Monday Open Thread (2010-11-15)

Here is your open thread for Monday November 15th, 2010. 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
    Pegasus says:

    Fraud-closure biz fizzles out

    Look what happens when someone decides to enforce rule of law in fraud-closure cases…..

    “Bank lawyers prosecuting the 80,000 foreclosure cases in New York are all but admitting that the cases they have filed over the past number of years have been riddled with fraud.
    In the three weeks-plus since New York State Chief Judge Jonathan Lippman put the foreclosure lawyers on notice that any fraud in foreclosure paperwork would be met with severe penalties — he is making lawyers sign affirmations promising they took “reasonable” steps to make sure the legal papers are true — practically no new foreclosure cases have been filed, The Post has learned.

    And existing cases have ground to a halt, a source close to the state’s foreclosure practice said. “Banks do not want to be the first to test the new rules,” the source said.
    The virtual shutdown of New York’s foreclosure business comes despite chest-thumping, bravado-filled statements made by some banks in October that they had nothing to be afraid of when it came to foreclosure fraud and that the lawsuits aimed at kicking delinquent homeowners from their houses would continue shortly.
    It seems lawyers pressing the foreclosure cases are not willing to bet their law licenses on such claims.”

  2. 2
    Chris says:

    I thought this article regarding Orange County apartment rents was interesting – specifically the quote about the larger REITs increasing rents at the expense of higher vacancies.

    I supposed when 4 REITs have 6500 rental units they can move the market by themselves somewhat. I guess it’s predictable that as home ownership numbers decline, these REITs will take advantage of greater demand in the rental market.

  3. 3

    RE: Chris @ 2

    How many people will pay $2000+/mo Rent Who Aren’t Already Homeowners?

    My guess is very few. So, we can talk about pent up demand for rentals with home prices sliding down….but these same folks are also trying to save money to eventually buy too, so I imagine a lion’s share of them won’t pay high rents that mitigate savings rates [they’ll live in a smaller place for the time being]. It’s a conundrum.

  4. 4
    Herman says:

    I just posted this elsewhere, but I’m sort of fond of it so I will repost here.

    A commenter was lamenting the fact that there was a seller who had fully paid off her home, but who would not accept any reasonable offer.

    “There is a class of seller out there for whom their home equity = their retirement savings. For them, there is no next paycheck, and whatever they get out of this sale will determine the quality of the rest of their life. I can understand their reluctance to accept an offer that is lower than whatever they had priced into their retirement plans. They may set their price and try to wait years for someone to come along with that offer. Do not waste your time on them.

    Unfortunately, the money for that secure retirement in Key Largo with full caregiver support and annual trips to Mexico may never come no matter how long the wait. People were misled into making plans and choices that they never should have, and these decisions that seemed so safe at the time have cost them their retirement. Bystanders were unexpectedly whipsawed out of employment at age 55 with few prospects to return to the workforce.

    This is to say nothing of the young families who were priced out of reasonable housing options and college grads who have been frozen out of work before even starting. Pity them too. They will bear the full cost to repay the subsidies and bailouts that are meant to buffer the mature workforce and the existing homeowners from equity-sapping deflation. Ironically these bailouts use their own present and future tax payments against them, as they maintain the inflated housing prices and aging industries that deny them good housing and good jobs.

    This bubble has been a tremendous human tragedy. Wrought by the greed and incompetence of a few, the impact is felt by all. Or, almost all – Bush, Greenspan, Paulson, and a criminally anonymous host of wall street bankers and hedge fund managers have disappeared with their riches and live in comfort while the rest of the nation suffers and sorts out their mess.”

  5. 5

    RE: Herman @ 4 – I’ve seen people with a ton of equity be unreasonable in many situations, not just retirement situations. Often they had unreasonable beliefs about what their place was worth at the peak.

    On the retirement topic though, it is sad when you see someone whose retirement is significantly affected by the fact that they retired 2 or 3 years after the peak. Many people when from a good situation to a marginal if not dire situation.

  6. 6
    Guest says:

    RE: Herman @ 4

    The offers I’ve made to sellers in the lot of equity / close to retirement / no mortgage categories have all been rejected, generally after a period of stalling and distraction tactics on the part of the sellers.

    Calling all sellers on the Seattle Bubble party line. . ..

    Is there anyone out there who is willing to sell their decent home for the going rate to a qualified buyer, is there any seller who isn’t underwater on their mortgage, and is actually prepared and ready to move out in 45 days?
    -crickets chirp-
    all I hear is crickets.
    thanks for listening, anyway.

  7. 7

    RE: Guest @ 6 – One thing that might help is limiting your search to vacant houses, preferably one with a moderate amount of mortgage debt and not free and clear.

  8. 8
    Guest says:

    RE: Kary L. Krismer @ 7
    Thank you Kary, I didn’t know I could get acccess to people’s mortgage balance.
    How do you do that?

  9. 9

    RE: Guest @ 8 – No, I can’t. But you’ll also want a house that they’ve owned a long time, and if they have the house as an ATM type personality, that would be apparent.

    It’s the type of thing where you might exclude some that are good (e.g. an old first and a HELOC that hasn’t been drawn on), but are unlikely to deal with something bad (e.g. if the last first position loan is for $100,000, it’s 10 years old, and there are not subsequent loans, that’s pretty likely to be good).

  10. 10
    Guest says:

    I get the psychology. If I can’t see the actual amount of their financial incentive to sell, I can look for the Hummer in the driveway and the granite counter tops in the kitchen. If they are really hard up for cash or ran out of heloc at the end of their rope, then they will have just the granite tiles and not the slab granite. If the house is vacant, look in the garage for boxes of fancy tiles used in the fabulous entry remodel of ‘07.

    Oxymoron alert:
    Apply an “intuitive algorithm” within the real estate bubble paradigm, to help deduce seller motivation.


    By the time I learn the best way to make an offer I’ve already screwed it up. Too High. Too low. Talk too much. Talk too little. Seller just looking for a rube to be part of his extend and pretend. Fiz-bo seller just looking for gullible buyer to provide him with sales contracts he can copy and use on his “real” buyer to save even more cash on lawyer fees.

    How about the Ha Ha house: the one idiots like me come along and make an offer on and all the neighbors say, Ha Ha, you’re stupid.

    There is no place in the world for idiots like me any more.

  11. 11

    RE: Guest @ 10

    The Joke of It Is Too

    All that remodeling debt is just that, mostly losses, when it’s time to sell. The owners like to think different, but your house is only worth what an approved sale and signed escrow papers say it’s worth….not a dime more, and in a lot of cases not near as much as the property tax assessed value too.

  12. 12

    RE: Guest @ 10 – The problem you might be having is thinking that you can accurately predict what a seller will do. Someone who has to bring $25k to the table to close might be more willing to do a deal than someone who will be receiving $150k in proceeds from the sale. People are not entirely predictable, so you just have to play the odds. The problem is, finding the house worth making the offer on can be a lengthy process, so that’s why I think it is better to play the odds when you’re searching.

  13. 13

    By Guest @ 8:

    RE: Kary L. Krismer @ 7
    Thank you Kary, I didn’t know I could get acccess to people’s mortgage balance.
    How do you do that?

    I can’t access to people’s mortgage balance, but through the MLS I can find out the amount they borrowed and when they borrowed it. Through county records you can find out if it was paid back in full.

  14. 14
  15. 15

    RE: Scotsman @ 14 – Just what I need. Another reason to be afraid of flying! ;-)

  16. 16

    RE: Kary L. Krismer @ 15

    LOL Kary

    More news to stoke your flying fears, article in part:

    “…The TSA’s invasive new screening measures include officers literally putting their hands down people’s pants if they are wearing baggy clothing in a shocking new elevation of groping procedures that have stoked a nationwide revolt against privacy-busting airport security measures….”

  17. 17
    sallybuttons says:

    RE: Ira Sacharoff @ 13 – I’m crazy ’bout you but O- Ira, let’s not go that way, alright? Realtor games for what the hell gain? blech. blah. yuk. Let’s suggest: Quit shopping like a half-starved hound for primary residence – maybe get a life and limit intrusive play…? Probably will meet with more success as today’s seller-scenarios don’t require a whole bunch of figurin’.

  18. 18
    Dirty_Renter says:

    Folks – don’t throw away your good credit unless you have to….

  19. 19
  20. 20
    corncob says:

    RE: David S @ 19 – Those are some real monstrosities. And what is with the weird shotgun lots? Builder didn’t get a chance to subdivide them?

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