.

    This time it is just some boneheaded decisions on lending standards and a bunch of weekend Donald Trumps who know a good heads-I-win-tails-the-bank-loses deal when they see it. It’s simply a matter of time until bank capital recovers once they figure out who’s pocket it will all come out of.

    The EU is falling apart, Japan is entering negative population growth, and China and India are suffering from rising labor costs. Meanwhile a falling dollar helps Boeing and Washington in general.

  21. 21
    been there says:

    yeah that falling dollar is a real help it is so good for the prices of imports like oil. sheesh.

  22. 22
    Buceri says:

    I know this is the flavor of the month; but I truly believe “green jobs” are the new internet/tech wave. I was just in Walla Walla where I was driven to one of the wind turbine farms. My contact told me there was a full time maintenance crew down the valley on the town of Touchet (very, very small town) on hwy 12 (?). Of course, I am using this as a very small example of jobs that were not there before.

    No matter which party sits on the White House next year, there will be “cap and trade” of carbon. And a ton of jobs related to controlling, studying, and administering it. Plants will need Environmental Engineers and Env. Sciences major in general. All will be in their 20s and 30s. Bubba, in his 50s, will bitch about the new “educated kids” that don’t know shit about running a plant. I’ve been selling industrial instrumentation for almost 20 years so I’ve seen this movie before (and in very large corporations).

    Time will tell….

  23. 23
    harbored says:

    Lynnwood realtor accused of jewelry theft

    Phyllis Etzler Tomaras

    Confirmation of a bear market.

  24. 24
    Scotsman says:

    Green may be the dream, but I doubt it will be the reality. Going green is in most instances a luxury, the providence of those who can afford it, primarily North America and Western Europe. The other two thirds of the world’s population, i.e. China, India, and Russia, don’t want to have anything to do with it. Who did, and did not, sign the Kyoto treaty? When our economy is in the tank, and Western Europe’s is worse, there won’t be funds for green projects when we find ourselves competing with the Chinese and India for resources and production advantages. If you doubt this, look at how the national attitude toward drilling in Alaska and offshore has changed in the last year- almost 2/3 of the population are in favor of drilling NOW. Something about $4.00 gas forces a change in values and priorities. The same will be true for other “green” attitudes.

    Carbon cap and trade is a farce put forth by those who hope to manage and profit from the process- it has very little effect on net carbon levels, but seriously distorts markets and adds a layer of cost we soon won’t be able to afford. I wouldn’t place large bets on its becoming a reality. Lots of talk no doubt, but little real change.

  25. 25
    mikal says:

    Scotsman, you are wrong.

  26. 26
    matthew says:


    How does a falling dollar help Boeing if rising fuel costs mean that no airline company wants to buy more planes? Is that why Boeing stock was down 13 percent this week?????

    Try again.

  27. 27
    matthew says:

    Wow, not only is Boeing down 13 percent on the week, it’s down 23.49% on the year. They must really be loving that falling dollar!

  28. 28
    mikal says:

    Rising fuel costs mean that airlines will want fuel saving jets. I agree that they won’t sell as many airplanes domestically, but they will have buyers for the new jets.

  29. 29
    matthew says:


    Sure they will have buyers, just not as many buyers as they had before. The argument was that a weaker dollar was BETTER for Boeing, not that airplane sales will CEASE.

    Higher fuel costs = less travel = less need for new planes. Just like:
    Higher fuel costs = less driving = less auto sales. Sure demand for hybrids and other high MPG cars will increase, but overall car and SUV sales are going down.

  30. 30


    I also hope the media slows the crash down by using your type of alleged optimism as “positive brainwashing” to psychologically blind us temporarily. It beats a quick crash, but crash it will be sooner or later.

    The huge difference between now and past recessions is wage growth butcher-axing from worker overages [outsourcing and insourcing] competing for dwindling jobs, especially industrial base ones. The 787 is not a good example, its 90% outsourced. The 767 Tanker Contract is a good example, the tools are all mostly at the Everett Plant….but Boeing hasn’t got the contract yet and we won’t know for almost a year. During the 1970 recession unions were strong, wages for those that worked were going up like 10% a year with rising hyper inflation; today we lie about food and gas [took it out of the COLA} and exagerate the COLA at 2-3%, even you Jon must see this a complete joke today.

    Europe is really irritated with us, re: our low mortgage and savings interest rates are causing oil [collapsed dollar based] to sky-rocket in price, as I agree with Europe, we must step up to the plate now and drastically raise interest rates or watch the whole world fall into a massive recession from projected $250/bbl oil next year [Russian oil company prediction].

  31. 31


    I hear a good percentage of the growth [like almost half of it] was inventory hoarding [like people hoarding bags of rice at COSTCO before it sky-rockets in price]. The stimulus checks probably helped a bit too.

    The real GDP is recessionary, about 0.5%. A very grim quarter.

  32. 32
    jon says:

    If oil gets really high, the US has huge energy reserves that we aren’t using. The oil under the ANWR National Mosquito Reserve is the easiest. But there is also FL, CA, CO, and MN. There just needs to be the political cover to make decisions that aren’t too icky for the soccer moms.

    As long as the price of oil is too low to make solar thermal viable, or make people allow drilling over the horizon off FL and CA, or in some forsaken wilderness in the Arctic, its not really that high. People will just have to decide if saving the mosquitos is worth riding the bus to work.

    And how is a 0.5% recession very grim?

  33. 33
    matthew says:


    We are at least 5 years out from getting to any of our oil reserves. Drilling is not a short term strategy, by the time Congress would even approve drilling, the economy will be on the fast track to hell and housing prices in Seattle will be plummeting.

  34. 34
    EconE says:

    “how is a 0.5% recession very grim?”

    LOL…remember when the housing bulls were saying “How will 2% of subprime going bad hurt housing”?

    2007 Housing Bull = stupid person

    2008 Housing Bull = scared person

  35. 35
    jon says:

    Oil prices will collapse once the market sees that we are serious about doing something about energy. It’s just pumping a liquid from the ground. How is that $140/barrel?

    As for “How will 2% of subprime going bad hurt housing”?, that whole market collapsed a year ago, and we have yet to see the long promised single month of decline. I’m not saying it won’t happen, it’s just the coverage has gone excessively gloomy these past few weeks. Must be time buy!

  36. 36
    matthew says:


    Oil prices are largely dependent upon supply and demand. The fact of the matter is that supply has remained flat for the last 7-8 years or so, while demand has increased. The industrialization of developing nations such as China and India is adding immense pressure to global demand. Even if you tapped all the US oil tomorrow that is easily refined, you would hardly add enough oil to the world supply to make much of a difference. This point is somewhat moot however, because a Democratic Congress has shown absolutely ZERO desire to allow further oil exploration and drilling. If oil prices reach a point to where democrats decide its a good idea to drill, it will be far too late. By the time oil rigs, pipelines, wells, and contracts are established high energy prices will already have sapped the consumer for all they are worth.

    “Must be time to buy:” ??


  37. 37
    Scotsman says:

    Oooh, buy mine too! Zillow has dropped it another $1,000 over the last two days.
    Can you say “cliff dive?”

  38. 38
    david losh says:

    What was this post originally about? It doesn’t matter really.
    In the mid 1970s I met a flipper/flopper who was doing business in Portland. He invited me down to see a completely southern exposure glass wall structure with acrylice hydro tubes standing like columns. The inside was set in about two feet with half walls and rolling screens for privacy. It was hip, open, light filled, and he had three thousand square feet of living area.
    You can kind of see one of these structures over looking the freeway in Maple Leaf by Northgate. I forget what he said about utility costs, but they were low. I wish I could remember his construction costs also. He did most of it with recycled building materials except for the thermopane glass panels and acrylic tubes.
    He was in Portland because Seattle gave him a lot of grief about his design.
    The technology has always existed to combat dependency on oil, but our goverment seems reluctant to embrace it. How stupid do you have to be to buy a SUV, Hummer, or Diesel truck? Our car industry, government, and insurance companies just spent ten years or more promoting the safety features of large vehicles and now we have an oil crisis.
    How many of you thought invading Iraq would give us cheap oil? Be honest. We saw the Mother of All Wars coming in the 1990s and yet we invaded Iraq anyway.
    The government can end dependency on oil. They don’t want to.

  39. 39


    Its too late now. I find it ironic that elites from both political parties preach green then go home to their mansions in Hummers or private jets. Even Ralph Nader leads a frugal life; but his millions in the bank fund energy consumption projects galore.

    None of us are innocent.

  40. 40
    david losh says:

    Does it seem strange to anyone else that when the stock market tanked the price of Real Estate went up, and now that Real Estate has tanked the price of oil has gone up? It seems like one thing after another.

  41. 41
    Joel says:

    Desire to buy something (like a new planes) does not necessarily equal ability to buy something (like new planes).

  42. 42
    Joel says:

    Does it seem strange to anyone else that when the stock market tanked the price of Real Estate went up, and now that Real Estate has tanked the price of oil has gone up? It seems like one thing after another.

    Holy crap! Something coherent!

    You’ve noticed something very important Dave. Every time the Fed pumps liquidity into the markets to try to save a speculative bubble from bursting they end up blowing another bubble somewhere else. I mean, give a bunch of investment bankers access to a bunch of money and guess what they’re going to do. Invest it. Since fad A turned out to be a bust they gotta find a different fad.

  43. 43
    Scotsman says:

    Amen, Joel!

    “We’re from the government, and we’re here to help!” AAcck!

  44. 44
    David McManus says:


    This point is somewhat moot however, because a Democratic Congress has shown absolutely ZERO desire to allow further oil exploration and drilling. If oil prices reach a point to where democrats decide its a good idea to drill, it will be far too late.

    As we get closer to the election, I’m sure you’ll hear a lot of people in Congress changing their tune, at least until the day after the election.

  45. 45
    matthew says:


    I wouldn’t hold your breath. It looks as if Congress will try to point the finger and blame everyone else first. Currently it appears that they are attempting to curb speculation in the oil market.

    Actually drilling for more oil will probably be their last resort. By then it will be much too late.

  46. 46
    Nell Plotts says:

    Even if we could slip a straw into a big pool of oil it would be fast drawn down, the result of global demand from the newly industrialized companies. That which we don’t pull up now will be there for our grandchildren to exploit. At least there is gasoline to buy, not like what we experienced in the 70s.

    Between the mortgage fiasco resulting in the melt down of the dollar and world wide demand for oil we are in for a tough ride for (my guess) 10 years. In that time AE should be economically viable. Our low income residents will be in a heck of hurt between driving to work and heating their residences (homes will be lost to foreclosures). The same can be said for the middle income folks in the developing world.

  47. 47
    david losh says:

    I’m always coherent.
    We don’t need oil. There have always been alternatives. OK let’s say we don’t need that much oil.
    We have hydro electric. If we can use a river, we can have ocean tides turn a turbine. Thermo electric plants can turn a turbine. Isn’t there an active volcano someplace? Isn’t the the a core of the earth hot enough to boil water and create steam? Aren’t there steam turbines?
    We don’t need Chinese products. God bless the workers who are putting food on the table but paying five dollars for a one dollar Chinese shirt just seems wrong to me.
    Our government vilifies South American dictators, but is encouraging trade with China. South America has thier own oil. They are closer, they have a competetive work force and yet we are catering to China as a trading partner. Why?
    For that matter why can’t we open borders between the United States and South America? In the winter we can live where it’s warm. Why can’t we migrate the way workers do?
    We just don’t need to cripple ourselves financially so some hedge funder can make his yearly bonus.

  48. 48


    All of south wants to move north, adding more workers to a shrinking labor pool and pop goes the real estate bubble.

    Now I’d agree with your assertion if everyone wanted to move south, it ain’t so in the least. Nope, open borders bank management caused the real estate mess, once the hoards came north and we sattled ’em much of them with preditory loans. I think you realize that.

  49. 49
    Ray Pepper says:

    Anyone loading up on WM tomorrow at 4.80? Everyone on the financial talk shows is saying buy buy buy…Hmmmmmmmmm. I dont think I can seeing IMB at .80 and NCC at 4.50. I say they go lower. .GM now the talk is Bankruptcy. Trading at 11.00 pps. Hmmmmmmmmm.

    I’m thinking its about time to back-up the truck on CHTR again. Debt ridden Paul Allen ventures. I have traded it for years at this level. I think im 6-6. Hmmmmmm as it hits a buck IM IN.

    Hope oil gaps up tomorrow and the mkt tanks. I will jump in again full throttle.

  50. 50
    Buceri says:

    Not only it’s too late to drill at home; but Iraq is opening their oil projects for bid. Guess which companies will win??

  51. 51
    matthew says:


    The only thing you should be loading up on is PUTs.

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