Monday Open Thread (2012-10-01)

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Here is your open thread for Monday October 1st, 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.

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
    DanW says:

    Interesting stats about the shadow inventory
    1.2M reduction in inventory in the first half of 2012

    Chase claim approx. 6M shadow inventory, while Corelogic shows their estimate at about 1.3M – no idea how come these two numbers are so different.

  2. 2
    softwarengineer says:

    And When You Have a Job to Move To

    Do you rent your underwater mortgage home out for theoretically less than your mortgage payment? Or, do you buy a house at your new job location and then let the Seattle home foreclose?

  3. 3
    Blurtman says:

    RE: softwarengineer @ 2 – Maybe we should turn homes into consummables and give them a 10 year lifespan.

  4. 4
    Wazzuner says:

    Anyone following the huge spread between the prevailing 30 year mortgage rate ~3.4% and the yield on the FNMA 3% passthrough (1.7%)? Seems as though the bottom should dropout on the 30 year in the next few months… Thank you helicopter Ben

  5. 5
    softwarengineer says:

    RE: Blurtman @ 3

    I Asked This Same Morals Question to a Good Friend of Mine

    He told me the best thing to do is what the Rich do with bad real estate deals [like Donald Trump], turn ’em back over to the bank that should have known better too. He said don’t buy another house [you could rent], live like a gypsy in a trailor [nothing of any value to put a lien on after a foreclosure in another city]. If anything the rich should have more moral responsibility on a like issue like this than middle class or poor….so think like them.

  6. 6
    softwarengineer says:

    RE: Wazzuner @ 4

    I Also Saw 10 Year CDs at 1.2%

    That’s the trouble with low interest rates, they’re fine until you need a 401K to survive on….or even worse as a home buyer, the rates go back up to 6-8% and you’re left holding the house as a frustrated seller watching the price get mitigated from high interest rates years from now. Ben wants to hold ’em down until 2015, a couple three years from now, hardly a good and long enough investment period betwen unit sales for new staging and closing costs.

  7. 7
    Sparky says:

    RE: softwarengineer @ 2 – Hopefully they aren’t still holding on to it. That discussion was in 2008…

  8. 8
    pfft says:

    By DanW @ 1:

    Interesting stats about the shadow inventory
    1.2M reduction in inventory in the first half of 2012

    Chase claim approx. 6M shadow inventory, while Corelogic shows their estimate at about 1.3M – no idea how come these two numbers are so different.

    shadow inventory is an old story. it’s already priced in.

  9. 9
    softwarengineer says:

    RE: Sparky @ 7

    Yes Sparky

    Sort of an old story, but the FC area was brand new then, and, IMO, the logic is the same today, as it was since it first started…..the administrative delays of eviction can carry over years BTW, ask Kary.

    Whatever that example seller did, is either haunting them in liens on their new home, or he’s kept the AZ house as a loss landlord. I don’t think rents have changed much in 4 years either.

  10. 10
    softwarengineer says:

    RE: pfft @ 8

    Its Priced in Alright Pffft

    The less its listed, the higher the prices and the lower the listing stock released. Its bank controlled, your Democrats’ friends?

  11. 11
    whatsmyname says:

    RE: DanW @ 1
    “- no idea how come these two numbers are so different.”

    They tell you why – Chase counts every loan over 60 days delinquent. Core logic only counts 1st lien loans with foreclosure actionable under the documents – which may not occur until 90, 120, 150 days or sometimes even longer, to paraphrase the article.

    Even better, Core logic has stats for completed foreclosures in selected markets: Seattle-Bellevue-Everett? Just under 6,000 for the 12 months ended in July – about 500 per month. Now you just compare that with the total of King Co. warranty deeds (about 2,000 per month over the period) plus King Co. trustee deeds of about about 300 per month (over the period) and combined Sno. Co. deeds of about 1200 per month over the period). Actual foreclosures have been running at about 1/7th of monthly sales locally. Have foreclosed homes been about 15% of the sales mix July to July? I think they have. I think Tim did a chart on that.

    Of course, some people will continue to wait for the tsunami.

  12. 12
    Howard says:

    I thought Ray was exaggerating when he talked about gaming the foreclosure process..

    The website has multiple threads about dragging the process out. Most are successful for at least 18-24 months, some almost make it 4 years living rent free. Some of what there is complete 47% Baloney (note, I won’t be voting for Romney).. The sob stories of the evil banks making them refinance and them having too much debt and inflated appraisals and they were defrauded gets sickening… People who have lived in their houses for 22 years getting foreclosed becaused they refinanced their ranch for over 1 million and the crying foul when the bank wants their money.

    Some stories are sad, but I did find the site educational and entertaining.

  13. 13

    RE: Howard @ 12 – I suspect there are some properties the banks know they don’t want back due to condition, so they delay on those. There may be others too, but I’m just saying banks may purposefully delay some due to condition.

  14. 14
    apartment boy says:

    Einhorn just announced a short position on Chipotle. Make sure and watch Cramer’s existential meltdown on Mad Money this afternoon.

  15. 15
    DanW says:

    RE: whatsmyname @ 11
    Thanks for the translation of the docs :-)

    The most interesting element to me was seeing the numbers for loan mods in the initial docs – seems harder to find that data than the numbers of foreclosures, and it did seem to show that there is not as much shadow inventory to come onto market as had previously been expected.

  16. 16

    Didn’t someone here (Ray?) know someone who faked being in the military to prolong a foreclosure? Apparently someone else used faking being in the military to get time off work.

  17. 17

    RE: Howard @ 12

    And If They Live In It Rent Free

    I imagine they can rent it out under the table with cash for at least 50% going rent. This conundrum is turning a lion’s share of recent ex-homeowners all into Boardwalk Empire crooks.

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