KING 5’s Up Front: Local Housing Downturn Not Over Yet

Sunday’s Up Front on KING 5 focused on the local real estate market, and provided a relatively balanced picture. Host Allen Schauffler presented an overall picture of the current market, a look at a couple that got swept up in the bubble mania, a look at the next wave of adjustable rate resets, a warning about loan modification scammers, and an interview with George W. Johnson, Ballard’s 96-year-old real estate agent.

Here is the money quote:

Local economist Jim Hebert says those prices are going to drop even more. And that’s something people should consider now, when they make an offer.

[Hebert] “…perhaps what you do is you don’t look at today’s price, you look at the price in four to six months. And it’s going to continue to fall—for a while, it will fall. It must.”

Schauffler only interviews one real estate professional in the broadcast, mortgage broker Howard Bono, who forecasts a horizon of “three or four or five years” before the market gets back on its feet.

The overall tone of this most recent piece is a far cry from the November 2007 Up Front in which Lennox Scott, responding to a forecast of home prices dropping 19.5% in five years, made the assertion that “that’s not the projections that we’re seeing.” For the record, King County’s median home price is down 24% from its July 2007 peak, and 18% since Mr. Scott made that claim.

In stark contrast to Sunday’s balanced Up Front report is this piece from KOMO News on Saturday: Home deals: A bright spark amid economic gloom (emphasis mine)

It’s one of the few bright spots amid the economic gloom – a local real estate market that is brimming with deals and incredibly low financing.

But no one knows just how long it will last. So some people aren’t waiting any longer to make the plunge.

Coupled with the dropping prices are some jaw-dropping financing offers that are being made by some lenders. Some banks are offering rates as low as 3.875 percent.

“How crazy is that?” says real estate agent Becky Hiller. “I know, it’s incredible. Amazing – it’s just unheard of.

“I think the bottom has hit,” says [builder Mark] Huber. “Supply is going to start diminishing, and the good ones are going to go fast. This is definitely the time to buy.”

Because who knows when real estate prices will skyrocket once again.


Props to KING 5 for a balanced and realistic story about the local housing market, and shame on KOMO 4 for running a thinly veiled advertisement for local agents and builders and calling it “news.”

Hat tip to RedmondJP for pointing out the KOMO piece over in the forums.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    S-Crow says:

    Interesting video. I’d like to know how the couple interviewed obtained the three investment properties. Cash? If financed, was a non-owner occupied affidavit signed at closing? I’d like to know if the mortgage broker interviewed originated the loans for these folks. Something doesn’t seem right.

  2. 2
    EconE says:

    Komo should do a report on CDOM being “goosed” on my Redfin searches and inquire into the who, what, when, where and why regarding the CDOM “change”.

    This was on the market over 670 days when I mentioned it on UrbnLivn.

    4 days later, it’s relisted and the CDOM has mysteriously dropped to 353.

    A 3% price drop in almost 2 years? (original list was $9,100 higher)


  3. 3
    nonskanse says:

    Is there a graph somewhere showing a count of bottom-callers, pessimists (the market will still go down for a while) and optimists (the market is already recovering?). It would be a fun and entertaining bar graph over time.

  4. 4
    nonskanse says:

    Er- I ask because I want to be like Warren and be greedy when everyone is fearful. Right now my general feeling is about half of people are fearful and half are still stupi–er optimistic.

  5. 5
    SG says:

    Another interesting article in NY times on falling housing prices

  6. 6
    shawn says:

    “So some people aren’t waiting any longer to make the plunge.” I like their use of the word plunge. Seems fitting. One big factor is that people are beginning to see RE as a con. That is going to take time to overcome. We will not be seeing another RE bubble in a long time.

  7. 7

    Great segment!!

    How often is the Main Stream media that objective? What did you think about that Agent who said things will be okay in 3-5 years? Wishful thinking / denial or reality?

    I thought that was funny to see footage of that couple who wanted to “buy a house every year” back in 2005. There are so many arrogant people out there like that.

    The segment on the Mortgage Modification made me ABSOLUTELY sick though!! People are vulnerable these days and they make bad situations worse by taking advantage of them. What are we as a society when this stuff happens? I hope McKenna puts them all in jail for a while.

    Did you see those smug jerks working there? They were all in that 24-40 age bracket(I’m 30 myself BTW) and had the cute receptionist who the top dogs are probably b*nging. Those are the same kinds of people that cut you off in their Acura’s and BMW’s on the road and laugh at you for it.

    That one guy was caught so redhanded he didnt even have a good excuse.

  8. 8
    One Eyed Man says:

    Doesn’t Hebert carry a fair amount of weight with the local real estate brokerage community. I think J. Lennox Scott and/or his minions reference Hebert’s economic forecasts from time to time. How do they spin a forecast like that?

    I think I saw a NAR commercial yesterday and they were basically saying that we may be on hard times but every market is different and you should consult your local realtor. If you’re a local brokerage do you ignore the economists you previously relied upon as a source in the 2006 time frame when they were saying that the national real estate picture is bad but the local economy is still good and the local real estate market is still strong? What are the odds of seeing Lennox on TV saying:

    “Local economists forecast a potential decline in home prices of between ten and twenty percent over the next year or two. Although prices are down and the inventory strong, now may not be the best time to invest in real estate. If you would like more information on your local real estate market or you need to buy or sell, call us. Our business is built on long term relationships. The trust we earn today is the foundation for our continued success.”

    They all say “We want to be your trusted real estate consultant.” Do you think they’ll put their money where their mouth is. Lennox, if you’re reading this, take the high road. If you’re not going to go head to head with the discounters on price, you better make sure you maintain the quality of service and “trusted” reputation to justify the premium.

    Hey, The Tim, does Lennox monitor the site? I was obviously being rhetorical when I spoke directly to him. But I would think that somebody in his network of people probably does at least occasionally right? After all, they all pride themselves on being the technological leaders and the most “in the know” about the industry.

    Nah . . .

  9. 9
    Bird says:

    I agree it’s got a long way to go and will continue to drop, just based on common sense. My rental is still a far better value than purchasing an equivalent place. Sellers are still unrealistic, even if they are underwater they are holding out I presume trying to “wait out” the market. I’ve been out looking at 3-bedrooms in West Seattle and it’s frankly quite shocking what people are asking for their weird little homes. After a few weeks of looking and dealing with rude brokers, I’ve decided to put the search off until the fall then try again. And if somehow prices and interests rates went up again by then- who cares, then my lovely rental is an even better deal and I’ll stay in it.

    For example- I saw a place asking $650,000 that’s been on the market for months, started in the $700,000s. My long-term assessment of the value is somewhere around $450,000 (good location and cute, but small and very old windows, rotted wood, etc.). The broker said the couple rejected an offer for $620,000 because they owe a lot and put money into renovations and just believe it’s worth more. Yet- the only other people at the open house were nosy neighbors with their dog outside. So no point in pursuing that one.

    Saw another place that was gorgeous in some spots, but awkward, tight and dark in others, and has some 100-year old wooden stilts that are questionable. The broker said they had 2 offers at asking price ($575,000) the week it went on the market, but it’s back on again- because the buyer found carpenter ants.

    It is puzzling to me that brokers/owners are turning us away because we have the ability and willingness to buy for a fair price– but their mentality is still bubble era. Luckily we’re in no hurry and will just wait it out, perhaps keep renting for years.

  10. 10
    The Tim says:

    RE: One Eyed Man @ 8 – I doubt Lennox reads the site, but I know his PR lady Shelly Rossi at least checks in when his name is mentioned (she probably has a Google News Alert set up for his name). How do I know? Because she sent me a delightful email a while back in response to one of my posts. See more in the forums here: Email from Shelley Rossi, Lennox Scott’s PR Director.

  11. 11
    David McManus says:

    After a few weeks of looking and dealing with rude brokers, I’ve decided to put the search off until the fall then try again.

    I think some of the real estate “pros” are now in the anger stage having been in denial for so long. Maybe it’s the fact that no money is coming in, yet they still have to pay for their cribs / Lexuses / BMWs.

  12. 12
    The Tim says:

    By David McManus @ 11:

    I think some of the real estate “pros” are now in the anger stage having been in denial for so long. Maybe it’s the fact that no money is coming in, yet they still have to pay for their cribs / Lexuses / BMWs.

    That reminds me of the “cycle of market emotions.” It’s been a while since we had a post dedicated to that—since just one month after the peak.

    Even though it’s been a year and a half, I suspect here in the Seattle area we’re only just now moving from denial into fear. That’s my sense from looking at the overall market, anyway.

  13. 13
    David McManus says:

    Ah, I was looking for that post, Tim. Thanks!

    People tend to lash out with anger when they are scared (Fear).

  14. 14

    “I doubt Lennox reads the site”

    That’s J Lennox to you, ya little know it all twerp.
    Love Ya,
    J Lennox

  15. 15
    The Tim says:

    RE: Ira sacharoff @ 14 – I do so hope he’s at the Downtown Business Breakfast on Monday. Would love to actually meet him face-to-face.

    Do you suppose Lennox would make a good selection for my arch-nemesis? In the past I may have selected another local RE blogger, but I think Lennox may be a better choice…

  16. 16
    Hugh Dominic says:

    RE: SG @ 5
    Very nice article – thanks for passing it on.

  17. 17
    One Eyed Man says:

    RE: The Tim @ 15

    I think he’d make a great arch-nemesis if he could and would actually participate in meaningful diologue. But unfortunately, the need to protect the corporate image that he is an unquestioned real estate authority above the fray would prevent his participation. If you were preceived as getting the better of him, it would be News, especially if you did it in a humorous or mocking fashion.

    The risk to the corporation that the image could be damaged is a tremendous risk to the good will of the company. I think that’s at least in part what the PR Director implied in her explanation as to why he wouldn’t consent to an interview with you. I assume that he controls the Board, but if I were a Board member, I’d call him on the carpet if he risked his image as an authority and the image of the corporate without some very clear, measurable and substantial upside. Even if he thought it would be fun and interesting, I don’t think his responsibility to the company would allow him to do it.

    Although he wouldn’t remember me, I’ve met him before and from what I’ve heard about him he has a good sense of humor which I see as an excellent quality in any arch-nemesis.

  18. 18
    Notorious ART says:


    Are you going to the afternoon lecture, too? Anyone else going? I plan on attending. Shiller is going to launch an ETF that is tied to Case-Shiller Composite 10 Home Price index. It will be interesting to see how it all plays out.

  19. 19
    Ray Pepper says:

    RE: Notorious ART @ 18

    I will be there trying to get him to wear a 500 Realty Shirt prior to his speech.

  20. 20
    Snigliastic says:

    RE: Ray Pepper @ 19
    what does GEM stand for? I heard in on the radio this morning.

  21. 21
    Ray Pepper says:

    Snig my definition of a GEM is different then others. I’m an investor. I will always be. Houses for me are tools and I only like them as income generating revenue. In the curent climate:


    A property that is purchased today and can be sold tomorrow for a profit. These are the only homes that I currently look for in other states.

    A property that generates revenue each month greater then 20% based on rental income. These are what I look for in this state.

    I’m travelling to Scottsdale next month to view possible Condo blocks of GEMS (condo’s selling for 50K). I most likely will not buy because of the dues and flooded rental market but we shall see. 1400 properties hit the PHX Auction last month and it appears some GEMS were bought.

    Gem for others:

    A property that is now selling substantially below its previous highs. In Nevada/Calif I have seen 65% off. Many call those Gems. Not me. I cannot sell them the next day for a profit. But, for a home to live in. It is a GEM in their eyes.

    Snig I received my real estate license over 10 years ago just for investor purposes. 4 years ago I saw an industry that needed change. So my path still contains investor searches but now takes on a mission as well.

    Snig there are many Gems out there in many states. Just take your time and look. There is no RUSH.

  22. 22
    One Eyed Man says:

    RE: Ray Pepper @ 21

    Good stuff on relative perspective on the market Ray. Thanks!

  23. 23
    Notorious ART says:

    RE: Ray Pepper @ 19

    HaHa, I have a 500 Realty shirt from the last meetup in the U-district. See ya Monday!

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