Fly the Real Estate Cheerleading Skies with Alaska Air

A few readers who have been flying recently pointed me toward a delightful magazine publication that apparently graces seat-back pouches on Alaska Air planes, providing otherwise entertainment-free flyers with something to do.

Unfortunately, it seems that someone in the editing department mis-labled the “Humor” section of the magazine as “Real Estate.” Consider the following excerpts from the article entitled “Buyer’s Market” (which begins on page 77):

San Diego resident Matt Scharkozy is trying to relieve a seven-year itch. After spending that much time renting a home in th Southern California city he has grown to love, the telecommunications salesman and Pennsylvania native decided last summer to take the plunge and buy a condominium.

Some might think Scharkozy is taking a risk buying a home in this time of economic uncertainty. But he, and others like him, may accomplish the ultimate goal for many in real estate: buying at or near the bottom of the housing market.

Some real estate experts are predicting that, barring a double-dip recession or an unforeseen crisis in Europe or another part of the world (and, yes, those are big “ifs”), 2012 will be the year housing markets start to heal and home prices not only stabilize but maybe even begin to rise.

Yup, now even airlines are getting into the real estate bottom-calling business. Of course, what do you expect when the magazine has been largely funded by builders of brand new condos and houses? Here are a few of the prominent advertisers found inside:

But wait, it gets better!

So where are the best locations to buy a home—places where property values are expected to rise in the coming years? While you might expect cities such as Seattle and San Diego to be on the list, other cities may come as a surprise.

Fiserv’s economic models, which are created using data for single-family homes and condominiums, have identified strong markets throughout the West. Fiserve found that prices in Tacoma, Washington, are expected to increase 24 percent between 2011 and 2013. In fact, Stiff expects that just about any metropolitan area in Washington state—as well as many other cities throughout the western United States—should see home prices rise.

According to Fiserv, the cities of Bend, Oregon, and Carson City, Nevada, both could see home prices spike by 17 percent, while 10 percent gains are expected in Seattle, Tucson and Reno.

You read that right. 10% gains by 2013 in Seattle, 24% in Tacoma. They used economic models, you guys, so obviously you can trust these forecasts to be absolutely accurate.

To wrap things up, enjoy this quote from Julie McAvoy, community sales director at Realogics Sotheby’s International Realty in Seattle (who happens to be handling sales at Olive8):

“I don’t think there has ever been a better time,” McAvoy says about acquiring a condo. “But it has to be for a long-term hold. If you want to buy a place and live in it, I don’t think you can beat this moment.”

Pretty much this exact same article could have been (and basically has been) published in 2008, 2009, and 2010. According to the people who make money selling homes, sudden recovery and price growth has been just around the corner ever since home prices first started falling here in the Seattle area in late 2007. Newsflash: That is not going to happen. We’re in for a long slog of flat to slightly declining prices. Deal with it.

In case the online version of the magazine is taken down, I have generated a pdf excerpt of the cover, table of contents, and the real estate section for your enjoyment.

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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
    No Name Guy says:

    [Hysterical laughter]

    [Sides splitting]

    [Starting to cough from laughing so hard]

  2. 2
    Scotsman says:

    ““I don’t think there has ever been a better time,” McAvoy says about acquiring a condo. “But it has to be for a long-term hold.”

    Especially if it’s in Tacoma. Does she really fail to see the logical inconsistency here? Why is it a great time to buy- but only if you’re in it for the long term, i.e., are willing to hold on through additional price declines before that golden eventuality of breaking even?

  3. 3

    RE: Scotsman @ 2 – People who fly are risk takers. ;-)

  4. 4
    trucker says:

    Had it been totally up to me we would have continued to rent for another year or two before buying a house, but SWMBO really didn’t want to move twice. So we bought a pretty nice place on nearly 5 acres about a year and a half ago. We just had the house appraised for a refi and the appraisal came in $22k (5.5%) higher than what we paid for the house. Now, I doubt we could actually sell it for that much (maybe $10k more that we paid), but you never know.

    It helps that we bought a short sale, so we probably got a really good deal for the time. Besides our goal is to stay there for 20 years. I figure it’s unlikely that we’d lose money, even after adjusting for inflation after 20 years. Possible, but unlikely.

  5. 5
    toad37 says:

    Entertaining stuff… so classic. I agree on slogging flat to down for years to come. This stuff is great for a laugh, sad thing is is that some probably get suckered in by it.

  6. 6
    Crashcadia says:

    We all know how overpriced the items in flight magazines are. I find they are often 100% overpriced.

    Thus by my model. (25% gains in Tacoma) – (100% overpriced in magazine) = (75% decline in prices)

    Probably about as good as their model.

  7. 7
    Jonness says:

    Well, let’s take a look at Fiserv’s predictions last year:

    According to the article, house prices hit bottom in Bremerton in Q1 2010. 2.5 years from now, prices there will increase by 44.7%.

    Better buy now, or you will definitely be priced out forever!

  8. 8
    Feedback says:

    Congratulations to Tim on outsmarting the Alaska Airlines in-flight magazine’s real estate writers!

  9. 9
    Ray Pepper says:

    Calling for Carson City area to pop 10% has already been noted. The area has been crushed nearly 80% in the homes I track. Bottom was placed on many homes at 60k and now you cannot find anything under 80k. These hit a high of 270k. Heading back down for Thanksgiving and Xmas to the family and you could be dang sure I will be looking..The rental market is good and these homes all rent for 1000.

    The last 18 months I have been comparing (Reno-Carson) to Tacoma because of the ability to get these inexpensive homes from time to time if your cash is sitting in the right place at the right time. I bought two in both areas and sold The Tacoma ones on the flip this year. Carson City, however, I just feel just so much more profit potential due to the meteoric collapse of 80% + and the homes being built in the 1980’s+ are just so much newer then the turn-of-the century Tacoma homes. Gems to be had in both areas!

    Good Job Southwest for pointing out the obvious..

  10. 10
    nick says:

    This makes me wonder if there is an amazing treasure trove of the same type of drivel, waiting to be translated from circa 1991 tokyo condo catalogs.

  11. 11
    MichaelB says:

    RE: Ray Pepper @ 9

    Ray, What’s your prediction for Everett?

  12. 12
    Cheap South says:

    I am sure some of those condos were being sold in the SkyMall magazine (same page as the real size Darth Nader).

  13. 13
    Ray Pepper says:

    RE: MichaelB @ 11

    The entire NW I predict FLAT with little to no appreciation for years to come. Too many short sales on the horizon and kicking the can down the road via loan modifications.

  14. 14
    Holly says:

    Are you taking into consideration that we literally have haulted new construction and our population in Seattle continued to grow, this is still a coveted area for business growth- tie this with the investors oversees buying up our foreclosures- I think proves are bound to rise sooner than you expect. As soon as Bank of America dumps the rest of it’s foreclosures finally I expect prices to go up quickly there after – supply and demand for newer homes is definetly on the rise. RE: Ray Pepper @ 12

  15. 15

    RE: Holly @ 14 – New construction started up almost two years ago. Not so much in multi-family, but single family. They still haven’t worked through all the land that was platted though, so the pace isn’t as rapid as it was.

    (BTW, I assume you’re a Chrome user. You need to move or cursor after hitting reply so that the material you type is after the “reply” tag. A minor Chrome annoyance.)

  16. 16

    RE: Cheap South @ 12 – Skymall should give free Internet access to First Class passengers. With free drinks and free Internet, their sales would probably skyrocket. [Pun, if any, unintended.]

  17. 17
    Ray Pepper says:

    RE: Holly @ 14

    “supply and demand for newer homes is definetly on the rise. RE: Ray Pepper @ 12 – ”

    excuse me for laughing but I suggest you talk with friends, neighbors, and people in your social network about the homes they own and the feelings they have about them.. You will see why I’m hoping for a flatline in the years to come but most likely will have further % price declines for many many years.

    We have not suffered the 80% drops like Nevada and California that I tour. SWA calling for 10-20% price increases means 15k in real money and thats an easy call.

    However, GEMS are to be had over this decade and walk away from all multiple offer scenarios. Also never engage in a “highest and best”. Good Luck! time is definitely on YOUR SIDE if your a Buyer. If your a homeowner, and must sell, contact your Lender and get the paperwork initiated. You will join the masses in selling short your home because in the end…………………They will ALL come back one way or another……….

  18. 18

    Ambiguous Bottom Calling Seattle Home Prices in Error Not Our Fault

    The Wall Street Crooks and their minions have all but destroyed any chance of defining a verifiable/reliable price bottom to Seattle real estate, IMO. How did these mobsters manage that you ask?

    Its simple to SWE, they have the crime lord attorneys tell the shady Seattle area corporate employer clients that they cannot verify the identification papers of their workforce….therefore, a lion’s share of their employees may be anomalous or illegal, but its OK, they did it unknowingly.

    This creates a huge population impact in Seattle we can’t count, they’re undocumented.

    My Ouja Board tells me population in the Seattle area has risen 50% in the last decade [just by driving around and looking out the window], but the census and Wall Street Crook MSM sources use like 10%….who’s right????

    Until we sort this out for its impact on wage and home price mitigation, we’re all using Ouja Boards on price bottom predictions for Seattle real estate. E-verify at the work place would fix it, but God forbid we force the Wall Street crooks to end their addiction to slavery.

  19. 19
  20. 20
    Scotsman says:

    RE: The Tim @ 19

    “Dogs and cats, living. . . together!”

  21. 21

    […] post about Alaska Air’s condo-booster “article” reminded me of this 2007 piece in the Seattle Times: Condos a bright spot in […]

  22. 22
    Suitably Skeptical says:

    RE: Scotsman @ 2 – I love that we are told we have to hold for the long term in the same article that claims price gains will be 25% in a year.

    If I can flip a condo with a 25% gain in a year, I really don’t have to hold long, do I?

  23. 23
    CCG says:

    “Yup, now even airlines are getting into the real estate bottom-calling business. Of course, what do you expect when the magazine has been largely funded by builders of brand new condos and houses?”

    If it’s free, then you’re the product, not the customer.

  24. 24
    Scotsman says:

    RE: CCG @ 23

    “If it’s free, then you’re the product, not the customer”

    Nice. I should know that, having spent some of the early years in marketing. Consider it stolen- and thank you for the donation. ;-)

  25. 25
    David Losh says:

    RE: Holly @ 14

    This is the second time today I heard this argument. It’s true that the demand for new construction remains high. I see it in neighborhood spot lots, in city, and there is a new push to build on completed plat developments.

    The problem is math. We over built. We have a continued ability to over build. We can have product readily available.

    Another math problem is price. Just because payments are low due to historically low interest rates, doesn’t translate into actual value of the product.

    An example I like to use was before Hurricane Katrina. I think I was paying $11 for sheets of plywood. In the span of a week the price per sheet shot up to $17, then $24 a sheet. It’s all supply, and demand. Strand board was shunned up to that point, but with plywood doubling in price strand board became much, much more viable.

    In 2005 to 2006 the product of new construction changed. By 2007 you were buying cheap carp for premium prices. Now, in 2011, the margins are thinner, but the expectations are lower.

    So yes, there is a demand, but yes there is product available. The question is if there is any, I mean any, value in the product, or if it is just a black hole to throw mortgage payments into.

  26. 26
    Blurtman says:

    San Diego is an over developed crap hole with a very nice climate. Something happened in the early ’80’s that accelerated development there and the destruction of the area. If not for Camp Pendleton interrupting the over grown sprawl, it truly would be part of LA. Nuke it and start over, please.

  27. 27
    Macro Investor says:

    By Blurtman @ 26:

    Something happened in the early ’80’s that accelerated development there and the destruction of the area.

    Easy credit. Look to that as the cause any time you see an investment bubble.

  28. 28
    MichaelB says:

    RE: The Tim @ 19


  29. 29

    I’m sticking to reading the vomit bag in future!

  30. 30

    […] Fly the Real Estate Cheerleading Skies with Alaska Air – It’s like 2008 all over again on the Seattle-based airline’s planes, with such classic lines as “I don’t think there has ever been a better time” and “I don’t think you can beat this moment.” […]

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