Mid-Week Open Thread (2009-10-21)

Here is your open thread for the mid-week on October 21st, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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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
    Sniglet says:

    Off topic. I just wanted to mention that I have posted two new podcasts in the Optimistic Bear “Practical Economics” series. One is an interview with Bill Conerly (who believes the economy is on the mend) and the other is with Matt Stiles (who thinks that the inflation/deflation debate is irrelevant).


    For amusement, I also posted “Microsoft Program Management for Dummies”, describing what I experienced in my career at Microsoft.


  2. 2
    David Losh says:

    Even more off topic, it looks like some agents are advertising on the Seattle Bubble.

    What does that say about the business enviorment for Real Estate agents? As the housing market contracts there are fewer deals for fewer agents. Will the Top Producers keep a market share or will it cost them too much money in over head to justify the time spent for the fewer deals?

    Then where does the consumer go for advice about that home purchase? How will the commission structure have to change?

  3. 3
    AMS says:

    RE: David Losh @ 2 – I suggest we follow the David Losh philosophy of kicking the most talented down. The talented sellers need a big pay reduction, even if they are the only ones making the sales.

  4. 4
    truthtold says:

    Sales rep advertising…Brent appears consoling (at least) and the other is a sharp dresser. I like it when they hold dogs.

  5. 5
    Scotsman says:

    As a cat person, I often wonder why there are no pictures of realtors holding cats….

  6. 6
    Herman says:

    Brent’s house is for sale. If you want to help him, you should buy it.


  7. 7
    Scotsman says:

    It’s a great time to jump into the market!

    Housing Market Has Bottomed, Banking Analyst Bove Says

    Posted By: Antonia Oprita | Associate Web Producer, CNBC.com
    CNBC.com | 21 Oct 2009 | 09:21 AM ET

    The biggest problem that banks have faced was the fall in the housing market, and this seems to have bottomed, Rochdale Securities banking analyst Richard Bove told CNBC.

    “I really believe that the industry has bottomed, that we’re not going to see further crashes in home prices or in home sales,” Bove told “Squawk Box.”



  8. 8

    RE: Scotsman @ 7

    Like Lemmings Lined Up Jumping Off the Cliff….LOL

  9. 9
    Scotsman says:

    Oops, looks like CNN disagrees with the Bove assessment offered up on MSNBC:

    “Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.
    Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
    In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.
    Mark Zandi, chief economist with Moody’s Economy.com, agreed with Fiserv’s current assessments. “I think more price declines are coming because the foreclosure crisis is not over,” he said.”


    Who ya gonna believe?!?

  10. 10
    Kary L. Krismer says:

    By Scotsman @ 5:

    As a cat person, I often wonder why there are no pictures of realtors holding cats….

    Someone apparently hasn’t read my profile over at SREP. ;-)

  11. 11
    Scotsman says:

    Well there we go! Cats rule, dogs drool!

    I will, however, need a shower after visiting SREP. Kary is the only ray of hope over there…

  12. 12

    RE: David Losh @ 2

    I advertised primarily on Seattle Bubble primarily because I like the site and believe in it. I know, I could have simply donated and kept it anonymous, but I am in fact a real estate agent, and even if I just got a few comments like ” So much more entertaining and funnier than typical real estate ads”, it’s worth it.
    Plus, Seattle Bubble is a good place to advertise. As has been shown, typical Seattle Bubble readers are smart and have money….That they’re reluctant to part with that money makes them even smarter. In short, these are my peeps.

  13. 13
    David Losh says:

    RE: Ira Sacharoff @ 12

    I work with a lot of Real Estate agents. Most are way below the number of deals they normally do. The second part is the number of agents who also carry mortgages on investment properties. Many have sold properties, others are holding out for the market to improve. I think every agent agrees that things will never be like they were in the past ten years.

    I would be very interested in a guest post from Brent Fosso. I would also like to hear more from other Real Estate agents. There are other perspectives of the market place from people who do more than purchase a family home.

  14. 14
    TJ_98370 says:

    This should prove to be interesting to watch. I’ll believe it if it actually happens……
    Administration plans big pay cuts at bailout firms
    WASHINGTON (AP) — The Obama administration will order companies that received huge government bailouts last year to slash the base salaries of their top executives by an average of 90 percent and cut their total compensation in half, a person familiar with the decision said Wednesday.
    The cuts apply to the 25 highest paid executives at the seven companies that received the most assistance, said the person, who spoke on condition of anonymity because the decision has not been announced. Smaller companies and those that have repaid the bailout money, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., are not affected……….


  15. 15
    TJ_98370 says:

    RE: Ira Sacharoff @ 12
    I for one appreciate yours and Kary’s posts. Your credible opinions / challenges keep Seattle Bubble from slipping into another groupthink fest site IMO.

  16. 16
    AMS says:

    RE: Ira Sacharoff @ 12 – I really like your ads–there is a certain level of honesty that is hard to match.

  17. 17
    Courtney says:

    RE: Ira Sacharoff @ 12 – I loved your ad! I showed it to my mom. =)

  18. 18
    DrShort says:

    After 20 months of renting since I sold my last house, I am jumping back in. It’s not so much that I think the bottom is here, but after looking at 75+ houses, we found one we really like.

    I wouldn’t be surprised to see prices drop another 10% – 15%, but I felt we’ve had enough correction in the market where I could focus on finding the right house rather than timing the bottom. But I must admit, the prospects of further declines scares the hell out of me.

  19. 19
    NoMoreWork says:

    Going to change the direction here….

    We need more STATS!! That’s what brought me here, that’s what keeps me refreshing. Op posts are nice but I want more hard analysis (I’m also an engineer! Yes, Boeing if you ask). Don’t get me wrong Tim, I value the opinion and insight, but I want more charts, tables and calculators!!! Bread and butter SeattleBubble stuff!

    How about a post on average salary in the region, also broken down by county and income tiers (high, med, low), and what that can buy ‘affordably’ with 3, 10 and 20% down? Those charts would be interesting and provide insight into the current underlying “buying power” of the region.

    Just my two cents, I don’t make the posts (and thus don’t make any money off them), I just read ’em. Keep up the good work tho! Consider it constructive criticism…

  20. 20
    buystocks says:

    RE: DrShort @ 18
    You made sense until your last sentence “But I must admit, the prospects of further declines scares the hell out of me.” I’m a worst case scenario planner, so I haven’t yet taken plunge (looking for a year). Anythings possible in this unstable market (range from a 80% drop from peak to begin appreciating before I buy). With a leveraged asset I’m still much more scared of the worst case scenario and will continue to wait

  21. 21
    Scotsman says:

    RE: DrShort @ 18

    Why not just send me your down payment, ’cause it sounds like you’re going to lose it anyway, and I can put it to better use than some criminal bank. And you won’t miss it because in two years you’ll be able to buy something you never thought you could afford…. if you aren’t locked into some upside down short sale.

    Too harsh? Re-read your own post, have a beer, and call me in the morning. ;-)

  22. 22
    The Tim says:

    RE: NoMoreWork @ 19 – How’s today’s post for you? I definitely prefer the stats stuff too. Ideally the op-ed type stuff would just be “extra” posts that are highlighted over on the side or something.

  23. 23
    Sniglet says:

    I wouldn’t be surprised to see prices drop another 10% – 15%

    For what it’s worth, I suspect we are going to an additional drop in prices on the order of 50% to 70% from where they are now. Of course, this won’t happen all in one year, and we could easily see a year or more where prices “recover” before we finally hit bottom.


  24. 24

    RE: Sniglet @ 23

    Especially if the 787 is Terminated

    Why didn’t those buffoon CEOs terminate the 787 last year? By now, the embarrassment would be over and a new aluminum development plane [made locally with decent sub-assemblies] would be on the market. But I’m not their CEO, so what do I know?

    For all you diehard globalists that would never blame Boeing’s current 787 problems on foreign junk, article in part:

    “….Boeing Co. Chairman and Chief Executive Jim McNerney said the company had overreached in outsourcing production on its marquee 787 Dreamliner program, leading to a string of problems…”

    The rest of the WSJ URL:


  25. 25
    Kary L. Krismer says:

    RE: softwarengineer @ 24 – I think the mistake Boeing made, assuming they wanted to outsource (which itself was a questionable decision), was not having each part made by two companies. If they’d done that they probably wouldn’t have been forced to buy Vought (sp?) in SC.

    If they’re so worried about the delays due to strike, they have a lot to learn about the delays due to a single supplier not producing.

  26. 26
    DrShort says:

    By Scotsman @ 21:

    RE: DrShort @ 18

    Why not just send me your down payment, ’cause it sounds like you’re going to lose it anyway, and I can put it to better use than some criminal bank. And you won’t miss it because in two years you’ll be able to buy something you never thought you could afford…. if you aren’t locked into some upside down short sale.

    Too harsh? Re-read your own post, have a beer, and call me in the morning. ;-)

    I’ve looked at 75+ houses and finally found one I like and think is a good deal. Apparently, I’m super picky. This isn’t an investment for me and I plan on being here for 10+ years. However, I’ve carefully chosen a house I think will retain value as compared to the market (not new, cookie cutter, etc.).

    Prices may countinue to fall, but the house price/rent and home price/income ratios are MUCH closer to historical norms than they were 20 months ago when I sold.

  27. 27

    You know what’s really wrecking the economy?
    Aliens, the kind from outer space, collecting unemployment benefits:


  28. 28
    Kary L. Krismer says:

    RE: DrShort @ 26 – We looked at over 80. And it took a lot of negotiating to make it a good deal.

  29. 29
    Scotsman says:

    RE: Ira Sacharoff @ 27

    Heh. Have you seen “District 9?” I thought it was pretty clever. Next thing you know it’ll be zombies on unemployment. “Zombieland?”

    Rule #1- “cardio” ;-)

  30. 30
    TJ_98370 says:

    RE: Ira Sacharoff @ 27

    Okay, there went your credibility…….and you were doing so well up to now.

  31. 31
    Scotsman says:

    NO! Say it ain’t so! (Or is that “told ya so?”)

    From CNN’s Lauren Kornreich

    TARP Special Inspector General Neil Barofsky said the government’s decision to support bank mergers may have put the U.S. economy more at risk.
    WASHINGTON (CNN) – The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.

    Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN’s Wolf Blitzer on Wednesday that the government’s decision to support bank mergers over the past year may have put the U.S. economy more at risk.

    “These banks that were too big to fail are now bigger,” Barofsky said. “Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we’ve said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.

    “Potentially we could be in more danger now than we were a year ago,” he added.

  32. 32
    patient says:

    RE: DrShort @ 26 – DrShort, that “not trying to time the market”, “stay for 10+ years” talk sounds an awful lot like the usual realtor sales tacticts to upease a logical thinking, rightfully skeptical buyer , you know that don’t you? If you are concerned of further big declines why don’t you just wait and see? What’s the big hurry? Are you sure it’s not just a feeling that you don’t want all your time to look for a home to be wasted? Make sure to take a break for a while and properly evaluate your long term priorities before jumping on something that makes you uneasy. Those feelings are very often justified and an alarm bell to take seriously.

  33. 33
    posthoc says:

    RE: patient @ 32 – Because some of us have families? And, for better or worse, given the lack of public school choice, practically the only way you get your kid(s) into a good school is to buy your way into an expensive neighborhood–which at least in my experience do not have a ton of rentals on the market.

    Honestly I feel as if most of the bear arguments on this site have been rebutted, more than amply, by Elizabeth Warren’s 2004 book “The Two-Income Trap.” I would argue that, even setting aside speculative excess, or funny-money Fed policies, a major driver of escalating real estate prices over the last generation has been the conversion of many households with children from one income to two incomes, and the subsequent bidding-up of desirable homes in good neighborhoods, and a subsequent halo effect.

    (Warren is part of Obama’s administration, so whether or not you agree with her, her views have to be taken seriously as potentially affecting all of us.)

  34. 34
    buystocks says:

    RE: posthoc @ 33
    what? lax loan policy more responsible for housing bubble than the two-income effect. Halo? you mean the game?

  35. 35
    posthoc says:

    RE: buystocks @ 34 – Uh, what? Are you drunk? I claimed that the increasing prevalence of two-income households could not help but drive up the cost of family homes in neighborhoods with good schools. That’s about it–the rest of my post consisted of disclaimers.

  36. 36
  37. 37
    patient says:

    RE: posthoc @ 33 – You don’t need a ton and I have rented four in some of the best hoods on the eastside with very good schools. It was really easy to find and relatively cheap as well. We have two kids. How’s that for rebutted argument?

  38. 38
    posthoc says:

    RE: patient @ 37 – I’m impressed, and perhaps somewhat more open to the argument that the eastside really is better for families. One thing I might quibble with is–sidewalks. Every time we visit friends there, having to drive one’s kids everywhere, because of the lack of sidewalks, is a bit discouraging. Is it really a family neighborhood if your young children can’t set foot outside without supervision or chauffeuring?

  39. 39
    AMS says:

    RE: posthoc @ 38 – What neighborhood can you send young children out without supervision or chauffeuring?

  40. 40
    patient says:

    RE: posthoc @ 38 – Our kids are a bit small to be unsupervised imo but the street we live at is a residental only street with no through traffic so it’s full of kids skateboarding, cycling, even sledding last winter. It’s not europe for sure where I grew up where we cycled to school, soccer practice, shopping, etc but it’s not bad for the suburban USA.

  41. 41
    AMS says:

    RE: patient @ 40

    Your kids are a bit small to be unsupervised on your current street.

    I’m waiting to hear back from posthoc as to a new neighborhood for you to toss your youngsters out into the street unsupervised.

  42. 42
    mukoh says:

    Our school district is top 3 in the state and some other ridiculous number in the country. To get in here to rent? Yes an apartment which there are about two or three of, maximum 1100 Sq Ft and no garage, thats lovely for a family. The rest are all single family homes. The rent is roughly close to what a mortgage would cost as rarely does anyone want to rent out their house. Even though I would like to build another home for myself in another area where I already own land, leaving this school district would be pretty bad comparatively to the other one.

    I can see how posthoc and can relate to the quality of schools.

  43. 43
    Tim says:

    Just caught the 5pm Seattle Times article about Sterling Financial parent of Sterling Bank and Golf Savings Bank . 3rd qtr. losses at $463.7 Million.


  44. 44
  45. 45
    patient says:

    RE: mukoh @ 42 – I dunno mukoh, we currently rent a ~2500 sqft two story built in the 90s for ~$1700/month. It’s been very easy to find a good sfh rental in a very short time every time we wanted to move. We only stayed in areas with highly rated schools. It’s really not been difficult, honestly. I had company paid housing for many years so renting was an easy choice, now when I pay myself it’s still an easy choice due to market conditions.

  46. 46
    mukoh says:

    RE: patient @ 45 – Patient, my left over mortgage on my house 3000 Sq Ft 3 car garage, with views is $1800 a month with taxes. So its just a matter of how you buy and what you buy, this house was custom built for someone but we took over it after a bit and under $500k, its a 2002 build.

  47. 47
    Rack says:

    By mukoh @ 44:

    Tacoma just can’t catch a break.

    Well, the good thing is, is that the call center is in the US. Another good thing is, that the people that move can buy houses after the bust. A bad thing is, is that they have to move to Las Vegas.

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