August Reporting Roundup: Reality Finally Sinking In

Oh man. They let Elizabeth Rhodes take just one day off, and look what happens:

Home Prices Slide Back to '06

Gahh! It’s right there in giant black print, above the fold on the front page! I can’t imagine the Seattle Times’ real estate advertisers feeling too great about this…

Eric Pryne, Seattle Times: King County home prices in August slide back to April 2006

The median selling price of houses in King County dipped last month to its lowest level since April 2006, according to numbers released Tuesday by the Northwest Multiple Listing Service.

The broker-owned service said the median price of single-family homes sold in the county in August fell to less than $424,000, down more than $53,000 from August 2007. The 11 percent decline was the first double-digit year-over-year drop for King County since the subprime-mortgage crisis turned the market on its head.

“Houses that are priced right still sell in 15 or 20 days,” said Jerry Howard, managing broker at the John L. Scott office in West Seattle.

Matt Deasy, general manager of real-estate giant Windermere’s Eastside operations, said the big year-over-year decline in median house prices shouldn’t surprise anyone.

Unless, you know, they were listening to the real estate agents that tout every single month as a “great time to buy.”

I also liked this bit from yesterday’s Times blurb by Cindy Zetts:

The most accurate comparison of home-sales numbers is done by looking at sales in the same month each year. This is because seasonal changes in the real-estate market can distort the picture when comparing one month to the previous one.

Some in the real-estate industry said they expected the local picture to improve in August because the market downturn began in August 2007. Until last month, they said, numbers were comparing a bad year to a good one. But August numbers don’t show an improvement — in some cases, the drops are more dramatic than those of previous months.

Looks like it’s finally becoming undeniably obvious that the REALTOR©®™ has no clothes. It’s nice to see the Times finally stop pulling their punches.

[Update:] The double-digit headline was above the fold on the P-I front page, also.
Aubrey Cohen, Seattle P-I: House values drop by double digits

Potential home buyers are out there in Seattle, watching and waiting.

“Different people tell me it’s a really good time to buy,” Hurricane White, of Seattle, said at a Greenwood open house Sunday. “I heard that back in April, and as I have been waiting, I have been able to look at more properties.”

And prices have continued to drop.

“You’ve got some properties now that have been on the market for a significant amount of time and are starting to have panic sellers,” said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. “The bottom line here is that for prospective sellers these are bad numbers, and what they’re going to have to evaluate is whether this is the right time for them to put their home on the market.”

Crellin noted that prices tend to dip toward the end of the year and Washington still has a lot of adjustable-rate loans due to reset to higher, potentially unaffordable payments in later 2008 or early 2009.

“That suggests to me that we’re going to continue to see some problems and instability in the market really for the next 15 months,” he said.

But Crellin also called timing the market “almost impossible.” Buyers should look at whether an individual home is priced well, and if they can afford it, plan on owning it for at least three years, he said.

Note that Crellin is the guy that last November said this:

“Owners need to focus on why we’re dealing with housing in the first place. It’s shelter. They need to focus on the shelter and potential tax breaks … and not worry so much about whether in a year a house is worth $5,000 more or $50,000 more.”

I don’t think there’s any reason to think we’re going to see a sharp decline [in home values]. Median prices have leveled off in recent months. I think we’ll see limited price increases through the middle of next year.

How he has managed not to completely destroy his credibility with the media by now is a mystery to me.

Mike Benbow, Everett Herald: Housing market favors buyers

There are some good deals on homes in Snohomish County, but tighter credit and the upcoming elimination of a program that allowed builders to help buyers with their downpayments are making things tougher, agents said.

“I cannot stress enough what an amazing opportunity exists right now for move-up buyers,” said J. Lennox Scott, CEO of John L. Scott Real Estate. “The price gap between affordable price ranges and higher price ranges has narrowed, which means these buyers can afford to ‘price jump’ into a new home.”

Dick Beeson a Tacoma broker who is a director of the listing service, said low interest rates and a good selection should make it a good time to buy but that it’s hard to get a loan.

“Buyers are stymied by the lending world’s inability to get their collective heads around making loans instead of running scared to the nearest disapproval letter,” he said.

I’m a bit disappointed in Mike Benbow, who did little more this month than reprint the NWMLS press release.

Brian Everstine, Tacoma News Tribune: Home prices fall a lot, again in Pierce County

Median home prices in Pierce County dropped in August even as the number of homes on the market declined. Figures released Tuesday by the Northwest Multiple Listing Service showed a 11.9 percent decrease from the same time a year ago. It’s the 11th drop in the past year and the largest.

Pat Maddock, an agent with Coldwell Banker Bain and a former president of the Pierce County Association of Realtors, has checked on areas across the West Coast and is convinced that Western Washington is in great shape. Even though the statistics look rough for Pierce County, it is nothing compared to areas such as Phoenix and Las Vegas, he said.

Low prices, lots of homes on the market and low interest rates continue to show that it is a fantastic time to be a buyer. But buyers are “sitting on their hands,” thinking things could get even better and waiting to buy. Another factor might be the tightening of credit markets that have made mortgages harder to get.

“If you are waiting for the market to bottom out, you’re going to miss it,” Maddock said. “You don’t know it’s at its lowest until it climbs upward.”

Don’t forget, “when the market flips, it goes in one day!

Rolf Boone, The Olympian: Housing market slump continues

South Sound home sales stayed cool in August yet prices largely have remained stable, the Northwest Multiple Listing Service reported Tuesday.

On a year-over-year basis in August, sales of single-family residences and condominiums stumbled, falling nearly 31 percent to 303 units from 439 units, the data show.

Year-to-date home prices, however, tell a different story.

Since January, median home prices have fallen about 5 percent compared with a year-over-year price drop of nearly 8 percent in August.

I guess until price drops hit double-digits, you can call them “stable.” Sounds like it’s a great time to buy… Right?

Here’s a pair of bonus stories from the TV and radio:

Don Porter, KING 5 News: Home market a mixed bag in Western WA
Tim Haeck, KIRO Radio: Dramatic drop in King County home prices

I think the double-digit year-over-year drop may have broken a psychological barrier of some sort and finally gotten the message through to Seattle-area home buyers that yes, prices really are dropping even here in pink pony land.

(Cindy Zetts, Seattle Times, 09.09.2008)
(Eric Pryne, Seattle Times, 09.10.2008)
(Aubrey Cohen, Seattle P-I, 09.09.2008)
(Mike Benbow, Everett Herald, 09.10.2008)
(Brian Everstine, Tacoma News Tribune, 09.10.2008)
(Rolf Boone, Olympian, 09.09.2008)

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
    shawn says:

    What is sad is that just like the national press, this comes too late to actually help anybody with anything. I really feel sorry for all the saps across the nation that got burned, but it is hard to feel sorry for people in Seattle that saw the destruction all around them, and said “not us were are special.” For those, I don’t feel a lot of sympathy, a bit, but not a lot.

  2. 2
    Matthew says:

    FINALLY!!!!!!!!!!!!!!!!! J6P is about to get a rude awakening… I’ll have a few “I TOLD YOU SOs” today at work…

    BTW, WAMU is down another 25% today. I was talking to a buddy (WAMU employee) talking about how his entire retirement has been wiped out (almost all WM stock). I wonder how many other Seattle area residence are feeling this negative wealth effect due to WM’s demise.

  3. 3
    Sniglet says:

    I can’t imagine the Seattle Times’ real estate advertisers feeling too great about this…

    What do you mean? They are likely thrilled, and jumping off the ceilings with joy. What a better advertisement could they hope for, than telling potential buyers they can now buy homes cheaper than before?

    The lower prices go, the better it is to buy!!!!

  4. 4
    rose-colored-coolaid says:

    I can understand your distress Tim. I mean, that whole Seahawk Shakeup has me quite concerned.

    Oh, you were talking about real estate? Well, I guess that’s pretty bad too.

  5. 5
    gpxl says:

    It will be interesting to see how such a big headline changes the local attitude. It wasn’t more than a month ago that some neighbors were telling me they thought it was a great time to buy even though their neighbors house has been sitting on the market for months after numerous price drops. Obviously they bought into the “houses are cheap/the market’s near bottom” that’s still present in these current articles.

  6. 6
    TJ_98370 says:

    The real estate spin machine is still working along the perimeters. The headline news in the Kitsap Sun is:

    Kitsap Housing Prices Nudge Upward in Latest Sales Figures

    …. median home price of the 242 properties sold in August rose nearly 4 percent, to $277,000, which is more than $8,000 higher than April’s combined median price.
    Although the figure is still around 8 percent lower than the same month a year ago……


  7. 7
    TJ_98370 says:

    Eleua is in fine form in the comments section of the Kitsap Sun article.

  8. 8
    HomeLoser says:

    As someone that bought near the market’s peak let me give you another persepctive But firstly, as a homeowner, I obviously prefer property value appreciation over decline.

    However, the drop in the value doesn’t phase me in the least. I bought in 2007 near the peak after moving from a state with regions where prices were begining to drop. I negotiated about a 6% discount off the asking price of my house from the owners who have lived in the home for 15 years or so. I was surprised to get it given the market at the time but would have walked without the reduction. Moving from a state ahead of Seattle in the real estate cycle gave me a heads up as to what might happen in Seattle.

    I purchased my home with a FRM and 20% down. In the interim, I took advantage of a decline in interest rates to prepay a significant proportion of my loan principal and get a new 30 year FRM with around 0.8% lower interest rate. My mortgage payment is now 24% lower than when I purchased the home – when was the last time your landlord dropped your rent by 24%? My P&I and property taxes are $300 more a month than my rental in my old state (with tax shield) and my home is 3 – 4 times larger and far nicer than my rental. I also live in one of the more desireable neighborhoods in Seattle in a home I plan to improve over time and don’t see myself moving any time soon. The lower mortgage payments reduce my fiance and my risk as we are now able to make mortgage on either one of our salary’s. In the worst case, I am close to being able to rent out my home and cover P&I and taxes and break even – not that I plan to rent out my home.

    Real estate is part of a portfolio of stock, bonds and cash. I wish my 401K had only dropped by 11% this year. I don’t think of my home as an investment but as a place to live. Ultimately, I hope to make money when I sell but if I don’t, it is not the end of the world. The way I look at it, I just cut one of my major living expenses by 24% and each year, that cost of living will decrease proprotionally as inflaction acts & my income increases.

    My final thought – I remember the agonising I went through watching housing and rates and trying to determine when to buy. Now that I am in the game, that stress is gone. I look at the landscape today and I have no idea whether I would wait or jump in. For me, life goes on. I live in a house I love in a neighborhood I really enjoy. I focus on living. The markets will do what they will. The vast majority of homeowners don’t pay much attention to the housing market and that is the way it should be. Life goes on!

  9. 9

    […] others in the nation, it is by no means invincible. The Tim over at Seattle Bubble points out “the reality finally sinking in” among local media, and today provides a collection of perspectives from news media and experts […]

  10. 10
    EconE says:

    The condo market will do fine however. Especially Downtown. The Realtors there don’t spin a thing and are TOTALLY honest. In fact, I’d be willing to bet that they never put a SINGLE client into a toxic loan.

  11. 11
    vboring says:

    in fact, downtown condo prices are going up.

    mostly because downtown Seattle has such an excellent nightlife.


  12. 12


    And the price collapse [with realitor, staging and closing costs] exceeds your equity [or savings in bank to cover the losses].

    You have two choices if you need to sell and you’re equity poor:

    1. Hand the keys to the bank.

    2. Cancel you plans to sell, if you can.

  13. 13
    vboring says:


    Congrats on buying for lifestyle instead of speculation and being brave enough to make yourself known as such in what is frequently an aggressive forum.

    Do you think that you will care if your house market value falls another 15-20-25-30%? Will you continue to keep track of what it is worth? Do you think this is typical?

  14. 14
    Buceri says:

    Holly Smokes!!! The daily PI goes for $0,75???!!!!

  15. 15
    patient says:


    It seems like you are ok as long as you don’t need to sell the next couple of years. You purchased wisely from an income/debt ratio but I can’t say that your timing was good or something that others should take as a good example. If your home looses another 10% in value you are practically underwater with your mortgage. If you need to relocate or find yourself in another situation that requires a home sale you have the choice of either foreclose and loose your downpayment + trashing your credit score or sell below mortgage which still means loosing your equity + bringing cash to the table. Both will likely severly impact your ability to buy another house in quite a while again. So yes, life goes on when values go down but to not follow what happens or care about the potential consequences can put you in a pretty dire situation. Enjoy your home but be alert to the developments and evaluate your risk now and then.

  16. 16
    david losh says:

    This head line will be used to get sellers to lower prices or list for less. A lot of focus here is on buyers, but listings are the bread and butter of Real Estate agents. Sellers may become more realistic in pricing.
    There again buyers will in fact need to be more wary of what they purchase. Just because prices are coming down doesn’t change location or condition.
    When you couple the lower interest rates with what may be lower home prices buyer may begin to panic. There is lots of inventory that is off the market that will be coming up again. Be patient, watch properties you may like, relax, and be tough. This is a business decision in very volitile times.

  17. 17
    HomeLoser says:


    I think my attitude is typical for most owners that purchased prior to the run up and are sitting on a pile of equity even with significant price decreases. The attitude may be less prevalent in people that bought near the peak. Personally, I am ambivalent to a further 10% price drop possibly 15% or 20% at a stretch. Beyond this I will admit to a slight does of queasiness but I really can’t go back on my decision without realizing what is now a paper loss by dumping my home on the market. Since buying I interact more with homeowners than I did while renting as most of my neighbors own. I was amazed at how little most care about the market. Of course, this changes if they are planning to put their home on the market!

    My view is to look at things long term: buy a nice home in the best neighborhood I could afford, ensure I could easily afford my home locking in my housing cost at a level I can afford and then reduce my risk over time. I think I have accomplished this. There are no certainties in life so I could still find myself in trouble but I could also die tomorrow.

    With my decision to buy came a weird calmness. As I said, I have no idea what I would do in this market. Personally, I think prices will decline further – how much further, I don’t know. But, interest rates are at near all time lows thanks to you guys bailing out Freddie and Fannie – socialism rocks!. Loans at or less than $567k now qualify for conforming jumbo mortgage rates that are a lot lower than they were a year ago. The increased conforming jumbo levels are unlikely to be kept at their lower levels after Jan 09. Also, first time buyer tax incentives will dissapear. Interest rates are at near all time lows that cannot be maintained long given the serious economic issues the USA faces. All this creates a very fluid complex environment. So would I buy now if I still rented? Who knows. I prefer certainty to uncertainty – must be the ex engineer in me – so I am comfortable with my decision.

  18. 18
    Ubersalad, Ph.D says:

    Most of us live in a neighborhood, and housing crash will effect at least some neighbors. Thus even a responsible long term home owner will be effected by the RE crash of neighbors whom are going underwater.

  19. 19
    HomeLoser says:

    patient ,

    I have over 30% equity in my home so can tolerate a bigger price reduction before running into credit issues. Also, as stated, I would rent out my house if I was forced to relocate rather than realize a loss if the market hasn’t recovered. I am close to being able to break even on mortgage + taxes with potential rental income now and hopefully, could cash flow my place if I was forced to rent it out in several years.

    Was my timing perfect – no. I could have theoretically purchased my home today for 5% (assuming initial price on my house reflected market prior to my 6% price reduction ) less than I paid for it and be sitting at the same mortgage rate I currently have but I would only have really saved 2.5% since I would have been paying rent in the interim. No two peoples situations are similar so my message is buy when it makes sense RE economics wise, financially and personally and you will be able to live with your decision.

  20. 20
    gpxl says:

    HomeLoser, explain to me how you are sitting on a pile of equity if you bought near the peak? Is that due to paying down a significant portion of your mortgage as you stated earlier? If so wouldn’t that point to you LOSING overall value in your portfolio due to your purchase? Sure it’s better than having your money in financials this year ;-) but a loss is a loss.

  21. 21
    Ubersalad, Ph.D says:

    Perhaps Tim should compile an interactive timeline from the beginning of this blog to the latest double digit price drop, which includes pictures of headlines and quotes from various RE players. I think it would be a fitting and attractive feature to this blog.

  22. 22
    HomeLoser says:

    gpxl , I agree that a loss is a loss! I paid down my principal when I refinanced as I had a lot of cash sitting around that I had no idea what to do with and instead of having it eaten away by inflation or lost in the stock market I decided to pre-pay my mortgage as over the life of the loan, prepaying and refinancing provided me with a 5.6% return (including loss of tax shield on the mortgage) taking account the reduction in my housing payments only i.e. no assumptions about value of my home on selling and when this might occur.

  23. 23
    patient says:


    With 30% in current equity you are definately in a better situation than most who bought close to peak, probably better than about 99%. However I don’t think there is any situation for anyone where it’s a good idea to buy a depriciating and paying 5% or mor in interest for the pleasure of it. So, I don’t buy the argument, well if it’s right for your personal situation. I don’t buy it at all. It’s just another realtor trap.

  24. 24
    Joel says:

    plan on owning it for at least three years

    Didn’t that used to be 10 years, then 7, then 5? Now apparently 3 years is a long enough time to justify buying vs. renting.

  25. 25
    80percentdecline says:

    “But Crellin also called timing the market “almost impossible.” Buyers should look at whether an individual home is priced well, and if they can afford it, plan on owning it for at least three years, he said.”

    That is crazy talk I miss the good old days when you could flip a house in a month and jack up the price 30%. Three years is a lifetime to buy a house. When I buy a house I plan on using it 6 months tops before selling. Same with cars buy a car drive it for 2 months clean the seats and try to sell it for a 20% profit. That’s how a healthy economy is suppose to work right?

  26. 26
    HomeLoser says:

    patient, I am not advocating my approach for anyone in the market today! It is a personal annectdote of my situation. My point was that my decision to buy was made 14 months back. I am in the market and cannot undo my decision. So, I make the best of it by reducing financial risk which is what I did by refinancing. I would never plow cash into prepaying if I could figure out how to make money in this stock market.

  27. 27
    gpxl says:

    patient, I’m not sure that statement is true all the time. If you save more in the interest savings than you would gain from an investment elsewhere; then it IS a good idea to pay down. Remember he’s paying off the debt that he’s already responsible for, not on the current value of the house. I take it he’s calculated a 5% savings on the debt interest which beats current returns from the S&P, CDs, etc…

  28. 28
    gpxl says:

    Doh,.. HomeLoser beat me to it :)

  29. 29
    TheHulk says:


    Interesting perspective you have. Methinks you have a *LOT* of equity from your previous home sale (say 150K) that you dont care prices have dropped 11% from peak. Good for you, most of us on this blog are buying our first house so we dont have that luxury.

    Nonetheless, say you had made a leveraged investment (your first house), putting down say 60K towards a 300K house back in 2002. Fast forward to 2007 and magic! the same house is *worth* 500K. A nice 200K profit – 50K for various fees (realtors/real estate taxes etc etc) gives you a cool 150K cushion towards your new home. You plug *that* into a 600K house since you are so much *richer*.
    Now, apparently prices have dropped 60K from peak (dont matter since it still means you are 90K up). Stop to consider this:
    1. By the time this bottoms out 30% declines from peak are easily possible (and yes given all the gloom, 30% from peak is conservative) that 600K will be worth around 400K. That wipes out your *on paper* 150K and in fact puts you 50K under.
    2. From that 400K in say 2013, its almost 100% sure that nobody is going to believe in housing as an investment for a long long time. Cheap credit wont be available and I dont think we are ever going to see double digit increases on 400K houses in our lifetime. From that bottom, housing prices are going to *stagnate* for 10 – 15 years. That means they will barely keep up with inflation.
    Suddenly all that paper value doesn’t count for a lot, does it?

  30. 30
    patient says:

    I absolutely agree that it’s a good time to pay down your mortgage. In fatc I would argue that it’s almost always a good idea. Less debt is aleways a good thing in my books. What I reacted to was the notion that buying a home should be based on your personal situation and not the hard financial reality. I.e that it can be ok to buy a home in oday’s market if you can afford it and think you need it. That I disagree with since I can’t wrap my head around the “ok” in buying an asset that rapidly depriciates with borrowed money, ever.

  31. 31
    Civil Servant says:

    So much of the spin these days seems to be along the lines of “Well, if you find a place you love and you can get a good rate, deal with the monthly nut, and have the constitution to deal with a potential value decline in the range of 20%, then what’s the big deal, why shouldn’t you buy right now?”

    All right, fine. But why *should* I? That is the piece I’m missing.

  32. 32
    Civil Servant says:

    PS — Yeah, what Patient said.

  33. 33
    patient says:

    When the burst of the bubble hits the front page of the local news paper like this i’s the final proof that we reached the point of no return. I see a buildup and bust of a bubble pretty much like an avalanche, you can prevent it but if it’s triggered it will run it’s course, you are to late to stop it or control it when it’s in motion.

  34. 34
    Timber says:

    “So much of the spin these days seems to be along the lines of “Well, if you find a place you love and you can get a good rate, deal with the monthly nut, and have the constitution to deal with a potential value decline in the range of 20%, then what’s the big deal, why shouldn’t you buy right now?”

    All right, fine. But why *should* I? That is the piece I’m missing.”

    You don’t seem to be paying attention to the situation. Like the agents have been telling us the prices will turn around in one day and if you are not ready for it you will be priced out of the market forever. The time to buy is now!

  35. 35

    I am going to play devil’s advocate here. However this headline coupled with the drop in interest rates MAY get some more people to jump in and start looking. Financing and qualifications may be a hurdle.

    With lower interest rates a buyer should be able to qualify for a better priced house then when rates were at 6.3%.

    It seems like if a buyer looks around that there are some deals out there which could be foreclosures or short sales.

    Just my thoughts

  36. 36
    BubbleBuyer says:

    TheHulk, this was my first home purchase so I never had any paper profits to start with. Just cash from renting and living below my means for a while. Everything I plow into my home is / was real hard earned money.

  37. 37
    pfft says:

    “But Crellin also called timing the market “almost impossible.”

    yes, you can’t time the market but why would I buy an overpriced home because of that? so what if I can afford a house when it could be worth 10% less in a year.

    timing the bottom is not really important. this is just a straw man to get you to buy homes. you might lose out on 5% trying to time the bottom. so what? in the mean time.

    1. renting is cheaper than owning so you’re saving money money
    2. taxes could very well go up
    3. you can earn interest while waiting for the bottom
    4. you have the opportunity to keep saving you income

    It would be interesting to see how fast prices went up the last time Seattle bottomed and see how much you “lost” waiting for the bottom.

  38. 38
    deepcgi says:

    Would you all agree that there are no signs of rebound here? I suppose there is a possibility of Uncle Sam kicking the dead horse it just bought (Fannie, Freddy, Indy) in order to convince us they’re still alive. Nevertheless, foreign investors won’t be spending new investment dollars on repackaged mortgage money anymore, no matter what the US government does. In fact, the poor horse’s body still looks flat-lined after the first shock.

  39. 39
    economist says:

    All right, fine. But why *should* I? That is the piece I’m missing.

    Because the realtor needs the commission, silly.

  40. 40
    SeattleMoose says:

    Well, BALLARD is still “special”!!!!

  41. 41
    NoMoreWork says:

    Check out the times’ website today, the headline has been drastically scaled back…

  42. 42
    NoMoreWork says:

    The PI headline is even harder to find on their website.

    Must have been some rather upset groggy-eyed realtors calling in this morning after they grabbed the paper outside their ~11% depreciated house. Theirs is probably special tho.

  43. 43
    Civil Servant says:

    Great catch, NMW. As of now, I don’t see the headline linked at all from the home page (via nwsource), though the Local News and AP Regional Wire sections note that “Mother Bear Leaves Renton Tree Perch” and “Alaska Chum Eggs are Liquid Gold.”


  44. 44
    The Tim says:

    Wow, seriously. Check these out. (Screenshots with the story links highlighted)

    Times Online Front Page

    P-I Online Front Page

    It would appear that the online editors have slightly different priorities than those in charge of the print editions.

  45. 45
    TheHulk says:

    Bubblebuyer@36 My comments were for homeloser.

    Nonetheless, when did you buy your house? I hope for your sake it wasn’t too late.

    The greater Puget sound area is right now at that stage in the older tom and jerry cartoons where tom has been walking on thin air and at this very moment has just realized it. The priceless look on tom’s face before he falls is what you see today in the newspapers front pages.

  46. 46
    Buceri says:


    Washington Mutual at 17-year low, debt risk soars

    Wednesday September 10, 3:12 pm ET
    By Jonathan Stempel and Dena Aubin

    NEW YORK (Reuters) – Washington Mutual Inc (NYSE:WM – News) stock sank as much as 30 percent to its lowest level in 17 years and the perceived risk of its debt soared on concern it won’t find a buyer or raise enough capital to combat soaring mortgage losses.

  47. 47
    TheHulk says:

    Better get your money out of WAMU while you can. Last week I withdrew everything except 500$ in a savings account. I think I will close my account before the end of today.

    Whoo hoo!! (Thats the credit crunch train steamrollin over WAMU)

  48. 48
    patient says:

    TheHulk, that will speed up my plans as well. Instead of looking at a decent bank with good rates to move my WaMu money I will now settle with a decent bank. I’ll do the move on Friday.

  49. 49
    Eleua says:

    It will be the greatest irony if the epicenter of the financial panic is in the place that locals delared “too special” to care.

    Seattle. WaMu.

    Stay tuned

  50. 50
    vboring says:


    I doubt that WaMu will be able to seize the spotlight for Seattle for very long, if at all.

    NY, D.C., CA, and FL are the real focal points for this mess. Seattle is well outside of the limelight – and will remain so unless the seizures of the financing industry somehow directly causes the death of the tech industry – or the revival of grunge music.

    The local impact of WaMu going tits up will be interesting, though. It’ll make it a lot harder for people to pretend that Seattle is special.

  51. 51
    Mike2 says:

    I miss having Ardell drop by to say “don’t you wish you would have just bought a house in 2005 instead of spending time talking about a bubble?”

    “Bubbles are for bathtubs” – Team Reba

  52. 52
    Everett_Tom says:

    It will be the greatest irony if the epicenter of the financial panic is in the place that locals delared “too special” to care.

    You know, from what Jillian has said (i.e. when she travels and does training -> I’d have to dig up the rain city guide reference).. virtually everywhere believes themselves to be too special to be affected…

    in other words, here or somewhere else, you still get irony.

  53. 53
    Sniglet says:

    The Wall Street Journal has declared that the Seattle real-estate market really IS special. We will weather the real-estate downturn just fine.

  54. 54
    TheHulk says:

    While we are on WAMU and decent banks, are credit unions better than all the commercial banks when it comes to all the risky loans and bets banks have made in the past decade?

    Back when I was still a student I had money in a CU and they gave me better rates until INGdirect came along. The only reason I used to stick money in a commercial bank was for easy access thru a wider network of ATMs.

  55. 55
    Eleua says:

    vboring #50,

    I’m not saying that job losses at WaMu would cause our RE market to collapse (it would sure hurt it, though), but that the implosion of WaMu would have a very high likelihood of causing a nation-wide run on the bank, as the FDIC lacks both the funds and manpower to put WM out of its misery.

    Their accounting (thankyou K. Killinger) has destroyed any value in that company. They are already dead.

    Where is your money going to be this weekend?

  56. 56
    richie says:

    WM is on the verge of bankruptcy. The impact to Seattle’s housing market will be significant.

    Apparently, nobody wants to be a white knight for WM. The stock tanked to 17-year low of $2.32 today. The stock may sink below $2 in the morning. At that price, the game is over.

  57. 57
    bidingmytime says:

    Given all the previous discussion about things getting worse on the outskirts before Seattle proper, what is the explanation for the larger YOY drop in Seattle (14%) vs King County (11%). Just a fluke or am I missing some detail in the analysis?

  58. 58
    Timber says:

    WaMu was downgraded to BBB-minus bond status yesterday. That is one notch above junk bond status, where I’m sure WaMu will be at in no time.

  59. 59
    Timber says:

    Also if anyone was wondering WaMu is the 6th largest bank in the US based on deposits according to this website.

    Also I started a thread earlier today about the final days of WaMu.

  60. 60
    Eleua says:

    The cost of insuring 10years worth of WM debt is roughly half of the face value.

    Nobody has that kind of credit rating in the banking business and lives to tell the tale of how they made it out of their mess.

    Why did the board wait so long to sack KK?

  61. 61
    Bits_of_Real_Panther says:

    The crazy run up year was from summer ’05 to summer ’06 if I recall correctly – if prices backtrack to ’05 we will have something truly newsworthy. This retrace to ’06 was a gimme

  62. 62

    The actual price peak was July 2007, even though by that time sales had slowed and inventory had risen.

  63. 63
    The Tim says:

    BoRP @ 61:

    You’re correct. Observe the yearly price jumps since 2000 in this chart, where I have made January of each year a horizontal line for reference.

    The biggest jump by far is between the purple (’05) and green (’06) lines.

  64. 64
    NoMoreWork says:

    Anybody notice that the 10% decline headline is now completely removed from the PI mainpage. WTF?? If you ignore it, it will go away…. la la la la la, I can’t hear you.

    Also, not a single mention of WaMu stock (WM) losing ~30% of its value and being on the verge of bankruptcy on either site.

    Just the fluff stuff today I guess, oh look “New York Fashion Week” photos!!!

  65. 65
    The Tim says:

    Hah. Technically it’s still on the front page. Waaaay down the page in the second column under “Homes.” Also at the moment it’s #3 in the “most e-mailed” list in the far-right column and #4 in the “popular soundoffs” list.

    Totally makes sense that they would remove such a popular story from the main list of stories on the front page. Wait, er…

  66. 66
    Ron says:

    Prechter is calling for $600. gold.
    Roubini is calling for more regulation.
    Gross is calling for more bailouts.
    Pelosi is calling for more stimulus.
    Paulson is calling for calm.

    Bunning is calling for resignations.
    Bair is calling for blog control measures.
    Lereah is calling (another) housing bottom.
    Greenspan is calling this capitalism.
    Rice is calling for Russian withdrawal.

    Putin is calling Rice a whore.
    Palin is calling out Obama.
    Chuck Prince is calling for more music.
    Cayne is calling his drug dealer.
    O’Neal is calling it a career.
    Medvedev is calling Putin.

    Ahmadinejad is calling for jihad (again).
    Dubai is calling Halliburton.
    Halliburton is calling Cheney.
    Cheney is calling ( ??? )
    Hillary is calling her lawyer.
    Bill is calling Monica again.
    Edwards is calling Monica’s lawyer.
    Cox is calling no one, about anything.

    Yellen is calling it a wage spiral.
    Poole is calling for a rate hike.
    Trichet is calling Berlin, they’re not answering.
    Biden is (already) calling for a recount.
    Jintao is (already) calling for a repegging.

    Bernanke is calling it “conservatorship”.
    Rogers is calling it “communism”.
    Frank is calling for an investigaytion.
    Paul is calling for abolition of the Fed.
    Limbaugh is calling for abolition of Paul.

    Sinclair is calling for a gold standard.
    Stein is calling for Goldman Sachs to have standards.
    Shedlock is calling it in advance.
    Kudlow is calling it in hindsight.
    Cramer is calling it Armageddon.

    Gartman is calling it a bounce.
    Zell is calling for a new Wrigley.
    Bidders keep calling Zell.
    McCain is calling for another “surge”.
    Buffett is calling it an opportunity.

    Ackman is calling it a shorting opportunity.
    Bloggers keep calling it Misean.
    CNBC keeps calling it Keynesian.
    Jefferson Co., AL is calling it Chapter 11.
    Spitzer is calling it a mistake.

    Cuomo is calling monolines solvent.
    Pandit is calling sovereign wealth funds.
    FASB is calling for more time.
    Wells Fargo is calling Fastow a hero, albeit privately.
    Dimon is calling to agree.

    Short termers call it inflation.
    Long termers call it deflation.
    Baby boomers call it stagflation.
    WWII ers call it a depression.
    Historians will call it…

  67. 67
    NoMoreWork says:

    You’re right, I can see it now. Had to change my resolution! j/k They must not measure success on clicks or visits, but rather on FS / P, Fluff Stories per Page. Very successful by that measure.

    I’m sure the advertisers would love to hear about the PI pulling headlines of the most discussed and emailed stories. Good business, good business, maybe they hired K. Killinger to run the website, I heard he was available.

  68. 68
    singliac says:

    Did you write that, Ron? Very clever. You deserve a pizza.

  69. 69
    wamu says:

    you guys need to get your facts right. wamu isn’t on the “verge of bankruptcy” it has cash and capital…the concern is that in the future if credit losses aren’t mitigated it might not survive.

    furthermore, it didn’t get downgraded to BBB- yesterday, BBB- has been its rating for a while, yesterday its outlook was downgraded from “stable” to “negative”

    not saying that wamu isn’t in trouble, but you guys claiming its going bankrupt have never even looked at the books or ever understand what bankruptcy really means. before the company ever gets to that point, the fed or ots or fdic will force a sale.

    yes wamu is in trouble, but stop acting like 12 year old girls being all dramatic.

  70. 70
    The Tim says:

    Anybody wanna guess what network the comment @69 was posted from?

    I’ll give you a hint… it rhymes with “Shamu.”

  71. 71
    wamu says:

    lol tim i wasn’t hiding it, check out my name

    anyway, yes in trouble, but get your facts right…

    some people on here sound as crazy as the non-bubble believers did in 06/07

  72. 72
    NoMoreWork says:

    wamu, what you say is true, thanks for the correction. However, from a shareholder point of view that might as well be the same as bankruptcy, i.e. they will all be washed out.

  73. 73
    vboring says:

    fine, maybe we’ll see a $2 shotgun wedding over the weekend instead of FDIC receivership.

    this is better how?

  74. 74
    tacomarenter says:

    WAMU is done and that’s a big deal (check the stock price). It may be called WAMU Federal by Friday and all the rich people without a clue will have lost their deposits over the FDIC limit by then as well. That could be considered a big deal as well. Fannie and Freddie just got taken over by the government as well and this is a big deal. If WAMU goes under that means the government will control a sizable portion of the banking industry and the mortgage industry. Can you guess how that will turn out?

  75. 75
    Timber says:

    “some people on here sound as crazy as the non-bubble believers did in 06/07”

    As crazy as those people calling for F&F to go under for the past few months? Also I am sorry it downgraded from stable to negative BBB- bond status I miss quoted. It is still barely above junk bond status. WaMu has lost 50% of its stock price in the last 5 days as well. If WaMu isnt on the verge of failure then I wish I wouldn’t register If you are correct however then this stock is a buyers dream because it appears just about everyone in the market is preparing for it to fail based on its stock price and if WaMu does survive then those buying shares right now are buying at the bottom and will stand to make a fortune and be buying up Seattle real estate left and right as house prices drop 80 %

  76. 76
    gpxl says:

    It’s not. And wamu has been drinking some nasty tasting kool aid over there :)

  77. 77
    Ray Pepper says:

    im sorry Wa Mu..its semantics. Its toast. If someone comes along and takes it out ( I cant imagine who will) maybe you get a pop to 4 or 5. In my travels and investor tours over the years WA MU was our Greatest Lender. The 40 year pick a pay option (which i adore and still have 3 loans on rentals in Fallon Nevada) are a noose around the neck of WA MU. I don’t believe there is a potential suitor who will step in and buy WA MU. You just don’t know how much worse it will get. I personally know of 6 WA MU homes going back in Oregon and Nevada. They owe on these homes over 250k and the homes can be had now for about 155k. WA MU even has the seconds. It was just too easy. Too easy for too many.

    The greatest problem to WM, WB, WFC, BAC, and NCC is how about 12-36 months from now when people walk. Their homes are still worth over 100k less then these homeowners owe. The mkt knows what I have seen. The foreclosures will continue for years to come. These are death stocks. A great trade but if you BUY AND HOLD you will lose.

  78. 78
    Eleua says:


    I appreciate your situation. I really do. I also am employed by a complete wreck of a company that is run by morons.

    I have looked at your books. You have been booking money that has never crossed your doorstep and calling it income. Go back to your Jan07 10Qs and start there.

    I also noticed years ago that you wrote the bulk of the seconds and thirds in the neighborhoods I was researching on Bainbridge. I’m guessing that those will never get paid, as the borrower will be upside down on the primary TD, and your paper will have little, if any, worth when the homes are sold at the courthouse. I am going out on a limb and saying that Bainbridge is typical of the lending practices of WM for much of your market.

    Good luck, but please dont attempt to baffle us with BS. The CDS’ on your debt show it to be roughly 50% of the face value, which is positively frightening by any standard – especially for a S&L. Internal mortgage performance information is readily available on Mish’s blog, which shows your last two vintages of mortgages to be performing at a level that will bankrupt any lending institution in very short order. You can’t survive another 10% rollback in prices of the properties you wrote against.

    You don’t sack your CEO on “Bazooka Day” unless things are very, very dire.

    There is no way to spin WM right now. It is a horror show.

  79. 79
    singliac says:

    wamu has cash now, but couldn’t that change quickly if people start to close their accounts. I know they are FDIC insured, but I’d be tempted to withdraw my money just to avoid the hassle of getting my money out after a collapse. It seemed like a pain for the IndyMac folks to get their money. Just a thought. I’m not claiming to be an expert by any means.

  80. 80
    Eleua says:


    IMB cost the FDIC around 1/6 of its total arsenal.

    WM would cost it in excess of 200%, depending on how fast they act.

    See the problem, and why this is a huge deal?

  81. 81
    Timber says:


    I just withdrew my money from WaMu a few weeks ago. When the teller asked why I was withdrawing I said I was afraid WaMu would go bankrupt. She said they were stable and FDIC insured I said I know but I still want my money.

    Who wants to have to take a day off work though to wait in line to get your money when you can go it out now without the hassle. How many here would really be surprised if WaMu is put under fed control by this weekend? I am not trying to cause a run on the bank because not enough people will see this that it will even matter but why put yourself in a position like the IndyMac crowd if you don’t have to.

  82. 82
    crispy&cole says:

    Sorry Wamu (or Shamu) but you are going see some serious changes there…the FDIC is going to be having pizza party (FDIC joke) very soon one Friday night at your location. Too many bad loans in Ca, Wa, etc…

  83. 83
    Scotsman says:

    If/when GAAP forces WAMU to restate the true value of the assets shown on their books, it will all be over. But I doubt they’ll last that long. Put me down as saying they’ll be gone by the end of the month. And when they go, TSWHTF.

  84. 84
    EconE says:

    Speaking of WAMU…

    Did they have the painted window ads on all their branches up here like they did in Los Angeles during 2005-2006 for 100k HELOCS with “no income verification”, “no credit check” and “no SSN required”?

    The loans up here might not be the ones that crush them.

    The loans in California? That I’m not so sure of.

    On another note….Has anybody ordered a pizza lately? I have never seen so many older, well dressed pizza delivery drivers. I wonder where they are coming from.

  85. 85
    Timber says:

    “On another note….Has anybody ordered a pizza lately? I have never seen so many older, well dressed pizza delivery drivers. I wonder where they are coming from.”

    Last time I ordered a pizza the delivery guy gave me his business card and said if I am going to be in the market to buy a house anytime soon to give him a call, since of course “the time to buy is now!” I tipped him my standard $1 and said I hope he enjoys being a pizza delivery man for a long time because no ones going to be buying anything from him for a long time that’s not covered in cheese and delivered in 30 minutes or less.

  86. 86
    TheHulk says:


    I was asked the exact same question this afternoon. Even as I was attempting to close my account, they kept trying to push their amazing CD rates on me.
    I wanted to ask the sales rep, would he/she put all his money in a WAMU CD today? But then why bother troubling the poor employee? They have to sell the company line, it is their job, so I just closed my account and went away.

  87. 87
    rent for now says:

    WaMu – get it while you can. FDIC could be bye-bye with one wack. The Office of Thrift Supervision doesn’t just “drop by”. They are trying to see how they can unravel this beast as easily as possible, if there is such a thing. (will they make it to their earnings date?)

  88. 88
    Bits_of_Real_Panther says:

    Pizza delivery is the best job I ever had and nothing else is even close. It was at the tender age of 33 when I finally had to let it go

  89. 89
    rentalbliss says:

    “Pizza delivery is the best job I ever had and nothing else is even close. It was at the tender age of 33 when I finally had to let it go”

    Hey my husband delivers pizza at the age of 34. A great second job and he likes doing it, with daycare so expensive for 3 kids someone has to make up the all so important second income in this day and age.

  90. 90
    richie says:


    If WaMu adjust the cost of its investment (mortgage notes) to the fair market value properly, it will be well below the book value. In other words, liabilities are greater than assets or negative equity. WaMu has played the game for many years to risky borrowers. It de facto dug a grave to bury itself.

    IMB had cash until depositors pulled out $1.3B for 11 days when the stock dropped below $1 on June 26. Fed shut it down in on July 11. If WaMu sinks below $1 by Friday, history may repeat again.

  91. 91
    Ray Pepper says:

    I delivered Dominos all through college. I remember the people who were always rude or bad tippers. I would always tilt the pizza on the passenger seat so when I got to the home it would all GLOB to one side. When I was hungry I used to eat the pepperoni toppings while I drove. I used to wonder if I took a small slice out and slid it together would they know…AHHH yes, it was a great job.

  92. 92

    I’m getting lots of emails today from Realtors promoting price drops on their listings…..maybe the Seattle Times article helped some agents get those price reductions.

  93. 93
    didn't just fall off the turnip truck says:

    Ray @ 91 you wrote:
    I delivered Dominos all through college. I remember the people who were always rude or bad tippers. I would always tilt the pizza on the passenger seat so when I got to the home it would all GLOB to one side. When I was hungry I used to eat the pepperoni toppings while I drove. I used to wonder if I took a small slice out and slid it together would they know…AHHH yes, it was a great job.

    This doesn’t exactly encourage one to do business with you

  94. 94
    Joel says:

    Who wants to have to take a day off work though to wait in line to get your money when you can go it out now without the hassle.

    You don’t have to do that to get your money out of a failed bank. If it’s FDIC insured it’ll be there the day after and even several months after. If it’s not insured it’s gone whether you get in line first or wait a year to withdraw. You might have to wait a month or more to access it however.

  95. 95
    Ray Pepper says:

    Why? Do you think I’m gonna bring you pizza?

  96. 96
    magnolia44 says:

    Th Tim

    So you felt the need to post where a comment came from on your blog? Seems pretty shady, people posts on boards blogs etc usually under the premise of some type if anonymity. I think that was a lousy thing to do to point out where the WAMU poster was commenting from.

    If you are going to make a habit of that good luck on your website career, bush league move in my opinion.

  97. 97
    TheHulk says:

    I think all Tim was doing was uncovering any potential bias that might have gone unnoticed behind the original post supporting wamu (as if the name wamu wasn’t enough). It is not as if Tim posted the actual ip address or the user’s email or any private information. The user “wamu” is still very much anonymous to all of except that we know he is one of the oh-i-dont-know 50,000 odd people who work for wamu in seattle.

    OTOH magnolia, assuming you have no skin in wamu’s game, would put your money into WAMU CDs today??

  98. 98
    david losh says:

    Washington Mutual is a bank. It is pretty paintings on the store front window hawking wares like CDs, Equity Lines, and Free Checking.
    The paper in the Washington Mutual Tower is what’s for sale. The wamu guy is right. The paper will be bought sold and traded. The portfolio loans will now mature because who will be able to refinance, and why would they?
    The assets, or Real Estate Owned properties will either be rented, or sold. FDIC will clean up what it can. The bottom line is that it was a nice run, everybody made money. Now they are shredding evidence and they have had months to do it.
    The scary part is that Real Estate agents really are lowering prices and pushing buyers into what may be bad deals. Once again, if you are buying, be careful. All of this news can be spun to your favor, but be realistic. Prices will fall to value.

  99. 99
    Interloper says:

    Regarding the Seattle Times cover: it’s about freaking time! They’ve done a great irresponsibility to their readers for the last year. Maybe for one day it’s worth the $0.75 they charge for it.

    The great irony is that the August NWMLS data may not be the best data for the media to react to. It’s erratic from month to month though directionally accurate. I’ll be curious to see the August Case-Shiller numbers in a couple months when they come out to see if the slope of decline has actually increased. I hope so, because it’s going to take a lot more than the recent slow rate of decline to correct this local housing bubble.

  100. 100
    mukoh says:

    to patient like most bubble heads the argument of buying a home because you can easily afford it and plan to live there without worrying it it goes up is novel idea.

    then don’t buy a car and ride a moped, or estimate how much a child costs before having one.

  101. 101
    Mariner22 says:

    I have severe doubts WAMU has any future except receivership. From what I understand (I am no financial accountant), if any financial institution bought out WAMU they would have to mark to market all of WAMU’s paper that so far they have hidden true value. What do you really think a second mortgage on a house 200,000 underwater in So Cal is really worth? Being the 6th largest bank just means there are very few institutions that could write off the huge liabilities.

    Question I have to the board is what do companies with accounts (i.e. payroll) do with accounts at WAMU? The FDIC won’t protect above 100K, even medium sized companies need more than 100K operating cash. If you were CFO of a company wouldn’t you be closing your company account now? Given that WAMU is such a huge bank, there must be many company accounts outstanding.

    I would guess the traders would wait until a few dominos like WAMU fell causing true financial panic and then go long on BAC – no question B of A is too big to fail and they will be getting a lot of business from scared depositors (especially institutional).

  102. 102
    matthew says:

    The worse the news the more off topic the bubble deniers become. Gotta love it!

    Let’s not discuss the double digit price declines, let’s comment on how someone runs their PRIVATE blog.

  103. 103
    patient says:

    mukoh, buying a car with borrowed money is just as dum just on a smaller scale. We buy our cars with cash. We also don’t borrow money to bring up our kids. Try something else.

  104. 104
    jonness says:

    WAMU @71:

    When you guys stole $300 from me, I attempted to tell the manager assigned to field my complaint your company would eventually pay the price for adopting a business strategy of biting its customers’ hands during feeding times. I went on to explain WAMU was founded upon principles of providing courtesy and free services to its customers, and this was imperative to maintaining a financially-sound base of investment capital from which to grow upon. Well, she didn’t think much of my business hypothesis, and you guys continued to defraud your customer base long after I closed my account.

    Today, I’d just like to say, “I told you so.”

    As for WAMU being well capitalized and SeattleBubble bloggers being uninformed, today, I would just like to inform you that 11 days prior to being ceased by the FDIC, IndyMac was well capitalized too.

  105. 105
    mukoh says:

    Borrowed money or not, rationale for personal life decisions are not just guided with will this asset make me money or not. I do that in business every hour on the hour as it is. I make money in business and my financial decisions are made in order to enjoy my personal luxuries when I am off.

    I pay way more then median price for a house in the best school district in this state. Even if the house doesn’t appreciate or goes down in value makes no difference to me as the payment is locked for a few dozen years to come, and I get to see the ocean every morning out of my windoz. Payment will never change. :)

  106. 106
    b says:

    mukoh –

    nice position to be in, sadly the vast majority of people do not live in such luxury and purchasing a house is not a flippant decision. I am sure if most people here had a boatload of money to buy an oceanview way-over-median house in the best school district in the state they also wouldn’t care about the market.

  107. 107
    EconE says:

    What is the best school district in the state?

    And if money is no object as it seems to be for Mukoh…why wouldn’t you send your kids to private school and then scoot them off to Andover, Exeter, St. Pauls, Groton, Hotchkiss, Choate or Deerfield?

    They’d be able to do bong-hits with some really unique people too!

  108. 108
    jonness says:

    As obvious as this sounds, something just occurred to me. Seattle is very special. It”s just that with the economic crisis our nation is facing, houses are anything but special. So I would like to say that Seattle is beautiful, and I’m grateful to be here watching house prices declining to levels where everyday families can afford to raise their children without the unnecessary financial hardship that overinflated house prices bring.

    Also, I apologize for my WAMU post above. It appears more mean spirited than I intended it. My real intent was to emphasize at the heart of any business model it is important to treat your customers well, and I believe not having done that has a lot to do with WAMU’s impending failure. I’m primarily meaning the predatory lending climate.

    When a few weeks ago, I mentioned I thought a major bank would soon go belly up, I was mostly referring to WAMU. I think a lot of us feel the same way about it as far as risk is concerned. And if it goes, the earth will tremble. It won’t be a pretty site.

    Some people probably think I am a perpetual gloom and doomer. But really my excitement of the current economic situation comes from historical significance of what we are privileged to bear witness to.

  109. 109
    patient says:

    Thanks guys for the backup. mukoh, if buying a home is not a bigger deal than buying another rich mans toy to use and if needed write-off whenever by all means knock yourself out. On the other hand if the purchase is significant to your finances and you need lend money I still don’t see any rational defense to buying a rapidly depreciating asset as a Seattle home current is, ever.

  110. 110
    shawn says:

    one thing about gloom and doom, it is very pleasant to avoid buying at the top and I look happily forward to buying at the bottom!

  111. 111
    Michael says:

    WAMU got me for $3000. I really hate those idiots and will be more than glad to see them go out of business. I will be celebrating when WAMU goes. It will leave more room for an institution that is not run by a pack of thieves. They cashed a for deposit only check on my business with no signature on the back. Then they ran me around for two years with paperwork and BS until I gave up. BECU is a far better choice and they will probably take up a lot of the slack. WAMU always reports more earning in fees than interest in quarterly reports. What good is a bank whose entire business plan seems to be about adding hidden fees to customer accounts.


  112. 112
    Jay says:

    I frankly don’t buy that WaMu will be allowed to go belly up and die, and comparisons to IndyMac situation are invalid IMO because they are really on different scales. Sure, IndyMac is one of larger banks to fail, a name known to many, unlike typical failed banks that few have ever heard of, but it was definitely not a TBTF bank. IndyMac had deposit base of about 19 bil, WaMu has ten times that. Its domestic deposit base is similar to Citibank, and is the nation’s sixth largest, which makes it solidly TBTF. Considering its size and and its retail operations, WaMu is quite attractive to one of the major financial cos (and especially to JPM, for which WaMu could be a perfect fit to make it the largest bank in U.S. by both size and reach, ahead of BAC).

    What probably will happen is a situation like Bear Stearns, where JPM a stronger institution acquires WAMU with the Fed backing or cleansing or doing some sort of voodoo on WAMU’s bad assets. Why isn’t anyone stepping forward now? Well, why the heck would anyone? Things are getting worse, so no reason to jump in now, and the best deal will come when WAMU is really on the verge of collapse.

  113. 113
    Buceri says:

    “The worse the news the more off topic the bubble deniers become. Gotta love it!”

    Matthew – most people that denied the bubble on this blog have financial interests tied to property (own or rental). Cheap personal attacks are easier than confronting facts.

    “It is difficult to get a man to understand something …when his salary depends upon his not understanding it” – Upton Sinclair

  114. 114
    The MD says:


    Patient, YOU ARE ABSOLUTELY CORRECT! I smell realtor sh!t! This is a complete ploy from an anonymous realtor to garner trust and placate to the emotions of future potential buyers/sellers. Its predatory.

  115. 115
    The MD says:

    Eh, hem…. Homeloser = Loser Realtor

  116. 116
    EconE says:

    wamu @69 = angry employee that took advantage of their employee stock purchase plan at the wonderful 5% discount perhaps?

  117. 117
    The MD says:

    WaMu is a true POS. The company is notorious for hiring employees without experience in the fields they are employed (ie. hiring a person as a Sr. Loan Consultant when the only experience the person has had was perhaps as an analyst in Merchant Services, or maybe an elementary school teacher). Actually, that is a real scenario. Also, WaMu has, hands down, the worst management I’ve witnessed in banking – again, hiring a “bean counter” or an accountant to lead a nation-wide team of Cash Management Consultants and Deposit Chasers. What could they possibly know about managing people? Strategies within that company are seriously f&cked up, and I called it over 6 months ago. They’re OUTTA HERE! Whether they’re forced into a “shotgun wedding” with another major player like JP, or they go t”itts up,” the company will cease to exist as we know it today.

    What kind of a company would keep Kerry Kill-WaMu as CEO for so long, even with the “writing on the wall” over a year ago? Honestly, is ANYONE surprised they’re stock is pushing $2/share? I hope not.

  118. 118
    mukoh says:

    EconE, patient,
    I was not saying that buying a home is not a serious financial decision. It should be taken as an extremely serious one. But buying a home as a personal residence is not just an asset decision. At least to a lot of people in my area.

    Buying assets is what I do with investments in multi unit rentals, now that is buying an asset. With a home purchase I looked at what is the payment for the next 10-30 years. And whether the value of it goes up or down is not that significant as I am in it at least until my kids finish school which is 12 years from now.


  119. 119
    EconE says:


    What is “your area” specifically?

    Or is that a secret?

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.