Mid-Week Open Thread (2009-12-30)

Here is your open thread for the mid-week on December 30th, 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!

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.

46 comments:

  1. 1
    softwarengineer says:

    New Years Eve Bashes

    OK, what’s you bloggers plans for the New Years?

    Stay safe at home with your Jack Daniels and watch the Space Needle firework show on TV?

    Go to a nice expensive lounge party with dinner, champaign and dancing girls?

    Visit friends and party hearty, then take a cab home.

    Other?

    I usually play it by ear, I sometimes get some invite at the last minute to a lounge party, if I pay….LOL

    My Latina girlfriend works all the time, but when she gets a 12 hr window off she wants a wild night out with a nice restaurant meal and fine wine….LOL….BTW, with equal genders and such, isn’t the man pays for dates and such an extinct dinosaur now [I still do, but I guess I’m old fashion]?

  2. 2
    AMS says:

    Arrow Trucking Company shut down just before Chirstmas, leaving over 1,000 drivers stranded, some of which complained about bad checks.

    Now YRC will probably shut down:

    “OVERLAND PARK, Kan. (AP) — An analyst said Wednesday that YRC Worldwide Inc., one of the nation’s largest trucking companies, could file for bankruptcy and close its doors as early as this weekend despite its effort to complete a critical debt-to-exchange offer.”

    “The last time a trucking company about the size of YRC went out of business was in 2002, after Consolidated Freightways filed for Chapter 11 protection. Less-than-truckload carriers like Consolidated and YRC, which consolidate shipments from many sources at company terminals, historically have not been able to keep their doors open after filing for bankruptcy because of their high fixed costs and customer defections.”

    http://finance.yahoo.com/q?s=YRCW

    Remember the days when 50% of the mail was credit card offers?

  3. 3
    BillE says:

    Here’s a couple of observations from the market I’m looking at. Quite a few houses on my favorites list have gone pending in the last couple of weeks. This was a surprise to me simply because I thought the holidays would put most purchases on hold. Not so. What I really find interesting is that several homes that went pending since the summer have come back on the market as active listings. Some of them went pending as far back as July and just went back to active in the last week or so.

  4. 4

    RE: BillE @ 3 – Those going back active after that long of a delay were probably short sales.

  5. 5
    BillE says:

    That was my thinking too. But from the info available, not all of them are short sales. Most of the homes that I’ve seen go pending recently are bank owned or short sales. Nothing scientific about my observations, they’re just home’s I’ve kept an eye on in Snohomish County.

  6. 6
    Smitty says:

    RE: BillE @ 3 – P

  7. 7
    Smitty says:

    RE: BillE @ 3 – OK, that didn’t work. I’ll give it another try. I’m seeing the exact same thing with my Redfin favorites. Ten out of about 60 went pending this week alone. Not indicated as ss, but that’s not necessarily the case. Anyway, seemed strange to see so much activity in just this last week. I too have seen several listing that went pending over come back active in Dec. FWIW, most of mine are Eastside listings.

  8. 8
    Scotsman says:

    Deflation is real.

    Dec. 30 (Bloomberg) — The amount of corporate debt outstanding globally shrank for the first time in at least 15 years in the first half of 2009 as U.S. banks reduced the size of their balance sheets, according to Mizuho Securities Co.

    The volume of corporate bonds, commercial paper and asset-backed securities fell to $52.9 trillion at June 30 from $53.2 trillion on the same day in 2008, Tetsuo Ishihara, a senior credit analyst for Mizuho in Tokyo, said in a report yesterday that analyzed data from the Bank for International Settlements.

    “It’s unprecedented that the global debt market shrinks,” Ishihara said in a telephone interview. “When redemptions and buybacks are greater than new issues the outstanding size can shrink, which appears to have happened here.”

    Debt is money. And regarding the 15 years, note that is as far back as the records go. This could be the first time corporate debt has shrunk since the GD.

  9. 9
    fabuladocet says:

    By BillE @ 3:

    Here’s a couple of observations from the market I’m looking at. Quite a few houses on my favorites list have gone pending in the last couple of weeks. This was a surprise to me simply because I thought the holidays would put most purchases on hold. Not so. What I really find interesting is that several homes that went pending since the summer have come back on the market as active listings. Some of them went pending as far back as July and just went back to active in the last week or so.

    I had a similar experience with the homes I was tracking in upper Queen Anne. A month to six weeks ago most of the homes I was tracking went pending or simply went off of the market. I had mistakenly thought that things would be slowing down or dropping for the holidays instead of this massive contraction in interesting inventory. I have some ideas of what happened, in retrospect, but the fact remains that upper Queen Anne has thus far bucked the trend of slumping sales and lower prices. Sellers are asking for and getting prices that are in excess of 2007 same-home prices. The homes that remain on the market are homes with list prices well in excess of 2007 values. I’m a relative novice to this kind of analysis and thinking, obviously, but I am puzzled by the current scenario.

  10. 10
    David Losh says:

    I looked up a the Census statistics in King County http://quickfacts.census.gov/qfd/states/53/53033.html for a comment to respond to Ardell. If you look at the number of housing units compared to households there seems to be enough housing units available.

    Doesn’t this look like an excess of housing? More importantly will all these empty holes in the ground turn into a further over supply of housing?

    The second part is that for all the crying about the poor banks losing all this money from bad loans, haven’t they already taken as much cash as they need out of the system leaving the stock holders and government to pay the difference? Isn’t that the system we have in place?

    So what I’m trying to figure out is, why any one would care what the price of housing turns out to be? I know that there is a debt owed on the properties, but what does the bank care, at this point? Why aren’t banks just happy to get whatever they get from this pioint forward?

    So whether banks sell at foreclosure, or sell for a heavey discount, or renegotiate the loans in place, it seems to me that no one, other than the suckers with loans would care. What do you care?

  11. 11

    By fabuladocet @ 9:

    By BillE @ 3:

    Here’s a couple of observations from the market I’m looking at. Quite a few houses on my favorites list have gone pending in the last couple of weeks. This was a surprise to me simply because I thought the holidays would put most purchases on hold. Not so. What I really find interesting is that several homes that went pending since the summer have come back on the market as active listings. Some of them went pending as far back as July and just went back to active in the last week or so.

    I had a similar experience with the homes I was tracking in upper Queen Anne. A month to six weeks ago most of the homes I was tracking went pending or simply went off of the market. I had mistakenly thought that things would be slowing down or dropping for the holidays instead of this massive contraction in interesting inventory. I have some ideas of what happened, in retrospect, but the fact remains that upper Queen Anne has thus far bucked the trend of slumping sales and lower prices. Sellers are asking for and getting prices that are in excess of 2007 same-home prices. .

    I don’t think that’s correct, but without knowing the specific area you’re talking about I can’t pull data. Can you give me some street boundaries or something?

  12. 12

    RE: David Losh @ 10 – That census link says there were just over 700,000 households in King County in 2000. Some of those are living in apartments, not owned units, so let’s say only half live in owned units, that would be 350,000 owned units, which is probably low. In 2006 the NWMLS reported just over 37,500 sales of SFR and Condo, so that would be over 10% of the owned units changed hands.

    One the one hand that percentage seems high to me, but if you assume people only tend to stay in the same place less than 10 years it would be low.

    For comparison purposes, through the end of November we’ve only had just under 20,000 closed sales this year.

  13. 13
    AMS says:

    RE: David Losh @ 10 – We all know that half of those outside of the PNW are seeking to move to the PNW, or at least that’s the claim of some. Essentially, build and they will come.

    I do not subscribe to this way of thinking, but it’s possible that there will be a big migration into the area.

  14. 14
    AMS says:

    RE: AMS @ 2 – UPDATE: YRC saved for now.

    YRC was able to get enough of the bond holders to agree to avoid bankruptcy. It’s my opinion that this is an indication that debt holders are getting more realistic about not getting paid, even if there is an underlying credit default swap.

    Do I think this is a positive indicator? Only to the extent described above. This is an indication of bygone days of loose credit.

  15. 15
    AMS says:

    I was listening to Art Bell’s annual prediction show on Coast to Coast. I could not help but see the parallels between some of the crazy housing predictions to those who predict that the aliens will be landing. Where do people get these thoughts?

    I am forced to ask myself, did the people who made the prediction really believe it, or did they do it as some sort of hoax? At the peak of the housing market it was not difficult to find those agents who suggested the housing market was going up by another 20-25% per year for many years. Buy now or get priced out. If the agents actually believed these predictions, then it was simply a false claim. On the other hand, if the agents knew that there was a good chance that fuel behind the rocketing prices might run out, then it’s an intentional deception, otherwise known as lying. Who knows, maybe the agents actually believed that aliens were going to land.

  16. 16
    deejayoh says:

    By Kary L. Krismer @ 11:

    By fabuladocet @ 9:

    By BillE @ 3:

    Here’s a couple of observations from the market I’m looking at. Quite a few houses on my favorites list have gone pending in the last couple of weeks. This was a surprise to me simply because I thought the holidays would put most purchases on hold. Not so. What I really find interesting is that several homes that went pending since the summer have come back on the market as active listings. Some of them went pending as far back as July and just went back to active in the last week or so.

    I had a similar experience with the homes I was tracking in upper Queen Anne. A month to six weeks ago most of the homes I was tracking went pending or simply went off of the market. I had mistakenly thought that things would be slowing down or dropping for the holidays instead of this massive contraction in interesting inventory. I have some ideas of what happened, in retrospect, but the fact remains that upper Queen Anne has thus far bucked the trend of slumping sales and lower prices. Sellers are asking for and getting prices that are in excess of 2007 same-home prices. .

    I don’t think that’s correct, but without knowing the specific area you’re talking about I can’t pull data. Can you give me some street boundaries or something?

    you can get the trend stats off of redfin. Observation seems correct wrt volume, but price reflect as $/sqft seems to be dropping

    http://www.redfin.com/neighborhood/831/WA/Seattle/East-Queen-Anne
    http://www.redfin.com/neighborhood/3034/WA/Seattle/West-Queen-Anne
    http://www.redfin.com/neighborhood/1928/WA/Seattle/North-Queen-Anne

  17. 17

    RE: deejayoh @ 16 – I did a search in the area and both mean and median were off by >10%. I didn’t notice the square foot price. That is pretty good, especially for higher priced houses, but it’s still not 2007 prices. But there very well could be a smaller area within the area I searched that is doing better overall.

  18. 18
    Trigger says:

    RE: Scotsman @ 8 – Normally you would have a deflation if not for Helicopter Ben. Get those print presses rolling!

  19. 19
    fabuladocet says:

    By Kary L. Krismer @ 11:

    By fabuladocet @ 9:

    By BillE @ 3:

    Here’s a couple of observations from the market I’m looking at. Quite a few houses on my favorites list have gone pending in the last couple of weeks. This was a surprise to me simply because I thought the holidays would put most purchases on hold. Not so. What I really find interesting is that several homes that went pending since the summer have come back on the market as active listings. Some of them went pending as far back as July and just went back to active in the last week or so.

    I had a similar experience with the homes I was tracking in upper Queen Anne. A month to six weeks ago most of the homes I was tracking went pending or simply went off of the market. I had mistakenly thought that things would be slowing down or dropping for the holidays instead of this massive contraction in interesting inventory. I have some ideas of what happened, in retrospect, but the fact remains that upper Queen Anne has thus far bucked the trend of slumping sales and lower prices. Sellers are asking for and getting prices that are in excess of 2007 same-home prices. .

    I don’t think that’s correct, but without knowing the specific area you’re talking about I can’t pull data. Can you give me some street boundaries or something?

    I wish you were right, Kary. Unfortunately for me, most available options have disappeared, and those remaining are the 2007 +20% holdouts who refuse to believe that each year doesn’t automatically add 8 – 10% to their home’s value.

    My area of interest is Queen Anne hill, within these boundaries:
    North – McGraw
    East – Bigelow
    South – Prospect
    East – 8th West
    …and these specs:
    4 beds
    3 baths

  20. 20

    RE: fabuladocet @ 19 – Thanks. I’m running out, but should be able to get to that when I return.

  21. 21
    AMS says:

    “ANN ARBOR, Mich.—Michigan has endured six straight years of job losses and the next two years will see even more—the longest stretch of employment loss in the state since the Great Depression, say University of Michigan economists.”

    This is old news! Very old. Published over three years ago: Nov. 17, 2006

    http://www.ns.umich.edu/htdocs/releases/story.php?id=1069

    With the 20 week November 2009 extension, in Michigan an unemployed worker could receive unemployment benefits for 99 weeks, which could be extended yet again. Yes, we’d need to select the right group of unemployed workers to maximize the weeks of benefits, but it’s not that uncommon.

  22. 22
    Scotsman says:

    Please- buy this house… and repaint the whole thing. What were they thinking- or is this the current look?

    http://seattle.craigslist.org/est/reb/1529573166.html

  23. 23
  24. 24
    AMS says:

    “Landlords are offering tenants up to six months of free rent, flat-screen TVs and new appliances. They’re also slashing monthly rates and easing application standards.”

    http://www.usatoday.com/money/economy/housing/2009-12-30-rent-bargains-discounts_N.htm

    (HT: CR)

  25. 25
    Haybaler says:

    Home Prices Increase by 25% This Decade Even with Slump
    December 31, 2009

    After the biggest housing boom and bust in U.S. history, prices of existing homes managed to increase by only 25% over the past 10 years, according to the National Association of Realtors. The Realtors reported that median home values rose from $137,600 in November 1999 to $172,600 in November 2009 or 25%. At the peak of the market, the median house price hit $230,300 in July 2006. The latest forecast by NAR economists shows that the median house price will rise 3.6% in 2010 to $178,900, after falling 12.8% in 2009. The economists expect existing home sales will rise 10.8% in 2010 to 5.71 million from 5.15 million in 2009.

    Source is Broker Universe Magazine, e-version.

  26. 26
    corncob says:

    RE: Haybaler @ 25

    That is pretty interesting, it means that housing didn’t even beat inflation over the decade:

    $137,600.00 in 1999 dollars is $178,673.52 in 2009 dollars. (source: BLS)

  27. 27
    David Losh says:

    RE: corncob @ 26RE: Haybaler @ 25

    Housing appreciates at about 4% per year, or close to inflation.

    Here’s the problem i’m seeing with the inflation of the past decade: it’s all credit created.

    Did prices actually go up on hard goods or did people pay more because they could finance? Did 0% financing raise the price of all goods as it did with Real Estate?

    Do we have a false economy based on credit and financing option?

  28. 28
    David Losh says:

    RE: Kary L. Krismer @ 12

    Housing units in 2008 were 833K, even with a population growth that’s a housing unit for every household.

  29. 29
    EconE says:

    RE: Haybaler @ 25

    Broker Universe Magazine?

    And why exactly should we give them any credibility?

    Oh…that’s right.

    We shouldn’t.

    Mortgage slinging scumbags quoting Realturd scumbags.

  30. 30
    corncob says:

    RE: David Losh @ 27
    So are you saying that inflation should have been 0% over the decade because actual inflation was caused by the credit bubble? I think that there was probably enough real productive growth in the economy during that time to cause some of the inflation, however I would not want to guess what that ratio actually is.

  31. 31

    RE: fabuladocet @ 19 – Here’s what I pulled using the borders you specified in Queen Anne. I used 4 bedroom or more, 2.5 bath or more, rather than 4/3. Both periods were 6/25/ to 12/25 of their respective years.

    2009 2007

    Sales 10 17
    Median 875k 1295k
    Mean 1499k 1592k
    DOM 157 36
    SP/LP 91.4% 96.48%
    Sq Ft 3933 3697
    Mean List 1640k 1672k
    Orig List 1871k 1672k

    From that I think what you might be seeing is that what the sellers are asking is pretty close, and their original list price is even higher. But back in 2007 the sellers were getting closer to those numbers much faster.

    BTW, right now I’m not seeing an active property under 1.2 fitting these parameters, but the average DOM for those listings is 315!. Only two have been on the market less than 6 months.

    Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

  32. 32
    Pen McQuade says:

    Been watching an area in the south sound, Auburn, for a couple years. Since the Home Buyer Tax credit the volume of homes for sale have decreased significantly. Now all I am finding on the market is either overpriced homes or homes in very poor condition. I also noticed quite a bit of pending sales showing up these past few weeks. We have been looking for another home and have run into some problems…two homes we wanted to see were not available to view these last few weeks. It maybe a coincidence that these sellers wouldn’t show their homes or I wonder if these sellers are waiting to see if the first of the year will bring out more buyers and drive prices up. If this is proves to be the case we will suspend our search. One RE agent told me people are waiting to list their homes because they want a 2010 MLS number? Not sure what advantage that would give a seller.

  33. 33

    Here are the same numbers using just 4 bedroom, 2.5 bath+, with houses under 4,100 square feet (same disclaimer)

    Sales 5 14
    Median 665k 1275k
    Mean 754 1378k
    DOM 146 36
    SP/LP 94.5% 98%
    Sq Ft 3006 3403
    Mean list 797k 1404k
    Orig List 806k 1431k

    Those are showing a more significant reduction because the 2009 sample in the earlier post had 3 of the 10 houses having over 5000 square feet.

  34. 34
    corncob says:

    RE: Kary L. Krismer @ 32 – There you go again Kary, with all your fancy numbers and facts. Can’t you just take someone at their word anymore?

  35. 35

    RE: corncob @ 33 – LOL. Actually I was looking more to see if it could be true. I could very well see that a small pocket of the city, close to downtown, would hold value, despite financing issues.

  36. 36
    David Losh says:

    RE: corncob @ 30

    Productive growth may have been financing rather than an actual increase in the cost of goods. As a matter of fact the price of goods could have gone down with our importation of Chinese goods. Instead we saw prices inflating.

    What I’m thinking is that the contraction of credit may make the price of goods go down, and the price of housing will continue to fall.

    The 25% figure may be wrong, but it seems it could be correct.

  37. 37
    Jbeans says:

    I’ve noticed the same thing, lots of houses that have been sitting are suddenly going pending, and houses that were pending have come back on the market. I’m also seeing quite a few flipped properties coming on the market. Real estate sure is a mystery these days.

  38. 38
    David Losh says:

    There is a town house on 88th and Midvale Ave N that sold for $370K four months ago with multple offers. We’ve been in a lot of those town homes and the most we saw one sell for was $340K a few years ago.

    It’s just crazy.

  39. 39

    By David Losh @ 28:

    RE: Kary L. Krismer @ 12

    Housing units in 2008 were 833K, even with a population growth that’s a housing unit for every household.

    I wasn’t trying to address that issue. All I was trying to figure out is what percentage of owned units (e.g. not apartments) sell each year.

  40. 40

    By Jbeans @ 36:

    I’ve noticed the same thing, lots of houses that have been sitting are suddenly going pending, and houses that were pending have come back on the market. I’m also seeing quite a few flipped properties coming on the market. Real estate sure is a mystery these days.

    Unless they go back active within two weeks or less, chances are it’s a short sale. If it’s more than two months, almost certainly a short sale.

  41. 41

    By Scotsman @ 22:

    Please- buy this house… and repaint the whole thing. What were they thinking- or is this the current look?

    http://seattle.craigslist.org/est/reb/1529573166.html

    I don’t think that is that bad, but it does give rise to caution when picking your roof material. It can really limit the color that you can paint your house.

  42. 42
    Scotsman says:

    RE: Kary L. Krismer @ 41

    Ugh! Are you serious? Did you see the marble in the fireplace? Like the roof, a bit limiting, eh?

  43. 43
    fabuladocet says:

    By Kary L. Krismer @ 31:

    RE: fabuladocet @ 19 – Here’s what I pulled using the borders you specified in Queen Anne. I used 4 bedroom or more, 2.5 bath or more, rather than 4/3. Both periods were 6/25/ to 12/25 of their respective years.

    2009 2007

    Sales 10 17
    Median 875k 1295k
    Mean 1499k 1592k
    DOM 157 36
    SP/LP 91.4% 96.48%
    Sq Ft 3933 3697
    Mean List 1640k 1672k
    Orig List 1871k 1672k

    From that I think what you might be seeing is that what the sellers are asking is pretty close, and their original list price is even higher. But back in 2007 the sellers were getting closer to those numbers much faster.

    BTW, right now I’m not seeing an active property under 1.2 fitting these parameters, but the average DOM for those listings is 315!. Only two have been on the market less than 6 months.

    Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

    Thanks, Kary. I appreciate your research, which is true to the statistically sound approach of this blog (i.e. – looking at sales, median, mean, DOM, etc.). I don’t think I have access to the tools you are using, and in any case this is not my field. I study upper Queen Anne because of my very narrow interest in purchasing a home there for my rapidly growing family and the hordes of extended family that can’t seem to get enough of us these days.

    So I’m coming at this from a very different, less rigorous, perspective; as a prospective buyer. My observations are based on those homes that are active now or have sold/gone pending in roughly the last 2 months, compared to the same home’s sold prices in or around 2007 (obviously these dates narrow the data population substantially, and skews toward flippers). But still, it seems that the drop in home prices has thus far effectively bypassed upper Queen Anne, at least for current and recent inventory, and I wish that weren’t true if only for my very narrow self interest in being able to afford a place in the neighborhood I like. Perhaps the key words here are “thus far”.

    Here’s a favorite example of mine, which sold in 2004 for $960k and is currently offered at $1,950,000:

    http://www.redfin.com/WA/Seattle/1205-8th-Ave-W-98119/home/132282

  44. 44

    RE: fabuladocet @ 43RE: fabuladocet @ 43 – Well one difference is I was going back six months, using just solds, while you were looking at actives that went pending over the past two months.

    Another is that the actives are currently very high priced. I didn’t try to compare them beyond the basic specs, so it’s possible they might be worth it. But there certainly is a huge discrepancy right now between the median sold and the median active!

  45. 45
    fabuladocet says:

    RE: Kary L. Krismer @ 44

    In other words there’s a huge discrepancy between reality and wishful thinking on the hill. This may be one of the last bastions of hopefulness; sometimes feels like these guys are trying to hold back the tide.

    Thanks again for your analysis!

  46. 46

    RE: fabuladocet @ 45 – You’re welcome. One thing to note is that with this being the first of the year there might be new listings coming on. Those might be lower priced.

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.