Friday Flashback: “Just get on the up escalator!”

I was browsing through some old posts when I came across this one from April 2006, in which I highlighted an email I received from a local real estate salesman:

Regardless of what happens with the bubble the longer you wait to purchase a home the harder it will become. The only time I would agree that it would be appropriate to wait would be if you feel the bubble will burst and prices/values will fall.

Nothing in anyones crystal ball says anything about values falling in the Northwest, the primary reason being supply and demand. Here in (Mr. F’s) County our market is cooling. Even at that if we only have a 10% appreciation this year it is still great news for homeowners. So my recomendation would be to buy now not later. In not buying now you are loosing appreciation and tax writeoffs. As I tell most new buyers, just get on the up escalator! Once there at least what you currently own is appreciating at the same value as most of the homes around you so it will be easier when you are ready to sell and buy the next one.

So many classics in just one email…

  • “the longer you wait to purchase a home the harder it will become”
  • “Nothing in anyones crystal ball says anything about values falling in the Northwest”
  • “if we only have a 10% appreciation”
  • “buy now not later”
  • “just get on the up escalator!”

I’ll have to send Mr. F an email and see how he’s doing these days.

The purpose of our Friday Flashback series is to remind people why it’s never a good idea to base your home purchase decisions on the word of someone with a vested financial interest in selling as many homes as possible for as much as possible, no matter what. If you’ve got a good example of local home salespeople or other industry shills on record making fools of themselves in the years before the bubble burst, shoot me an email.
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.

18 comments:

  1. 1
    Updog says:

    Might be fun to look back and gloat about how much smarter bubbleheards are than this guy or some reporter/analyst, but what’s the point now since we aren’t in a bubble?

  2. 2
    Chris says:

    Great to look back. In fact it’s interesting to see the progression of NAR themes – from the escalator/”Suzanne researched this” era by NAR’s David Lereah through the immediate post-bubble era of “all real estate is local” to the NAR now apparently gearing up for a big fight over continued government support for Fannie Mae and Freddie Mac as they continue to hemorrhage cash with the FHA soon to follow. Pfft will be disappointed to learn that even the NAR seems to have given up on getting the GSEs to buy subprime loans.

    Bubble Lereah: http://www.amazon.com/Real-Estate-Boom-Will-Bust/dp/0385514352/ref=sr_1_sc_1?ie=UTF8&qid=1323462062&sr=8-1-spell

    Immediate Post Bubble: All real estate is local: http://www.youtube.com/watch?v=Z6R192JOtGs

    Propaganda for more support of upcoming secondary market bail outs.

    http://www.youtube.com/watch?v=GaHS_YXct9E

    http://www.realtor.org/press_room/news_releases

  3. 3
    Jesse says:

    I’ll bet he knows how to spell “losing” now!

  4. 4

    Is Roubini Another Cramer Too????

    Dr Doom guessed correctly and became famous during the 2007 housing bubble, since then, I don’t listen to him anymore….he told us to buy Euros about a year or two ago, they were safer than dollars, he said.

    Maybe most of the MSM economists are crackpots?

  5. 5

    RE: softwarengineer @ 3 – I don’t remember the name of the person, but there was a woman in the media who made some type of a prediction on housing, even though that’s not her area, and then after that she gained a following with her further statements. People really want to believe that some people can predict the future.

  6. 6

    RE: Kary L. Krismer @ 5

    I love people who predict!

    None better then Coach Knight!

    http://www.youtube.com/watch?v=50LsvwmgJ7I

  7. 7
    SSMayer says:

    Given any encouragement, they’ll be right back to singing this tune again. Why more people don’t realize they’re being “sold”, I don’t know.

    We’re still watching prices go down, and sure, I may someday be glad to be an owner again, not because we’ll “make money” hand-over-fist, year to year, but for a good place to live.

    Wait; that’s what my rental is already. :)

  8. 8

    By raymond pepper @ 6:

    RE: Kary L. Krismer @ 5

    I love people who predict!

    None better then Coach Knight!

    http://www.youtube.com/watch?v=50LsvwmgJ7I

    That’s fantastic. Especially the follow up question at about 1:10 and his response to it! Thanks!

    (At least the other people (presumably reporters) in the audience realized the question was stupid as soon as it was asked.)

  9. 9
    Chris says:

    RE: raymond pepper @ 6
    Ray – I like Coach Knight but my favorite prediction happens to be from the the NAR: “8 out of 10 economists agree home prices WILL RISE in the next 5 YEARS.” Too bad for the NAR the ad was from 2009.

    http://www.youtube.com/watch?v=SDyGotnphuY

  10. 10
    Scotsman says:

    RE: Updog @ 1

    “what’s the point now since we aren’t in a bubble? ”

    That’s right- bubbles are for bathtubs Now get out there and sell! /

    In other news, Seattle didn’t make the top twenty for lowest unemployment:

    Unemployment Rates for Large Metropolitan Area
    Oct. 2011

    Rank Metropolitan Area Rate

    1 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area 5.4
    2 Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area 5.7
    3 Oklahoma City, OK Metropolitan Statistical Area 5.8
    4 Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA 6.2
    5 Pittsburgh, PA Metropolitan Statistical Area 6.4
    6 Rochester, NY Metropolitan Statistical Area 6.7
    7 Richmond, VA Metropolitan Statistical Area 6.9
    8 Buffalo-Niagara Falls, NY Metropolitan Statistical Area 7.0
    8 Virginia Beach-Norfolk-Newport News, VA-NC Metropolitan Statistical Area 7.0
    10 Austin-Round Rock-San Marcos, TX Metropolitan Statistical Area 7.1
    10 Cleveland-Elyria-Mentor, OH Metropolitan Statistical Area 7.1
    10 New Orleans-Metairie-Kenner, LA Metropolitan Statistical Area 7.1
    13 Baltimore-Towson, MD Metropolitan Statistical Area 7.2
    14 Milwaukee-Waukesha-West Allis, WI Metropolitan Statistical Area 7.5
    14 San Antonio-New Braunfels, TX Metropolitan Statistical Area 7.5
    16 Columbus, OH Metropolitan Statistical Area 7.6
    17 Nashville-Davidson–Murfreesboro–Franklin, TN Metropolitan Statistical Area 7.7
    18 Denver-Aurora-Broomfield, CO Metropolitan Statistical Area 7.8
    18 Kansas City, MO-KS Metropolitan Statistical Area 7.8
    20 Birmingham-Hoover, AL Metropolitan Statistical Area 8.0
    20 Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area 8.0

  11. 11
    Blurtman says:

    RE: Updog @ 1 – Some would say we are in a bond bubble. Stay tuned.

  12. 12
    wreckingbull says:

    Not Seattle, but since we are on the subject of predictions, I don’t think that anything comes close to the predictions of Greg Swann. Professional athletes will save the Phoenix real estate market! Same guy that called bubble bloggers “Brown Shirts”.

    http://www.bloodhoundrealty.com/BloodhoundBlog/?p=114

    Oops.

  13. 13
    Jonness says:

    By Updog @ 1:

    Might be fun to look back and gloat about how much smarter bubbleheards are than this guy or some reporter/analyst, but what’s the point now since we aren’t in a bubble?

    Given that house prices are still a good 20% higher than relationships to historical incomes in the Puget Sound area, I take issue with your claim that we are no longer in a bubble. I believe the bubble is alive and well, and prices will continue to decline in the future. I guess that makes you the guy still on the “buy now not later” side, and me the guy on the “don’t buy now, buy later” side. Thus, the topic of Tim’s post is still quite meaningful. Only time will tell who’s right and who’s wrong.

    But I do agree with you on one thing, Mr. F is most likely an intellectually challenged human being. But while you’re willing to let bygones be bygones, I’m more apt to ridicule the heck out of him in order that he learn not to give bad advice to people that aids in the demise of their financial well-being.

  14. 14
    Jonness says:

    By Kary L. Krismer @ 5:

    People really want to believe that some people can predict the future.

    If it’s so impossible, then why did you buy equities?

  15. 15
    Jonness says:

    RE: Scotsman @ 10 – But I thought Seattle was special? We are surrounded by water, and we have Boeing, Microsoft, and Amazon!

  16. 16
    The Tim says:

    RE: wreckingbull @ 12 – Greg Swann is my all-time favorite bubble era real estate prognosticator. I’ve even quoted him in a previous Friday Flashback.

  17. 17

    By Jonness @ 14:

    By Kary L. Krismer @ 5:

    People really want to believe that some people can predict the future.

    If it’s so impossible, then why did you buy equities?

    You can think things are likely to happen, without pretending to be a fortune teller.

    In the case of equities, if you are going to predict something, the best thing to predict would be what will be the stupidest thing the most people will do.

  18. 18
    Jonness says:

    By Kary L. Krismer @ 17:

    You can think things are likely to happen, without pretending to be a fortune teller.

    I agree with that. Investing is about probability theory. If you are keen and do your research, you can invest on the most likely outcomes. Sometimes you will win, and other times you will lose. At the end of the day, one hopes to be keen enough and lucky enough to win more than they lose. And that’s what drives huge pools of money around the world rushing in and out of different bets as situations continue to change and further reveal themselves.

    I think when people provide predictions about the future, they are providing what they believe to be the most likely outcome. Some are more confident about their forecasts than others. There is danger in being overconfident, just as there is danger in being underconfident. But hopefully, if people are diversified enough, they are afforded a little protection from their flaws and short-sightedness.

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.