Mid-Week Open Thread (2011-03-30)

Here is your open thread for the mid-week on March 30th, 2011. 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.

21 comments:

  1. 1
    ChrisM says:

    First post!!! Wait, don’t delete!!! :-)

    This property has an usual sales history and looking at the tax records (which haven’t been updated) I *think* the property transferred to HUD?

    http://www.redfin.com/WA/Arlington/25019-1st-Dr-NE-98223/home/2641244

    Call me clueless, but under what circumstances would a property transfer from the bank to HUD? Or am I misreading this?

    Any idea how the 56k amount for 3/2/2010 was arrived at?

    Thanks!

  2. 2
    Pegasus says:

    Mortgage applications decline 7.5% as refinancing activity subsides

    The market composite index — a measure of loan volume — declined 7.5% after experiencing a 2.7% increase on a seasonally adjusted basis last week. On an unadjusted basis, the index decreased 7.2%.

    The unadjusted purchase index fell 1.5% over last week and is now down 21.9% when compared to the same week a year earlier.

    http://www.housingwire.com/2011/03/30/mortgage-applications-decline-7-5-as-refinancing-activity-subsides

  3. 3

    Seattle Economy Robust and Growing for Real Estate Price Increases….Not

    Article in part:

    “….Seattle’s operating budget is about $16 million in deficit because of lower than expected tax revenues and anticipated reductions in state and federal aid, city officials said Wednesday….”

    http://www.seattlepi.com/local/437917_mcginnbudget30.html?source=rss

    Where does the city get its money and why the 3% drop they didn’t anticipate [meaning likely it dropped some before already, this is on top of the previous shortfall]?

    To my knowledge city money comes from parking meters, a portion of the sales tax, a tax on City Light, a tax on cell phones, a tax on garbage, cable bill[?], etc, etc….how about a property tax portion too? Most of this stuff looks sorta stable to me….maybe the Mayor shot himself in the foot when raised the parking meter fees and sent all the business elsewhere?

    It does tell me the Seattle economy is generally going down the tube, not improving and it’s no statistical chart for predicting a real estate price bottom soon, just the opposite.

  4. 4
    Scotsman says:

    OK Seattlites- you elected McGinn, now you hate him. What’s up?

  5. 5
    Kary L. Krismer says:

    By Scotsman @ 4:

    OK Seattlites- you elected McGinn, now you hate him. What’s up?

    They discovered he didn’t want to spend money like it was other peoples’ money.

    I’ve actually hated the last three (or more) Seattle mayors, and find him a bit refreshing. He is a bit erratic though.

  6. 6
    pfft says:

    Deep Thought:

    Shadow inventory is the new “CRE is the next shoe to drop.”

  7. 7
    Blurtman says:

    Good new for Seattle biotech. Local company Dendreon’s Provenge approved for reimbursement by Medicaid. Provenge is a first in class cellular therapy, manufactured from a patient’s own white blood cells. It is a patient specific product, manufactured in a lot size of one. While inaccurately described as a cancer vaccine, it is more appropriately described as an immunostimulant.

    “Medicare officials said Wednesday that the program will pay the $93,000 cost of prostate cancer drug Provenge, an innovative therapy that typically gives men suffering from an incurable stage of the disease an extra four months to live.

    The Centers for Medicare and Medicaid said the biotech drug made by Dendreon Corp. is a “reasonable and necessary” medicine. The decision ensures that millions of men would be able to afford the drug through the government-backed health care coverage. With government reimbursement, analysts estimate Provenge could rack up $1 billion in sales next year. The decision, which will be finalized by June 30, is important for Dendreon because most prostate cancer patients are 65 or older.”

    http://finance.yahoo.com/news/Medicare-to-pay-for-93000-apf-2472968382.html?x=0&sec=topStories&pos=4&asset=&ccode=

  8. 8
    LocalYokel says:

    By softwarengineer @ 3:

    Seattle Economy Robust and Growing for Real Estate Price Increases….Not

    Where does the city get its money and why the 3% drop they didn’t anticipate [meaning likely it dropped some before already, this is on top of the previous shortfall]?

    It does tell me the Seattle economy is generally going down the tube, not improving and it’s no statistical chart for predicting a real estate price bottom soon, just the opposite.

    RE: softwarengineer @ 3

    This will probably put you to sleep and so fringing esoteric, but…
    The budget for the city of Seattle is about $4B. There are four parts to it:
    1. $$ from state, feds, levies = $1B. These are earmarked for something.
    2. SPU – Seattle utilities. $1B. No share with others.
    3. Seattle City Light – $1B . Ditto.
    4. The General Fund = $905M. This is what we are can spend on the
    basic city services, such as fire, police, human services etc.

    The 3% reduction or $16M is from the General Fund and this is a bad sign.
    Of the General Fund: There are 5 sources of funding.
    1. Property Taxes = 28-30% largest part.
    2. B&0 Taxes = business occupation taxes = 18%
    3. Utility Taxes = 18 %
    4. Sales taxes = 16%
    5. Fees, interest, Fines, speeding tickets, = 16%. The mushiest part.
    As you can see, 2+3+4 are awesome during the good times,
    and sucks eggs during the bad times for revenue collection.
    A part of the reductions are from state and fed funding about $5M or so.
    The real troubling part is the rest: $3.5M for not enough parking fee? Bullshit.
    You mean not enough people shopping in areas where they have to pay $$ to park.
    The $4M or so from reduction of the above 2+3+4 is the real bad news.
    Meaning that things are still bad and getting worse. A mid year correction
    means spreading out the pain because things are going to get worse.
    There will be another correction depending since it is an election year.

    How does this all related back to the Seattle Bubble? Glad you asked, friend!
    REET = Real Estate Excise Taxes, you know….all those real estate wheeling
    and dealing and stealing? Those taxes skewed the budget for the last 8 years at least
    and when those fund dried up, recession, WAMU going adios, Boeing adios, Safeco adios,
    FIRE industry adios, construction adios, well here we are SNAFU.
    But honestly, Seattle isn’t that bad compared to some other cities who
    are really hurting, but still very, very troubling.

  9. 9
    Pegasus says:

    RE: LocalYokel @ 8 – They could initiate an extra special tax just for renters… say about 15 percent like the hotel room tax. Voila! Problem solved. Extra money to burn!

  10. 10
    David Losh says:

    RE: pfft @ 6

    What? Other shoe to drop? pfft? did Tim allow some one else to comment under the pfft name? Is it a different spelling of pfft?

    There must be green shoots in Commercial Real Estate. The stock market tells us so. Stocks are up! It must be all of the businesses that are thriving and paying over priced per square foot rents! The stock market tells us so.

    Oh wait, if the stock market were only trading on the quality of accounts receivable (debt) There is a chance profit statements might seem rosier than the reality of a consumer’s lack of ability to pay. If consumers are tapped out, or redirecting earnings to retiring debt, or if they are acquiring new debt then maybe, just maybe they aren’t shopping, buying, paying, consuming, or in general businesses might be feeling a decrease in actual income.

    A promise to pay is something different than cash.

    So I guess you are saying that the stock market is some kind of apparition separated from the realities of day to day commerce. You must be talking about economy in your other comments, but facing the reality that yes, leases are hard to come by. Business doesn’t want to commit to long term expenditures. Commercial leases may be coming down in price, and income.

  11. 11
    Scotsman says:

    RE: David Losh @ 10

    “A promise to pay is something different than cash.”

    BAZINGA!! Cash flow always wins in the end.

  12. 12

    RE: LocalYokel @ 8

    Thanks for the Info

    You insiders are wonderfully descriptive and just the type of person to make ole SWE smile….I also like the blog tax the renters…LOL

    Eventually we’ll have no economy because we have no money left to spend after taxes….LOL

  13. 13

    RE: David Losh @ 10

    I Think the Bubbleheads Brainwashed Pfft

    LOL

  14. 14
    TheHulk says:

    I filled up gas yesterday night. 40 and change for 10.5 ish gallons. Ouchie. First time that has happened since 2007. Sure as heck didn’t feel like spending any money after seeing those digits roll up at the pump.

  15. 15
    Scotsman says:

    Euro central banks to wrestle interest rate control from U.S. Fed? Without getting into a debate about whether the fed truly sets rates or just follows the market, this is important. If other countries decide they won’t let us export our potential inflation to their markets and raise their interest rates first then our Fed has essentially lost control of the main tool they’ve been using to spur “recovery.” And who will buy U.S. debt when other alternative pay a much better rate? Game over.

    “FRANKFURT, March 31 (Reuters) – After following the Federal Reserve’s lead for over a decade, the European Central Bank is poised to launch a series of interest rate hikes before the U.S. central bank for the first time in the ECB’s history.

    The change from the traditional pattern reflects the ECB’s greater preoccupation with inflation pressures, as well as its higher level of discomfort with the emergency bond-buying programmes run by central banks.”

    http://www.reuters.com/article/2011/03/31/ecb-fed-rates-idUSLDE72S1AE20110331

  16. 16
    Scotsman says:

    RE: softwarengineer @ 13

    Hey, Softy- curious, isn’t it? ;-) At first I thought he/she was being facetious or snarky, but humor and/or witticisms don’t fit with the pfft we all know and love. But who knows, maybe my favorite commenter is having an emotional growth spurt or something? Bubbleheads are curious- has pfft been abducted by tea party aliens, or did his subscription to Mother Jones just run out?

  17. 17
    Scotsman says:

    Hey- sign me up! No, wait- what am I thinking??!

    “In a never-before-seen carrot and stick approach, People for the Ethical Treatment of Animals (PETA) are coaxing pet owners to sterilize their furry friends, using the possibility of a free vasectomy as the proverbial carrot.

    To recognize “National Infertility Awareness Week” -beginning April 24th- PETA will judge entrants’ ability to answer their (likely randomly selected) question: “Why should PETA neuter you?”

    http://dailycaller.com/2011/03/31/twofer-neuter-your-dog-and-yourself/

  18. 18
  19. 19
    Scotsman says:

    RE: hp @ 18

    Whoa. Why bother downloading it?

  20. 20
    One Eyed Man says:

    RE: Scotsman @ 16RE: softwarengineer @ 13RE: David Losh @ 10

    I’m sure all of you believe there is a coming CRE crisis. But that subject isn’t entirely without debate. In case Pfft wasn’t clear to you, I’m sure he believes that there won’t be a further expanding CRE crisis. Below is a recent article by an econ prof from U Chicago in the NYTimes. And there is some support for that position. Many REIT’s are doing well. If I recall correctly, I believe thats especially true of apartment REIT’s and Office REIT’s with “A” rated buildings. Perhaps less true for retail space REIT’s, but I think many of them are turning the corner too.

    http://economix.blogs.nytimes.com/2011/03/16/real-estate-crisis-it-depends-on-supply/?partner=rss&emc=rss

  21. 21
    pfft says:

    By Scotsman @ 15:

    If other countries decide they won’t let us export our potential inflation to their markets and raise their interest rates first then our Fed has essentially lost control of the main tool they’ve been using to spur “recovery.”

    it’s the other way around. the booming emerging economies are causing inflation.

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