Weekend Open Thread (2011-05-27)

Here is your open thread for the weekend beginning Friday May 27th, 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!

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.


  1. 1
    Scotsman says:

    The spring bounce is dead.

    “Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.

    The National Association of Realtors Pending Home Sales Index dropped 11.6 percent to 81.9 in April, the lowest since September. Pending home sales lead existing home sales by a month or two.

    Economists, who had expected pending home sales to fall 1.0 percent last month, said bad weather in some parts of the country might have affected home shopping.”


  2. 2
    The Tim says:

    RE: Scotsman @ 1 – Heh, it’s always the “bad weather.” Because so many people are like “oh well I was going to buy a house this month but it rained more than I expected so I guess I’ll put it off.”

  3. 3

    RE: Scotsman @ 1 – I wouldn’t be pointing to those statistics as being meaningful no matter what they showed. We know how useless pending stats are locally. When you go national with that type of statistic it becomes even more meaningless.

  4. 4

    South Carolina Not Only Sucking the 787 Jobs from Boeing

    They’re sucking 2000 Amazon jobs too.


    After reading this article above, I’m more convinced than ever. Its time to vote out all the incumbents for hopefully, a new crop of hard-line polticians in Washington State ready to play hardball with the big leagues to attract and keep jobs in the Seattle area. If the new crop fails, vote ’em out too, until we get this right like South Carolina.

  5. 5

    RE: Kary L. Krismer @ 3

    I Agree Kary

    Nationally, the average home price is a measly $175K….its got to be twice that bad, in comparison, in the Seattle area.

  6. 6

    RE: softwarengineer @ 4 – Not really clear that’s the type of facility that would have been built here in any event.Odd deal.

    Basically the state is letting Amazon not collect the sales tax due, but the sales tax will still be due–from the buyer. Presumably without their presence in the state a use tax would have still been due from the buyer. So in effect the state is merely giving up for a period of 5 years the ability to use Amazon as a means of actually collecting the tax due.

  7. 7

    Boeing Orders Recently Dismal: Japanese Disaster, European Debt and High Oil to Blame


    “…The global economy’s change in tone is reflected in some company announcements. Chicago-based Boeing Co. (BA), the world’s largest aerospace company, said it received two orders last month compared with 98 in March….”


  8. 8
    Scotsman says:

    RE: Kary L. Krismer @ 3RE: The Tim @ 2

    Come on, guys! Kary- work on developing a sense of humor. This is the perfect post- we know pendings aren’t the best indicator, especially in a deteriorating economic environment. But NAR (the source) goes with them anyway, along with the classic “weather” excuse. A perfect parody of all that we know and love.

    Still, in all seriousness, a miss in expectations of this size- down 11% verses 1% shouldn’t be ignored.

  9. 9
  10. 10

    RE: Haybaler @ 9 – I wonder why they would foreclose in the name of MERS. Was that a money making service MERS offered?

    I looked in King County and didn’t see any MERS notice of trustee sale docs, although there were many deeds of trust. Snohomish County doesn’t seem to reference MERS at all in their indexing.

  11. 11
    Macro Investor says:

    Warning — this comment contains math :)

    3-4 weeks ago I predicted a double dip recession was starting. That was when the weekly unemployment claims spiked up unexpectedly. Since then durable goods orders are way down, the Richmond and Chicago feds reported slowing in their regions, and the prelim GDP number was revised down to 1.8%. (2% is the unofficial recession definition). And now pending sales fell off a cliff as well. All these data points are flawed, but together they paint a picture of a new slowdown.

    Normally this would be fairly minor. However, it comes at the same time we have 0% interest rates and $2 trillion a year in stimulus. Removing that stimulus subtracts 13% from GDP, or roughly 20 million jobs. So it will take about 4 years of normal growth just to allow the stimulus to be removed without causing harm. This is what happens when regulators turn a blind eye and let banks go crazy ape s*** with debt. Things will get back to normal, but it will take much longer than almost anyone expects. Bear markets in stocks have an average length of around 18 years.

  12. 12
    David North says:

    By Macro Investor @ 11:

    Warning — this comment contains math :)
    Things will get back to normal, but it will take much longer than almost anyone expects.

    I fully agree, with emphasis on the word “much.”

  13. 13
    Blurtman says:

    As of April close to 6.4 million loans are delinquent or in foreclosure. What is downright disturbing of the 2.2 million homes in foreclosure you have 675,000 homes (31 percent of the pool) that have not made a payment in over two years. That is right, two full years. Apparently one-third of the bank’s strategy in dealing with foreclosures is simply to ignore missed payments. Glad it took them giant bailouts and four years to figure that one out. The housing crisis strategy is really a banking-centric one and that is why nothing has really been resolved since the crisis started. Banks are dictating the movement going forward so the idea of keeping prices inflated is simply one to protect banking interests. Since the market has very little desire for inflated real estate, banks just slip it under the rug for another day.


  14. 14
    Blurtman says:

    Depending on what data source you look at California has roughly 80,000 to 89,000 homes that are REOs and ready for sale. That still leaves another 600,000 to 700,000 REOs across the country that need to be sold. You also have to wonder of the 675,000 foreclosures with two years of missed payments how many are in massively overpriced bubble states like California or New York? Well I can tell you that California currently has 157,000 homes in the foreclosure process that have yet to go REO. The bottom line is you have a massive pipeline of distressed properties waiting to make their entrance on the MLS stage.


  15. 15
  16. 16
    Cheap South says:

    By softwarengineer @ 4:

    South Carolina Not Only Sucking the 787 Jobs from Boeing

    “….until we get this right like South Carolina.”

    You obviously have never been in South Carolina. People in Seattle seem to like what they have; in fact, most mayors would love their town to have the jobs Seattle has, and the level of education of its citizens. The recent NY Times article: “Seattle shows the value of smart people” was reprinted in papers around the country (family e-mailed it to me). Since you live in a pretty expensive and obviously desirable RE market, if you don’t like it, just pack and move, It’s very easy to downgrade. The South is full of people that think like you, it barely rains, and RE is dirt cheap (I wonder why?). What are you waiting for?

  17. 17
    Blurtman says:

    Eroding the Fear of Foreclosure: New Research Shows Strategic Defaulters Experience With Post-Foreclosure Credit

    One of the most cited deterrents of deciding whether or not to foreclose or strategically default is the fear of a catastrophic and irreversible hit to one’s credit score, leading to an inability to rent, purchase a new car or home, or open a new credit card. After polling some of our 5,000 clients nationwide, YouWalkAway.com has discovered it’s a fear that may be blown way out of proportion.

    Susan Edwards is a client of YouWalkAway.com, a company that walks defaulting homeowners through the foreclosure process. Edwards recently walked away from a property in Southern California. “Prior to missing our first payment, my credit score was 805,” Edwards stated “I checked it again in June after we missed the 5th payment and it was 680. At the time, it was commonly reported that the average foreclosure would lower your credit score about 150 points. I had assumed it would stay in that range for up to 7 years. I was wrong.”

    So, what is Edwards credit score now? According to Edwards, after only 3 months following the foreclosure auction of her property, her credit is back up to 734 and climbing. Fortunately, the hit taken to her credit was not nearly as bad as most people, including those who claim to be experts, might have depicted.

    Edwards is not the only YouWalkAway.com client to see her credit rebound so quickly. New York resident and YouWalkAway.com client Jodi Romanello has walked away from two investment properties in Florida. While she has never closely monitored her credit score, Romanello has yet to see any negative repercussions of a credit drop. “When I first skipped payments on my first foreclosure, CitiBank Diners Club abruptly canceled my card due to ‘undesirable changes in my credit rating,’” Romanello explained. “I got very upset because I hadn’t thought this would happen, but to my enormous relief none of my other cards did this. I have a high limit with American Express Gold, Visa, MasterCard and a lot of store cards, and Amex just renewed my card with an invitation to go Platinum.” Romanello continued to explain how she staved off the negative credit effects of two foreclosures, “I am careful to pay all other bills instantly when I receive them, I run no balances on any cards month over month.”


  18. 18

    RE: Blurtman @ 17 – Imagine that. A company that somehow profits off of people walking away coming up with stories about how it’s not that bad. I never would have imagined such a thing.

  19. 19
    Blurtman says:

    Always good advice and a perfect use for the Sunday NY Times.

    “As far as sh*tting goes, do it on a few sheets of the New York Times, wrap it up, put it in a plastic bag and throw the bag into a trash can on the street. To avoid unnecessary hassles, do not use the trash cans owned by your neighbors.”

    Yes, that is frowned upon in the tonier neighborhoods of Kirkland.


  20. 20
    Macro Investor says:

    By Kary L. Krismer @ 18:

    RE: Blurtman @ 17 – Imagine that. A company that somehow profits off of people walking away coming up with stories about how it’s not that bad. I never would have imagined such a thing.

    Where is your evidence to the contrary? Imagine that. Someone that profits off of people buying real estate…

  21. 21
    Scotsman says:

    Our nation decent into the absurd. I love this guy:

    “I’ve been writing this weekend about a once free people’s descent into hyper-regulatory tyranny. I thought this fishy footnote was the last word in statism’s lack of any sense of proportion, but several readers then alerted me to the federal rabbit police cracking down on magic shows. As they used to say in Nazi Germany, “Your papers, mein hare!”

    When the brokest nation in history still thinks it can afford to send federal investigators snooping through the back yards of children’s magicians on the off-chance they might be using rabbits on stage, you’ve got to conclude it actively wants to die. I was going to say something about “lemming-like behavior” but I don’t want any trouble from the USDA lemming inspectors.”


  22. 22

    By Macro Investor @ 20:

    By Kary L. Krismer @ 18:

    RE: Blurtman @ 17 – Imagine that. A company that somehow profits off of people walking away coming up with stories about how it’s not that bad. I never would have imagined such a thing.

    Where is your evidence to the contrary? Imagine that. Someone that profits off of people buying real estate…

    How about here: http://realestate.aol.com/blog/2010/12/09/how-foreclosure-affects-your-credit-score-and-your-life

    Also the effect on getting a new Fannie and Freddie loan is well publicized.

    The article I was responding to it isn’t even clear that the numbers are obtained from legitimate sources–perhaps the people paid to get their “credit score.”

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.