Weekend Open Thread (2012-07-13)

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Here is your open thread for the weekend beginning Friday July 13th, 2012. 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!

NOTICE: If you have comments to make about politics or economics that do not somehow directly relate to Seattle-area real estate, they may be posted in the current Politics & Economics Open Thread. If you post such comments here, they will be moved 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.

41 comments:

  1. 1

    They say the definition of an idiot is someone who does the same dumb thing over and over again. On that note, Ballard’s annual lutefisk eating contest will take place Saturday, July 14th, 1 PM at Bergen Place in the heart of Ballard. Once again I will be participating. Get there early if you want to participate. Cash prizes for the first three finishers. All you have to do to win is very quickly eat several pounds of a lye soaked fish filet that has aged, smells, and closely resembles sticky fish jello.

  2. 2

    RE: Ira Sacharoff @ 1 – Out of curiosity, how much cash does this get you? Or is it mainly just bragging rights?

  3. 3

    By Kary L. Krismer @ 2:

    RE: Ira Sacharoff @ 1 – Out of curiosity, how much cash does this get you? Or is it mainly just bragging rights?

    1st prize=250 dollars
    2nd prize=150 dollars
    3rd prize= 50 dollars

  4. 4
    Pegasus says:

    RE: Ira Sacharoff @ 3 – Are those prizes paid in actually cash or leftover lutefisk? You appear to be a glutton for punishment……

  5. 5
    One Eyed Man says:

    RE: Ira Sacharoff @ 3

    Sticky fish jello seasoned with lye. I can taste that stuff coming back up with a slight essence of bile, just thinking about it. I’d like to come watch the contest but my court appointed psychiatrist says I should cut back on my attendance of S & M rituals. I do, however, have a couple of questions. Can you mix it with cheap Scandinavian booze and do lutefisk jello shots? Barring near starvation, I would never eat lutefisk, but my sense of debauchery might entice me to do a few lutefisk jello shots. Could you eat it with a straw? For some reason the concept of lye flavored fish jello just makes me think that sucking should somehow be involved. And how do you know if you got some bad lutefisk? Or is that a non-sequitur?

    My apologies if none of that was funny. I know its stupid and irrelevant, but the idea of somebody saying “I got some bad lutefisk” just makes me laugh. To paraphrase Ray, “Its all coming back.”

    And my apologies for posting an irrelevant comment. I delete most of my comments without posting them cause I generally consider much of what I write to be self indulgent crap. But the other day Ira told me not to do that so I decided to posted this one anyway just for Ira.

  6. 6
  7. 7

    Look at this comment: “The banks aren’t holding these properties in THEIR inventory, the properties are being held in the inventories of MBS trusts. The losses incurred as a result of delays in selling REOs are being allocated to pension funds, etc., in the case of private MBS, and the taxpayer, in the case of Fannie, Freddie and the FHA.”

    :(

  8. 8
    David Losh says:

    RE: Jill Schlicke @ 7

    It gets worse as you look at Europe, here’s kind of a primer, tough to read, but it basically says, all is well in 2012, but never says how the back log of foreclosures will be dealt with.
    http://www.pwc.com/it/it/publications/docs/italian-npl-market.pdf

    Second up is http://urbanland.uli.org/Articles/2011/Nov/ParrEurope

    Again, all is well, just don’t look behind the curtain.

    What these links show is the activity of the Non Performing Loans.

    It gets complex, but it is really simple. Banks never intended to service loans. Banks made loans to feed a secondary market. Those assets may come onto the market, but they are coming onto the market at prices that are in line with the price of the security.

    These people are trading loans making the securites pool as homogenous as possible. European Banks buy American, but it says United States banks are taking losses by writing down the loans they may have in Europe.

    As an example, in Spain a condo is for sale, as a foreclosed property. It is 480K Euros, and it’s a dump. In the same neighborhood another foreclosure is 400K Euros, and still a dump. In a news report http://www.businessweek.com/news/2011-06-15/spain-rejects-proposal-to-reform-mortgage-foreclosures.html the home owner still owes the debt after foreclosure. The bank was asking for debt forgiveness so they could clear inventory, and the Legislators said no.

  9. 9
    2kt says:

    RE: Jill Schlicke @ 6

    “My rough calculations”? This is rich. Assuming “rough calculations” of anonymous poster are true – if MBS trust decides to hold the property of the market, it certainly can certainly do so. How is it so that property owner’s decision to hold it off the market becomes “market manipulation”, if you don’t mind me asking?

  10. 10
    David Losh says:

    RE: 2kt @ 9

    It’s not market manipulation if the price of property continues to go up, or holds steady.

    It would be market manipulation if the property owners began dumping properties for less than what the market would bear.

  11. 11
    pfft says:

    Two interesting housing articles.

    WSJ: The U.S. Housing Bust Is Over
    http://www.calculatedriskblog.com/2012/07/wsj-us-housing-bust-is-over.html

    Buffett: US Housing Picking Up, Rest of economy slowing down
    http://www.calculatedriskblog.com/2012/07/buffett-us-housing-picking-up-rest-of.html

  12. 12
    Blurtman says:

    Off topic, but the Mrs. and I had the pleasure this evening of dining at Cafe Juanita, in Kirkland. Absolutely amazing food, designed to stimulate the palate. Very nice ambience. Very friendly employees. Great menu filled with interesting dishes. The wine list, quite good. Northern Italian cuisine. I had the braised rabbit, and it was melt in your mouth good. Yes it is pricey, but well worth it. Three thumbs up. Check it out. http://www.cafejuanita.com/

  13. 13

    By Jill Schlicke @ 7:

    Look at this comment: “The banks arenâ��t holding these properties in THEIR inventory, the properties are being held in the inventories of MBS trusts. The losses incurred as a result of delays in selling REOs are being allocated to pension funds, etc., in the case of private MBS, and the taxpayer, in the case of Fannie, Freddie and the FHA.”

    :(

    So the losses are being “socialized” and the profits are being privatized.
    It seems like these guys are incorrigable, doesn’t it?

  14. 14

    RE: Jill Schlicke @ 6 – Find even one property in King County that is owned by Fannie or Freddie for over 2 months which is not on the market.

    That could happen due to condition or title issues, but if the situation were anywhere near as common as what the article suggests, it would be rather easy to find such a property. I did some looking, and only found one which was suspicious. One I found they did try to list but it was apparently subject to a lease and the tenant wasn’t cooperating, but I did find another where there was no obvious explanation.

  15. 15

    By Ira Sacharoff @ 13:

    So the losses are being “socialized” and the profits are being privatized.
    It seems like these guys are incorrigable, doesn’t it?

    Considering the market impact of banks not timely processing short sales and initially selling REOs in very crappy condition, I’m not so sure that isn’t fair.

  16. 16
    Pegasus says:

    RE: Jill Schlicke @ 7 – Just part of the systemic fraud that permeates our financial institutions. Mortgage rate are artificially low in order to get people to pay a higher price for real estate and assume more debt rather than decrease outstanding debt. At the same time those artificially low rates are impacting the rates of returns that investors, citizens, pension funds receive on their assets all at their expense in order to continue bailing out the banksters. Are you aware of the impact of the ZIRP by the Bernanke and crew on the 2.8 trillion dollar Social Security Trust Fund Assets? Bonds that were invested at 5 percent are maturing and are being reinvested at rates of about 1 percent. If you thought Social Security might be financially in trouble, getting far lower rates on the Trust Fund assets is only making it worse.

  17. 17

    By Pegasus @ 16:

    If you thought Social Security might be financially in trouble, getting far lower rates on the Trust Fund assets is only making it worse.

    Not to mention the tax holiday that President Obama has extended on social security taxes. Talk about kicking the can down the road.

  18. 18
    Pegasus says:

    RE: Kary L. Krismer @ 17 – That shortfall is being made up by the general fund and transferred over to the Social Security Trust Fund but it is money that is not being received by the government, one way or another. One wonders whether they will extend it for next year especially if Obama gets his tax cuts for the middle class that would offset the loss to citizens if the tax holiday does not get extended.

  19. 19
    pfft says:

    By Pegasus @ 16:

    RE: Jill Schlicke @ 7Mortgage rate are artificially low

    we have an oversupply of savings that is causing low interest rates. if you have too many savers and not enough borrowers mortgage rates and interest rates in generally must come down. simple supply and demand.

  20. 20
    pfft says:

    By Pegasus @ 18:

    RE: Kary L. Krismer @ 17 – That shortfall is being made up by the general fund and transferred over to the Social Security Trust Fund but it is money that is not being received by the government, one way or another. One wonders whether they will extend it for next year especially if Obama gets his tax cuts for the middle class that would offset the loss to citizens if the tax holiday does not get extended.

    but conservatives have been telling me for years the trust fund is a fraud?

  21. 21
    Pegasus says:

    Ira Sacharoff loses again…I hope he is not ill

    Lutefisk eating contest a crowd pleaser at SeafoodFest

    The winner was a Ballardite, named David Johnson, who said this was his eighth time competing. He had won previously but had not been able to compete in recent years since he was away fishing. He grew up in town and said he was happy to be back and win today.

    http://www.myballard.com/wp-content/uploads/Shoveling-it-in.jpg

    http://www.myballard.com/2012/07/14/lutefisk-eating-contest-a-crowd-pleaser-at-seafoodfest/

  22. 22
    David Losh says:

    RE: pfft @ 19

    Cash on hand is different than an over supply of savings.

    http://thinkprogress.org/economy/2011/08/11/293999/corporate-cash-59/?mobile=nc

    Apple Corporation has more cash on hand than the United States government.

  23. 23

    RE: Pegasus @ 21
    The first three finishers win money. Last year I finished third. The year before I finished second. This year the competition was tougher and I was out of the money. But getting elimnated after the second round allowed to me to feel much better, having consumed less than a pound of lutefisk. The winner’s technique was amazing. He practically drank the lutefisk.

  24. 24
  25. 25
    Lord Koos says:

    By pfft @ 19:

    By Pegasus @ 16:

    RE: Jill Schlicke @ 7Mortgage rate are artificially low

    we have an oversupply of savings that is causing low interest rates. if you have too many savers and not enough borrowers mortgage rates and interest rates in generally must come down. simple supply and demand.

    RE: pfft @ 19

    If you think the Libor rate-setting fraud and the Fed’s policy of ZIRP is “supply and demand” you may have drunk of the kool-aid a little too deeply my friend.

  26. 26
  27. 27
    ChrisM says:

    RE: Kary L. Krismer @ 14 – The source article appears to jump to the assumption that a property would be held by FNM/FRE, and I’m not sure where that assumption comes from.

    Down here in Clark county, I’m seeing properties held by banks for significant amounts of time (over a year) .

    I thought there was a process where a bank could hand over the property to FNM/FRE at some point after the bank had taken over the property – is that correct?

    I also thought banks were milking fees, and really in no hurry to hand over to FNM/FRE.

  28. 28
    ChrisM says:

    Help! I’ve repeatedly posted how difficult it is for a normal consumer buyer/seller to evaluate a real estate agent, and now I fear my parents (who are trying to sell their house) have enlisted a dud Realtor ™.

    My main complaint is that the listing does not show up correctly on realtor.com, zillow.com, nor the real estate agent’s company website (I don’t want to get specific here, because I want agents to be able to discuss this situation). Items like year built and school district are unpopulated.

    I would have thought a competent agent would check the online presence of their listing. Is this not actually the case?

    I’m also not happy about the listing photos – key elements of the property (rural) were left out of the pictures. There are nine pictures for a hobby farm property.

    For you agents out there, how do you ensure Zillow is correct. Is Zillow relevant?

    What other ways are there to evaluate a listing agent before a sale takes place?

    Thanks!

  29. 30

    RE: Lord Koos @ 24 – If you believe those claims, find those properties locally. Real estate records are public records and available over the Internet.

  30. 31

    RE: ChrisM @ 28 – Yes, the agent should have their listings show up on Realtor.com, Zillow and Trulia. Craigslist IMHO is a total waste, so I wouldn’t penalize them for a listing not showing up there. For Realtor.com whether they automatically show up depends on their firm. While it’s possible for listings to automatically post on the other sites, usually a third party product is used. I use Postlets.

    The way to test a listing agent is to check out their existing listings to see if they show up on those sites. While you’re doing that try to look at other similar listings the agent might have to see how they market those listings. Keep in mind that not all properties are marketed the same way though. For example, REOs don’t typically get professional photographs, and not all non-distressed properties get professional photographs either (some houses aren’t that clean).

    Beyond doing that, there are other things an agent should do that would be harder for a consumer to test. For example, making sure that the tax id number and map placement are both correct. Providing “attached documents” for agents wanting to make an offer.

    Finally, even after offer(s) come in the agent can be important. I wrote about that recently.

    http://www.trulia.com/blog/kary_l_krismer/2012/06/congratulations_you_received_multiple_offers_for_your_house_now_what

  31. 32

    RE: ChrisM @ 27 – I don’t recall seeing the transfer to Fannie or Freddie occurring after the sale. More typically they take title directly from the DoT Trustee.

    If they did transfer it after the sale, I’m not sure how they would avoid excise tax. Fannie and Freddie don’t have to pay excise tax, but state banks seemingly would need to. It’s too early in the morning (not enough coffee) for me to remember whether national banks pay excise tax, but I believe they do.

    Keep in mind the point I mentioned yesterday. If the property is leased the bank may have to (or want to) wait for the lease to expire. Also, I believe there are some programs where bank type entities will lease to the prior owners. That would be an example of holding inventory off the market.

  32. 33
    David Losh says:

    RE: ChrisM @ 28

    Marketing in rural communities is usually looking for a local buyer. You can adverise broadly for a gentleman farmer, but chances are the buyer will be some one local.

    I would check for how well the agent in established in the community, and the longevity they have. More Real Estate transaction can be done in the local church than through the Multiple.

    The pictures help a lot, as well as having the listing show up in as many places as possible. The agent would have to monitor, and input, the listing into different sites to be sure. There may also be local sites that are popular.

    In the case of rural less common sites may give the listing more exposure to a larger buyer pool. We never think about Homes, and Land, but that may be a better advertising resource http://www.homesandland.com/

    Check with the agent to see what the strategy is. Different types of properties have different marketing.

  33. 34

    By David Losh @ 33:

    In the case of rural less common sites may give the listing more exposure to a larger buyer pool. We never think about Homes, and Land, but that may be a better advertising resource http://www.homesandland.com/

    How do you come up with these things?

    I did a limited search in Covington that found 6 listings. Not a single one was an active listing! Only two were pending! The rest were more stale than that, and one was non-existent (no address but no listing in Covington ever by that agent.)

    When you go to third party sites like Trulia, Zillow and this one Losh just endorsed, what you get are incomplete and inaccurate listings. But the one Losh just endorsed is probably the worst example of that I’ve ever seen.

    But yes you might find a buyer there. You might also catch a fish by having your fishing pole blow off your deck, and then snag on your dock with the un-baited hook in the water.

  34. 35
    David Losh says:

    RE: Kary L. Krismer @ 34

    You should stick with lawyering.

    The agent has to do the inputs by setting up the accounts, like you have done with Trulia. Any agent can set up an account, and begin inputting.

    Are you unfamiliar with Homes, and Land? I didn’t endorse, it exists, and has a long history of searches concerning land.

    This person asked about rural marketing which to me means land, so you choose the vehicles that will best get you the search results you want.

    For me the local community is still the best buyer resource.

    Shees.

  35. 36

    By David Losh @ 35:

    RE: Kary L. Krismer @ 34

    You should stick with lawyering.

    The agent has to do the inputs by setting up the accounts, like you have done with Trulia. Any agent can set up an account, and begin inputting.

    Read post 31. Rather obviously I know how to get my listings to third party sites, but there are so many of them you need to use sites like Postlets to try to cover as many as possible. No matter what you do, it’s impossible to get them all, and somewhat pointless when it comes to the site which you just endorsed. And don’t try to claim you didn’t endorse it. You told someone to use it!

    By David Losh @ 33:

    In the case of rural less common sites may give the listing more exposure to a larger buyer pool. We never think about Homes, and Land, but that may be a better advertising resource http://www.homesandland.com/

  36. 37
    pfft says:

    By Lord Koos @ 25:

    By pfft @ 19:

    By Pegasus @ 16:

    RE: Jill Schlicke @ 7Mortgage rate are artificially low

    we have an oversupply of savings that is causing low interest rates. if you have too many savers and not enough borrowers mortgage rates and interest rates in generally must come down. simple supply and demand.

    RE: pfft @ 19

    If you think the Libor rate-setting fraud and the Fed’s policy of ZIRP is “supply and demand” you may have drunk of the kool-aid a little too deeply my friend.

    no. the savings rate went up from zero to around 5%. people are paying down debt and saving, not spending. the economy is deleveraging. ZIRP is just a reaction to that. LIBOR is it’s own deal.

  37. 38
    David Losh says:

    RE: Kary L. Krismer @ 36

    Postlets? Postlets is your edge in the market place? the rural market place?

    Stick to lawyering.

    This may sound good to the people at home, but in the world of Real Estate marketing you need to target your market.

    The comment is about this person thinking the agent is a dud. I’m saying he should ask the agent what the strategy is.

    You want to sell your services to the public with Postlets.

    You are blogging for business. Some one may hire you, but the buyer should beware.

  38. 39
    wreckingbull says:

    RE: pfft @ 37 – So in 1980, when the savings rate was double what it is today, we should have had even lower rates, right professor pffffft? The fed fully admits that their actions are the intended cause of today’s low rates. Uh, its no secret.

  39. 40
    pfft says:

    By wreckingbull @ 39:

    RE: pfft @ 37 – So in 1980, when the savings rate was double what it is today, we should have had even lower rates, right professor pffffft? The fed fully admits that their actions are the intended cause of today’s low rates. Uh, its no secret.

    was the economy deleveraging in 1980? 4 or 5 years into a deleveraging and you people should have caught on by now…

  40. 41

    By David Losh @ 38:

    RE: Kary L. Krismer @ 36

    Postlets? Postlets is your edge in the market place? the rural market place?

    Stick to lawyering.

    You should stick to something you know something about, once you figure out what that is.

    Yes, Postlets. The goal is to post to Trulia and Zillow. It accomplishes that task, and more.

    But hey, what do I know. I’m not the one who endorsed a website that seemingly has little besides stale listings and possibly no active listings.

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