Weekly Twitter Digest (Link Roundup) for 2012-03-03

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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.

18 comments:

  1. 1

    Odd descriptions on a couple of those pieces. Cragun is giving an example of a bank making a stupid decision in refusing to deal with their borrower. The “Heating up” article is basically just pointing out a purported Warren Buffett quote, where he claims that he sees buying on a 30 year to be a good investment.

    On the building smaller homes thing, I think the reason for the discrepancy is the current style of a lot of low end new construction is the box. Two story boxes contain a lot of square footage. It’s also possible the report might not be right, or maybe includes garages in the size for some of it’s data. In King County the median size for 2011-2012 houses sold roughly the past 180 days is just over 2350 square feet, where back in 2008 at this time the 2007-2008 houses were about 2250 median.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  2. 2

    I’m going to risk Ray calling this off topic, but Tim, you missed a big one–and again it’s Harney’s article.

    http://seattletimes.nwsource.com/html/realestate/2017612718_harney04.html

    Basically, Harp 2.0 allows automated refinancing of certain Fannie and Freddie loans. Unfortunately one loan guarantee company isn’t agreeing to one of the terms, so even if you have such a Fannie or Freddie loan, you won’t qualify if the insurer of your loan was a company called United Guarantee. Seems all well and good, because why would a company have to accept conditions set forth in Harp 2.0 by the Obama administration?

    Well the kicker is that United Guarantee is a subsidiary of—wait for it—AIG. The government basically owns AIG, but we can’t get one of their subsidiaries to agree to something all the other insurers have agreed to!

    Clearly President Obama isn’t a very good socialist! ;-) :-D

  3. 3
    David Losh says:

    What the heck happened to the Real Estate market?

    I agree the market palce is heating up. It’s another hot, hot, hot market with multiple offers.

    What is that about?

    Prices continue to fall, only to have a group of buyers bid them back up? Then you go on for a few months, and prices have declined again. On top of that there seems to be a lot of buyers out there. People can’t wait to get an offer in.

  4. 4

    RE: David Losh @ 3 – Everything else staying equal, lower prices means more buyers. That’s normal market activity.

  5. 5
  6. 6
    tim2 says:

    Bottom.
    March 2012. Seattle Bottom.
    Long flat bottom, but bottom.

  7. 7
    wreckingbull says:

    After Kendra Todd and Greg Swann, Cragun was one of my favorite public caricatures of the real estate bubble. I am happy to see he is alive and we can look forward to future posts. Whaaaaaaaaaaaaaaaaaa!

  8. 8
    patient says:

    RE: tim2 @ 6

    Question: What’s the safest sign of spring in Seattle?
    Answer: Bottom calls at Seattle Bubble.

    Hopefully this spring will be a bit warmer than last.

  9. 9
    David Losh says:

    RE: Kary L. Krismer @ 4

    There is nothing normal about today’s market place. I just got back from showing property, and it is insane.

    The definition of insanity is doing the same thing over, and over again, while expecting a different result. Every year we go through the same motions of hysteria, only to find prices decline a year later.

    We looked at a place that came on the market yesterday that had agents crawling all over it. It is a disaster. Less than a minute away we saw a house that has been on the market for over 45 days, in much, much better shape, same price, and it just sits there.

  10. 10

    By David Losh @ 9:

    There is nothing normal about today’s market place. I just got back from showing property, and it is insane.


    We looked at a place that came on the market yesterday that had agents crawling all over it. It is a disaster. Less than a minute away we saw a house that has been on the market for over 45 days, in much, much better shape, same price, and it just sits there.

    Again, lower prices will bring more interest. That’s normal.

    As to people and agents looking at new listings, how do you expect them to check them out? That they were looking doesn’t mean that an offer will be made, or that if it is an offer will be accepted. Agents and buyers look at a lot of listings that they don’t like, and look at a lot of new listings.

    Again, you’re commenting on normal market activity, not understanding what is going on.

  11. 11
    David Losh says:

    RE: Kary L. Krismer @ 10

    I am getting it Kary. Like I originally said last year, when agents start talking about REOs, and short sales as a market segment, that isn’t normal.

  12. 12

    RE: David Losh @ 11 – Not sure what that has to do with what you’ve said previously in this thread. But whatever. Early 2007 wasn’t “normal” either. Not sure why you expect a normal market.

    But what do you expect? Agents to pretend REOs and short sales are exactly the same as normal listings, or that they don’t have any impact at all on the market? You’re really not making yourself clear at all.

  13. 13
    MichaelB says:

    By Kary L. Krismer @ 2:

    I’m going to risk Ray calling this off topic, but Tim, you missed a big one–and again it’s Harney’s article.

    http://seattletimes.nwsource.com/html/realestate/2017612718_harney04.html

    Basically, Harp 2.0 allows automated refinancing of certain Fannie and Freddie loans. Unfortunately one loan guarantee company isn’t agreeing to one of the terms, so even if you have such a Fannie or Freddie loan, you won’t qualify if the insurer of your loan was a company called United Guarantee. Seems all well and good, because why would a company have to accept conditions set forth in Harp 2.0 by the Obama administration?

    Well the kicker is that United Guarantee is a subsidiary of—wait for it—AIG. The government basically owns AIG, but we can’t get one of their subsidiaries to agree to something all the other insurers have agreed to!

    Clearly President Obama isn’t a very good socialist! ;-) :-D

    Kary, Thanks for the link! HARP 2.0 will ensure Obama’s re-election. As far as socialism goes – not really sure what you are talking about… Killed Bin Laden, saved GM, avoided the Great Depression, Hired all the leading Finance guys to key posts… He seems pretty mainstream to me. You must be referring to his healthcare policy which is very similar to Romney’s? Did you know that healthcare costs are the leading cause of bankruptcy in the USA?

  14. 14

    By MichaelB @ 13:

    By Kary L. Krismer @ 2:

    I’m going to risk Ray calling this off topic, but Tim, you missed a big one–and again it’s Harney’s article.

    http://seattletimes.nwsource.com/html/realestate/2017612718_harney04.html

    Basically, Harp 2.0 allows automated refinancing of certain Fannie and Freddie loans. Unfortunately one loan guarantee company isn’t agreeing to one of the terms, so even if you have such a Fannie or Freddie loan, you won’t qualify if the insurer of your loan was a company called United Guarantee. Seems all well and good, because why would a company have to accept conditions set forth in Harp 2.0 by the Obama administration?

    Well the kicker is that United Guarantee is a subsidiary of—wait for it—AIG. The government basically owns AIG, but we can’t get one of their subsidiaries to agree to something all the other insurers have agreed to!

    Clearly President Obama isn’t a very good socialist! ;-) :-D

    Kary, Thanks for the link! HARP 2.0 will ensure Obama’s re-election. As far as socialism goes – not really sure what you are talking about…

    First, it was a joke, which is why I followed the comment up with both a wink and a smile. So in the future if I make a reference to President Obama being: (1) Socialist: (2) Foreign born (or alternatively a reference to his birth certificate); or (3) Muslim, and then I follow that with a wink and/or a smile, that means it’s a joke. It doesn’t mean I think he is any of those things. If I refer to him being Muslin, then I’m making fun of people making the third claim.

    Second, anytime you have to explain a joke, that means the joke failed. But the reference for the joke is the government takeover of AIG. If he were a “good socialist,” he would take over and control the entities, and then he wouldn’t have a problem with a company the government owns not going along with his Harp 2.0 plans.

  15. 15
    jonness says:

    Prices are now down 33.8% from their June/July 2006 peak, prompting index chairman David Blitzer to predict further declines going into 2012. “Up until today’s report we had believed the crisis lows for the composites were behind us with the 10-City Composite originally hitting a low in April 2009 and the 20-City Composite in March 2011,” he said, adding “now it looks like neither was the case, as both hit new record lows in December 2011.

    Of course house prices were set to go down. This has been and continues to be as plain as the nose on your face. Could house prices stabilize in 2012 in areas that have overshot the bottom? Yes. Will they? It’s impossible to know. However, if gas prices go through the roof, expect another big leg down.

    We will most likely see economic volatility continue through 2012. Thus, the stock market continues to look much better than housing for those who understand cycle timing and how to make money on both sides of a trade.

    Best case scenario: Housing market bottoms in winter of 2012.

    Worst case scenario: Food stamps.

  16. 16
    jonness says:

    By Kary L. Krismer @ 10:

    Again, lower prices will bring more interest. That’s normal.

    True, but it also builds an expectation of continued lower prices in the future, which pulls prices even lower in the future. IMO, this self-sustaining deflationary cycle will only end when investors can make easy money again. IOW, the lure of housing is fickle, as it is based on the cycle of mass hysteria. However, the lure of practically guaranteed profit is always strong and never weak.

    House price depreciation can fix itself if the government just steps out of the way. And yes, it will cause short term temporary pain for many. But that’s the cost of betting wrong in a free market system. Either we go communist, or we continue to allow a system that rewards ingenuity, hard work, and clear thinking, and punishes who don’t do the work, or just plain get it wrong.

    I’m betting we go communist. Unfortunately, it’s been shown to have a limited lifespan.

  17. 17
    whatsmyname says:

    RE: jonness @ 16

    “IOW, the lure of housing is fickle, as it is based on the cycle of mass hysteria.”

    Housing, Ha. I see an increasing number of forward looking individuals downtown who have already cast aside this silly notion of living indoors.

    “Either we go communist, or we continue to allow a system that rewards ingenuity, hard work, and clear thinking, and punishes who don’t do the work, or just plain get it wrong.”

    Hard work? Weren’t you just espousing the need for easy money and guaranteed profits? (Investors only of course, screw the workers) From your posts, I don’t see where you contribute any useful work; you seem only interested in siphoning the benefits of the work of others. Perhaps the wrong people are being punished.

    “I’m betting we go communist. Unfortunately, it’s been shown to have a limited lifespan.”

    We all have a limited life span.

  18. 18

    By jonness @ 16:

    By Kary L. Krismer @ 10:

    Again, lower prices will bring more interest. That’s normal.

    True, but it also builds an expectation of continued lower prices in the future, which pulls prices even lower in the future. IMO, this self-sustaining deflationary cycle will only end when investors can make easy money again. IOW, the lure of housing is fickle, as it is based on the cycle of mass hysteria. However, the lure of practically guaranteed profit is always strong and never weak.

    House price depreciation can fix itself if the government just steps out of the way. And yes, it will cause short term temporary pain for many.

    What you’re describing in the first paragraph is how markets can over adjust. The position you’re taking in the second paragraph is being against government preventing them from over adjusting.

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