June Reporting Roundup

This month’s theme is “let’s scare fence-sitters by telling them that rising interest rates will eliminate any savings from falling home prices.” Let’s see how well our local papers do at driving this point home.

Read on for the this month’s roundup…

Elizabeth Rhodes, Seattle Times: King County home sales edge up in June as lower prices lure first-time buyers

Last month’s sales also continued a depressed price trend, with houses in the county selling for 4.3 percent less than in June 2007, although they are showing signs of rebounding.

Others, apparently, are doing the math and also trying to beat rising mortgage rates, because some agents report increased sales activity from first-time buyers.

Agents say that rise [in median prices] still reflects a decrease over sellers’ asking prices.

In some cases, that’s given rise to a new phenomenon: multiple offers below asking price.

Vija Williams, a John L. Scott associate broker, started seeing them a few months ago. One home she sold drew multiple offers around the $495,000 range. It was listed for $509,000.

One Ballard seller is dealing with that issue now.

“I definitely expect to get an offer below list,” the seller says.

He says he got one offer “that was laughable.”

“I understand the buyers’ side of things,” he said. “It’s scary to think you could buy, and the house will lose another 10 percent.”

But he thinks many buyers don’t realize “the reduced value is already priced into the list price,” and sellers aren’t asking top dollar from the start.

What can I add to this delightful piece? It’s too perfect.

Aubrey Cohen, Seattle P-I: Local housing market warming up with the weather

The monthly market story is fairly short, probably because Aubrey was busy writing an entire story dedicated to the rising interest rates scare: Home buyers: Don’t forget interest

Like many potential Seattle home buyers, Beth Romano wonders if she could get a better deal if she waits.

Area prices have come down a bit but are still “outrageous,” Romano said outside of a Greenwood open house in late June. “I’ve really started to think I shouldn’t buy (now).”

Romano also is like most in that she isn’t factoring interest rates into when she buys.

“I think more about looking at the price, because you can always refinance,” she said.

But some local real estate professionals say buyers should be mindful of rates, which probably will rise in coming weeks, potentially wiping out any savings from lower home prices along with the chance to lock in historically low rates. Others say interest rates are even harder to predict than home prices so buyers shouldn’t focus too much on short-term fluctuations.

Pam Johnson, who is moving to Seattle from the San Francisco area for work, said she has paid attention to mortgage rates.

Johnson is forging ahead with her home search now, she said, even though some have advised her to wait six months.

“I feel I need to find the right property rather than find the lowest possible price,” she said. “There’s no possible way to time the market.”

Aubrey’s articles have been fairly balanced lately, but this one seems to be pretty one-sided, pushing the “buy now before interest rates go up” line fairly hard. Oh well.

Mike Benbow, Everett Herald: Inventory increases as home sales slow

In Snohomish County, inventory was up, sales were down and prices were lower than they were a year ago.

While the number of available homes has increased in recent months, the local market is still more balanced than in other parts of the country, the listing service reported. Nationally, the number of homes for sale amounted to a 10.8-month supply based on the June sales pace.

Another fairly short piece. I’m really surprised that the reporters don’t have more to say about the apparent one-month strengthening of the stats.

Devona Wells, Tacoma News Tribune: Pierce County sellers could soon have their market

June’s year-over-year price decrease is the ninth in the last 10 months, though the declines have not been as steep as seen by many other areas around the country. And the price remained essentially flat from May.

Shrinking inventory could indicate a market shift in Pierce County as fewer houses and condos were for sale in June than the same month last year, which, if the listing decline persists, could eventually move the advantage from buyers to sellers. Not only did the overall inventory of listings dip by 5.7 percent, but the number of new listings dropped year-over-year by 20.3 percent.

Still, the supply of homes for sale here remains above the region’s. Statistics pulled June 30 showed Pierce County with just below an 11-month supply of homes compared to nearly a seven-month supply for the four Puget Sound-area counties combined, according to Dick Beeson, an MLS director and a Windermere broker.

The industry standard for a market that equally favors buyers and sellers is six month’s supply, meaning it would take six months to sell everything that’s on the market.

Wow, 11-month supply down in Pierce. Even with a slight drop in inventory, they seem to have a ways yet to go before the market works itself out down there.

Rolf Boone, The Olympian: Local home values hang on as sales decline

Thurston County home sales are down, building activity has tapered off and more people have fallen behind on mortgage payments, according to newly compiled data for the first half of the year.

The data raise new questions about the vitality of the county’s real-estate market, but South Sound real-estate experts say the county still has job growth, low unemployment and population growth to stimulate home sales. The housing market also has slowed since 2006, which was a record year for home sales, yet Thurston County homes continue to hold their values.

Also, I noticed this bit in the article, which is somewhat related to other discussions we’ve had here recently:

Lisa Brand, who lives in south Thurston County, said she searched for a house for more than a year until she came across a rarity: a two-story, 1,800-square-foot house built in 1899. It cost her $133,000.

“I consider it a blessing,” she said.

During her search, she noticed that many houses were sitting on the market unsold.

And although she now has a 40-minute commute to work in Olympia, higher gasoline prices don’t concern her, she said.

“I didn’t give it a second thought because it was so nice to have my own place,” Brand said.

Finally, although it has nothing to do with real estate, I have to say that this is my favorite article in today’s papers.

(Elizabeth Rhodes, Seattle Times, 07.07.2008)
(Elizabeth Rhodes, Seattle Times, 07.08.2008)
(Aubrey Cohen, Seattle P-I, 07.08.2008)
(Aubrey Cohen, Seattle P-I, 07.07.2008)
(Mike Benbow, Everett Herald, 07.08.2008)
(Devona Wells, Tacoma News Tribune, 07.08.2008)
(Jim Szymanski, Olympian, 07.06.2008)

0.00 avg. rating (0% score) - 0 votes

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
    jon says:

    Congratulations on the coverage of the Naked Loon. Very nice article.

  2. 2
    budbrad says:

    What I find really telling is how the headlines for the stories change. Aubrey’s story had 3 different headlines in less than 24 hours. It started off with something like “Homes sales plummet”. and then becomes “Market warming up”.

    Editors get cranky calls from their publishers who get cranky calls from their advertisers.

  3. 3
    Ray Pepper says:

    ABK and MBI insurers up another 40%. Sure they were 100.00 but what a nice bounce for 1.00 and 3.00 stocks. Were forming a nice bottom. WM , WFC, BAC seem to be capitulating as well. I still say we lose NCC and obviously IMB is toast.

    Dare I say a bottom is forming? Good Lord!. Time for the Pee Wee Herman Tequila Dance again!

    Ray Pepper

  4. 4
    Scotsman says:

    Tequila before noon? The bottom is in? Are you starting to see “gems” everywhere you look? I think I understand you now Ray. Carry on!

  5. 5
    vboring says:

    if your income is tied to price inflation (many incomes are) and you expect 1970s style price inflation to result from our current debacle, then maybe locking in a historically low interest rate is a good idea.

    it should be kept in mind that whatever the end scenario for Freddie and Fannie is could have a very strong impact on interest rates. they are writing most of the loans today. if they go tits up, RE interest rates will be determined by a highly risk averse and undercapitalized market. interest rates could rise faster and higher than most people expect.

  6. 6
    Ray Pepper says:

    I got in yesterday from my tour of destruction in Sacramento, Stockton, and Reno. I was surprised to see many of the “GEMS” have been gobbled up. An entire street in Reno was sold when RK HOMES went Bankrupt. When I was there 90 days ago they were all available.

    Bottom forming? It appears so but then again these homes are nearly 50% off their highs. Wait till all the current home owners find out their homes are worth 100-200k less. They will be a walkin!

    What a mess! But, yes there are GEMS! But, I’m not biting yet nor am I focusing on residential. Commercial/Mixed use has always been my passion!

    Ray Pepper

  7. 7
    obelus says:

    I can never figure out what Ray is saying. This last post he says everyone is buying GEMS, then the next sentence he says those same folks will see even further price erosion!

  8. 8
    Ubersalad, Ph.D says:

    Ray has mastered the art of random mumbling. I think he was referencing our latest political stance on Iraq.

  9. 9
    jon says:

    Seattle has a low rental vacancy rate and King County is already at 5.9 MOS for SFH. If interest rates rise, and people are not able to buy, then all the new growth will go into rentals. Within a few months of an interest rate increase, rental costs would increase sharply. All the talk of a low cost of rent compared to mortgage will seem like stories of $2/gal gas.

  10. 10
    Ubersalad, Ph.D says:

    Then these mofos need to move out!

  11. 11
    Ubersalad, Ph.D says:

    Btw Tim, I don’t like how you are only cutting and pasting a small portion of an article…I like the way software engineer does it, cut and paste an entire article so we have to scroll way down or read the stupid article we have already read.

  12. 12
    Alan says:

    In the future, whenever you fake quote Mayor Baker you should append the quote with “Will this get my name in the paper?”

  13. 13
    deejayoh says:

    obelus // Jul 8, 2008 at 11:07 am

    I can never figure out what Ray is saying. This last post he says everyone is buying GEMS, then the next sentence he says those same folks will see even further price erosion!

    Seems to me like you’ve figured it out pretty well.

  14. 14
    The Tim says:

    RE: Alan @ 12 – That’s hilarious.

  15. 15
    Ray Pepper says:

    I will make it simpler for all of you Bubblers.

    I did not find any GEMS for myself so I’m not buying. The other investors found GEMS. Good for them! I’m buying only mixed use and commercial that are in the GEM status.

    It appears a bottom has formed in the areas I toured at about 44% off the highs. Many of the home owners bought much higher. A % of these will now become “walk away homes”. I hope you all spent enough time researching the epidemic of walkaway homes in the country.

    I suggest there is no rush to buy in Az, Ca, or Nv due to years of foreclosures ahead. The GEMS will be abundant. But, if you have the cash and you analyze the “cost to build” for labor and materials I can definitely see why many in our group pulled the trigger!

    Keep Your powder dry baby! Do your DD and FIND THOSE GEMS!

    Hope you get it!

    Ray Pepper

  16. 16
    b says:

    jon –

    without wage inflation to match, rents can’t rise that much. you can’t squeeze blood out of a turnip…

  17. 17
    Ubersalad, Ph.D says:

    Tim, you missed one article in your roundup:

  18. 18
    Ubersalad, Ph.D says:

    Tim, nice article on the naked loon in Seattle times.

  19. 19
    jon says:

    b – It is entirely hypothetical, but the most likely reason 15% inflation and interest rates would come about is because of a falling dollar caused the Chinese and others to stop funding the US deficit. In that case, US real estate would seem cheap to them, and they would pay cash. However, the cost of materials would be experiencing inflation, and the only reason they would buy is because properties “penciled out” in terms of the rent that can be earned. So in order for an area like Seatte to grow, the rents would have to rise in order to satisfy the foreign investors. They would simply look to see if the rent was high enough to make sense to build a new building. They would not care if the renters felt like turnips.

  20. 20
    blueskitten says:

    Yeah, nice article on the Naked Loon in the Times. Whoever would have thought our little toga party would be newsworthy? The Tim has become such a pop culture icon! :)

  21. 21
    b says:

    jon –

    who is going to live there in this scenario? supply and demand does not care what these foreign investors want satisfied. in such an event, the US economy would be in shambles and rents would rapidly deflate to match earnings. its better to lose a little money than a lot, even foreign investors know that.

  22. 22
    jon says:

    There are trillions of dollars floating around outside the US. Eventually the owners of those dollars will spend those in the US. It will be spread out among services, goods, companies, and worst for us, real estate. So there will be jobs and money here, but the money might have less purchasing power overseas. In that scenario, we would become like a developing country where everyone is very busy producing products that are shipped elsewhere for people to enjoy, like much of the world is currently doing for us.

    The only way to maintain our purchasing power is to continue to produce valuable products and improve our efficiency.

  23. 23
    b says:

    jon –

    You seem to have come around and back to supporting my original argument: rents will not rise that much without corresponding wage inflation. Foreigners can buy up anything they want, but they won’t be able to charge us more for it in dollars without maying us more for work in dollars. Your argument is basically that you could make a ton of money right now by buying cheap property in China with US dollars (which you can) and then renting it out for some huge premium over what rents your tenants can afford. You can try, but you wont have any tenants.

  24. 24
    Ashamed Lurker says:

    Why is it when something positive in the market happens (prices go up, sales up, advice about buying closer in because of gas prices, advice about interest rates eroding buying power) then Tim makes snarky sarcastic comments about it not really making an impact? See- the real estate agents are trying to screw you, gas prices don’t impact anything because Tim lives in the sticks – and newspapers all need to prop up the market! When prices go up month over month it’s just a blip! Thank you oh wise sage. How much more money do you want?

    I thought this was a neutral site- supposed to be educating people. Right Tim? Right? You’re veneer is wearing off, good luck with the fund raiser. You’re a charlatan. But we all know what P.T. Barnum said – you have your audience.

  25. 25
    jon says:

    b – I expect the standard of living to fall as rents rise and salaries do not. That’s why I bought and many others have as well. It was just a month ago that we were talking about the layoffs in the local construction industry. Now we have just seen a sharp drop in inventory. It is difficult to build a new house at today’s prices. That means that if people continue to move here, there won’t be places for them to live unless prices rise. So either people will stop moving here, or prices will rise. Given that floor under prices, people are not going to be buying houses just so they can rent them out at low rates. Seattle commercial rents are rising at one of the fastest rates in the country. I don’t know about residential rates, but I assume the same is happening, or will very soon.

  26. 26
    NotaBull says:

    “It is difficult to build a new house at today’s prices. ”

    I think it’s more accurate to say that it’s difficult to build a house at today’s *land* prices. Take out the cost of the land and I don’t see any reason why it costs more to build here than it did back in 2000. OK, so maybe lumber is a bit more expensive, but surely that’s about it. I’m betting labor rates in construction will be going down a bit too. Hell, building a house might even get cheaper today if there’s a national glut of lumber and high construction unemployment.

  27. 27
    deejayoh says:

    Jon, a couple of observations on your post.
    – For sale inventory is at an all time high, sales at a low, yet you are referring to shortages of places to live. What sharp drop in inventory are you seeing?
    – commercial rents look more likely to bust than to boom, from what I am reading. Reference this article from just 2 weeks ago: Commercial real estate brokers worry about Seattle buildings

    I am not sure I would concur with your conclusions based on observations, but we shall see.

  28. 28

    Anyone realize that interest rates increasing will decrease the value of homes. I guess that is too obvious for the homeowners to comprehend.

    That aside, interest rates will remain unchanged or go up minimally as a sharp increase would absolutely kill any chance of a Real Estate recovery. Besides, the current spread between Prime and the average 30 fix is off the charts 4+%. Rates for consumers are not that low, and lending standards are tightening.

    Another thing buyers need to consider is the debt service on the average home. Say you buy a home for 500k carrying a note for 400k. At 6% interest, you are paying the bank 24,000/year in INTEREST + you are on the hook for taxes, and insurance. Quite simply, you can rent a very nice home for those kinds of numbers, and you won’t be liable when the market sinks.

  29. 29
    jon says:

    The sharp drop in inventory is the green line in Tim’s first graph of King County SFH inventory. It came as quite a surprise to me, but the hourly numbers appear to be all over the place right now, so who knows. Maybe that is just seasonal activity, but with sales uncharacteristically up in June, along with prices, I doubt that is all it is.

    I think the SeattleTimes article yesterday was whipped out quickly without time for thought. The actual data was very surprisingly strong. Your article about doubts about future commerial rents is good news for everybody except CRE owners. Rising rents locally will be bad for businesses, and make it difficult for everybody.

    b – if you are saying that lumber and land would need to drop sharply in order to maintain current rental rates, then we agree on that. I just don’t think it will happen that way.

  30. 30
    Garth says:

    Lumber in not cheap currently, a bunch of the local mills are closed, transportation costs are high, and the dollar makes Canadian prices pretty high right now.

  31. 31
    b says:

    jon –

    First, lumber prices are currently at all time lows. The futures market seems to believe they will also be heading down quite a bit more as well. (link here, preview doesn’t like it embedded: http://www.nahb.org/generic.aspx?genericContentID=527)

    Second, land prices experienced the same credit bubble explosion that home prices did. To expect there will be no correction in land prices when new and used home prices, with land, are falling is nonsensical. Who are they going to sell this land to if someone cannot take it, build a structure on it and make a profit?

    Finally, the “sharp drop” in inventory was about 500 units. If you look at the next graph, pending sales, it shows only an increase of about 200-250 units. The other dropped inventory, half or more, was probably people pulling their stuff off the market without selling (I know a couple of people who have done this myself). Immigration to Seattle has slowed this year, and bad home sales in California will likely keep it that way for a while. Look at the pipeline of new inventory in Seattle/Bellevue (crane count) that will be online in 2009, then add in all of the people right now who are pulling their stuff off the market to put it back on, also in 2009. Sales are still at an all time low which means that 2009 is likely to see a precipitous drop in prices.

  32. 32
    b says:

    Garth – Mills close because prices are /too low/, not because they are high and going higher. See my NAHB link above, prices now are down significantly from 2003/2004.

  33. 33
    Ubersalad, Ph.D says:

    Ashamed Lurker,
    I wouldn’t consider the news to be “positive” by any means. June’s pending sale number is still the lowest June sales in last 8 years, and also 4th lowest of any Summer months (June – September) in the last 8 years. Summer as we know is the top RE selling season, so as far as the term “positive” to be used for this little bump on the downward trend…I don’t think so.

  34. 34
    NotaBull says:



    Prices for lumber have NOT BEEN THIS LOW for over a decade, and that’s in nominal dollars.

    B, thanks for the link for lumber prices. I went to the place there the NAHB gets their data – it’s referenced from their website.

  35. 35
    Ashamed Lurker says:

    Ubersalad – Do you live here? Did you see what the weather was like? Worst June in at the last SIXTY years.

  36. 36
    Scotsman says:

    In the end it’s really all about wages. Neither home prices or rents can move up without an increase in personal income. With unemployment rising, personal income isn’t going up. With increases in productivity flat, wages aren’t going up. And with increasing competition from better capitalized and increasingly educated foreign workers, wages here in the U.S aren’t going up.

    That being the case, rents can’t go up, and any increase in interest rates can only be compensated for by a drop in home prices. There is only so much disposable income to go around, and the easy financing that used to make what income is available go further has all but disappeared.

    When inventory growth is flat, all the forclosures are out on the table, and/or everyone you know is getting 10%+ raises, home prices will stop falling. They may not head up, but they will stop falling.

  37. 37
    Ashamed Lurker says:

    But thanks for making my point. For some reason Tim and his cohorts only get excited and start back slapping when prices continue to go down. Schadenfreude at it’s best. Anything that doesn’t jive with that is ridiculed and put under sarcastic headlines like:

    “This month’s theme is “let’s scare fence-sitters by telling them that rising interest rates will eliminate any savings from falling home prices.” Let’s see how well our local papers do at driving this point home.”

    This from a guy who professes to be a neutral intermediary just trying to help people understand the market. Anyone else see that there’s a mild disconnect with reality here.

  38. 38


    This is common sense, any highly educated savy home buyer should bite at this clear logic hook line and sinker…..

    More common sense:

    “Always stay on topic and stop bickering with the bloggers!”

  39. 39
    The Tim says:

    Ashamed, I find your perspective to be quite interesting.

    How is it a “disconnect with reality” for me to point out what I see as bias/propaganda in the “mainstream” media reporting of the subject?

  40. 40
    Garth says:


    The price of lumber futures may be down in the last couple of months, but to date I have not seen an appreciable adjustment in the prices on the market locally. I have a project I would undertake if the labor / lumber costs drop enough, and well priced labor is available, but the lumber costs remain about the same (higher delivery costs and fuel surcharge combined with a slight decrease in unit price) as they were a year ago.

  41. 41
    Ashamed Lurker says:

    Hello Pot? This is Kettle!

    Hypocrisy anyone? Bias and propaganda? You wrote the book. No ill will or bad wishes on you, if people are dumb enough to think you know what you’re talking about (and then PAY for it) that’s great for you. I find it amusing that you profess to be a neutral party , and then make snide comments about things that don’t fit in with the whole idea behind your website.

    Prices up? – Must be a blip.
    Gas prices changing attitudes? – Stupid mainstream media
    Interest rates eroding buying power? – Quit trying to scare everyone

    Like I said – disconnect from reality. These stories all are backed by fact, but since they don’t fit in your neat little sandbox, they’re ridiculed and discounted.

    Make sense?

  42. 42
    b says:

    Garth –

    First, retail lumber costs are going to be higher for someone like you compared to a large builder. Second, take a look at my link. Its not just futures, lumber costs overall for builders have been dropping pretty steadily since 2004. If people were able to build homes and sell them for a profit in 2003, then it isn’t lumber costs which is preventing that from happening in 2008.

  43. 43
    The Tim says:

    Ashamed: “These stories all are backed by fact…”

    Interesting assertion. Could you point me to the specific facts that support the notion that gas prices will significantly impact people’s purchasing decisions? Or the facts that June’s price bump was not a blip on the way down? Or what about the facts that show that climbing interest rates will not merely drive prices even further down?

    I’m all about facts. Please bring them to the table, and let’s talk.

  44. 44
    TheHulk says:


    We all have our feet in the water in some way and yes that produces a “confirmation bias”. To be clear, I am going to buy sometime in the near future (future more likely than near), but what I would like to know is, what’s your interest in looking at this site?

    E.g. RAL needs to sell and move. Myself and Tim we wanna buy. What about you? Looks like you wanna sell but can’t (at least not at the price you want to sell)

    And yes, Tim may have a bias, but its backed up by facts. You can’t deny the worst sales in June over a decade. Again, cant deny 50% drop in sales and 5% YOY drops from last year. Cant deny that 500 listings were taken off, but only 250 or so were actual recorded sales (drop in inventory != increase in sales). Care to refute me on that?

  45. 45
    Scotsman says:

    Ashamed- I think you missed the major shift in the universe that put Tim’s comments in the proper perspective. At this time, just about everyone except for a very few hard core deniers and hold-out Realtors have come to the conclusion that home prices will continue to fall. Yes, even in Seattle. So when the Times and others, who are largely supported by advertising from car dealers and real estate groups, print up articles with a positive spin on what pretty much everyone recognizes as a turd, it’s OK to let a bit of cynicism creep into the analysis and comment.

    It’s taken a while, but even Ray, Ardell over at Rain City, RAL, etc. have faced the truth. You can too. Hey, maybe you’re loosing your shirt on that nice home you bought, or maybe now you’ll have to change to a non real estate centered career, but it’ll be OK. It’s only money. And the sooner you stop looking for scapegoats and get on with it, the better. Cheers, ;-)

  46. 46
    deejayoh says:

    Ashamed Lurker // Jul 8, 2008 at 4:20 pm

    Ubersalad – Do you live here? Did you see what the weather was like? Worst June in at the last SIXTY years.

    OK, looks like we can cross out “weatherman” on the list of possible occupations…

    1971 still the champ for cold Junes

  47. 47
    johnnybigspenda says:

    dear ashamed lurker,

    you have to understand that a large % of the commenters here are renters who are more than happy to say ‘i told you so’… you won’t find many that will support you. They didn’t buy a house 5 years ago (when many of their friends did) and they have heard about how much their friend’s houses went up in value ever since. I’m happy for the renters since they are not exposed to the equity losses that owners are now experiencing. It bugs me that they think they predicted this… probably 10% of the renters actually thought housing would crash.. the other 90% just couldn’t afford it (lucky for them as it turns out).

    there ARE several owners that post as well, but generally the interest of the group is to agree with eachother that prices are falling and that they may never come back….

    Tim chooses to use language that is definitely not ‘neutral’. To be honest, it strikes me as sarcastic (the cheapest form of humor) and leaves me wondering if I need to go back to the raw data to check it myself… (since the author sure seems to have an interest in the bursting of the bubble … i can only ‘trust’ that he is providing us with accurate data… I’m sure many take it as absolute truth.. oh well, I guess…. sucker born every minute).

    I’d personally like to start to see more of both sides of the story. Maybe a ‘signs-of-seattle-market- recovery.com’ site to balance the propaganda that this site is bordering on.

    It is not a coincidence that there has NEVER been a story on seattlebubble that has mentioned the possibility of slowing rates of decline (in the markets that are much further along in the realestate correction). Whats the deal with Charlotte staying postiive ? Can we look at the timeline of events in Florida or Boston and try to predict our own fate based on a premise of us being 12-18 months behind them?

  48. 48
    mikal says:

    Johnnybigspenda, Good post.

  49. 49

    I’m still trying to figure out how The Tim is a charlatan. A charlatan is someone who is fooling people for personal gain. There have been a certain number of mortgage brokers and real estate agents who fit that description, and newspapers are pretty heavily dependent on advertisements from big real estate brokerages, so it’s easy to see why they try to put a positive spin on things….but The Tim?? A charlatan?
    What’s he gaining from all this? I don’t always agree with the guy, but I deal with charlatans on a regular basis, and he just doesn’t fit the bill.

  50. 50
    Rentersarelosers says:

    Johnnybigspenda, excellent post.

    Yes there is a bias to this site, and we all know what it is. Unfortunately so many renters that “live” here have adopted Tim’s sarcastic and negative view that they will all miss the RE bottom in Seattle. As a matter of fact, I think they already did back in January and February of this year.

    Of course I will get my usual punishment for this post being told this and that about interest rates rising will chop home prices etc…,

    Ain’t gonna happen. I predict the US dollar will strengthen thus no need to raise rates.

  51. 51
    mikal says:

    The only way the dollar will really strengthen is if the tax cuts end or the government stops spending so much. Neither will happen till the stupidest person alive leaves office in January.

  52. 52
    Pegasus says:

    Ira…you didn’t look very far. Tim is on the take from the renters community. Unfortunately he has chosen the wrong crowd to promote as is evidenced by his slow…so very slow..climb in his fundraising drive. I think he chose the wrong group to represent and will now have to return to the world of getting a real job and commuting to work.

  53. 53
    Ashamed Lurker says:

    Tim –

    I understand you need help with facts – glad to help. First off – I didn’t say that they WERE fact, but backed by specific facts that you choose to ignore or ridicule because it helps you.

    So – refute these facts:

    1) Gas prices are up significantly – since it costs fuel to power an automobile – if you live far away from your job it will cost you more to get there than if you lived close. This negates some of the difference in price. Usually cost is a factor in purchasing a home – I’m pretty sure you understand that.

    2) Prices month to month were up – that’s a fact. If it’s a blip – that may be possible but you’re the one that is acting like that’s a fact. It furthers your attitude.

    3) Interest rates fluctuate based on several factors in the economy and the Fed’s policy. Since most people have to borrow money to finance a home purchase, if they have to borrow at a higher rate this makes the amount they can afford to borrow less. This has an impact on how much house they can afford.

    There you have it. 3 Facts just like I said. Do you understand?

  54. 54
    Ashamed Lurker says:

    Scotsman – Thanks, I see you’ve been drinking Tim’s kool-aid. I don’t refute that the market has been going down, it’s obvious. What I do think is going on here is the glee and back slapping that long time renters have at the expense of other families. I hate to disappoint you but I’m not looking to sell the beautiful old home I have in an established in-city neighborhood. See, I did it the right way – I bought a starter home 8 years ago, watched it go up in value and took care of it. Sold it for a nice profit and used that to get where I am today. I know that lots of other people didn’t do that and they are in trouble. I feel bad for them by and large, and for those of you here that enjoy other people’s misery.

    That’s the problem with Tim, he proclaims that he’s a neutral just helping people along, but the headlines an attitude refute that.

  55. 55
    Ashamed Lurker says:

    jonnybigspenda –

    Thanks for the sane and thoughtful reply. I appreciate that. I agree with pretty much everything you said.

  56. 56
    Ashamed Lurker says:

    Ira – I’m pretty sure I’ve seen Tim put up a “fundraising drive”, and he professes to be a neutral observer while miking angst and misery for personal gain.

    Close enough for ya? It may have been a bit strong of an adjective.

  57. 57
    johnnybigspenda says:

    Pegasus… you actually make a good point that Tim should consider. Most likely the only people that will give Tim money are those that STRONGLY agree with his view points.

    I wonder if he should consider posting articles and ideas related to possible signs of a turn around … if not here in Seattle, maybe in other cities? And when I say this, I don’t mean an article titled :”Microsoft and Boeing plan to hire 26 employees… our housing market is saved!”.

    I’m just saying, if reality was such that ALL the news was bad, there would be no debate and no one would buy a single house until 2015… why bother reading about the seattlebubble in that case?

    We need some legitimate buy side fodder for discussion on this site.

  58. 58
    Ashamed Lurker says:

    Pegasus – I agree with you as well. I read the intro to the fundraiser – hilarious. I think he wanted to make the $2,500 in a week. That was in mid may right? Lol. Here’s a Seattle Bubble type headline for you on it.

    “Tim: Fundraising Drive up Ever So Slightly Since Mid-May – Tops Expectations- I’m doing this all for you!”

  59. 59
    Greg Perry says:

    Residential sales for the Eastside (NWMLS areas 500-600) had their largest one month drop in absoprtion in 4 years. May 2008 MOI was 8.2, June 2008 6.5. Pendings were up 22% from May coming in at 635(June) from 522 (May). April had 512 Pendings.

    Inventory dropped from 4349 (May) to 4154 (June).

    Median prices for the Eastside’s 2nd quarter:
    $618k+ (April), $622k+ (May), $632k+ (June)

  60. 60
    Ashamed Lurker says:

    Oh and deejayoh – Nope, not a weatherman, but I’ve lived here long enough to know that they’re never right either!


  61. 61
    jon says:

    I don’t recall an emphasis on this site over the winter that YoY stats were still positive for Seattle. Now that YoY is negative and MoM is positive, its all YoY all the time, as if all MoM is a blip. It wasn’t that way a few months ago. And comparing sales and inventory to a period last year when the boom was still going just isn’t interesting anymore.

    The RE industry has their bias, and Tim has his bias, and that’s fine. But if both sides stick to their bias and the market really is turning up, then Tim’s site will be seem a less reliable source of information than RE sites.

    Last winter I was expecting a drop of about 10% at this time. Looking at drops of 4%, with positive MoM is surprising, especially since we are past the peak of the subprime resets. Unless there are bigger price drops, there just isn’t going to be the deflationary foreclosure pressure that other areas have seen.

  62. 62
    EconE says:

    Funny how all the new trolls keep chiming in about how we are out of the forest WRT the subprime resets.

    I wonder how many Alt-A loanowners frequent Seattle Bubble.

    They’re the ones that must be shitting in their pants right now.

    I also love how they give each other the “reach around” with their “good post” posts.

  63. 63
    pegasus says:

    Ok Tim should sell his soul and his posts to the highest bidder so he doesn’t have to commute.

    Tim I am sure there are plenty in the real estate community…agents, brokers, developers, newspapers, blogs, etc that would happily pay you more to say the right things…like..”its a bottom.. buy now” or “real estate is expected to rise at 10 percent a year” or “you can’t lose if you buy real estate” or “they ain’t making anymore land”. You could pattern your posts after David Lereah or Lawrence Yun. Those guys made or are making some pretty good coin. Course you would have to live with yourself….can you?

  64. 64
    mikal says:

    Could Tim be Tim Eyman? Maybe just the first name and attitude are the same.

  65. 65
    Rentersarelosers says:

    I also love how they give each other the “reach around” with their “good post” posts.

    You need to back up and take a good look at your fellow Bubbleheads.
    You all have been stroking each other for months, all while missing the reality out there. You didn’t get the drop you wanted even with Tim’s SKEWED graphs.

    Subprime resets is old news, very limited around Seattle proper. Try to find a new shtick will’ya.

    My prediction: The Seattle Bubble Blog will be a laughing stock in a couple of months and you renters will be destined to rent forever!

  66. 66
    Matthew says:


    You either haven’t been visiting this site for long, or are you are truly ignoring what people are typing. Nearly everyone on this blog has been quoting YOY price changes since the blog was started.

  67. 67
    Matthew says:


    Amazing how you had SB withdrawals and couldn’t stay away, and yet have the audacity to call others out? Seriously dude, its 80 degrees outside and you don’t even believe in a housing bubble, WTF are you doing on this site all day long?

  68. 68
    Rentersarelosers says:


    Who gives a shit about YOY? With YOY you are comparing stats with the absolute top.

    You missed the bottom dude.

  69. 69
    deejayoh says:

    Could Tim be Tim Eyman? Maybe just the first name and attitude are the same.

    hey now, there’s no need for name calling!

  70. 70
    Lake Hills Renter says:

    This new crop of bulls/trolls sure makes me miss Meshugy. At least he brought something to table. Compared to the insults thrown around by this bunch, his style of eternal optimism was quite entertaining in retrospect.

  71. 71

    RAL- Care to put your money where your mouth is? How about a $1000 bet (I’ll go more if are really are the home equity money bags you claim to be) that the mean price in Seattle will be down in 6 months?

  72. 72
    b says:

    Captain Kirkland –

    Don’t bother, he has/had his chance to put his money where his mouth is and didn’t take it. He is currently trying to sell his home (and is getting unacceptable lower offers) and claims to have a ton of equity in it. A rational person who really believed it was bottom a and was bullish would buy their new residence now (at a discount price) and pull their current residence off the market until they could sell it next year for a much higher price. Deep down inside he must know the predictions of further declines are true or he would have taken advantage of that situation.

  73. 73
    mikal says:

    My favorite is the guy that thinks housing is going to drop 80% around here. He talks about biting his tounge when his coworkers talked about how much their homes have appreciated. How bitter it must have felt and that would explain why alot of you are so bitter. Yes, I know, many of you have money saved for the bottom. I still believe there is to much uncertainty in the market to say we are at the bottom, but the last six months seem to indicate that there is more strength than one would assume.

  74. 74
    Scotsman says:

    b- my guess is for all the money RAL has he can’t afford to buy the new place without selling the current home. If that’s true, and he doesn’t/can’t sell, he’ll be….


  75. 75
    mikal says:

    Most of us that own don’t do stupid things like buy a house before selling our first residence. Maybe someday you will find that out for yourself. Yes, some will be


  76. 76
    Rentersarelosers says:

    Thank you Makal.
    Common sense isn’t a Bubblehead trait.
    Most are Losers.

    Renters are LOSERS

  77. 77
    Rentersarelosers says:


    You are drinking too much Scotch.
    Yes I can buy several more homes, buy I am not an idiot. Sell first then buy.


  78. 78
    b says:

    mikal –

    I would never advocate a normal person buy before selling their old place. But you see, RAL has constantly (and does in the post above this) claim that he is exceedingly rich and has a lot of equity in his home. Either his payments are very small since he has lived there a long time, or he makes enough money to pay down the balance very quickly. Whichever it is, he obviously has money to burn. Someone in that situation who was positive that we had just hit bottom would be in a great position to buy their new place low and sell their old place high.

  79. 79
    b says:

    RAL –

    Why not buy several homes right now then? We are at or just slightly past the bottom, isn’t now the very best time in years to become a Seattle real estate speculator? Won’t this likely be the best entry point for who knows when? With all of your wealth you can really make some serious gains in the next few years with the leverage that real estate financing provides. Probably far far better than any investment out there right now, unless you are trading on margin and also believe that equities have just bottomed. I hope your money is not in some safe investments, that would be really shortsighted right now since this is the best opportunity to make some easy money.

  80. 80
    50%off says:

    Tsk. Tsk. Tsk. Boyz, Boyz. You simply MUST be more civil to each other. This is, after all, a Bubble Blog….what? you think The Tim is going to suddenly change his outlook? I’m willing to bet that he will—When the bubble is fully popped.

    BTW, have you ever seen a market chart or trend line go in a straight, non-top direction always? Nope, me neither. The Tim (I presume) and most of the rest of us here still see a lot of tragic self denial about the state of real estate. Those who seize upon a slight trend as proof positive that it’s all better now have only our sympathy. At some point the trend will indeed turn around. That point just isn’t here yet in all likelihood. If I’m wrong, well, I’ll have missed out on a buying opportunity but I’m a big boy, not a bitter boy. I believe most here can relate, but obviously not all.

    As for facts, well, I own my home outright but would like to buy again when the deal is right, hopefully all cash too. Of course, my home floats and is up here in the Broughton Island group for the summer. It doesn’t/didn’t retainpurchase value either, but then, I knew that too when I bought it.

    Still waiting for some really nice vacation property in the San Juans…… they”ll be out there next year.

  81. 81
    The Tim says:

    Ashamed @ 52,

    You seem to be reading things that I haven’t said.

    1) The only fact here is that gas prices are up. I don’t refute that. My problem is that newspapers are taking this fact and jumping to the conclusion that this will significantly affect home purchasing decisions. The second part is not a fact, it’s speculation masquerading as fact, which is what I have a problem with.

    2) Again, not arguing that prices were up month to month. In my comments yesterday about the bump, I used language like “we can’t say,” and “I doubt it.” That hardly sounds like I’m “acting like it’s a fact” that it is a blip. That’s my opinion and I am clearly presenting it as such.

    3) I’m not arguing with this fact either. I’m merely taking issue with the press that uses this as a sort of scare tactic. Two additional relevant facts get conveniently ignored when the press repeats the cry of agents of “buy now before rates go up!” First, if interest rates go up and affordability drops, home prices will inevitably be forced to adjust downward further. Or do you suppose that affordability can just drop through the floor while home prices continue to the skies forever? Second, if you get stuck with a high rate, over the term of a 30-year loan, interest rates will almost certainly be lower at some point, giving you the opportunity to refinance. You can never refinance how much you paid for the house.

  82. 82
    mikal says:

    b, Advising someone to do something dumb……..makes you look dumb.

  83. 83
    NoMoreWork says:

    RAL said,
    “buy I am not an idiot.”

    Perhaps he meant: “Buy?! I am not an idiot.”

    If so, then for the first time ever that I agree with RAL, it would be idiotic to buy. But unfortunately he’s back and he is an idiot. Anyone else notice how these trolls only came back with the “uptick”? They’ve been saying housing will rise for a long time now, they called it. Good Job!!! (apparently they enjoy positive reaffirmation) Yet they criticize all the bubblers for predicting declines and then noting when those predictions come true…. Interesting.

    The site is called SeattleBubble and it’s not about Gum, what do you think you’re going to get on here? Rosy housing market posts when the housing market isn’t rosy? BTW there is place to find “positive” posts on the housing market: SeattleTimes.com, SeattlePI.com. Go there and piss off.

  84. 84
    b says:

    mikal – if you were positive we had hit bottom and could afford it, why would it be dumb? were else would you get such a return on just mortgage payments and minimal maintenance for a year?

  85. 85
    mikal says:

    Seattle Bubble is about not wanting to hear a different viewpoint and living in your bubble.

  86. 86
    Rentersarelosers says:

    b, Advising someone to do something dumb……..makes you look dumb.

    You are a troll and don’t have the balls to use your real handle on this site.
    BS Post.

  87. 87
    Rentersarelosers says:



  88. 88
    Rentersarelosers says:




  89. 89
    jon says:

    Calling a bottom here is not based on a one month blip.

    – new construction inventory stopped growing months ago. There have been layoffs. In most industries there is an inventory build up prior to a layoff so they can postpone rehiring as long as possible. But migration continues into the area.

    – Seattle city and the Eastside have shown strength for months.

    – High end prices along the whole West coast have been rising for months.

    – Seattle is still lower priced that all the other desirable areas on the West coast.

    – A simple calculation shows that median purchase prices are affordable to the sector of the population that is in a position to buy.

    – When interest rates rise, that is not going to lower the cost per square foot when new construction has already fallen off at the current price. What will happen is that people will move into smaller apartments to find lower rents, as people at the higher end are not able to afford the existing houses and instead settle for the high end apartments.

  90. 90
    The Tim says:

    RAL: tone down the temper-tantrum. Seriously, chill out.

  91. 91
    Rentersarelosers says:


    Is b for “BOZO” ?

    My home is my home, not a stock trade.
    I live in my home.

    You live in a cheesy rental and have to pick up and move every couple of years (or less) No Fixed address.

    I make enough dough off the markets (yes even now) to support my lifestyle just fine.

    Do I want 2 or 3 homes? Hell no. One is enough thanks. I already told you I am not a real estate investor nor flipper. I enjoy the freedom of stock trading, no inventory, no whiney assed employess, no problems.

  92. 92
    Rentersarelosers says:

    RAL: tone down the temper-tantrum. Seriously, chill out.

    Tim, admit that you have been overly bearish on the Seattle RE market.
    Your posts are starting to be quite comical, along with the lack of raising the measly 2500 bucks.

    Maybe this post will help.

  93. 93
    mikal says:

    Any more talk like that and you will be banned. This is his livelihood.

  94. 94
    johnnybigspenda says:

    I think calling ‘the bottom’ at this point is equivalent to calling ‘prices will be 40% off their peak by the end of 2009’… the fact is, no one here (or anywhere) really knows the answer and thus, we keep reading this blog (and many others) trying to gleam some insight into the psyche of the market.

    Just the facts that there aren’t (many) bidding wars any more, that banks don’t let (many) $50K/yr households buy $500K houses anymore, and that people aren’t looking to buy a home and budgeting that they will see double digit price increases means we are coming back to ‘reality’. Will there be a day when you look around and see that every house is 40% off their peak value and so you can take your pile of $ you’ve been squirelling away to buy the house of your dreams in Green Lake… well, keep dreaming… there will be deals, but they will be interspersed with the dogs. There are some houses out there today that are pretty close to being ‘reasonably priced’.

    By the time everyone agrees that we’ve hit bottom, it will have been 12 months before that… not that we’re going to return to a 15% a year appreciation market again anytime soon, but if you want the zinger of a deal, you’re going to have to risk it…. they will come when it is ‘maximum risk’ and the general public believes that the end is not yet in sight. If you have the cahones to buy at that time… good for you.. there will likely be sellers that will also have to sell and believe that the end of the beatings are no where in sight…. so you’ll get the house below market.

    Probably another 6 months before sellers start to really feel the pain (and start to panic)… but who knows? The government may come up with a plan to bail out the banks/mortgages/undewater homeowners/economy… if they do… you missed the bottom.

  95. 95
    The Tim says:

    I’ve only ever banned one person, and that was for massive spamming in the comments. My policy is that all opinions are welcome, even rude ones and especially ones that disagree with me. Which makes these accusations of ultra-one-sidedness all the more hilarious to me.

  96. 96
    mikal says:

    Who is going to bail out the government?

  97. 97
    Rentersarelosers says:

    Probably another 6 months before sellers start to really feel the pain (and start to panic)… but who knows? The government may come up with a plan to bail out the banks/mortgages/undewater homeowners/economy… if they do… you missed the bottom.

    I really do’t think so. The rest of the country has been whacked for almost 18 months. Tim had to adjust his graph cause Seattle kept rising while the remainder of the country was falling. We seem to have a bottoming here not only in Seattle but many other areas of the country. The stock market (S&P500) hit and broke a triple bottom yesterday just as softwarengineer declared doom and gloom. ‘Ol Ben sure came to the rescue as I counted on (mega bucks on SSO) to turn things around at support. This is a new era folks. Not Greenspan, Benanke. The markets will be supported, the dollar will rally avoiding the unpleasant interest rate increases and America will be OK. Watch Ben.

    Still the best and only place to live in my humble opinion.

  98. 98
    Scotsman says:

    Ooohh, just checked Zillow. My home is down another $1500 since last Thursday when I checked before heading out for a couple of days. That makes it $9,000 in the last 30 days. I’d say the rate of decline is slowing, and the bottom is in sight, but the spec house down the street just dropped their price another $20,000 and re-listed as ” new on the market.” When Willow runs their program and picks up that price reduction my place will drop yet another $2,000 or so based on cost per square foot.

    You Perma-Bulls are pretty entertaining. Lots of noise, very few facts. It’s fun to watch everybody get all excited about a very predictable seasonal uptick in sales and price. Gee, who would have thought the Spring/Summer selling season would see an increase in activity and some (temporary) firming in prices? More surprisingly, who would have thought that only the bulls would get so panicked they’d start to loose it on a housing blog?

    Bear markets are always very uneven and unpredictable, until you stand back from the trees and look at the trend lines. It’d pretty clear we’re heading down at a very healthy rate.

    How about a new slogan: Sell now, or own it forever!

  99. 99
    Rentersarelosers says:

    Scotsman, where do you live? I live in Seattle and my home has been going up on Zillow over the past 30 days to the tune of about 10 grand.

  100. 100
    NoMoreWork says:

    RAL wrote,
    You are a troll and don’t have the balls to use your real handle on this site.
    BS Post.”

    Balls? My real handle? haha, what are you talking about? I have never posted under anything different. That is ridiculous.

    So is your real name “Mr. Renters R. Losers”? So your parents are Mr. and Mrs. Losers? Thus, you come from a long line of Losers? Sounds about right.

    Your opinions are welcome here, your outlandish rants and insults to all are not. You said you were going away. Honor your word.

    Thanks for all the info Tim. Great Posts! (positive reaffirmation for all)

  101. 101
    b says:

    RAL –

    Pretty weird your house is appreciating and yet you cannot sell it for your price, despite several cuts. Weird, isn’t it? Maybe your demeanor at open houses is frightening the would-be buyers of your shitbox. Do you rant at them as well?

  102. 102
    magnolia44 says:

    are there really any perma bulls left? Not really maybe owners who think Seattle wont fall the 25 – 40% that is touted here but I think perma bulls are long gone.

  103. 103
    Scotsman says:

    RAL- wow, up $10,000 a month and you can’t sell? OK. Even in an area of million dollar homes that’s up 12% on an annualized basis. Better than any CD, and much better than the market. Better hold onto that GEM.

    I’m in Issaquah, in an area of established million dollar homes on acreage. It’s crashing hard. But I’m a renter/loser, so only my landlord feels the pain. My rent doesn’t come close to covering his PITI, let alone all the other expenses. And while he wants to sell, and I’d love to buy…. I’m not a fool.

  104. 104
    mikal says:

    Scotsman, Lets not be rash.

  105. 105
    jon says:

    Zillow has my house up 18% since March. Only problem is that it lost that same amount in January.

  106. 106
    david losh says:

    Holy Cow!
    If this Tim guy’s got some indignation, so what? Back the truck up and pay some attention. There’s a lot here that makes sense, so please, let them do what they do on a day to day basis. How’s it hurting you?
    I read this blog for Real Estate information. How bizarre is that? These guys present the most comprehensive view of Real Estate of all the BS in the great Real Estate Blogosphere.
    This guy put up your BS. It didn’t get stuck in the spam filter or whatever. That’s a part of what makes this place great; pay attention.

  107. 107
    mikal says:

    David , I completely agree. But some of them move beyond that and deserve to have the axe swing.

  108. 108
    mikal says:

    I was kidding in that last post, shouldn’t have had that last one. Have to go to bed, I have a job. Good night.

  109. 109
    explorer says:

    RAL’s spawn must have overpaid for my triplex in May. See, they know there is absoluetly no appreciation in it, so they just raised all the rents 45% to cover their asses.

    They won’t get it from me. Too bad condos have not fallen as far as they need too, or I would be tempted to buy now. Then again, I’m not the 20 yr old landscaper mentioned in the SeattleTimes who bought now because of the rents. Shhh… don’t tell anyone RAL bankrolled the downpayment, and is subsidizing his mortgage.

    Damn the torpedoes!

  110. 110
    what goes up comes down says:

    “What I do think is going on here is the glee and back slapping that long time renters have at the expense of other families..”

    Ashamed how could this possibly happen when the market is going back up?

    RAL man you are one nutty dude.

    Mikal sometimes I think you actually post something worth reading but man hitching you wagon to RAL man you need to check your judgement.

    RAL did I mention you need some serious help, hey can you post your home address so we can check the zillow numbers — no I thought not, if you were trying to sell it wouldn’t matter posting the address — oh, that’s right the keep words are YOU ARE TRYING TO SELL — yes, ASHAMED I TAKE SOME GLEE IN THAT, because it is funnier than shit, HE CAN’T SELL.

  111. 111
    what goes up comes down says:

    oh and btw it looks like inventory is above 13,000 has that look JON?

  112. 112
    ekim says:

    You guys call all this ranting a discussion??

  113. 113
    Ubersalad, Ph.D says:

    Seriously, every month around this time we have this same old discussion. Home owners and RE agent from one side of the fence is trying to find positive spin on data, and Tim and his bubbleheads put in their 2 cents from the other side.

    Summer is ALWAYS peak season, so if you want to see a real MOM crash, wait till Fall/Winter and we’ll see.

    Fact the matter is, at least some of the renters didn’t “miss” an opportunity to cash out. You had a chance to cash out and you didn’t, who’s the fool now?

  114. 114
    Buceri says:

    Man!! The price I have to pay for being on a different time zone. I come in early morning and it’s insults galore!!!

    Please keep it civil – if you don’t agree with the bubble theory, be polite or start your own blog: “Undervalued Seattle.com”. Hey, it was early last year when the PI quoted an idiot saying Seattle was way undervalued.

    Summer numbers are always better. This site offers tremendous analysis with detailed historical information. If you disagree, please bring the data.

  115. 115

    The only # that matters is the inventory; and only price comparison that is accurate is the Case/Schiller Index. Inventory is sky high, case/schiller indicates that Seattle continues to decline = smiling stupid renters.

    Homeowners can ignorantly rant, but the FACT is that prices are coming down…a lot. It you think your house is worth what it was 1 year ago, just try and sell it. You’ll get circled jerked by a bunch of existing homeowners through contingency contracts, but they won’t see their house to be able to buy yours.

  116. 116
    Garth says:

    Tim’s titles are generally much more provocative than the actual posts, and this is a blog. I have always had a rough idea of what tim’s opinion was, but most of his posts contain questions and data that allow me to form my own opinion.

    I don’t know if I think it is possible for seattlebubble to become a “general” real estate resource, but I do think it provides a valuable service by providing an opposing viewpoint and drawing different conclusions from the same data. In real life I am often accused of being a real estate bear, while sometimes here commenters have accused me of working in real estate many of the ideas posted on here are pretty far from mainstream. For someone who wants to own a home and has been bombarded with positive empirical data advertising and sales pitches there is nothing better than a bunch of posts from the bubble coming up at the top in google when they start their research to help balance things out.

    I do think the environment here might be a little more confusing now for new users than it was a year or two ago, but the questions are harder now too.


    I think everyone might benefit from a few current “wrap up” type of posts that cover things long term readers just know that confuse new users. Write a few posts from your viewpoint when you started the blog updated for today’s environment about things like the why you should look at buying a house, if real estate is an investment or lifestyle choice etc. One thing I have found reading some of the same blogs over time is that when they are focused on niche and do a lot of linking back to inform new users (you do this alot in your posts and comments, referring back to older posts when somebody asks what a pink pony is for example) some of the links used frequently and their comments become out of date and cause more confusion than clarity. While I totally understand that running the seattlebubble for two years has diminished your desire to purchase housing and your rent/own bar is pretty high with free rent, I still kind of miss some of your earliest postings which I perceived were written more from the perspective of a person wanting to buy a home but blown away by the market environment.

  117. 117
    davidB says:

    It seems that only realtors, sellers, and other real estate industry minions think that now is a good time to buy. In other words, people with an economic interest in selling homes. They miss the “good old days” when homes sold with no effort at always increasing prices. It’s unrealistic to think that prices can continue to increase when wages aren’t increasing at the same rate and inflation has been low until the past year.

    There’s no data to back up the idea that the market has bottomed and home prices will start going up. The economy is in a recession and things will get worse before getting better. Even the economist for the National Association of Realtors doesn’t expect the real estate market to improve until the first half of 2009 and he’s optimistic!

    Time will tell but I expect to see a big pick up in price drops here in Seattle this fall!

  118. 118
    Buceri says:

    The easy money is gone.
    Salaries are down (when inflation is thrown into the equation)
    The economy is down
    Home prices are at record highs at “yearly salary multipliers” that make our parents feel sorry for our generation (I own, by the way).
    Inventory is at record high.

    Come on people; with these facts, bear = realistic.

    Instead of making accusations, please have valid arguments explaining how prices will continue to raise when household income is stuck at about $70,000.


  119. 119
    The Tim says:

    Garth, thanks for the suggestion. I really appreciate that kind of input. Have you checked out the About page recently? I update that every few months to try to provide a summary of how I see the housing market at the time.

    Also, I’m not sure how I’m putting out the vibe that I have a diminished desire to purchase a home. I’m not actively looking to buy right away, but I’m definitely planning to buy in the next few years, and am constantly searching the listing sites for homes. My current living arrangement is time-limited, and I’d greatly prefer to move from here into a house that I own.

  120. 120
    Ray Pepper says:

    WOW..Nice Boeing announcement. ******* 30,000 planes in 20 years!!

    stock up up up!

  121. 121
    deejayoh says:

    For those of you pining for the opposite of Seattle Bubble – I suggest you all move your conversation over to Seattle Bubble?, started by the only guy who spammed enough to finally cross the line with Tim. It offers all the things this site doesn’t. Infrequent posts, no readership, and no dissension since there are no comments.

    Those who appreciate the effort Tim puts in to dissect market information in meaningful ways please stick around, and keep it civil.

  122. 122
    TJ_98370 says:

    Jon said:
    ….It is difficult to build a new house at today’s prices….

    I actually have a casual acquaitance who bought land in the Port Orchard area and had a house built because he could not afford the prices of existing houses that had the amenities that he wanted.

  123. 123
    mark says:

    You are a troll and don’t have the balls to use your real handle on this site.
    BS Post.”


    Why don’t you show some “balls” and list your MLS number and your real handle?
    It’s easy to sit at your computer and spew insults and claim to be an equity rich home owner. Why don’t you back it up with some “balls”. My bet is you don’t have any.

    Also, you did say you were going away. Your word doesn’t seem to mean much! Do you lay awake at night losing sleep worrying about what a bunch of stangers on a blog think? You’re pathetic and a horses ass too boot!

  124. 124
    Ubersalad, Ph.D says:

    Tim Dunn is a donkey…Master from where? Kind of like my Ph. D =)

  125. 125
    Rentersarelosers says:

    Instead of making accusations, please have valid arguments explaining how prices will continue to raise when household income is stuck at about $70,000.


    Who says a 70k income should be entitled to a Seattle home? We live in a Capitalist society not Communist. There are many that make $150k + who want and can afford the luxury, convenience and strong long term price growth of a Seattle home. There is no land left here. In city homes have the best opportunity for price appreciation. Suburban homes see lower price appreciation as they get hit every time a low cost builder plows a field and builds starter homes.

    Bubbleheads seem to want a Magnolia or Greenlake home on a 70k income and that just isn’t going to happen. If you have a lower income, why don’t you try South Seattle or even futher away?

    Wishing, praying and beating drums on this blog isn’t going to make prices go down, as a matter of fact, prices have already bottomed and are now rising.. Look at a 10 or 20 year chart of Seattle Home prices. The past year is but a minor dip and recovering nicely.

    I believe a good percentage of the slip in closings has to do with transferees to our area (usually higher income) that are having difficulty selling their homes in other states. As the market improves elsewhere, closings and home prices will continue to rise here as they have started to in the past couple of months.

    SFH av price June 2007 $480 (the Top)
    SFH av price Jan-Feb 2008 $430 (the Bottom)
    SFH av price June 2008 $450 (The start of the Recovery)

    Call your realtor before you get priced out again.
    Have a nice day :-)

  126. 126
    Ubersalad, Ph.D says:

    SFH avg price July 2008 $449 (Start of another crash?)

    Let’s take these numbers literally.

  127. 127
    b says:

    RAL –

    Ballard and Greenlake are places that middle income people want to buy into with inflated loans. People with $150k+ incomes do not want to live in shitty 3/1 1500sqft crapboxes in those neighborhoods, they want to live in the actually nice areas of Seattle/Bellevue. North Seattle shitbox neighborhoods will return to the price supports they always had, that of middle income people willing to settle for something crappy to live in Seattle proper.

  128. 128
    Rentersarelosers says:


    I disagree.

    As the population grows, lower cost neighborhoods with “crapbox-shitbox” houses (as you describe them) get purchased and renovated if possible, if not they are torn down and new homes built on the lot.
    I have seen this in many major cities including Seattle. Less desirable neighborhoods can become desirable again due to their close proximity and convenience. Don’t underestimate the lack of available land in Seattle and it’s positive effect on home prices.

  129. 129
    Garth says:


    your last comment makes it pretty clear that you have been living in silicon valley for quite a while.

  130. 130
    Tsuru says:

    Don’t underestimate the lack of available land in Seattle and it’s positive effect on home prices.

    “They’re not making any more land.”

  131. 131
    Ubersalad, Ph.D says:

    Nothing really changed since 2003, and state population hasn’t seen a sudden and dramatic increase…why should there be a sudden spike in price?

  132. 132
    Gill says:


    Sorry, but you’re talking out your ass.

    There are plenty of $150K incomes out there looking and wanting to live in Seattle/North Seattle because of it’s proximity to Seattle and the surrounding neighborhoods and these neighborhoods are being renovated and upgraded constantly — lots of new businesses popping up here and there as well.

    Anyone who wants to buy a home not as just a monetary investment but an investment in a neighborhood/community will be looking to north Seattle for quite some time to come. Maybe you should get off your high horse and spend some time there before insulting the “middle income people willing to settle” there.

    Seriously — you’re obviously a cynical douche bag.

  133. 133
    b says:

    Garth –

    I was just in Seattle a couple of weeks ago and in those areas. People who think that area is full of nice houses or is a desirable/rich neighborhood need to live in another city or two for a while. Seattle has a few nice/rich neighborhoods, and Ballard is not one of them.

  134. 134
    b says:

    Gill –

    30 years ago North Seattle areas like Ballard were working class neighborhoods and now its middle class. The only reason homes are so expensive there is that middle class people got financing to pay for them way beyond their salaries, it does not change the fact they are middle class neighborhoods. If you think $150k+ income people are dying to live in a Ballard 3bd/1ba with a paint job then you are nuts. Without the credit bubble those homes would be back to their 2003 prices and 2003 buyers, middle class folks who want to live in the city in a decent area. Quite contrary to your opinion of my comment, I think thats a very good thing. If you want gentrification, then please gentrify the truely shit areas first. Sending middle class neighborhood prices to the moon such that you either need to kill yourself to buy a house, or people buy them for teardowns, will just split Seattle into the rich and the poor.

  135. 135
    b says:

    RAL –

    I’ve lived in several cities all around the US and have seen plenty of gentrification. Turning middle class neighborhoods into upper class neighborhoods is the city shooting itself in the foot. It takes a whole lot longer to gentrify former projects or poor enclaves into middle class areas than it does to tear down a block of houses and turn it into 3 mcmansions.

  136. 136
    b says:

    I think all of these comments are because I did not make my original point correctly. Ballard shitboxes are not *WORTH* $600k even if their PRICE is $600k. They are worth what the buyers for them can actually afford, without the credit bubble. This gets you to back to 3-4x income, which means in the $300-400k range for a family. Just because the credit bubble made Ballard shitboxes priced up to $600-800k does not mean that $200k+ income families, who can really afford those prices without crazy mortgages, really want to live there all of the sudden. It means that house is overpriced by 30%+.

  137. 137
    Gary says:

    I see your point, and to be honest, it takes longer to get to downtown from ballard then it does from almost ay other in city area.
    15th isn’t exactly a fast moving road, aurora is better but further off through freemont and such and I-5 is actually quite far by time considering the distance because the side streets there are so small.
    Not much room to change it either with those 3,500 sq ft yards butted right up to places like leary way.
    I don’t dislike ballard, I just think it is very much overpriced for what you are getting.

  138. 138
    NotaBull says:

    B has somewhat of a point, in that a lot of Ballard and Greenlake is still kinda crappy – it’s a real mixed bag. However, over the past decade it’s been getting much nicer and the nice houses there (that do exist) are very expensive. They tend to be the newer houses though or the ones that have been significantly renovated to remove their “shitboxness” which is a direct result of it actually being a cheap house, as it was *supposed* to be when it was built in the 40s/50s.

    In my situation, our household income is well over $200K. If I had to live in Seattle, I’d still not want to live in Ballard or Greenlake. I’d prefer Madison Park or maybe Madrona towards Lake Washington. Greenlake is overpriced due to its “hipness” factor and given that the housing boom has stopped I think that the neighborhood improvement is going to slow significantly. Madison park (and other similar areas) are already very nice so aren’t going to rely on another housing boom to renovate all the crappy houses that remain.

    A friend of mine just moved into a really nice house in Queen Anne. I think he paid about $700K for it. Lovely house. But his neighbors don’t mow the lawn. When it got over a foot high he just went over there and mowed it. That’s the problem with some of the mixed neighborhoods, you pay a lot and you end up running the risk of living next to someone that doesn’t give a shit that bought it back in the ’60s for $100 when the neighborhood was truly a cheap neighborhood.

    If you’re willing to live in a generally mixed and up and coming neighborhood then you can truly do very well for yourself over the long term. I’m sure Ballard will be really really nice in 20 years. But it’ll take another housing boom and some time. Personally, I’m only going to live in my current house for 10-15 years and I want it to be nice now, not when I’m about to leave.

  139. 139
    explorer says:

    I agree completely with b. I have lived in three parts of Ballard for 18 years, and in two other cities before Seattle. I have seen it go from affordable to unaffordable in the past five years, both rent-wise and property-wise. Lot’s of those small formerly middle-class houses with a paint-job are not moving, and the turnover in the past 5 years had to be bankrolled by ARM’s. There is some “dark money” around, certainly that is what bought my triplex. The new owner’s are naive 1st time landlords.

    The bubble has hit the hardest in Ballard, Phinney, Greenwood, and Greenlake, IMO. I will likely have to move farther North for a year or two, to get something reasonable until prices to buy come back down to earth. I can easily do FHA, but I’m not going to waste it on overpriced crap that you could get for half that or less in other areas of the country.

  140. 140
    b says:

    Gary –

    Thanks, that is basically my point. Ballard and surrounds are greatly overpriced for what they are, which is decent middle class neighborhoods with mainly old small houses. For some reason owners there have confused the price bubble with a sudden influx of actually rich people who love living in a small crappy (compared to houses a $200k income prior to bubble could afford) house in Ballard. There might be a handful of them, but the majority of the area is the same middle class folks just overpaying for the same exact house because WAMU gave them a loan for 8x their income.

  141. 141
    Lake Hills Renter says:

    Oh man, I forgot about that Tim Dunn guy. He’s freaking hilarious, but not quite in the way he thinks.

  142. 142
    Ubersalad, Ph.D says:

    no one is laughing with him that’s for sure…

  143. 143
    Garth says:


    What kind of “dark money” are you talking about, I have only seen that term used regarding loan sharks or money laundering.

  144. 144
    explorer says:

    Garth — I saw that term on a post some months ago. It was a play on dark matter/energy– You can’t see it or know where it comes from overtly, but you can measure and see its effect.

    It describes for me exactly why some of these overpriced places, especially in Ballard are still selling to people who still think it’s a good “investment” to by now. Damn the low cap rate, they can just jack up the rent to pay the mortgage, and they believe they can get it. Not from me, or anyone who is trying to save up to buy on a working class salary.

  145. 145
    Ashamed Lurker says:


    You’re obviously don’t understand why many high income people want to live in old in-city neighborhoods. I would say that the actual “shitboxes” are the mcmansion new construction homes that you apparently would rather live in. You get to drive your car to the country club, to the grocery store that looks like anywhere USA. The neighborhoods like Ballard are popular for very many simple reasons (and I should know because I live there in a 3/1 beautiful 1926 tudor).

    1) Charm and Character (which you can’t build new)
    2) Proximity to downtown for work (I live 7.1 miles from my office door to door)
    3) Transit availability
    4) Parks and Golden Gardens and the Locks
    5) Good schools that are arts oriented
    6) Downtown Ballard with it’s many restaurants, bars, bookstores, coffee shops, theater etc.

    This is all within walking distance, in fact I don’t drive my car but maybe once a week. If you can’t understand that then I feel sorry for you. You’re a buffoon.

  146. 146
    Garth says:


    How low is your estimated cap rate for the tri-plex? If they are 1 bed units they are probably expecting to raise rents to at least $1200-1500 over time if they are currently under $1000 rents will be increased to there very soon. The whole game with buying rentals is to get a good price at a lower cap rate while projecting a higher cap rate after you raise the rents. No matter what the market is, buyers of multifamily properties are looking for under market rents they can immediately raise after the purchase. If it is on a > 10,000 sq ft lot I would imagine they plan to add 8 or 9 more units eventually too.

  147. 147

    Ashamed Lurker-

    No one said Ballard isn’t nice. B said it was over priced, and he is exactly right. I think you all are over-estimating how few people make 100k+/ year…its certainly not enough to sustain this bubble.

  148. 148
    b says:

    Ashamed –

    Those are great reasons to live in an actually nice, upscale neighborhood in Seattle. You obviously have never lived somewhere outside of Seattle or you would realize that Ballard is not an upscale neighborhood. It is a middle class neighborhood interspersed with working class homes and a handful of really nice homes. The only reason you believe its upscale is that the prices are ridiculous for what you get, prior to 2003’s bubble expansion it was priced right for what it is. Madison Park, or really most areas very close to Lake Wa and near downtown are the nicer neighborhoods in Seattle. Ballard is not one of them, no matter what price people are trying to charge.

  149. 149
    b says:

    Once again, I should point out I am using “nice” in the relative to income context since this seems to be lost on people although I pointed it out earlier. What is nice for a household making $200k+ a year is very different from what is nice for a household making $80k+ a year. Ballard is nice for the second category (middle class), but not that nice for the first category (upper-middle class)

  150. 150
    Ashamed Lurker says:

    B – I’ve lived in 14 different places in my life, and been to every continent except for Antarctica. I still know that Ballard is a beautiful progressive neighborhood and wouldn’t really want to live anywhere else. You’re obviously a guy that likes the suburbs, new construction houses on cul-de-sacs and the big new Best Buy with the Olive Garden. Good for you – you can have it and stay out of my neighborhood.

  151. 151
    NotaBull says:

    “1) Charm and Character (which you can’t build new)
    2) Proximity to downtown for work (I live 7.1 miles from my office door to door)
    3) Transit availability
    4) Parks and Golden Gardens and the Locks
    5) Good schools that are arts oriented
    6) Downtown Ballard with it’s many restaurants, bars, bookstores, coffee shops, theater etc.”

    All good reasons to move to Madison Park or near Lake Washington, which are REALLY nice neighborhoods. I’m sure there are also others that I’m not aware of and have never been to. Ballard is an old working class neighborhood, with cheaply built houses (as was the original intent), that’s suddenly got hip and more expensive than it would be without the hipness.

    Nobody is saying that Ballard is a terrible dump, just that when you’re earning over $200K, you’re not likely to want to live there. You have nicer choices.

  152. 152
    b says:

    Ashamed –

    Obviously you are blinded by your love of Ballard, so this is really not a productive conversation. I am not a big fan of the suburbs, and I don’t care for new construction since most of it is shit. I am sorry if living in a 3bd/1ba home built for working class people in the 1940’s is not my definition of high living. They are mostly fine houses, but please don’t pretend they are upscale.

  153. 153
    EconE says:

    Ballard is overrated.

    We established that long ago with Meshugy.

    Countless neighborhoods in Seattle are nicer from the South to the North.

    Wedgewood, Bryant, Ravenna, Sandpoint, Windermere, Laurelhurst, Leschi, Madrona, Madison Park, Capital Hill.

    I could go on.

    Even Phinney looks down on Ballard.

    Ballard sucks. period. No character at all. It’s blight in my opinion.

    and I HATE suburbs and new construction.

  154. 154
    Ashamed Lurker says:

    You guys are hysterical. Have fun on your little whiner board. Ta!

  155. 155
    NotaBull says:

    “You guys are hysterical. Have fun on your little whiner board. Ta!”

    Oh dear. Mr Ballard is upset…

  156. 156
    Lake Hills Renter says:

    I wonder if he’ll be back in a few weeks too.

  157. 157
    Lamont says:

    They’re missing the point that I’m saving money while renting.

    So, not only do I get the price decline, but if I wait awhile I should have another $50k down up front. How much is that worth in terms of eliminating interest payments, particularly if I buy the home that I need and resist the urge to simply buy as much home as I can qualify for a loan for? (I know, I’m unamerican, unpatriotic and letting the terrorists win…)

  158. 158
    mikal says:

    Ballard is all right if you don’t have to commute to I-5. Madison Park is all right except for the drive through the most crime ridden part of Seattle.

  159. 159
    WestSideBilly says:

    I love the internet.

    Small point of contention, taken largely out of context:

    something positive in the market happens (prices go up,

    The attitude of the last ~5 years has been that rapidly rising house prices is a good thing. When prices were going up, owners were high fiving each other on how much “wealthier” they were, while a few people stood around scratching their heads . Now, when prices are correcting from an irrationally high peak, those who aren’t cheering for a rapid turnaround get crapped on by internet trolls like RentersAreLosers.

    I’ve seen several posts whining about how the drop in prices is hurting families. Those same families who made some very poor economic choices and overextended themselves on credit? Nobody seems to acknowledge that Seattle is an EXTREMELY hard place to get started in, because housing prices, even in marginal neighborhoods, are so high. That affects a lot more families in much more real ways than losing a few percentage points of imaginary wealth does for the “Winners”. The truth is that inexpensive housing is a GOOD thing for everyone involved, except for RE agents. Inexpensive housing means young families (and individuals) can get started without mooching off their parents, middle income families can afford to live where they need to (for work/school), and the rich can still afford a bigass mansion.

  160. 160
    mark says:

    “The stock market (S&P500) hit and broke a triple bottom yesterday just as softwarengineer declared doom and gloom. ‘Ol Ben sure came to the rescue as I counted on (mega bucks on SSO) to turn things around at support. This is a new era folks. Not Greenspan, Benanke. The markets will be supported, the dollar will rally avoiding the unpleasant interest rate increases and America will be OK. Watch Ben.”

    And how did that work out? Today is a new day and all of yesterdays gains are now gone. Have you taken a look at Fannie Mae and Freddie Mac? They’re down
    (-13.11%) and (-23.77%) today alone, not to mention their other massive declines over the past year. Housing related stocks, right up there with WM, CFC, IMB, WB, and BSC. Is the government going to have to bail out FNM & FRE? Life isn’t looking too good for them at this point. Privatize the profits and socialize the risks?

    And the dollar is going to rally? It was down again today! Can the Fed raise rates? It doesn’t look like it! The major indices are now in a Bear Market. Wake up and smell the dog shit, RAL.

  161. 161
    mikal says:

    The dollar will not rally until that idiot is out of the White House. Cutting taxes and expanding government is a great way to kill your country’s currency. It’s like printing money.

  162. 162
    los says:

    I think there’s going to be a WHOLE lot more printing of money done before we’re out of this mess.

  163. 163
    explorer says:

    Forgive the slightly off topic note to Garth:

    The cap rate when it was sold in May matched the current rents. The selling price was the asking price, which was $200K over the assessed value. The lot is fully developed already, 3750 sq. ft. No room for more unless they tear it all down and build up–extremely unlikely. All the units are 2BD, 1BA. The two upper units have garages for one car. The unit next to mine has more square footage, and is completeley away from the busy street. They are now charging the same rent for both. All they did in the last month was replace the gas furnaces for both upper units, install a digital thermosat, bring the fusebox up to code, install GFI outlets to code, and tiedown the water heaters.

    It sounds OK on paper, good bones (but lots of old concrete and brick exterior). You gotta live in my unit to see how ridiculous a 45% increase ($455 a month) is, despite the code work. Street noise, single paned windows, lousy floor plan, no yard, only a narrow walkway, and the stupid decision to remove the carpeting so you can cannot avoid being awakened by the new neighboor’s 3 yr old running in circles on the bare floor at 5:45 AM in the morning. The downstairs occupants are loving that too, I’m sure. I might have expected a 10% increase, but damn….

    They will not have long term tenants in my unit for that price, if anyone is even foolish enough to pay it.

  164. 164
    mikal says:

    Explorer you are probably right in that the rent is now to much. Your old landlord was definitely not charging near enough. 2 bd 1 bath should go for at least $1200. That is what you will find when you start looking.

  165. 165
    Dani says:

    Why do the headlines of the Seattle paper so often sound like they were written by real estate agents? Could it be because of the revenue the Times/PI gets from the housing for sale ads?

  166. 166
    mukoh says:

    Historically our inventory has gone up in June.
    This time it went down to be accurate.

  167. 167
    explorer says:

    Mikal — The previous owners bought it for $300K in 1997. Leveraged it at least once to buy another place out of state in 2002. So, the rent was a good cash flow for them for many years, and they made out like bandits when they sold it. This place was lower than average, but yeah, I would stay if the increase came up to $1150 max. There are still small houses you can rent for what they are now demanding.

    I thought they would have sold it last year, if they were going to sell. Timing is everything and nothing at all. Some things you cannot predict with the necessary precison. Moving again so soon sucks.

  168. 168
    mikal says:

    Then you should rent that. My experience is that a 2bd 1 bath is worth $1200 if not more. Check Craigslist if you doubt. It doesn’t matter what anyone paid now or before for the property. It matters what the current local rents are. They have increased a bunch.

  169. 169
    explorer says:

    I’m well aware of that Mikal. I went through it last summer too. I have been on top of CL for a few weeks now.

    That’s why it’s likely to be Bye Bye Ballard for me after 18 years.

  170. 170
    mukoh says:

    One thing that is amazing is how people throw out there $80k being a salary of a medium income person in metropolitan Seattle, where a regular lever softie makes $100k, and the wife bring is $55k-$60k pushing stickies in offices.

  171. 171
    deejayoh says:

    mukoh // Jul 9, 2008 at 8:43 pm

    Historically our inventory has gone up in June.
    This time it went down to be accurate.

    I wouldn’t get the least bit excited about a 300 unit drop in inventory until it is accompanied by a sign of increased sales. Doesn’t mean much of anything. It might even be a worse indicator given that it was driven by stale listings coming off the MLS

  172. 172
    what goes up comes down says:

    mukoh, you are new here and I believe you have been smoking something.

    Historically our inventory has gone up in June.
    This time it went down to be accurate.”

    Was it ever so high in May — come on get a clue.

  173. 173
    jon says:

    Sales of SFH+Condo in King county went up by 3% in June from May, while pending sales went up by 5%. They usually drop in June.

  174. 174
    Buceri says:

    “Who says a 70k income should be entitled to a Seattle home? We live in a Capitalist society not Communist.”

    “Call your realtor before you get priced out again.”

    RAL – by now it’s clear that you are a realtor or 14 years old.

    $70K is the median household income, RAL – this means half of the households make less, half make more. So the median price of the home should fall around what’s affordable for that median income. That is capitalism.

    In fact, capitalism is what will make prices go down. How’s that for a twist???

    RAL – the real estate business is drying. Go and get your travel agent certificate. I hear it’s an up and coming career (who will ever buy plane tickets on the internet???)

  175. 175
    what goes up comes down says:


    Much more supply and a little more sales, hmmm, saw today more foreclosures too — where do you think the market is headed?

  176. 176
    deejayoh says:

    Sales of SFH+Condo in King county went up by 3% in June from May, while pending sales went up by 5%. They usually drop in June.

    If you want to get excited, great. I was just speaking for myself. Seems to me that is not really a meaningful shift, as the market is still bouncing along the bottom in terms of demand.

    Based on the discussion I had with a mortgage broker this week – my view is that availability of loans remains an huge issue, with most people having significant difficulty qualifying. I don’t see any fundamental improvement in the demand picture until that situation changes.

  177. 177
    NotaBull says:

    “So the median price of the home should fall around what’s affordable for that median income. That is capitalism.”

    I don’t think that’s going to happen. It’s true to say that the median house price and the median income are related, just because incomes buy houses. So without funny money, we’re bound to get back to that fundamental.

    However, you made the direct relationship between median income and median house price. That is not correct. For one, and like it or not, very poor people don’t buy houses and old people don’t tend to buy houses either, and these people earn less than the median. The median income of the *house buyer* (which is what sets prices) is higher than the median income of the overall population in the region which the house is being bought.

    In addition, move up buyers usually bring some equity with them. Not a lot usually, but they do bring some.

    I’m not saying that house prices are not going to go down more, just saying you have to be careful with where you expect them to eventually land.

  178. 178
    johnnybigspenda says:

    Buceri @ 174:

    You’re off on this one… you assume that people making the median income should be able to afford the median house. There are several factors that affect the demographics surrounding the median income. For example, what if only 40% of the people in Seattle actually owned a home… that would mean that 60% rent… therefore only the upper 40% of incomes would be expected to have to be able to afford the median home. Furthermore, of that 40%, what if 1/2 of those people bought more than 5-7 years ago.. the price they own at is well below the median house price today and likely to be affordable to someone in the 60th percentile of income… plus retirees who don’t make much income (definitely well below median) who own their homes outright probably take another 10% of the market… probably housing only needs to be affordable to the top 25% of incomes at best.

  179. 179
    crystalball says:

    Home prices in Thurston County dropped more than 9 percent from June 2007 to June 2008:


    This may be the first article in The Olympian to report price declines. A few days ago they ran an article about how prices were holding steady although sales were declining.

  180. 180
    Rentersarelosers says:

    However, you made the direct relationship between median income and median house price. That is not correct. For one, and like it or not, very poor people don’t buy houses and old people don’t tend to buy houses either, and these people earn less than the median. The median income of the *house buyer* (which is what sets prices) is higher than the median income of the overall population in the region which the house is being bought.


    Thank you for your excellent accurate comments. You just blew the Bubbleheads argument right out of the water!!!!

    There is NO contesting your analysis. Any attempt would just be gassy hot air.

  181. 181
    NotaBull says:


    Thank you for your excellent accurate comments. You just blew the Bubbleheads argument right out of the water!!!!

    There is NO contesting your analysis. Any attempt would just be gassy hot air.”

    Please don’t agree with me, it doesn’t help to get my point across. :P

    The point I would like to make, again, is that prices are STILL TOO HIGH even with median buyers not being median income earners, and the equity equation. The only thing I wanted to illustrate is that if you’re using some kind of formula to decide when we’ve “reached the fundamentals” then that formula should be a little more complicated then “median income buys median house” because that will give a value that’s too low.

    I don’t know what the actual value is, but I strongly believe that it’s higher than the simplistic formula above, and lower than the price of houses today.

  182. 182
    Rentersarelosers says:

    You gotta live in my unit to see how ridiculous a 45% increase ($455 a month) is, despite the code work. Street noise, single paned windows, lousy floor plan, no yard, only a narrow walkway, and the stupid decision to remove the carpeting so you can cannot avoid being awakened by the new neighboor’s 3 yr old running in circles on the bare floor at 5:45 AM in the morning. The downstairs occupants are loving that too, I’m sure. I might have expected a 10% increase, but damn….


    Renting sure sounds wonderful. $18 Grand a year out the window for a “lousy” 2 br 1 bath.

    I note renters are whining about high rental rate increases and not enough decrease in home prices.

    You Bubbleheads are never happy, probably never will be.

  183. 183
    EconE says:

    I agree with Not-a-bull also WRT median prices and think that many of the other bubbleheads here feel likewise.

    There will however properties that will fall further than the median home will. They will ultimately be investment properties that are bought strictly as rentals but usually won’t be properties that you would really want to live in yourself. I think that the ones that will fall the furthest are the low end 1BR apartment to condo conversions. Particularly because they just built to damn many 1BR’s.

    Surely even RAL wouldn’t recommend purchasing something like that…would you RAL?

  184. 184
    WestSideBilly says:

    $18k/year out the window for rent beats $36k/year out the window to rent from the bank, err, buy the same depreciating asset….

  185. 185
    Rentersarelosers says:


    Why anyone would want to BUY an apartment is beyond me.

    Apartments/Condo’s are basically out of the owners/renters control and as such have a limited life span in terms of desirability. In simple terms, most go downhill over time, only the most prestigeous buildings maintain their desirability and those are usually insanely priced.

    I also think that Townhouses suck. In Seattle as they are overpriced compared to Single Family homes and have absolutely no visual appeal. Basically like buying a 3 floor apartment. But, the market is there for the buyer that’s impressed by the “glitz” or “bling” of brazillian cherry floors and granite countertops.

    My advice has always been the same. Buy the best single family home you can afford with 2 criteria, location and floor plan, (views are nice too). Everything else can be customized to your individual preference over time.

    Hope that helps.

  186. 186
    Buceri says:

    Great arguments. I guess I tried to oversimplify my point that prices are way out of whack.

    People can move up after first time buyers buy. And first time buyers don’t make 6 figures; so let’s not discount the $70K median income completely.

    RAL – the lack of arguments and constant insults are obvious signs that you have a financial interest in prices going up. Frequenting this site will only have a negative effect on your health. I am really sorry you find yourself in a bad situation.

  187. 187
    NotaBull says:

    “People can move up after first time buyers buy. And first time buyers don’t make 6 figures; so let’s not discount the $70K median income completely.”

    I think this is closer to the point. The whole market is built on first time buyers. Without them, existing home owners can’t “move up” even when their increased salaries allow them to.

    So if we could come up with the median income for, say, 20-30 year old households and compare that to the “starter home” median price, then I think we could make a determination as to whether the market as a whole is in a healthy state that would correlate with price stability (stable and slowly increasing with wages).

    Perhaps the low tier of the Case Shiller prices could be used?
    Perhaps we use the census to find out what 20-30 year old households make?

    Tim, any thoughts on doing an “market healthibility” index based on these kinds of statistics?

  188. 188
    david losh says:

    Wow! Still going on after a couple of days.
    Rents are going up to cover increased land costs. That’s changing. Prices of properties are going down because we have long aticipated a revitalization of our down town core.
    It’s interesting you’re talking about Ballard. That neighborhood was always meant for worker housing.
    Now with the development of South Lake Union, Fremont may hold it’s own, but Ballard will become that rat maze of town house development with ever decreasing housing unit value. It’s tomorrows slum built today.
    If you look at all the crappy housing units built all around the down town core you have places for the displaced low income people that every gentrification process screams about. Here in Seattle we built those low income housing units first.
    If you paid $500K for a town house you’re toast. That unit is only worth $350K today. It should head to $250K soon enough. It has to do with land. Real Estate is the dirt the property sits on.
    Whether you look at it as if those town houses could have been denser use or less they were obsolete as soon as they broke ground and there are thousands of them. When we tear them down to build condo or apartment like structures it will be the same; decreased housing unit prices.
    The bubble is just beginning here in Seattle. What fascinates me is that this guy, outside of the Real Estate business saw it, capitalized on it, and is being villified by some whiners who can’t see it.

  189. 189
    jon says:

    “I don’t know what the actual value is, but I strongly believe that it’s higher than the simplistic formula above, and lower than the price of houses today.”

    Today’s actual value is shown in the graphs in Tim’s post. I think you meant to say the future value. To determine the future value, you need to look at the forces driving the market. Washington has a substantial number of people moving in every month pushing prices up, and a low occurrence of the subprime loans that are pushing prices down elsewhere. The preferences of renters is not a market force on the price of SFHs. As more people move into the area, people will adjust by taking on more roommates, settling for smaller spaces, move out to the burbs, or leave Seattle altogether. Hopefully not the latter, but since other areas of the West coast are more expensive than Seattle, about the only area that is growing faster than Seattle is Texas.

  190. 190
    Jonny says:

    Wouldn’t it make more sense to compare historical averages of median income to median home prices in King County? I think you can see a pattern there much like you see in the stock market with price to earnings ratios – they were way out of whack in the late ’90’s, and see what happened…

    It looks like prices are out of whack from a historical perspective.

  191. 191
    Rentersarelosers says:

    >So if we could come up with the median income for, say, 20-30 year old households

    Try 28-38 year old households.
    Can’t get the early 20’s crowd to move from the nest these days and people seem to be getting married a little later now.

    >Wouldn’t it make more sense to compare historical averages of median income to median home prices in King County?

    That might work if everything stayed the same, but it hasn’t.
    The local economy, population growth, changing demographics, interest rates, prices in comparible West coast desirable cities etc etc…all come into play.

  192. 192
    masaba says:

    I very much agree with RAL about the town houses. My wife and I have been renting a townhouse in a very townhouse-dense area. Beginning about 9 months ago we saw an increasing number of “for sale” signs sprout up like weeds. At the same time, 6 new townhomes were constructed, which went on sale about 4 months ago. Since then, more “for sale” signs have sprouted on existing properties, and a few weeks ago about 3 or 4 of the properties that had been stale for the last seven months finally just gave up (which I am sure, as people have pointed out here, added to the drop in inventory that we saw in June).

    Now there are an additional 8 new townhomes being constructed on the street, so I don’t see any prayer for existing townhome owners nearby having the ability to sell. I’m not sure why anyone would want to buy where I rent anyway, it’s nothing but EXPENSIVE townhomes (new ones are on sale for $415,000) which means streets packed with cars, very little space between houses, weird garages and car courts that aren’t really accessible from the street, etc. I love renting where I do because it is near Green Lake and not very expensive compared to home prices when we started renting (about 15 months ago), but my wife and I are currently looking to buy a SFH somewhere in Maple Leaf, Lake City, or Wedgewood.

  193. 193
    Jonny says:

    Wasn’t that what they were saying in the late ’90’s about the Nasdaq being around 5,200? History doen’t apply because so much has changed?

  194. 194
    Rentersarelosers says:


    That example is way extreme. The Nasdaq TRIPLED from 1500 to 5200 in 1 1/2 years from late 98 to March ’00.

    Seattle SFH pricing has been on a gradual rise.

  195. 195
    NotaBull says:

    “Seattle SFH pricing has been on a gradual rise.”

    A permanently high plateau perhaps?

  196. 196
    jon says:

    Stock prices are tied to underlying earnings much more directly than rents are tied to incomes. If rents become too high relative to income, there are all kinds of adjustments that can be made to accommodate that, from downsizing to moving to less expensive areas. Incomes can even rise if area businesses are profitable enough. But when stock prices get too high compared to earnings, prices will come down. Expecting house prices to come down to meet the needs of renters is like saying earnings will rise to meet the needs to stock owners.

  197. 197
    Rentersarelosers says:

    A permanently high plateau perhaps?

    Perhaps. The market determines the pricing.

  198. 198
    WestSideBilly says:

    Stock prices are tied to underlying earnings much more directly than rents are tied to incomes.

    I hope you’re joking.

  199. 199
    WestSideBilly says:

    Try 28-38 year old households.
    Can’t get the early 20’s crowd to move from the nest these days and people seem to be getting married a little later now.

    Chicken or Egg?

    I don’t think I’ve ever met a 20-something who wanted to live at home into his or her mid/late 20s. Even with a decent income, moving out from the nest is an expensive proposition in Seattle. So kids end up staying at home with Mom & Dad instead of driving the bottom of the housing market, until they find a significant other to move in with or get kicked out. In cheaper parts of the country, kids still can and do move out as soon as they finish school.

  200. 200
    Alan says:

    Expecting house prices to come down to meet the needs of renters is like saying earnings will rise to meet the needs to stock owners.

    Similarly, expecting renters to pay rent amounts that allow landlords to earn an acceptable rate of return on highly priced real estate is like expecting company earnings to rise to provice an acceptable rate of return for stock owners.

    Although in the stock market, prices rise because of an expectation of future earnings growth. That is why Google is trading at 30 P/E. An investor buying property today has one of three theories:
    – Higher rents will be supported soon enough to justify the higher price.
    – Someone else expects supported rents to rise so I’ll be able to flip this to that sucker.
    – 3% rate of return is a great investment.

    And sometimes investors are wrong. There are people who bought GOOG around 700 last year using those same theories. Those people have lost around 25% of their capital investment today.

  201. 201
    jon says:

    “Similarly, expecting renters to pay rent amounts that allow landlords to earn an acceptable rate of return on highly priced real estate is like expecting company earnings to rise to provice an acceptable rate of return for stock owners.”

    If rents are not high enough for an acceptable rate of return, then no new apartment buildings will be built, and renters will have to wait for older SFHs to be rented out. With population in Washington rising, there would quickly be a shortage of places to rent and thus rents would rise. It is not a matter of expectation, it is a result of growing population. The population is growing because prices here are lower than other growing job centers, except Texas.

    There may be a short term supply of apartments now because of condo overbuilding, but the numbers are fairly small compared to the monthly growth in population.

  202. 202
    Buceri says:

    “The population is growing because prices here are lower than other growing job centers, except Texas.” ………..and Florida, North and South Carolina, Georgia, and Alabama. Arm pits? Sure; but the numbers and forecasts show higher job growth than WA.

    And let’s face it, prices are lower than California’s job centers; you can pretty much live cheaper anywhere else (sure Boston, NY are higher).

    Also; cold and rain are not good for your joints; I don’t see too many seniors sticking around.

  203. 203
    jcricket says:

    I think what’s funny is the attempt to discern, with very simple formulas, exactly what will happen in the future. Outside of historical patterns (which Tim is good at point out) we don’t have any other models with which to predict the future. We can speculate endlessly, but who knows.

    Maybe population growth will diminish. Maybe it will go up. Maybe everyone will want to live downtown (b/c of time value or changes in attitudes). Maybe suburban living will become popular again (b/c of rising crime or perception of the city being ugly). Maybe we’ll build awesome light rail. Maybe another city will take away the type of people that would move to Seattle (Portland?)? Maybe the rich will get richer and buy up all the close-in properties, but the suburbs and ex-urbs will languish b/c middle-class incomes go down. Maybe the opposite will happen, b/c we get a growing economy.

    Maybe we’ll be in a global depression. WWIII? Maybe the Stock market will keep going up an average of 10%/year (like it has over the last 75 years). Or it will never go up again.

    Maybe everyone will face rising costs by cutting back and living with more roomates. Or their incomes will go up and they won’t. Or they will declare bankruptcy and move back in with their families. Or everyone will move out of rural towns and into cities b/c rural life will become unbearable.

    I could go on forever, but after reading this blog for a while the only thing that’s clear to me is that armchair economy theory is worth about as much as you pay for it. I think NotaBull has the only sensible viewpoint – things are more complex than anything the extreme bulls or bears claim, and housing is generally overpriced because of a recent unsustainable runup, but not nearly as overpriced as some believe/hope.

  204. 204
    Rentersarelosers says:


    Nice post. There is one thing for sure though:

    You only live once.
    Treat yourself well and enjoy life the way you want to.

    (Whatever you choose to do)

  205. 205

    […] common theme in recent real estate reporting is to repeat the scare-tactic that rising interest rates will eliminate any savings that […]

  206. 206

    […] I guess Wanda didn’t get the memo. “Rising interest rates” was last month’s scare tactic. […]

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.