“You hope beyond hope that you get this house…”

Last week the Seattle Times ran an editorial from a frustrated would-be home buyer currently in the trenches:

As I write this, I’m waiting to hear from my realtor on whether or not I just bought a house. It’s my sixth attempt at purchasing a home in Seattle this year, and you know what they say: The sixth time is the charm! Or maybe it’s the 16th?

There’s nothing quite like waiting for the call from your Realtor to find out whether you just spent your entire savings and then some on a house that may or may not survive even a minor earthquake. (You won’t know until said earthquake hits because you had to waive the once-standard opportunity to have the house properly inspected because inspection contingencies are so 2015.)

Nevertheless, you hope beyond hope that you get this house, despite the fact that the foundational supports are shimmed up with a log, a brick, a wedge of plywood — and is that a stack of plates? And if you have to write one more sickeningly earnest letter about why you’re the best buyer for this home, you might have to call it quits and move back to Iowa, where hundreds of thousands of dollars buys you an entire operational farm.

The whole piece has an eerily familiar ring to it… Here’s an excerpt from a piece that ran nearly 10 years ago in the Seattle P-I, the famous “last spaceship flight” piece:

But with friends who have not yet “squeezed in” to the housing market, I am reminded of how I felt when I got accepted by my first choice for college and my best friend got nothing but rejections. What do you say to each other? I try to offer soothing assurances: “I hear there are still some great deals up north.” “600 square feet is plenty of room!”

But no matter what I say, I know we all feel like they have probably missed their chance, like they didn’t buy their ticket on the last spaceship flight off a planet that’s about to explode. I fear they’re doomed to move back to Missouri in order to afford more than a studio condo on the fringes of the city.

Fortunately, none of my friends have left town — yet. And even if they don’t, even if they all hit the jackpot and land their cramped little dream homes, I guess I’ll never know who else may have left.

The author of the 2016 piece has apparently been getting lots of advice from her friends:

Well-meaning people keep offering unsolicited advice.

I wish people would stop telling me I need to keep the faith because my perfect house is right around the corner. I need them to stop suggesting I look for houses in neighborhoods they would never set foot in, let alone purchase property in. I would appreciate it if people stopped recommending fixer-uppers and tear-down-ers. And if one more person suggests that I include a heartfelt letter and photo of my adorable children in my offer packet, I will lose my mind.

The one piece of advice it seems nobody is giving her: Maybe you should just hold off and don’t buy a home in a ridiculously frenzied market. Just a thought.

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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.

340 comments:

  1. 1
    eastsidebuyer says:

    Here is the problem. When your little kid asks that why cant we afford home. You get emotional.

    Yes this is frenzied market. How long do you think it takes for it to settle?
    If it is 3-4 years then lot of people can’t wait that long. If it is a year lot of people might want to wait.

    I still can’t understand what happened in last 3 months that sky rocketed the prices.

  2. 2
    Dave says:

    RE: eastsidebuyer@1.

    Great question. If we could post images here I’d post my mixed Bloomberg terminal chart and call it the Emerald City Pentacle of Doom. 5 points.

    1. The annual seasonal emerald city housing price bump. (spring is here!)
    2. International money looking for safe long term investment. (Chinese here.)
    3. Immigration to the Puget Sound area based on relatively strong job market. (Amazon here.)
    4. Interest rates on the 10yr dropped again. (low 30 year mortgage rates here.)
    5. Corporate and mutual fund buyers are still around. (CHBO buyers still competing for homes.)

    Add to this scenario our fabulous local governing authorities that really make it easy for contractors to build new housing, (sarcasm). so now we have our housing pentacle of doom. I watched this happen to Los Angeles many years ago, then San Francisco, now here. Alas this seems more structural than seasonal so there’s that.

  3. 3

    RE: eastsidebuyer @ 1

    It is common for prices to accelerate at a more rapid pace in the first 6 months vs the last 6 months of any given year. But what is the basis for your statement “I still can’t understand what happened in last 3 months that sky rocketed the prices.”

    I don’t see anything abnormal. Where is the abnormal change happening?

  4. 4
    eastsidebuyer says:

    Thanks for the info. Hopefully price accelaration will slow down in the later part of the year.
    In from Oct 2015 to now the median price went from 780 to 960K in Redmond.
    http://www.altosresearch.com/research/WA/redmond-real-estate-market
    I felt this is abnormal :)
    May be this is market reality, I need to absorb this information.

  5. 5
    Erik says:

    RE: Ardell DellaLoggia @ 3
    Prices accelerate faster as we get closer to the bubble popping. Seems like a good idea to buy now and sell in 2 years and hope to profit. It’s riskier, but there is easy money to be had. If it doesn’t workout, I’m sure we’ll get bailed out again by the US government.

  6. 6
    greg says:

    By eastsidebuyer @ 4:

    Thanks for the info. Hopefully price accelaration will slow down in the later part of the year.
    In from Oct 2015 to now the median price went from 780 to 960K in Redmond.
    http://www.altosresearch.com/research/WA/redmond-real-estate-market
    I felt this is abnormal :)
    May be this is market reality, I need to absorb this information.

    well it is clear to anyone with a pencil and paper that these increases cannot continue much longer. unless of course speculators are willing to rent at extreme losses.

    Seattle is just the poster child, this is happening in many cities , in many countries and each and everyone is “special”

  7. 7
    Jasper says:

    Another piece of advice for the author of this editorial:

    Maybe she should stop including “heartfelt letters” in her “offer packets”.

    Washington’s anti-discrimination laws are meant to be a shield for people like her. When she includes these “heartfelt letters”, she gives sellers a glimpse behind that shield.

    (I am not a lawyer. I do not know if it is legal for a home seller to discriminate based on what they read in a letter in an offer packet, or based on their Googling of a buyer’s name. But I would not be surprised if it affected some sellers’ decisions.)

  8. 8

    RE: eastsidebuyer @ 4

    That is the mix, not the price rise. I don’t mix 98052 with 98053 when I run the stats. Both are small sample groups, so you can’t use median price to do the calculations. 98052 is commanding much higher prices for new construction recently, but those prices have not become the new normal for the area.

    Recent sales across the street are no higher than expected.

  9. 9

    RE: Jasper @ 7

    I agree and once wrote this piece on it and there has been a mild warning against them here and there.

    http://raincityguide.com/2012/08/18/discrimination-love-letters-to-sellers/

    But would like your opinion. I am recently doing one because my client is in the service. Everyone is all for our servicemen…in theory…until they want to buy a house with a VA loan. It’s disgusting really. So hypocritical to say we support our troops…until one of them wants to buy your house with a VA loan in multiple offers.

    I really want to put a heartfelt letter from me with a picture of his family with him in uniform asking the seller not to discount them because of loan type.

    What do you think? Lost cause?

  10. 10
    Erik says:

    RE: eastsidebuyer @ 1
    My guess is we have 8 more years before this bubble pops. It’s a great time to buy, remodel, and sell for profit.

  11. 11
    Jasper says:

    RE: Ardell DellaLoggia @ 9 – I grew up in a house that my father bought with a CalVet loan (the California version of a VA loan). The CalVet program had very good terms, and was the most reliable part of the California government. (When California’s credit rating got downgraded to the point it needed Bank of America to cosign its loans, the CalVet bonds kept their good credit rating.)

    How bad is the process for getting a VA loan? Is it even worse than getting a loan through PHH (aka NavyFed Mortgage, USAA Mortgage, and as of 2015, KeyBank Mortgage)?

  12. 12
    Andrew says:

    By Erik @ 10:

    RE: eastsidebuyer @ 1
    My guess is we have 8 more years before this bubble pops. It’s a great time to buy, remodel, and sell for profit.

    Nothing’s gonna pop, this time the membrane is made of different material.

  13. 13
  14. 14

    RE: eastsidebuyer @ 4

    By the time it slows down it will be higher and there will be fewer houses to buy, so not necessarily a good strategy. But I think your fears are a bit unfounded and offer this to reassure you.

    Woodbridge – popular neighborhood that sells fairly well. Chose this one because the homes are all about the same and built at the same time.

    8/15 – a 1,850 sf sold for $700k
    9/15 – a 2,250 sf sold for $730k
    10/15 – a 2,450 sf sold for $770k
    11/15 a 2,608 sold for $770k
    2/16 a 2100 sf sold for $750k
    4/16 a 1,880 sold for $752k

    Almost a year of sales, not much variance at all. There are always some differences based on condition and placement in the community, but hopefully you can see that your thinking that there has been a huge increase in 3 months’ time is unfounded.

    What is happening in Redmond is people are paying some astronomical prices for new & newer homes, and that is a new event for Redmond 98052 for the most part. Those very high sales of $1.1 million plus are pulling the median price up, but that has nothing to do with what you will pay for a $700k to $800k house.

    It’s not appreciation…it’s “the mix” impacting median home price. Hope that makes you feel a little better. Though it is clearly still a much better time to sell than to buy…it is not as bad as your numbers were indicating.

  15. 15
    DontRushIntoIt says:

    By greg @ 6:

    By
    well it is clear to anyone with a pencil and paper that these increases cannot continue much longer. unless of course speculators are willing to rent at extreme losses.

    Why is it so clear? Have jobs been lost? Pay going down? People not moving into town?

    Show me a clear indicator that there is any reason for retraction. Not flattening – that could happen – but actual retraction (aka, “the bubble bursts”).

    There are no fundamentals that would suggest that happening in this market. It isn’t “special” except that there are jobs and a strong economy…

  16. 16
    Som says:

    RE: Ardell DellaLoggia @ 3 – I’m sorry but you do not have a clue. I have been to open houses for one year now. I have also seen the difference between listing price vs selling price for one year now. I have also seen the sold price of each home in my match group.

    My match group is what an average techie family’s requirements would be who has been working for 6+ year and is wanting to buy a traditional home in Eastside with a good lot size and newer than 1980 with elementary/middle school 9+.

    This home has gone pending for around 890K (I bid on it and lost and came to know what the accepting offer was):
    https://www.redfin.com/WA/Sammamish/21607-NE-22nd-Ct-98074/home/264345

    This home has gone pending and will close very soon (I was considering bidding on it only to know it went for all cash around 950K+).
    https://www.redfin.com/WA/Sammamish/22201-NE-28th-Pl-98074/home/264078

    Compare this to the selling price of:
    https://www.redfin.com/WA/Sammamish/22237-NE-21st-Way-98074/home/263311
    https://www.redfin.com/WA/Sammamish/2133-222nd-Pl-NE-98074/home/265450
    https://www.redfin.com/WA/Sammamish/2007-223rd-Pl-NE-98074/home/263309
    https://www.redfin.com/WA/Sammamish/2108-220th-Pl-NE-98074/home/261323

    Compare this:
    https://www.redfin.com/WA/Sammamish/23232-NE-21st-Pl-98074/home/266486
    with
    https://www.redfin.com/WA/Sammamish/23220-NE-21st-Pl-98074/home/265004

    Compare this:
    https://www.redfin.com/WA/Sammamish/1335-229th-Pl-NE-98074/home/261551
    with
    https://www.redfin.com/WA/Sammamish/1524-233rd-Pl-NE-98074/home/266254

    I can cite so many. Why don’t you use redfin yourself: https://www.redfin.com/zipcode/98004/filter/min-price=650k,max-price=1M,min-beds=3,min-baths=2,min-sqft=2.25k-sqft,min-year-built=1980,max-year-built=2014,max-days-on-market=1mo,min-lot-size=4.5k-sqft,include=sold-6mo,status=contingent+pending,viewport=47.7116:47.57594:-121.92338:-122.23958,no-outline

    Don’t tell me old homes or ramblers are going about the same. I am not in the market for those. In fact most of the folks I see are in the market for my kinds of home.

    Call it for what this is. It is a bubble. If you want to get a feel, go to a decent house priced between 750K and 1MM and see the frenzy for yourself. I have seen this progression for 1 year now and can attest that things have gone haywire now.

  17. 17
    Som says:

    RE: greg @ 6 – No this is not happening in many cities. In most cities markets have stabilized and are growing 2-5%. Austin and a handful of others may be different. But Seattle takes the cake.

  18. 18
    greg says:

    RE: DontRushIntoIt @ 15

    I thought it was clear I said…….. ” these increases cannot continue much longer”

    If you want to do the math yourself I suggest just take the price inflation from the last 12 months and repeat that a few times, then tell me I am wrong .

  19. 19
    GoHawks says:

    RE: Som @ 16 – Som, thanks for your detailed post, outside of your hunch and experience, what data are you using to classify this as a bubble? Thanks.

  20. 20

    RE: Som @ 16

    I have been an agent for over 25 years. I have a clue. Eastsidebuyer and I were discussing Redmond and that prices did not go from $780k to $960k in a few month’s time. See comment 4 to which I was responding. That the median price changed from $780k to $960k in Redmond (just quoting Easidebuyer there…I am not saying that is correct but assuming it is) does not mean home prices jumped from $780k to $960k for a similar home. That is just not the case.

    I did see your comment about Sammamish on another post but you seem to be referring to one recent sale that isn’t closed yet. Are all of the properties in the links you posted reflecting huge gains as to closed price, or are they all samples of what that one house that was listed at $775,000 “should” have sold for. Is this a “one off” of a pending sale?

    It absolutely is “a bubble”. I do not dispute that. But prices did not go up from $780k to $960k in Redmond in 3 to 4 month’s time was the discussion we were having.

    As to your example, I think you will agree that the agent did not under price it. All of the other sales in your links look pretty normal to me.

  21. 21

    RE: Jasper @ 11

    It’s not harder to get the loan and not a worry they will get it. The problem is sellers do not like VA loans and so unless you are the only buyer in the room, the seller will pick the conventional loan over VA every time. My point being, sometimes a letter to the seller is warranted especially when you are asking a seller to not discriminate against an active duty seviceman in our military. We may have to upgrade them to “a protected class” to stop this discrimination based on loan type.

  22. 22
    DontRushIntoIt says:

    By greg @ 18:

    RE: DontRushIntoIt @ 15

    I thought it was clear I said…….. ” these increases cannot continue much longer”

    If you want to do the math yourself I suggest just take the price inflation from the last 12 months and repeat that a few times, then tell me I am wrong .

    Ok, you are wrong… :)

    But you didn’t address the response – what has changed about our local economy that makes you so certain?

    There has been significant price increases in housing. So what?

    I’m sorry that Som didn’t buy his dream house within a a tightly-bound area within a couple blocks of Sahalee last year and that it is now going to cost him $100k+ more. But this is basic supply and demand coupled with limited inventory…

    More people with high paying jobs are moving in and driving up the market. The jobs they have aren’t going away and the demand for the type of housing they want isn’t fading any time soon.

  23. 23
    Erik says:

    RE: Som @ 16
    Ummmmm…. You don’t know who you are talking to do you? Ardell is the queen of Eastside real estate because she works extremely hard and is obsessed. She’s the best agent on the east side. You don’t want to pick a fight with a 600 pound real estate gorilla, trust me.

    Pick on wreckingbull or one of the other computer industry fools to get your confidence up. Maybe after a few years you can spar with Ardell.

  24. 24

    I used to say if you made 6 offers and didn’t get one accepted that it was time to get a new agent. Now that’s not necessarily true. It could be the agent, but that is much less likely now. And unfortunately the buyer will likely never know if it’s their agent or some other reason that they are losing out. As a general rule though, in a multiple offer situation a seller is going to prefer an offer that does not require any changes, so that they can just accept the offer instead of making a counter-offer. If a buyer’s agent cannot write such an offer they will have less chance of success.

    Here’s some tips.

    1. Assuming you’re a buyer willing to waive an inspection (which I would never recommend), have your agent call the listing agent to see whether or not they would prefer to have an inspection contingency or a waived inspection. For the more risk adverse (and informed) sellers, waiving an inspection would be a negative. So by trying to help your cause by waiving the inspection you might be hurting your cause.

    2. If your agent thinks it helps to cross out paragraph 7 of Form 22A (the low appraisal provisions of the financing contingency), get a new agent. They don’t understand the forms.

    3. Offering some absurd price for a property with an offer requiring financing isn’t going to be too appealing, unless you can demonstrate an ability to bring additional money in when the property doesn’t appraise for the sales price.

  25. 25
    Blurtman says:

    By Erik @ 23:

    RE: Som @ 16
    Ummmmm…. You don’t know who you are talking to do you? Ardell is the queen of Eastside real estate because she works extremely hard and is obsessed. She’s the best agent on the east side. You don’t want to pick a fight with a 600 pound real estate gorilla, trust me.

    Pick on wreckingbull or one of the other computer industry fools to get your confidence up. Maybe after a few years you can spar with Ardell.

    Erik,

    Have her work on the heavy bag and a few rounds of tossing the medicine ball should tune her up for the match. We’re already getting a few calls from ESPN and Flip this House.

  26. 26
    Erik says:

    RE: Andrew @ 12
    This could be the “new norm”, but it’s very unlikely. So far the housing data has followed what would be expected of a bubble. We are in the expansion phase. This will likely last years. After that, we will move to hyper supply and then a crash.

    Do you have a good reason why this is not another bubble? If it looks like a bubble, walks like a bubble, and talks like a bubble, it’s probably a bubble. I’m not sure what will pop the bubble this time, but it could be inflated prices and the software companies laying off employees. Probably not crazy home loans, but I hope so because that will create a lot of opportunity for smart people.

    I went from north Everett white trash before the last bubble to a respectable citizen in Seattle and the east side. Next time the bubble pops, I will buy 10 rentals and retire early. I know what to do this time. Atleast that’s the plan.

  27. 27
    Cap''n says:

    After having read various things on the Internet (which are of course true), I think what really is different this time is real estate investors. I am not talking about your ma and pa flip shop or small time multi-family unit investors. In 2010-2012 we saw a huge push from large hedge funds, scooping up SFH properties. That continues in 2013-2014 with some new players. The big money saw the potential in buying up SFH and renting them out. When organized money (crime) goes all in to an asset class like they have, everything changes. You think the big money has an interest in anything other than high value/rental costs now? Can they manipulate the market so that housing costs are completely divorced from what something should “really” cost? You bet. Demand from typical sources is still high. But there is something different afoot. Unlike the shadow inventory theory, I think this one is here.

  28. 28
    Erik says:

    RE: Blurtman @ 25
    I have witnessed Ardell thrashing the hybrid lawyer-real estate agents around in a Seattle bubble pit fight. They fight for a while, then tuck their tails and run as Ardell chomps them into submission. This person calling Ardell out seems fairly new and I’m not sure they are equipped to handle her wrath. We need new people on here and I just don’t want to see Ardell beat this new person until they leave.

    There are lots of dumb people from the software industry on here that are clueless about real estate. Som should spar those bafoons for a while. When som realizes they have no idea what they are talking about, they could move up to Kary and fight him for a few months about real estate law. After that, som can start to take some on the big dogs. But going from zero to 100 miles an hour is a death sentence. Would you argue with warren buffet about investing when you are a new investor? No. Would you pick a fight with the east side real estate expert for your first battle and Seattle bubble champion? No. You’d get massacred.

  29. 29
    ESS says:

    By Cap”n @ 27:

    After having read various things on the Internet (which are of course true), I think what really is different this time is real estate investors. I am not talking about your ma and pa flip shop or small time multi-family unit investors. In 2010-2012 we saw a huge push from large hedge funds, scooping up SFH properties. That continues in 2013-2014 with some new players. The big money saw the potential in buying up SFH and renting them out. When organized money (crime) goes all in to an asset class like they have, everything changes. You think the big money has an interest in anything other than high value/rental costs now? Can they manipulate the market so that housing costs are completely divorced from what something should “really” cost? You bet. Demand from typical sources is still high. But there is something different afoot. Unlike the shadow inventory theory, I think this one is here.

    _______________________________________________

    Well, you still have the same basic supply and demand problems, it is just now, there are real estate investment companies and foreign buyers to throw into the buying mix with everyone else. While the composition of the mix is somewhat different this time, it doesn’t change the basic laws of economics, that large sums of money chasing limited product will force the price of the product up. When there is more product and less money chasing it, prices will go down.

  30. 30
    Erik says:

    RE: DontRushIntoIt @ 15
    Greg doesn’t know what he’s talking about. He has a track record of parroting the most recent propaganda he read. My guess is he’s a software person or sells loans.

    It doesn’t take a lot of complex thought to see the future of the next few years. Inventory is super low and will likely remain low for a while. Prices will go up in the nice areas.

    Greg has a bad record on here. Watch this website a few years and you’ll flush out the people that know what’s going on vs the fools. Corndogs had the best track record, but he’s gone now. Ray pepper had some good ideas, but he’s probably out enjoying the money he scored on the last economic disaster. That’s how it works here… the dumbest people have the loudest voices. You are basically left to figure it out yourself. If you can study and understand a real estate bubble, you can somewhat predict the future.

  31. 31
  32. 32
    Cap''n says:

    RE: ESS @ 29

    I agree completely. I think the catch is that the investor part of the demand has fundamentally altered the supply side. If hedge funds/large/foreign investors are holding down the supply by owning and not contributing to potentail sales, the market is completely different. The proletariat are bidding up the bread crumbs

  33. 33
    greg says:

    RE: DontRushIntoIt @ 22

    it is not my job to answer what ever questions you see fit.

    however I did think it was worth pointing out that my comment ref the increases being unsustainable is completely correct.

    If you cant figure out why then my explaining will not help. It is literally elementary my dear friend .

  34. 34
    Erik says:

    RE: Cap”n @ 31
    Interesting point. The Seattle market is more diversified now making it more robust.

  35. 35
    greg says:

    RE: Erik @ 30

    Erik is just crying because I and many others have called him out for his silly cheerleading.

  36. 36
    greg says:

    RE: Som @ 17

    cities and countries. and sorry but there are dozens of US cities with hot markets. I have been tracking a few as I have interests in them. not big money or anything just looking for particular things.

  37. 37
    Erik says:

    RE: greg @ 32
    You are wrong. Housing price increases will continue for atleast the next few years. It’s likely we won’t see price decreases for many years. I completely reject that we are nearing the bubble bursting again when we are at record low inventory. Builders haven’t even saturated the market yet. That alone will take years.

    I have been getting lots of job recruiters calling me to work at this place or that place lately, so I think the next few years Seattle will be red hot. This bubble is just ramping up. It reminds me of 2003 when nobody is really sure what to think yet. I feel the real insanity hasn’t even begun yet. I watch closely so I can bail at the right time.

  38. 38
    Ross says:

    This market is certainly frothing, but I think there’s a lot more upside before a pop.
    We have a confluence of factors pushing prices up:
    – Strong local economy
    – Strong immigration to Seattle
    – Population increase exceeding new housing stock
    – Foreign money, Chinese in particular, looking for a safe place to land
    – Amazon/Microsoft stock at high prices (both have more than doubled in the last 5 years). Many Amazon employees have significant stock compensation.
    – Low supply of housing, especially that is in great condition
    – Some investment/speculation keeping housing off the market or in rentals.

    Eventually, some of these will fall, but I don’t see enough negativity to change the market direction in the next 1-2 years. The US election is kind of the big uncertainty factor – where certain candidates’s win could roil a lot of feathers in the US economy.

    Of course, when things turn, it’s usually fairly sudden, but as always, the market can remain irrational longer than you can remain solvent.

  39. 39
    Erik says:

    RE: greg @ 34
    You can call it cheerleading if you want, but I’m confident the market will keep going up rapidly for atleast a few more years. People should be thinking about buying and selling in a few years to make $100k. That’s very doable in this market. Bubbles last for years and we are just ramping up. Probably not a great time to buy a long term rental, but a slow remodel is a great idea.

  40. 40
    Erik says:

    RE: Ross @ 38
    Aerospace is also bubbly. Boeing commercial has a huge backlog. Some commercial aerospace employees will be laid off this year, but if/when the defense side ramps up, aerospace will drive up prices in the area along with software. Prices could get pretty high if that happens.

  41. 41
    Andrew says:

    RE: Erik @ 26 – i didn’t say there’s no bubble, rather what I’m suspecting is that the expansion this time is propped by something different, something more elastic that can stretch drastically without breaking. Basically, also my theory with the assumption that seattle stays being a desired place to live along with deep pocketed programmers, foreign investors and whatnot in the area, when there’s a decline in far future, it will be mild and won’t be much of a collapse like last time. Buyers who are now able to retreat from this frenzy need to invest that cash elsewhere and come back later with more money that matches the prices then during hyper supply – that future bottom may be more than today’s prices, with probably more houses to choose from.

  42. 42
    Jasper says:

    RE: Ardell DellaLoggia @ 21 – Suppose I stipulate that the VA loan is just as likely to appraise high enough, and close in a timely manner, as loans from competent banks. Then in a (non-existent) rational world, if everything else were equal, a seller would prefer:

    1. A true all-cash offer (with verified cash-on-hand)
    2. (tie) A loan from a competent bank
    2. (tie) A VA loan
    4. A loan with lots of strings attached
    5. A loan from an incompetent bank

    Because different kinds of buyer financing do create different levels of risk for the seller, it does not make sense to make the financing type a “protected class”. But risks to landlords, neighborhoods, and society did not prevent any of the other “protected classes” from being created, so it could happen.

    Suppose I stipulate that sellers “will pick the conventional loan over VA every time.”

    Sellers’ agents are familiar with conventional loans and jumbo loans from competent banks. Are they accidentally confusing VA loans with other government-sponsored loans that have lots of strings attached?

    This suggests that you should explain that VA loans are as worry-free as regular loans.

    I don’t think that “Everyone is all for our servicemen.” You should only include the “heartfelt letter” “with a picture of his family with him in uniform” if you are confident that the seller really is “all for our servicemen… in theory.”

  43. 43
    Green Horn says:

    RE: greg @ 6RE: greg @ 6

    I just bought a second house in Central Seattle. I’m no experienced professional real estate investor. But my gross rent receipts should be about between 7 and 9% the purchase price. This is between 3 and 4 times what any dividend pays on Wall Street. Forget about returns on bonds or any bank savings. Even if there is a correction on the housing market, the volatility on Wall Street would likely be much worse. So let’s say the appreciation stops and I have to cut rent 30%. I’ll still come out ahead of any other investment vehicle that would probably crash even harder.

    “well it is clear to anyone with a pencil and paper that these increases cannot continue much longer. unless of course speculators are willing to rent at extreme losses.”

    I think that San Francisco and Vancouver show that the market has no obligation to “make sense” and pencil and paper can run out… just as we are out of land to build new homes. We can’t tear ’em down fast enough to keep up with the people who want to move here.

    I have no doubt that the real estate market will dip perhaps 20 or 30% some time in the next few years. But it’s just as likely to rise 40 to 50% more first before any correction.

    Even if I’m not convinced that Seattle is as great as so many claim, I’m content to stake my retirement on the dumb chumps who all view it as the “promised land” and are willing to pay dearly for the privilege to live here.

  44. 44
    Mike says:

    By Erik @ 28:

    RE: Blurtman @ 25
    I have witnessed Ardell thrashing the hybrid lawyer-real estate agents around in a Seattle bubble pit fight. They fight for a while, then tuck their tails and run as Ardell chomps them into submission. This person calling Ardell out seems fairly new and I’m not sure they are equipped to handle her wrath. We need new people on here and I just don’t want to see Ardell beat this new person until they leave.

    There are lots of dumb people from the software industry on here that are clueless about real estate. Som should spar those bafoons for a while. When som realizes they have no idea what they are talking about, they could move up to Kary and fight him for a few months about real estate law. After that, som can start to take some on the big dogs. But going from zero to 100 miles an hour is a death sentence. Would you argue with warren buffet about investing when you are a new investor? No. Would you pick a fight with the east side real estate expert for your first battle and Seattle bubble champion? No. You’d get massacred.

    Erik, you’re too new here to have seen how poorly Ardell predicted the last market bust. If we’re using her experience to pick buy/sell dates, one should sell about 18 months after she buys. AFAIK she hasn’t bought yet in this cycle – when she does that’s going to be a good time to start sprucing the house up for sale and watching for a coming peak. After that, keep your cash in hand and wait to buy her house for $0.50 on the dollar.

  45. 45
    Erik says:

    RE: Mike @ 44
    I know that. Kary sent me a link to some past threads before the last bubble. I think it’s difficult to be an agent and time the market correctly. Ardell knows a ton about real estate though. That cannot be disputed. If you want to know timing, study the phases of w bubble.

  46. 46
    wreckingbull says:

    RE: Green Horn @ 43 – What about net receipts? What is your expected long-term rate of return after considering operating expenses, maintenance, taxes, vacancy, and capital improvements?

  47. 47
    ess says:

    RE: Green Horn @ 43RE: Cap”n @ 32

    Cap”n – if you are correct – then it is a new dynamic that will alter the Seattle real estate market forever. Vancouver and area is a bit like you suggest regarding crumbs – the wealthy are buying the single family houses in Vancouver, and the working individuals with “normal” jobs and income are focusing on buying smaller condos in the suburbs of Vancouver that are not as attractive as single family houses, but that is all they can afford. My in laws up there are going through that – the older ones bought when they could and reside in what are very expensive houses , but their various kids either left the area altogether , and the ones that remain all live in rentals or condos, and none of them in Vancouver proper.

    Green Horn – congratulations on the purchase of your second house. You will be learning new skills and spending time managing the rental by necessity, unless your cash flow is so great that you can hire others to do all the work. While I can barely draw a straight line, I have become a better painter both inside and out of houses than most professionals, and my tool collection has grown. What part of Seattle is you new house located in?

    I agree that there may be a correction in the near future. As a matter of fact, I can predict with certainty that real estate prices in Seattle will have years that there are declines. But real estate, like stocks, generally increase over time in a step like direction. The problem is that no one knows how long and sustained both the increases and decreases will be, or when they will take place.

  48. 48

    By Mike @ 44:

    Erik, you’re too new here to have seen how poorly Ardell predicted the last market bust. If we’re using her experience to pick buy/sell dates, one should sell about 18 months after she buys. AFAIK she hasn’t bought yet in this cycle – when she does that’s going to be a good time to start sprucing the house up for sale and watching for a coming peak. After that, keep your cash in hand and wait to buy her house for $0.50 on the dollar.

    There’s a lot of things Erik doesn’t know or understand. He was also a fan of David Losh (RIP), which for those of you around here long enough should give you all you need to know.

    As an agent, having Erik vouch for you is sort of like being a politician and getting support from David Duke. It’s a negative, not something to be sought out.

  49. 49
    Blurtman says:

    RE: Erik @ 28 – I think it is human nature to conflate what you believe will happen or perhaps what you hope will happen with what is happening. Everything Zen.

  50. 50
    Erik's Step Dad says:

    RE: Ardell DellaLoggia @ 20 – I’ve been an agent for 26 years and you’re wrong. #TeamSom

  51. 51

    By Erik’s Step Dad @ 50:

    RE: Ardell DellaLoggia @ 20 – I’ve been an agent for 26 years and you’re wrong. #TeamSom

    LOL. Whenever I hear someone start their argument with explaining how long they’ve been in the business it’s usually a warning sign that the next thing out of their mouth will be complete nonsense.

    On this particular issue though, in this market you are very likely to be able to pull up examples of sales that went through well above FMV. That’s the nature of this market, bidding wars, and people with much more cash than is what is required for 20% down.

  52. 52
    greg says:

    RE: Som @ 31RE: Green Horn @ 43

    Woodbridge, has been hot since forever. I don’t know exactly what it is about that estate that makes it so attractive to buyers but prices tend to exceed the norm for the style of homes and location.
    I think it might be that the estate has a somewhat “euro” feel to it, it appears to pique the interest of recent arrivals

  53. 53
    Blurtman says:

    The Dow is hurtling towards 18,000. Local RE prices are going bonkers. And Bernie Sanders will be our next president.

    Buy now or be priced out forever!!!

  54. 54
    greg says:

    RE: Green Horn @ 43

    Good luck on your investment! I have no idea how to determine the strength of your investment based on gross receipts alone, that is beyond me…
    I admire anyone who puts their money where their mouth is. and I hope it works out great for you.

    speculating here…..
    Reading between the lines it sounds like you paid cash or close to and were looking for a place to put money to work. If that is the case then most likely you have a stuffed 401k or such like and did not want all your eggs in one basket…

    just a guess based on your comparing divs to RE..

    for disclosure I am not a big deal investor just another punter with a keyboard .

  55. 55
    Jasper says:

    By Ardell DellaLoggia @ 21:

    RE: Jasper @ 11

    It’s not harder to get the loan and not a worry they will get it. The problem is sellers do not like VA loans and so unless you are the only buyer in the room, the seller will pick the conventional loan over VA every time.

    Can you, or your buyer’s VA lender, make a convincing-but-reassuring argument that “It’s not harder to get the [VA] loan and not a worry [your client] will get it”?

    A quick Googling of ‘VA loan problems‘ and ‘VA loan “Minimum Property Requirements”‘ shows that sellers have good reasons for preferring conventional loans over VA loans:

    * The VA Loan “brand” has been tarnished by a reputation for slow turn times. Apparently, some real estate agents remember when VA Loans required mailing lots of paper back-and-forth. How reliably does your buyer’s lender close VA loans as quickly as the best banks close their conventional loans?

    * VA loans have restrictions on which kinds of closing costs can be paid by the buyer. Can your lender reassure the seller that the lender won’t force the seller to pay underwriting or other fees that are normally paid by the buyer?

    * The VA has “Minimum Property Requirements” that are very similar to those for FHA and HUD loans. Any (sub-minimum) problems identified need to be corrected by closing, at the seller’s expense. In other words, there are lots of strings attached. Depending on how the appraiser interprets the VA’s “guidelines”, most of the (decent or even great) houses I have been in recently might not meet all of the requirements. Have you handled a large enough number of VA-financed purchases that you can assure the seller that your deals are very likely to satisfy these requirements?

    * VA loans are often made with very small down payments. I assume this means that many VA loan buyers are unable to handle needing to bring lots of extra money to closing, like can happen if an appraisal is unexpectedly low. Can your buyer afford to make a down payment?

  56. 56
    Action says:

    By Justme @ 13:

    Condo bust coming soon to a city near you

    http://www.businessinsider.com/san-franciscos-condo-boom-turning-into-bust-2016-4

    I don’t think a condo bust is coming to Seattle anytime soon. New condo construction in Seattle is not keeping up anywhere close to demand.
    http://www.bizjournals.com/seattle/news/2016/04/06/uw-study-aims-to-find-out-why-so-few-condos-are.html

  57. 57
    Marcel says:

    In general, I would say I’m more of a pessimist, but from following this blog for 2-3 years now, here are my thoughts:

    No immediate pop to this “bubble” in the immediate future (next 12-24 months)**. Why?

    1) This is an unnatural manipulated market by the Fed. As long as interest rates stay low, home values should continue to increase.

    2) Not only are rates low, there are more and more articles (media) saying interest rates won’t be rising any time soon. In fact, negative rates are could be around the corner. Negative rates will further the stock and housing bubble. (Why put money in the bank where it will devalue?)

    3) Given that the most likely scenario for our next president (at this time) will be between Trump and Clinton, IMO, Clinton would win. (Only Cruz or another republican could oust Clinton). ASSUMING Clinton wins, Janet Yellen will stay and interest rates will continue to stay near 0 or even negative if China continues to slow down (which again is likely as they are trying to convert to a consumerist economy as oppose to manufacturing)

    4) EXTREMELY Low inventory will continue to push prices up (this is economics 101, supply & demand)

    5) Chinese investment in Seattle will continue (why? Chinese economy will continue to slow as they try and shift to a consumer focused economy)

    6) Jobs in Seattle will continue to improve. (There are a lot of comments on here about the influx of new “amazon” jobs.. While I don’t dispute that, it’s not the entire story. A personal friend of mine, making about $140k at Microsoft, just left Microsoft and got a job at Amazon, with a “30-40% salary increase” (his words). He is in his mid twenties. So people are also moving from job to job, pushing salaries higher. Higher salaries, home values will go up)

    Conclusion? I see housing continue to go up in the next 12-24 months. The bubble will continue to expand as Democrats see that they can manipulate the Fed to artificially increase home values and stock valuations, further lining their pockets. And if a Democrat wins the presidency, the bubble could easily continue to expand 4+ years..

    Your Thoughts?

    **Caveat: The one caveat I see to our present situation is if a Republican does win the presidency. And they follow through on their current rhetoric about regulating the Fed and ending this bubble. I could see the bubble popping in that scenario..IMO. But that’s a big If.. even if a republican wins the presidency, do you wanna be president while possibly seeing another great recession? If there’s anything we learned from Obama — use the tools you have to manipulate the economy to make it appear as an improving economy, and let the next President deal with the damage.

    About me: former Seattleite, engineer (BSEE), early 30s, don’t own any property (yes I’m kicking myself right now for not buying 3 years ago. I was too picky, and now I’m suffering the consequences), looking to move back to Seattle

  58. 58
    Erik says:

    RE: Kary L. Krismer @ 48
    That hurts lawyer-agent hybrid. I’ve seen Ardell serve you on here and sent you packing. The geeat and powerful Ray pepper exploited that you paid mostly cash for your house at the top of the bubble. I felt bad for you, but you just don’t listen. How can you read this data and make terrible decisions. I’ll tell you how… You are penny wise and pound foolish. You are so obsessed with real estate law that you don’t see the big picture. Both Ardell and Ray pepper ate your lunch, now it’s my turn. Nom nom nom.

    Fact: Kary bought in 2007 for almost all cash.

    Conclusion: you learn nothing on here.

  59. 59
    Jasper says:

    By Ardell DellaLoggia @ 21:

    RE: Jasper @ 11

    It’s not harder to get the loan and not a worry they will get it. The problem is sellers do not like VA loans and so unless you are the only buyer in the room, the seller will pick the conventional loan over VA every time.

    Can you, or your buyer’s VA lender, make a convincing-but-reassuring argument that “It’s not harder to get the [VA] loan and not a worry [your client] will get it”?

    A quick Googling of ‘VA loan problems‘ and ‘VA loan “Minimum Property Requirements”‘ shows that sellers have good reasons for preferring conventional loans over VA loans:

    The VA Loan “brand” has been tarnished by a reputation for slow turn times. Apparently, some real estate agents remember when VA Loans required mailing lots of paper back-and-forth. How reliably does your buyer’s lender close VA loans as quickly as the best banks close their conventional loans?

    VA loans have restrictions on which kinds of closing costs can be paid by the buyer. Can your lender reassure the seller that the lender won’t force the seller to pay underwriting or other fees that are normally paid by the buyer?

    The VA has “Minimum Property Requirements” that are very similar to those for FHA and HUD loans. Any (sub-minimum) problems identified need to be corrected by closing, at the seller’s expense. In other words, there are lots of strings attached. Depending on how the appraiser interprets the VA’s “guidelines”, most of the (decent or even great) houses I have been in recently might not meet all of the requirements. Have you handled a large enough number of VA-financed purchases that you can assure the seller that your deals are very likely to satisfy these requirements?

    VA loans are often made with very small down payments. I assume this means that many VA loan buyers are unable to handle needing to bring lots of extra money to closing, like can happen if an appraisal is unexpectedly low. Can your buyer afford to make a down payment?

  60. 60
    Erik says:

    RE: Blurtman @ 49
    Agreed. That helps explain why Kary paid cash in 2007 for a house. Shout out to mr. Peppers.

  61. 61
    Azucar says:

    By Erik @ 30:

    RE: DontRushIntoIt @ 15

    That’s how it works here… the dumbest people have the loudest voices.

    I finally agree with Erik! (He has made 13 of the 59 comments in this thread so far.)

  62. 62
    Erik says:

    RE: Action @ 55
    That’s why I bought a Seattle condo on the water before I got priced out.

  63. 63
    Mellon says:

    I’ll tell you when the next correction/bubble pop will happen- when the boomers start looking to convert their homes into the 401ks they have neglected and find out their children whom they have they screwed over can’t afford half of what they are asking.

  64. 64
    pfft says:

    By Blurtman @ 53:

    The Dow is hurtling towards 18,000. Local RE prices are going bonkers. And Bernie Sanders will be our next president.

    Buy now or be priced out forever!!!

    bernie is not even going to win the Dem nomination.

    He’s got like a 5 or 10% chance of being elected president.

  65. 65
    TeamSom says:

    RE: Erik @ 28 – Really? Software people are dumb? Actually I get it. Yes they are super dumb who do not understand the real estate industry. I mean who would get the complex and well thought out practices in place. I bet dumb software people wonder:
    – Why is it that the same house has to be inspected 15 times within 2 days? Why has the real estate industry not solved this waste in decades?
    – Why are their completely f*d up incentives in place for agents. 3% commission for accompanying me to open houses? Of 0 incentives if I choose not to buy after looking for 1 year?
    – Why is there no open and transparent auction of houses online instead of selling through opaque channels?
    – In a world where I can fly to space on a rocket, I have to sign archaic forms after forms to buy house?

    I mean how can software people who are trying to change the world by innovating be able to understand a completely f*d up industry? Sheesh, dinosaurs galore.

  66. 66
    Angel says:

    New commenter, but I have been reading this blog for a while now. Like Som we lost out on a couple of them move in ready ones – one of them ended up selling for $150K+ above asking in Redmond. The homes we looked at are similar to what Som likes – 3000 square feet, larger lot, not too old and move in ready. It seems that to stay in our preferred area (98052) we really need to be look at homes ~80-100K below the top end of our budget to even have a shot at the house and we had to be open to doing some tiny projects. Is this what you realtors recommend at this time?

  67. 67

    By Erik @ 57:

    Fact: Kary bought in 2007 for almost all cash.

    This isn’t that tough to understand, but one more time, let’s assume that I would have to pay $1,500 a month to live in this house (a very conservative number). To pay that I would have to make at least $2,000 before taxes. For the eight and a half years (100+ months) I have owned that would require that I make over $200,000 in earnings to pay that rent. Back off about $50,000 in real estate taxes paid and that still leaves me with about $150,000 in earnings not spent on rent, and still have the house that is worth more than I paid. And owning that better, more expensive house in a better neighborhood presented less risk during the market downturn.

    I think the “facts” speak for themselves (especially if you understand the facts related to the other agents you mention).

    But that doesn’t change my original point. An agent getting your endorsement is hardly a good thing for that agent. You don’t know what you’re talking about, and it shows! Your praise of Ardell is not a good thing because no one respects your opinion.

  68. 68
    Erik says:

    RE: TeamSom @ 64
    I’m sure there are smart software people out there, but we happened to not get them on this site. Tim and jonness seem pretty sharp. The rest of them, not so much.

    They try to use rule based logic. As you stated, that doesn’t work here. This is too complex for their little programmer brains.

  69. 69
    Erik says:

    RE: Kary L. Krismer @ 66
    This last bubble I went from broke and living in a dumpy house in the ghetto (north Everett) to living over the water in Seattle and comfortable.

    This happened because I paid $92700 for a condo in Kirkland in 2011. I listed for $220000 2 years later. Ardell fetched me $233000 ($13000 over asking). I knew to buy in 2011 because tim bought a few months before that and said we are near the bottom. When tim was saying not to buy in 2007, you bought anyway. Not sure where your head was on that one.

    I read Tim’s data every chance I get. I listen to everyone’s opinion on this site, even yours. You should do the same otherwise you are going to repeat the same mistake. The real estate market can be timed lawyer-agent hybrid. Right now it’s pretty obvious that we are not about to tank with record low inventory. Way more houses need to be built and that will take many years.

    And yes, I know first hand Ardell is a great agent. I have never seen an agent work that hard and make such good decisions on my behalf…not even close.

    I have a question if anyone would help with this… How do I figure out how many homes are being built and how many condos are being built? I would appreciate advice on this. I’d like to sell as close to the top as I can this time and this seems like something that would be important to know.

  70. 70
    AJT says:

    If this does come to pass prices WILL come down. I feel this is one of a couple of grey swans out there that could put downward pressure on the margins that could permeate the RE market. Who knows if it will occur though???
    http://wolfstreet.com/2016/04/13/china-overinvestment-in-housing-turns-into-largest-evaporation-of-wealth-in-history/

  71. 71
    SFraz says:

    What the heck’s going on with the banks?! Could this puppy go down?
    http://thegreatrecession.info/blog/what-is-happening-to-banks/
    *The Federal Reserve Board of Governors just held an “expedited special meeting” on Monday in closed-door session.
    *The White House made an immediate announcement that the president was going to meet with Fed Chair Janet Yellen right after Monday’s special meeting and that Vice President Biden would be joining them.
    *The Federal Reserve very shortly posted an announcement of another expedited closed-door meeting for Tuesday for the specific purpose of “bank supervision.”
    *A G-20 meeting of finance ministers and central-bank heads starts in Washington, DC, on Tuesday, too, and continues through Wednesday.
    *Then on Thursday the World Bank and the International Monetary Fund meet in Washington.
    *The Federal Reserve Bank of Atlanta just revised US GDP growth for the first quarter to the precipice of recession at 0.1%.
    *US banks are widely expected this week to report their worst quarter financially since the start of the Great Recession.
    **The European Union’s new “bail-in” procedures for failing banks were employed for the first time with Austrian bank Heta Asset Resolution AG.
    *Italy’s minister of finance called an emergency meeting of Italian bankers to engage “last resort” measures for dealing with 360-billion euros of bad loans in banks that have only 50 billion in capital.

  72. 72
    Macro Investor says:

    By Green Horn @ 43:

    But my gross rent receipts should be about between 7 and 9% the purchase price. This is between 3 and 4 times what any dividend pays on Wall Street.

    My dividend stocks pay me 6%. This is both gross and net. There is no insurance, real estate tax, maintenance or vacancy to deduct. My stocks don’t call me to come over and fix the toilet or cut the lawn. I don’t have to pester my stocks to pay the rent on time.

    Volatility isn’t an issue. The right stocks generally don’t have any. Sorry, I know some of you will want to know which ones, but that is impossible.

    Green horn indeed.

  73. 73
    Mikal Johnson says:

    RE: Macro Investor @ 70 – I’ve owned 2 duplex’s for 20 years. I’m NETTING $6000 a month from them and I could get more. I get called maybe once every three months for something small. The biggest expense I’ve had on either in the last 15 years was 2 new roofs at $5000 a piece. I paid $100,000 for the first and $150,000 and today they are appraised at 720,000 and 780,000. Central District. I know you want to know which ones but that is impossible.

  74. 74
    Justme says:

    San Francisco May Be a Bellwether for Other Markets as Prices Drop and Sales Plummet 22%

    https://www.redfin.com/blog/2016/04/march-national-housing-market-tracker.html

    And people will keep claiming that It’s Different Here. IDH! IDH! What do they make in SF anyway, except sourdough bread and Levi’s jeans?

  75. 75
    greg says:

    RE: Justme @ 74

    careful now , posts like that step on toes here. Too many people on this site are completely dependent on future growth, they purchased properties with years of gains already priced in and don’t want to hear anything that sounds like it may scare off the buyers.

  76. 76
    Action says:

    By Erik @ 69:

    RE: Kary L. Krismer @ 66

    I have a question if anyone would help with this… How do I figure out how many homes are being built and how many condos are being built? I would appreciate advice on this. I’d like to sell as close to the top as I can this time and this seems like something that would be important to know.

    Here’s some rough data that shows what you’re looking for based on authorized building permits for the Seattle-Tacoma-Bellevue metro area. This data can be broken into total units and single unit structures.
    https://research.stlouisfed.org/fred2/graph/?g=4agx

    While total units have bounced back to closer to pre-recession levels, single units are still lagging considerably. Around 800 per month compared to around 1200 per month for the decade prior to the recession. It is going to be a long time, if ever, for single family residential construction in this area to catch up with population growth. I don’t think it’s possible, with our urban growth boundaries, environmental regulations and increased NIMBYism in King County to have the level of single family construction that we had in the 90s and early 2000s. Therfore as the population and consequently demand for SFR continues to increase, prices will continue to go up due to lack of new supply and it will become a smaller and smaller percentage of the population that can afford to live in single family homes. While there is still plenty of develop-able land for increased infill and increased density, I would not count on being able to build our way out of this inventory shortage, at least for the SFR market.

    I also think the increase in total units the last few years has been driven mostly by new apartment construction. Per the article I posted @56, there just aren’t many condos being developed in this area.

    While it is a different geographic area, the King County yearly population growth that I overlaid on the graph gives an idea of population growth in the area during this same time frame.

    If anyone has higher resolution construction data for King County, I’d would be interested to see it.

  77. 77
    David B. says:

    “Maybe you should just hold off and don’t buy a home in a ridiculously frenzied market. Just a thought.”

    No, no, no! This time is different! For the first time in history, a market exists whose price will only continue to go upward! Buy now or be priced out forever!

  78. 78
    Marcel says:

    FYI, for everyone’s reading pleasure. My sister’s in-laws are selling their home in Bellevue. 5 all cash offers. All foreigners.

    The struggle is real..

  79. 79
    Shoeguy says:

    I really liked Ray Pepper and David Losh (didn’t know the guy had died!!) as well, but I find Erik insufferable….what’s going on here?

    Though I am beginning to begrudgingly agree with Erik that this Bubble will continue for years as the Federal Reserve is doing everything it can to print enough debt to keep it inflated for the foreseeable future. Supply will continue to be non existent until a catastrophe happens and investors dump their inventory in a race to the bottom, and there seems to be an endless stream of Chinese money launderers that have unlimited funds to dump into Vancouver and Seattle Real Estate sight unseen.

    There is no way in hell that 1 month of supply and 20 offer bidding wars per house is the new normal that our great-grandchildren will enjoy. Chaos eventually reverts to the norm, but I just don’t know when or what the catalyst will be to cause the reversion. No matter what though, the reversion is going to cause a lot of pain.

  80. 80
    Justme says:

    By greg @ 75:

    RE: Justme @ 74

    careful now , posts like that step on toes here. Too many people on this site are completely dependent on future growth, they purchased properties with years of gains already priced in and don’t want to hear anything that sounds like it may scare off the buyers.

    I wonder if The Tim would care to implement an up/down vote feature? It would be nice to see what the average reader thinks. But it is hard to control a voting mechanism without having a full login functionality that controls both posting and voting.

  81. 81
    Blurtman says:

    “…he estimated that, over a six-month period, Chinese buyers accounted for 66 percent of all residential land purchases in the expensive west-side communities of Dunbar, University Endowment Lands, and Point Grey. ”

    Now here is an idea: “Global money is boosting Vancouver’s prices, and local dollars can’t compete. Most troubling is that many homeowners are now selling directly to buyers in China, listing their homes in real-estate exhibitions in Beijing and Shanghai. ”

    “Vancouver isn’t an isolated example. With China’s economy slowing, the wealthy have increasingly looked elsewhere to park their cash safely. They’ve focused on gateway cities in North America, Australia, and the United Kingdom, including New York, Los Angeles, Melbourne, Sydney, and London. An unprecedented $1 trillion (US) flooded out of China last year. In 2014, $16.6 billion was invested in Canada, largely in Toronto and Vancouver. But buyers are now branching out into smaller cities as well, where they can find better deals. In BC’s north, for example, Chinese enterprises have invested heavily in resource land around proposed mines and pulp mills. Foreign investment has caused house prices to spike above the $1 million mark throughout Burnaby, Richmond, Port Moody, Coquitlam, South Surrey, Tsawwassen, Vancouver Island, and other areas in the region.”

    http://thewalrus.ca/the-highest-bidder/

  82. 82
    eastsidebuyer says:

    RE: Marcel @ 78

    Do you know if the buyers are physically located in WA?

  83. 83

    By Shoeguy @ 79:

    There is no way in hell that 1 month of supply and 20 offer bidding wars per house is the new normal that our great-grandchildren will enjoy.

    Yesterday I came across the 4/13/2012 Seattle Bubble thread looking for something else, and we were actually complaining about lack of inventory that far back! There seemed to be little/no recognition of what that meant for prices.

  84. 84
    ess says:

    By Blurtman @ 81:

    “…he estimated that, over a six-month period, Chinese buyers accounted for 66 percent of all residential land purchases in the expensive west-side communities of Dunbar, University Endowment Lands, and Point Grey. ”

    Now here is an idea: “Global money is boosting Vancouver’s prices, and local dollars can’t compete. Most troubling is that many homeowners are now selling directly to buyers in China, listing their homes in real-estate exhibitions in Beijing and Shanghai. ”

    “Vancouver isn’t an isolated example. With China’s economy slowing, the wealthy have increasingly looked elsewhere to park their cash safely. They’ve focused on gateway cities in North America, Australia, and the United Kingdom, including New York, Los Angeles, Melbourne, Sydney, and London. An unprecedented $1 trillion (US) flooded out of China last year. In 2014, $16.6 billion was invested in Canada, largely in Toronto and Vancouver. But buyers are now branching out into smaller cities as well, where they can find better deals. In BC’s north, for example, Chinese enterprises have invested heavily in resource land around proposed mines and pulp mills. Foreign investment has caused house prices to spike above the $1 million mark throughout Burnaby, Richmond, Port Moody, Coquitlam, South Surrey, Tsawwassen, Vancouver Island, and other areas in the region.”

    http://thewalrus.ca/the-highest-bidder/

    ——————————————————————————————————————————

    Very interesting article, a worthwhile read for everyone here thinking about buying real estate in the Seattle area market. Imagine if this area had only half of the foreign buying frenzy of Vancouver? And who knows — perhaps the next target will be the Seattle area. After all, the two cities are very similar in terms of geography and weather. But apparently Seattle is not on the US radar as is New York, LA and SF. Perhaps that will change.

    I have always complained to my Vancouver area in laws that they are hogging all the rich buyers. But perhaps that is changing. I was leaving a recent open house a few weeks ago, and I noticed a nice car with British Columbian license plates pulling up. The person got out and entered the open house. Perhaps the word is out that houses in Seattle and the Puget Sound area can be had for a fraction of the price of Vancouver, even with the lower Canadian dollar.

    Has anyone else notice out of town license plates at open houses? I find it interesting that houses are being bought sight unseen from overseas. Does anyone have information if that is also transpiring in the Puget Sound area?

  85. 85
    I'm just here so I won't get Fined says:

    RE: ess @ 84

    Yes I was at a couple open house near my home in Shoreline and I noticed a couple of cars with BC plates at open houses. In both cases they were potential Asian buyers. The agent accompanying them were speaking Chinese. This could be coincidence though, I’m not sure that Shoreline’s Parkwood and Meridian Park neighborhoods hold the same status ad Vancouver BC or Bellevue.

  86. 86
    Blake says:

    RE: Marcel @ 57
    >> “Conclusion? I see housing continue to go up in the next 12-24 months. The bubble will continue to expand as Democrats see that they can manipulate the Fed to artificially increase home values and stock valuations, further lining their pockets. And if a Democrat wins the presidency, the bubble could easily continue to expand 4+ years…”

    OK, Einstein… so what’s the Fed going to do next? Cut interest rates!? Maybe QE4 to buy bonds and drive rates lower? Been there, done that… “artificially increase home values and stock valuations”… already done! And last I checked interest rates were already at near all-time lows and the Fed was OUT OF BULLETS… “pushing on a string” as they say! In the wonky econ-lit I read, they are now discussing negative interest rates and “helicopter drops” of money as desperate measures by the Fed.

    And just where do you get the idea the mighty Democrats have the Fed under their thumb (and not the other way around)!!??
    http://www.wsj.com/articles/former-fed-adviser-activists-lay-out-a-plan-for-change-at-the-fed-1460400788
    “A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public. Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012…
    said: “A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan.

  87. 87
    AJT says:

    RE: Shoeguy @ 79
    One possible grey swan- http://www.bloomberg.com/news/articles/2016-04-14/china-defaults-prompt-issuers-to-pull-5-3-billion-of-bond-sales?cmpid=yhoo.headline

    another possible grey swan- http://wolfstreet.com/2016/04/13/china-overinvestment-in-housing-turns-into-largest-evaporation-of-wealth-in-history/

    I really think the only short term factor that could possibly cool housing prices is if there were a calamity overseas (by overseas I mean China). I truly have no idea if either of the two scenarios posted will come to pass to any significant degree but like Bill Gross recently stated “China is the mystery meat of the global economy.”

    For some people to state that there is no stopping this train I think is an overstatement. There are problems with the Chinese economy that even the Chinese government isn’t aware of that if do materialize could very possible precipitate a government decree that all previously “escaped” monies return home to cover losses. The communists have ways of reaching out and touching some of their wayward citizens that we do not even know about.

    But outside a problem in China………?

  88. 88
    Blake says:

    Is it a bubble… will it pop and drop precipitously?

    Long time Seattle RE vets like Ardell and Kary might have the best insight on this question. Bubbles happen for many reasons, but the factors that endanger markets to sudden drops are common – – hot monoey invested for short term speculation. I recall the market of ’04-’07 when I moved here and a huge amount of the frenzied activity in RE was flippers and speculators… and highly leveraged.

    Today we have limited supply and a hot IT sector boosting the market as well, but I wonder how much of the activity is being driven by speculators and hot money investors? The mythical Chinese money may not be short term… or is it?

    Ardell others? What’s your sense of how many of the purchasers are speculators now?

    (And note: Our hot IT sector boom might bust as well… dunno why I think that…?? I’ve burned so many brain cells partying like it was 1999!)

    Sustainable? Fragile?

    It’s a shame this happens to “real” estate and not just tulips and stocks, because people gotta live somewhere!

  89. 89
    greg says:

    RE: I’m just here so I won’t get Fined @ 85

    I see lots of Chinese buyers , mostly in the 750-1.5 m range , mostly homes that are “turn key”.

  90. 90
    ESS says:

    By I’m just here so I won’t get Fined @ 85:

    RE: ess @ 84

    Yes I was at a couple open house near my home in Shoreline and I noticed a couple of cars with BC plates at open houses. In both cases they were potential Asian buyers. The agent accompanying them were speaking Chinese. This could be coincidence though, I’m not sure that Shoreline’s Parkwood and Meridian Park neighborhoods hold the same status ad Vancouver BC or Bellevue.

    ————————————————————————————————————-

    Thanks for the info, Fined, perhaps it is a new trend? If so, perhaps Puget Sound real estate sales will be as exciting as Vancouver’s.

    While those neighborhoods don’t hold the same status as Vancouver or Bellevue, it may be that for BC investors, those homes pencil out better. If one can get three decent Shoreline homes for the price of one run down Vancouver BC property, it may appear to be a better deal in terms of longer term potential or for immediate rental income.

    Having resided in Vancouver for three years, and as a regular visitor to Vancouver to visit my in laws over the years, I know the location of where some of those million dollars houses are selling. Unless they have a view of the water up north, many areas of Shoreline are actually more attractive than many of the residential areas in Vancouver. Many of those Vancouver houses are nothing unattractive stucco houses on very small lots with no back yards, and very little vegetation and gardens. It is the accelerated foreign buying in Vancouver that is propelling much of the housing sales, not that those areas are so beautiful. As a matter of fact, Vancouver and surrounding cities are rather densely populated, with houses crammed together almost on top of each other. I find non view Seattle neighborhoods, as well as the cities that surround Seattle to have much more attractive residential areas than the residential areas of Vancouver, Richmond and Burnaby which are jammed packed with houses and apartments, and have a really overcrowded feel to them. But you can’t top Stanley Park, that is for sure.

  91. 91
    Blurtman says:

    I hope they get some competition from the drug cartel money. Only deal in cash.

  92. 92
    Blake says:

    By SFraz @ 71:

    What the heck’s going on with the banks?! Could this puppy go down?
    http://thegreatrecession.info/blog/what-is-happening-to-banks/
    *The Federal Reserve Board of Governors just held an “expedited special meeting” on Monday in closed-door session.
    *The White House made an immediate announcement that the president was going to meet with Fed Chair Janet Yellen right after Monday’s special meeting and that Vice President Biden would be joining them.
    *The Federal Reserve very shortly posted an announcement of another expedited closed-door meeting for Tuesday for the specific purpose of “bank supervision.”
    *A G-20 meeting of finance ministers and central-bank heads starts in Washington, DC, on Tuesday, too, and continues through Wednesday.
    *Then on Thursday the World Bank and the International Monetary Fund meet in Washington.
    *The Federal Reserve Bank of Atlanta just revised US GDP growth for the first quarter to the precipice of recession at 0.1%.
    *US banks are widely expected this week to report their worst quarter financially since the start of the Great Recession.
    **The European Union’s new “bail-in” procedures for failing banks were employed for the first time with Austrian bank Heta Asset Resolution AG.
    *Italy’s minister of finance called an emergency meeting of Italian bankers to engage “last resort” measures for dealing with 360-billion euros of bad loans in banks that have only 50 billion in capital.

    Frightening isn’t it? So glad the corporate US media shields us from all this negative news!
    Yes… the big banks are screaming because near zero interest rates and a flattened yield curve cut into their main profit line – Net Interest Margins. E.g. “In a research note published Wednesday, Morgan Stanley analysts suggested that another 0.10 percentage point cut in the ECB’s deposit rate would erode bank profits by 5-10%.” And Central bankers are panicking because they no longer have effective monetary tools and the world economy is a shambles…

    But they should all relax because the US economy is booming! :-)
    http://www.wsj.com/articles/weak-retail-sales-in-march-augur-ill-for-first-quarter-growth-1460581888
    http://www.cnbc.com/2016/04/08/first-quarter-economy-looks-bleaker-by-the-day.html
    “Some economists now see first-quarter growth as negligible, and it could easily turn out to be negative. The closely watched Atlanta Fed GDPNow model now shows first-quarter growth tracking at 0.1 percent, compared to a 0.4 percent estimate earlier in the week. JPMorgan economists now forecast the economy only expanded by 0.2 percent in the first quarter, from 0.7 percent.”

    Whoa whoa!! Our economy is overheating! Luckily the Fed says it is on course to raise interest rates 2 or 3 times this year!! Because… … ??? THE BANKS need it!!!

  93. 93
    pfft says:

    By David B. @ 77:

    “Maybe you should just hold off and don’t buy a home in a ridiculously frenzied market. Just a thought.”

    No, no, no! This time is different! For the first time in history, a market exists whose price will only continue to go upward! Buy now or be priced out forever!

    no matter how high prices are they can always go higher.

    I am quite sure you called the bottom so you’re probably calling the top too!

  94. 94
    Erik says:

    RE: Shoeguy @ 79
    So you don’t like me, but you know that I am able to figure out where we are at in the real estate cycle. I don’t really car what some shoe salesman thinks. I told you before, if I wanted advice on shoes, I’d ask you.

  95. 95
    pfft says:

    By Blake @ 86:

    RE: Marcel @ 57
    >> “Conclusion? I see housing continue to go up in the next 12-24 months. The bubble will continue to expand as Democrats see that they can manipulate the Fed to artificially increase home values and stock valuations, further lining their pockets. And if a Democrat wins the presidency, the bubble could easily continue to expand 4+ years…”

    OK, Einstein… so what’s the Fed going to do next? Cut interest rates!? Maybe QE4 to buy bonds and drive rates lower? Been there, done that… “artificially increase home values and stock valuations”… already done! And last I checked interest rates were already at near all-time lows and the Fed was OUT OF BULLETS… “pushing on a string” as they say! In the wonky econ-lit I read, they are now discussing negative interest rates and “helicopter drops” of money as desperate measures by the Fed.

    And just where do you get the idea the mighty Democrats have the Fed under their thumb (and not the other way around)!!??
    http://www.wsj.com/articles/former-fed-adviser-activists-lay-out-a-plan-for-change-at-the-fed-1460400788
    “A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public. Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012…
    said: “A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan.

    can you rewrite this please? It doesn’t make much sense.

    also, is the Fed controlled by Democrats or is it privately owned?

  96. 96
    Blurtman says:

    By Blake @ 88:

    It’s a shame this happens to “real” estate and not just tulips and stocks, because people gotta live somewhere!

    I lived in the Bay Area for a while, and I thought I was getting gouged and that it was best to move, which I did, to the Sierra foothills, a breath of fresh air. It is what it is. What it is.

  97. 97
    Cap''n says:

    Since we keep talking about Vancouver, I will
    mention that when I was there last month, I heard a public radio story about the efforts from the BC politicians to address affordability. They rolled out a ban on contract assignments done without the seller’s knowledge. Apparently some agents would sell a property, but then turn around and sell i.e., assign the contract to a different buyer willing to pay more, pocket the difference, and not tell the seller. The commentators thought the ban was a good idea but a small enough problem that it would not dent the affordability issue. The elephant in the room was foreign money. But no one wants to touch it. Think about it. Why would any homeowner that bought too high in a fucked up market want to “fix” the problem. That is a difficult constituency to deal with from a public policy perspective. You know that equity? The fact you’re not underwater? We’d like to take that away in the name of good housing policy. Tough. Easier to wait for the implosion.

  98. 98
    Justme says:

    By Blurtman @ 91:

    I hope they get some competition from the drug cartel money. Only deal in cash.

    How about if the commiegarchs and the drug cartels have themselves a shootout on Cougar Mountain? That could get entertaining. The PLA against the Zetas!

    PS: commiegarch as of this moment has 0 hits on google. Doing taxes apparently is good for your creativity.

  99. 99
    ESS says:

    Hot off the press – sales in Vancouver to increase by foreign buyers in 2016.

    Imagine if these foreign buyers concentrated on the the Puget Sound housing market. Buying and selling real estate would become much more exciting than it is now.

    http://www.canada.com/business/bc2035/chinese+investors+expected+more+canadian+real+estate+2016/11852196/story.html

  100. 100
    Rumpole says:

    RE: pfft @ 95

    The idea that the Fed is solely responsible for low interest rates completely misses the demand side of the equation. The Fed rate is a floor, not a ceiling for the banks; if there was sufficient demand for credit then the banks could loan money for 10%, regardless of the Fed rate. The reality is that credit demand growth has not been strong since the recession, hence the low rates.

  101. 101
    Blurtman says:

    By Justme @ 98:

    By Blurtman @ 91:

    I hope they get some competition from the drug cartel money. Only deal in cash.

    How about if the commiegarchs and the drug cartels have themselves a shootout on Cougar Mountain? That could get entertaining. The PLA against the Zetas!

    PS: commiegarch as of this moment has 0 hits on google. Doing taxes apparently is good for your creativity.

    Let’s work on the screenplay. Episode 1: A Tunnel in Issaquah.

    And don’t forget to trademark.

  102. 102
    Blake says:

    By pfft @ 95:

    can you rewrite this please? It doesn’t make much sense.

    also, is the Fed controlled by Democrats or is it privately owned?

    Sorry I lost ya pfft… The first paragraph in quotes is from Marcel @57.
    My response to Marcel begins; “OK Einstein…”
    I was being sarcastic calling him Einstein…

  103. 103
    greg says:

    RE: ESS @ 99

    I really don’t see why you think they are not already here?

  104. 104

    By Rumpole @ 100:

    RE: pfft @ 95

    The idea that the Fed is solely responsible for low interest rates completely misses the demand side of the equation. The Fed rate is a floor, not a ceiling for the banks; if there was sufficient demand for credit then the banks could loan money for 10%, regardless of the Fed rate. The reality is that credit demand growth has not been strong since the recession, hence the low rates.

    There are quite a few signs that the economy isn’t as strong as what the press and politicians would have you think. And yes, low interest rates are one of them.

  105. 105
    Blake says:

    By Rumpole @ 100:

    RE: pfft @ 95

    The idea that the Fed is solely responsible for low interest rates completely misses the demand side of the equation. The Fed rate is a floor, not a ceiling for the banks; if there was sufficient demand for credit then the banks could loan money for 10%, regardless of the Fed rate. The reality is that credit demand growth has not been strong since the recession, hence the low rates.

    Yes, you are right… and that is a very important point. After the financial crisis of ’08, the Fed (and other Central banks) used unprecedented measures to force down interest rates. These measures worked, but now the centrals banks are up against the zero bound and “pushing on a string”… i.e. out of bullets. The Fed raised rates last Fall – – but bond rates continued to drop (!!) Why? Because the economy is sick, there is little demand for credit (except for stock market speculators and such…) and deflation is now more of a threat than inflation! Yes… the central banks have lost control and are worried… The best hope for economic recovery would be for the US Congress and European governments to start massive spending/fiscal stimulus… but that’s not going to happen!
    Neo-liberal economic orthodoxy reigns supreme… aren’t we lucky?

  106. 106
    ESS says:

    By greg @ 103:

    RE: ESS @ 99

    I really don’t see why you think they are not already here?

    Even with the foreign exchange issues (Canadian dollar is worth less), housing in Vancouver and area is so much more expensive than in Seattle. This fact is even more glaring when viewing one of most expensive component of much of the housing – the dirt underneath it. Building lots in most of Vancouver as well as other surrounding cities are much smaller than Puget Sound. If Seattle experienced the same volume of foreign buyers competing for housing, the number of houses purchased and just kept vacant for speculation, as well as investment but vacant condos (some say 25% in Vancouver), the cost of housing in this area would accelerate to prices we can only either dread as buyers, or hope for as sellers.

  107. 107
    Justme says:

    By Action @ 56:

    By Justme @ 13:

    Condo bust coming soon to a city near you

    http://www.businessinsider.com/san-franciscos-condo-boom-turning-into-bust-2016-4

    I don’t think a condo bust is coming to Seattle anytime soon. New condo construction in Seattle is not keeping up anywhere close to demand.
    http://www.bizjournals.com/seattle/news/2016/04/06/uw-study-aims-to-find-out-why-so-few-condos-are.html

    Here is another data point that supports my view that Seattle condos may have peaked. And if condos are dropping again, can SFH be far behind?

    http://seattle.curbed.com/2016/4/14/11433422/new-seattle-condo-prices-remained-flat-in-march-inventory-dropping

    “After a big dip in February, Downtown Seattle condominium prices were unchanged from the previous month, remaining $786 per square foot. Prices peaked at $853 per square foot set in January but have fallen off since. The average resale price per square foot decreased by 6 percent in March to $666 per square foot, but remains 17 percent higher compared to the same month one year ago.”

  108. 108

    RE: Justme @ 107 – I wouldn’t read anything at all into the fluctuation of condo prices for such a small area where you have such a wide range of prices. The mix really affects that market. Also, there’s sort of the obvious–that inventory dropping isn’t likely to lead to lower prices.

  109. 109
    greg says:

    RE: Kary L. Krismer @ 108

    Kary, I know it might seem weird , but more than one market has had price declines with very tight supply actually declining further. Of course generally speaking tightening supply indicates price will trend up…

  110. 110
    Bryan Copley says:

    Hi everyone,

    Long time reader, first time I’ve waded in to the discussion. Would be curious to know how many potential homebuyers are trying to go outside the box (NWMLS, Zillow, agent, outbid 10 other buyers, etc) to find a home.

    This problem is a personal one for me: my team and I have spent the past several years designing solutions to figure out how to make real estate work better. Would love to hear what people have tried/are trying, and am glad to share what we’ve learned as well.

    Bryan

  111. 111
    greg says:

    RE: Bryan Copley @ 110

    So you are not looking to improve the system , but instead you are asking other to give up the tricks and systems they have developed?

    It is rather liking asking Ronald for his secret sauce recipe and offering nothing in return.

  112. 112
    pfft says:

    By Rumpole @ 100:

    RE: pfft @ 95

    The idea that the Fed is solely responsible for low interest rates completely misses the demand side of the equation. The Fed rate is a floor, not a ceiling for the banks; if there was sufficient demand for credit then the banks could loan money for 10%, regardless of the Fed rate. The reality is that credit demand growth has not been strong since the recession, hence the low rates.

    we basically have an oversupply of savings. more lenders than borrowers.

    people don’t know this when it’s the norm since the 2007-08. sad!

  113. 113
    Bryan Copley says:

    Greg,

    We have no mission but to improve the system.

    The technologies we’ve built thus far are what we’ve given in return.

    everyhome.co
    citybldr.com

    Neither of these sites charges a fee to consumers.

    Bryan

  114. 114
    Erik says:

    RE: Bryan Copley @ 113
    So you and your team are motivated to do work and invest your time just to bring a smile to the faces of consumers?….. Ya-right. There is always an underlying motive and it’s usually monetary.

    I’m here to learn more about real estate so I can buy and sell at the right times. In addition, I’m also here to pester software people because it brings a smile to may face.

  115. 115
    Bryan Copley says:

    Erik @114,

    We’re a Seattle real estate technology startup. Feel free to pester ;)

    You could also try it out and then pester. Crazy as it sounds, the squeaky wheels are the most valuable users.

    One of my favorite (and most surprising) things we learned (Greg @110) was that 61% of people would prefer to sell to a consumer over an investor – even if the investor was paying 5% more.

    Bryan

  116. 116
    greg says:

    RE: Bryan Copley @ 113

    Bryan ,

    Last year(2015) the MLS cartels spent $37,000,000 dollars lobbying to protect their entrench positions. They spend more than BIG OIL, more that the Tech industry in fact the only group that out spends them is the US Chamber of commerce . Which of course are a non governmental club that focus on protecting the interests of the 1%. They use that name because it sounds like it is some sort of formal government body….

    MLS cartels maintain their market position and pricing control by absorbing all new players and forcing them to comply with the status quo. They use massive volume of cash to ensure policy heads in the direction they wish it to and to ensure no new competitors can get a foot hold. The banking industry with all its money and power have never managed to breach the citadel. Time and again NRA has fought off all competitors and has used its monies to deepen the moat, avoid oversight and avoid any and all competition.
    Take Redfin for example they tried to dance around the edges, they tried a cheaper more open model. But as soon as the MLS saw them gain real traction they forced into full compliance.
    Had Redfin failed to comply they would have lost all access to the data and gone out of business. Zillow has tried to build a model that adds costs to the existing framework. their model assists members of the MLS to compete with each other. So while it is somewhat different it does not change the game for consumers.

    Now some Agents will cry foul and talk about how competitive a job it is , how hard it is to sign clients and how much leg work they do for each sale. What they leave out or are unware of is that they are competing internally, within the cartel. They are NOT competing with external forces as they would in a truly competitive marketplace, they are simply fighting over how to share out the monies.
    Remember folks , the NWMLS is a privately held company owned by various brokerages in the northwest. They take close to 95% of residential property sales, and that is the very definition of market dominance and market control. NWMLS set the price, sets the terms, and forces agents to comply or lose access.
    MLS lobbying is perhaps the most egregious abuse of the lobby system I have ever come across in my well travelled days, it places undo financial burden on an already heavily burdened public. It creates a mobility tax on labor . If Jane Doe, finds new work she may have to pay 30 thousand dollars just to dispose of an asset. Even the banks that put up the money to buy the home don’t make that kind of profit on the average mortgage and they have real skin in the game. Banks are lucky to get a couple of percent mean while the brokages take a fat 5-6% and then share that amongst themselves with each member crying about how they only got 1% -3%. But all the time forgetting that the whole 6% stayed with members of the cartel.
    To anyone who wants lower fees make Ending the lobby system your No.1 issue .

    So Bryan , if you are offering to help bust open the various MLS groups plaguing our nation and looking to help put and end to this gross abuse of our lobby system I will help you in everyway I can. Hell I will even give you financial support.
    But if as I suspect you merely want to put a new twist on an already warped and abusive system I would rather not support , and hope to goodness you do not find a way to add yet another cost to the stupidly high fees we currently have to struggle to avoid.

    https://www.opensecrets.org/lobby/top.php?indexType=s

    (typed quick and dirty so sure there are plenty of errors, but I have an appointment to see an unlisted property and I really must get going)

  117. 117
    Bryan Copley says:

    Greg @116,

    We have never taken or published a listing from or to the MLS.

    The shortest path between two points is a straight line. Currently, the ‘signal’ in real estate (intent to buy or sell) travels along a twisted path from the 850+ private, compartmentalized MLS organizations to agents, who have incentive to alter the signal. Someday, the signal in real estate will come from a transparent consumer network, sans walls, powered by machine learning, which is incentivized to delight users by strengthening and empowering the signal. In that future, agent commissions will be limited bonuses based on consumer satisfaction. That’s where Redfin nailed it.

    Straight lines. Strong signal.

    Bryan

  118. 118

    RE: greg @ 116 – That’s extremely deceptive. Most of the lobbying done pertains to things like taxes, and unfortunately lending. Probably none of it is aimed at maintaining the MLS system.

    If you want to thank someone that the state only takes 1.78% when you sell real estate, thank WR. Without them it would be much higher.

  119. 119
    Justme says:

    RE: pfft @ 112

    >>we basically have an oversupply of savings. more lenders than borrowers.
    >>people don’t know this when it’s the norm since the 2007-08. sad!

    Wow, what you are saying here is just massively wrong. In 2008, many of the banks had operated at a loan-to-reserve leverage of over 30x. That means that $1 of ACTUAL clean deposits generated $30 worth of loans/debts issued by the bank. And you think this means that there is a “savings glut”? In actuality there was a gigantic “leverage glut”, and not a “savings glut”.

    After 2008, the Fed has engaged in temporary and later permanent (QE) trashy-bond-swaps that credited bad bonds as good-to-go additional bank reserves. And your complaint is that not enough people are taking on debt, and that there is an “oversupply” of savers? Yah, only if $1 of actual savings generates $30 of debt looking for a home (so to speak).

    Leverage was the problem. More leverage is NOT the solution. With leverage at a reasonable level there is NO savings glut.

  120. 120
    AjaxManifesto says:

    RE: Ardell DellaLoggia @ 21

    I don’t agree. I moved out of Seattle after 15 years of renting. I took a management job in a nice Midwestern city. I’m from a nearby city, went to school here, and still have family here. I bought a wonderful house for $500k on a VA loan that would have easily been $1M plus in Seattle. My schools are awesome, way better than the crappy Seattle school my kids went to. I have less traffic worries, I can walk to a local downtown in minutes, and my neighbors are well educated biotech workers who are not living in techie La-La land.

    The key was my agent knew what he was doing as did my mortgage lender who was a real pro at VA loans. And the sellers liked me because I showed up first to the open house. 3 other bids came in and we negotiated $12k off the list after a thorough inspection. The sellers were most concerned that my wife liked the house. She was still in Seattle with our kids when I went house shopping. They also left a US flag for me for the flagpole. My neighborhood is apparently a real estate hot spot here, but its nothing compared to Seattle.

    You all are paying a premium for what? I miss the mountains and water of Seattle, but not much else. You are all in a bubble. Enjoy the race to buy that soggy, uninspected, overpriced house nestled in a traffic nightmare.

  121. 121
    greg says:

    RE: Kary L. Krismer @ 118

    Kary , it is extremely deceptive for you to claim  that when you are out spending , than Big Oil , tech , healthcare,  you are doing it from the goodness of your heart.  It is about protecting your vested interests and avoiding a competitive market.

    37 million spent in just 2015 alone lobbying and you want to pretend it is not to benefit of NAR, shame on you Kary.

    Why don’t you tell me how spending millions fighting off the banks was just to protect us?
    Everytime a group finds a why to work around your MLS you guys spend masses of time and money getting state laws altered to ensure they cant get off the ground.

    Oh and I have been in biz long enough to know exactly why you guys spend money fighting taxes, it is because if the costs get too high people might come after your 6% …

  122. 122
    AjaxManifesto says:

    By Jasper @ 55:

    By Ardell DellaLoggia @ 21:

    RE: Jasper @ 11

    It’s not harder to get the loan and not a worry they will get it. The problem is sellers do not like VA loans and so unless you are the only buyer in the room, the seller will pick the conventional loan over VA every time.

    Can you, or your buyer’s VA lender, make a convincing-but-reassuring argument that “It’s not harder to get the [VA] loan and not a worry [your client] will get it”?

    A quick Googling of ‘VA loan problems‘ and ‘VA loan “Minimum Property Requirements”‘ shows that sellers have good reasons for preferring conventional loans over VA loans:

    * The VA Loan “brand” has been tarnished by a reputation for slow turn times. Apparently, some real estate agents remember when VA Loans required mailing lots of paper back-and-forth. How reliably does your buyer’s lender close VA loans as quickly as the best banks close their conventional loans?

    * VA loans have restrictions on which kinds of closing costs can be paid by the buyer. Can your lender reassure the seller that the lender won’t force the seller to pay underwriting or other fees that are normally paid by the buyer?

    * The VA has “Minimum Property Requirements” that are very similar to those for FHA and HUD loans. Any (sub-minimum) problems identified need to be corrected by closing, at the seller’s expense. In other words, there are lots of strings attached. Depending on how the appraiser interprets the VA’s “guidelines”, most of the (decent or even great) houses I have been in recently might not meet all of the requirements. Have you handled a large enough number of VA-financed purchases that you can assure the seller that your deals are very likely to satisfy these requirements?

    * VA loans are often made with very small down payments. I assume this means that many VA loan buyers are unable to handle needing to bring lots of extra money to closing, like can happen if an appraisal is unexpectedly low. Can your buyer afford to make a down payment?

    Don’t agree. I bought a $500k house in a nice neighborhood with about 5% down. I have great credit, a good job, and large 401k and other savings in hand.

    It’s about having an agent and a mortgage broker who know what they are doing and a receptive seller in a place that respects military service (not just talk) and is not in a bubble.

  123. 123
    AjaxManifesto says:

    One thing is certain…the Seattle Bubble will pop once again…the issues are when and how severe.

  124. 124
    Marcel says:

    Huh? Your post doesn’t make sense. You sarcastically call me Einstein and then go on to agree that we’re probably headed towards negative rates…

    yes, oversight of the fed is what’s needed. But if you read my post, I wasn’t exactly praising the Fed. In fact, quite the opposite. The reason there’s a bubble to pop is precisely because of them. So again, you don’t make sense. You try and make fun of me but then just offer more support for the facts.

    My post ending with “your thoughts?” were for people who were ready to have an intelligent honest conversation on the ideas I wrote about. The fact I wrote “your thoughts?” in the exact manner precisely indicated I don’t know it all and was seeking feedback from others on this forum.

    B Blake @ 86:

    RE: Marcel @ 57
    >> “Conclusion? I see housing continue to go up in the next 12-24 months. The bubble will continue to expand as Democrats see that they can manipulate the Fed to artificially increase home values and stock valuations, further lining their pockets. And if a Democrat wins the presidency, the bubble could easily continue to expand 4+ years…”

    OK, Einstein… so what’s the Fed going to do next? Cut interest rates!? Maybe QE4 to buy bonds and drive rates lower? Been there, done that… “artificially increase home values and stock valuations”… already done! And last I checked interest rates were already at near all-time lows and the Fed was OUT OF BULLETS… “pushing on a string” as they say! In the wonky econ-lit I read, they are now discussing negative interest rates and “helicopter drops” of money as desperate measures by the Fed.

    And just where do you get the idea the mighty Democrats have the Fed under their thumb (and not the other way around)!!??
    http://www.wsj.com/articles/former-fed-adviser-activists-lay-out-a-plan-for-change-at-the-fed-1460400788
    “A former Federal Reserve adviser is joining with an activist group to argue for overhauls at the central bank that they say would distance it from Wall Street and make its activities more transparent and accountable to the public. Dartmouth College economics professor Andrew Levin—special adviser to Ben Bernanke and Janet Yellen between 2010 and 2012…
    said: “A lot of people would be stunned to know” the extent to which the Federal Reserve is privately owned, Mr. Levin said. The Fed “should be a fully public institution just like every other central bank” in the developed world, he said in a conference call announcing the plan.

  125. 125

    By greg @ 121:

    RE: Kary L. Krismer @ 118

    Kary , it is extremely deceptive for you to claim  that when you are out spending , than Big Oil , tech , healthcare,  you are doing it from the goodness of your heart…

    Not what I said. What I said was in response to your statement that the money was “spent $37,000,000 dollars lobbying to protect their entrench [sic] positions. ” I said the money was spent mainly on issues like taxes and lending. Like it or not NAR lobbies to keep the mortgage interest deduction in place, and to promote the availability of lending funds for houses. That type of thing hurts first time buyers but helps existing home owners.

    On the state level they tend to fight tax increases (REET, B&O, etc.) but also support things like requiring CO detectors, preventing time of transfer restrictions (including private transfer fees), and preventing cities from requiring local business licenses (which would really reduce competition).

    On the local level they mainly deal with point of sale restrictions and development issues (which is bad for the environment, but good for supply).

    BTW, it’s rather obvious you’re extremely gullible based on your earlier comments about Redfin. I left that alone. Now go back to believing everything you see on TV and quit mis-stating what I’ve said.

  126. 126
    ESS says:

    Vancouver media has all sorts of articles about the percentage of housing that is being bought by foreign money. Researching Puget Sound, there is not much in the way of hard statistics. I did come across this “oldie but goodie” down below . Does anyone have any information if foreign buying is spreading to other areas of Puget Sound, akin to the frenzy that is happening in Vancouver?

    http://www.nytimes.com/2014/09/21/business/in-suburban-seattle-new-nests-for-chinas-rich.html?_r=0

  127. 127
    David B. says:

    By Justme @ 80:

    I wonder if The Tim would care to implement an up/down vote feature? It would be nice to see what the average reader thinks. But it is hard to control a voting mechanism without having a full login functionality that controls both posting and voting.

    Tim chose to remove an up/down vote feature from this site: it used to have one, but it no longer does. Unless his thinking about the value of such a feature has changed, I would rate this possibility as highly unlikely.

  128. 128

    RE: ESS @ 125 – I’d be very skeptical of research on foreign buyers. I’m not sure how exactly you would determine that–unless maybe the deed had a foreign address for returning the original after recording. I think there would be a lot of errors in both directions.

  129. 129
    ESS says:

    By Kary L. Krismer @ 127:

    RE: ESS @ 125 – I’d be very skeptical of research on foreign buyers. I’m not sure how exactly you would determine that–unless maybe the deed had a foreign address for returning the original after recording. I think there would be a lot of errors in both directions.

    _________________________________________________________________________________________________________________

    Kary:

    One article stated that the research in Vancouver to determine foreign ownership was accomplished by using non anglicized Chinese names. Don’t know what the error rate for that is. And as you indirectly indicate, the return mail could just be sent to some front corporation or attorney handling the transaction, so you are probably correct in your thinking.

    But sometimes it is just the evidence presented in front of you. For example, Richmond, BC, allegedly the largest majority populated Chinese city outside of China has Chinese only signs on many of their businesses. I noticed this myself when taking the train from Richmond to Vancouver a few months ago. That signage even led to an unsuccessful push to insist that English be placed on the signage also. If businesses are willing only to advertise in Chinese, and not place English (or French) on their business signs to attract those customers , that is a pretty good indication that there is a sizable Chinese population that was not born in Canada. Of course with our first amendment, that would never be an issue down here, although it has been my experience to never trust how courts on any level are going to rule. After all, our Supreme Court discovered “penumbras” when establishing the new constitutional right to privacy in Grisvold.

  130. 130
    greg says:

    RE: Kary L. Krismer @ 124

    Kary,
    Your attempts to try to muddy the water with nonsense talk of taxes and safety is childish and obvious

    Of course you want to pretend that it is all about protecting buyers and sellers, but the real reason your group is spending $100,000 a day , 37 million a year is that they are protecting that fat fee.

    That is it, that is the whole point of NAR, NWMLS …… price control and maintaining barriers to new entrants.

    NAR and the RE industry spend more on lobby than any of the below.

    PHARMA
    CABLE TV
    MOBILE
    OIL
    INTERNET
    AIRLINES
    HEALTHCARE
    TECH INDUSTRY

    You guys spend more than any of those groups. ANY of them.

    Don’t you dare pretend you are spending that kind of money to protect us from taxes or look out for safety issues. Only a tiny fraction of you lobbying monies is spent on such things .
    The vast majority goes to lobbying for and against state level laws, that invariably protect MSL cartel interests.

    Gullible would be believing your nonsense.

    Your attempts to try to muddy the water with nonsense talk of taxes and safety is childish and obvious

    The real reason you and your buddies spent $37,000,000 last year and out spend everybody else is that you to do not have a natural barrier to entry and so you need to maintain an artificial one.
    A never ending cycle of lobbying on state and federal levels. It takes vast amounts of monies to control a market on a national scale. And that is exactly what you guys have been doing. Spending a 100,000 a day . Day after day, month after month year after year, decade after decade.
    No group on earth would spend that kind of money unless they were getting a very real and measureable monetary return.

  131. 131
    whatsmyname says:

    By greg @ 129:

    PHARMA
    CABLE TV
    MOBILE
    OIL
    INTERNET
    AIRLINES
    HEALTHCARE
    TECH INDUSTRY

    You guys spend more than any of those groups. ANY of them.

    Really?
    http://www.statista.com/statistics/257364/top-lobbying-industries-in-the-us/
    Statista disagrees.

    Pharma $238MM
    Telecom $88MM
    Electric utilities $118MM
    Oil and Gas $129MM
    Air Transport $81MM
    Hospitals/Nursing Homes $91MM plus Health Professionals $89MM plus Health Services $72MM plus Insurance $156MM
    Electronics Manufacturing $122MM

    No, I am not a member of the NAR, and have sold more than one property without them.

  132. 132

    RE: Erik @ 58
    Paying all cash for a house is not a bad decision, no matter what the real estate market is doing. For one thing, it means you have the cash. And in many cases, you did things to get the cash. For another , not having debt reduces one’s stress level, and frees up money that you otherwise would have been spending on a mortgage. Sure, borrowing at a low interest rate can be a very good strategy. But so can paying cash. And some people don’t want to take a risk of being foreclosed on, or having to short sale their home. Paying cash greatly reduces that risk. I’m not saying that Kary did a smart thing or a stupid thing by paying cash. Some Chinese investors are buying property here with cash, and interest rates are afar lower now than they were in 2007. Are they doing a stupid thing? I’m just going by feelings here, and not having to pay rent or a mortgage feels really, really good.

  133. 133
    pfft says:

    By Justme @ 119:

    RE: pfft @ 112

    >>we basically have an oversupply of savings. more lenders than borrowers.
    >>people don’t know this when it’s the norm since the 2007-08. sad!

    Wow, what you are saying here is just massively wrong. In 2008, many of the banks had operated at a loan-to-reserve leverage of over 30x. That means that $1 of ACTUAL clean deposits generated $30 worth of loans/debts issued by the bank. And you think this means that there is a “savings glut”? In actuality there was a gigantic “leverage glut”, and not a “savings glut”.

    After 2008, the Fed has engaged in temporary and later permanent (QE) trashy-bond-swaps that credited bad bonds as good-to-go additional bank reserves. And your complaint is that not enough people are taking on debt, and that there is an “oversupply” of savers? Yah, only if $1 of actual savings generates $30 of debt looking for a home (so to speak).

    Leverage was the problem. More leverage is NOT the solution. With leverage at a reasonable level there is NO savings glut.

    what are you talking about? It is a fact that there is an oversupply of savings. it’s not in dispute. that’s why rates are so low. leverage is merely one part. money is subject to supply and demand like everything else. when supply goes up price of money goes down. people saved, paid down debt and didn’t take on more debt. when everyone is saving and paying down debt you get a savings glut.

  134. 134
    Justme says:

    RE: pfft @ 132

    >>It is a fact that there is an oversupply of savings. it’s not in dispute.

    It is very much in dispute.

    >> that’s why rates are so low. leverage is merely one part.

    Leverage was 30x and savings is 1X. It should be obvious to anyone that 30X amplification of the savings into debt is the important number, much more so than the 1X. If you need 30X leverage to fulfill the artificially high demand for debt that constituted the housing bubble, the problem was that the 1X (savings) was too small, and the 30X was too big, and not the other way around, as seems to be the case in your universe.

    Listen, if you insist that The Fed ZIRP and QE machinations have no effect on short AND long interest rates, then I can’t stop you from believing that. But I hope not many other readers do.

    http://www.forbes.com/sites/stevekeen/2015/04/07/bernanke-summers-debate-ii-savings-glut-investment-shortfall-or-monty-python

    http://davidstockmanscontracorner.com/none-dare-call-it-fraud/

    QUOTE: In a word, there is a $100 trillion bond market out there that has been priced by a handful of central bankers, not a planet teeming with exhuberant savers. The mad descent of the former into the whacky world of QE and ZIRP has caused a double whammy distortion in the bond markets of the world.

  135. 135
    Eastsider says:

    By Kary L. Krismer @ 127:

    RE: ESS @ 125 – I’d be very skeptical of research on foreign buyers. I’m not sure how exactly you would determine that–unless maybe the deed had a foreign address for returning the original after recording. I think there would be a lot of errors in both directions.

    They do require FOREIGN SELLER disclosure in closings today. How about lobbying to require FOREIGN BUYER disclosure as well? It should be easy to add that requirement to closings :)

  136. 136
    Sam says:

    RE: eastsidebuyer @ 1
    The “Agent” happened. Zero risks for the agents on either side. Seller’s agent pulls a large asking price from his behind, buyer’s agent drools at the offer(read that 3% commission) and “advises” the buyer-“This is a great house. We should 15K more than asking with escalation clause!!”. Both the agents profit!!! At no risk to themselves!!!

    If the buyer wishes to throw away his hardearned money, heck why not!! I wish I were a real estate agent in these times!!
    I made my mind of not bidding on anything anymore after a friend was outbidded for a home by a bid which was 100K over asking. All cash…Go figure!!

  137. 137
    Team Som says:

    RE: Eastsider @ 134 – Home owners and sellers love foreign buyers. It is what has secured retirement for many and increased net worth of many. Extrapolate this and you’d see why many businesses love foreigners (more consumers), why technology loves foreigners (more talent pool), and why governments loves to being in foreigners (more tax payers).

    Native buyers hate foreign buyers (more competition). Extrapolate this and you’d see why not-so-well-off natives hate foreigners (more competition).

  138. 138
    SFraz says:

    RE: Eastsider @ 134 – They did lobby. For NON-DISCLOSURE. Follow the money.
    As signed into law in 2001, the Patriot Act would have required real estate brokers and others involved in real estate closings and settlements to conduct due diligence checks on their customers. After heavy lobbying by the industry, the industry was exempted from the final regulations.

    This “temporary” exemption for foreigners, handed to the real estate industry in 2002, is now under fire. In their letter to the Treasury’s Financial Crimes unit, the 17 groups are asking that this exemption be yanked, that real estate professionals and banks be required to perform due diligence on these foreign buyers – just like they already have to with American buyers. Why should foreign buyers go scot-free?

    Alas, I can already hear the howling from the real estate industry.
    http://investmentwatchblog.com/a-privilege-rich-foreigners-have-that-americans-lack-when-buying-a-home-in-the-us/

  139. 139

    RE: greg @ 129 – How about this. How about you coming up with something that the NAR has lobbied for that you think is wrong, rather than just posting obvious biased nonsense?

    And let’s exclude their lobbying for the things I’ve already mentioned, because people can take two sides on issues like whether mortgage interest should be deductible, or increased availability of mortgage funding. NAR tends to take popular sides on those issues, because the majority of people in this country own real estate, but I understand there is a contrary and well thought out position.

    So put up or shut up. What are they lobbying for that you don’t like? If you can’t come up with any examples that will speak volumes as the the value of your opinion. (Even ignoring the fact that your statistics might be completely made up, as was pointed out.)

  140. 140

    By Eastsider @ 134:

    By Kary L. Krismer @ 127:

    RE: ESS @ 125 – I’d be very skeptical of research on foreign buyers. I’m not sure how exactly you would determine that–unless maybe the deed had a foreign address for returning the original after recording. I think there would be a lot of errors in both directions.

    They do require FOREIGN SELLER disclosure in closings today. How about lobbying to require FOREIGN BUYER disclosure as well? It should be easy to add that requirement to closings :)

    Right, but I’m not sure that information on sellers is publicly available–it might just go straight to the IRS. And the reason it is requested is for payment of taxes (withholding).

  141. 141

    By SFraz @ 135:

    In their letter to the Treasury’s Financial Crimes unit, the 17 groups are asking that this exemption be yanked, that real estate professionals and banks be required to perform due diligence on these foreign buyers – just like they already have to with American buyers. Why should foreign buyers go scot-free?

    What due diligence do you think is done on American buyers? Lenders might require down payment funds be seasoned, if they don’t allow gifts for down payment. A lender could tell you better than me, but that seasoning might only go back something like 120 days.

  142. 142

    By greg @ 129:

    The real reason you and your buddies spent $37,000,000 last year and out spend everybody else is that you to do not have a natural barrier to entry and so you need to maintain an artificial one.

    You think the real estate licensing exam is a big barrier to entry? You don’t need to be a Realtor. The NWMLS isn’t even a Realtor entity (unlike MLS’s in many other parts of the country). What barrier to entry do you see? That you have to be a member of an MLS to use a particular MLS? That’s sort of obvious.

    I’m not familiar with MLS entities on other states, but I would guess they tend to merge because that makes a lot of sense not having to deal with multiple MLS entities as occurs in some areas. That would be a real PITA for everyone, including those trying to just keep statistics accurate, since double listing would be common.

  143. 143

    By Ira Sacharoff @ 131:

    RE: Erik @ 58
    Paying all cash for a house is not a bad decision, no matter what the real estate market is doing. For one thing, it means you have the cash. And in many cases, you did things to get the cash. For another , not having debt reduces one’s stress level, and frees up money that you otherwise would have been spending on a mortgage. Sure, borrowing at a low interest rate can be a very good strategy.

    I actually did quite an analysis of different options back in 2007, including investing in stock, bonds and also keeping both houses. With hindsight the bond option would have by far been the best, given what happened to interest rates (and what happens to bond values when interest rates fall).

    I purposefully did not keep both houses for two reasons. First I didn’t want to miss out on the tax free gain. Second I didn’t want to risk having too much exposure to real estate, knowing it could go down. By buying the new house we only increased our exposure to real estate by about 60%, while at the same time moving to a better place. Renting was not an option, so we weren’t going to reduce our real estate exposure to zero.

    BTW, the main reason to borrow at low interest would be if you expect inflation. Reducing cash levels by increasing exposure to real estate was one way to hedge some against inflation, but if you want to go in full on that you would borrow too.

  144. 144
    Eile says:

    Our economy is not as good as we think. We may have recession. China is in desperately trying to save themself.
    http://www.businessinsider.com/china-is-in-the-midst-of-a-triple-bubble-2015-7

    China has been burning money to save their real estate market in first tier china. Last year at one point, the house price dropped about 15%, then the government bump it back up because people got very mad at the government. Some of the 2nd and 3rd tier cities, we see house price drop as much as 40%, they still haven’t recover.

    China still have money to fight this for few more years. Once that bubble pop, it’s going to hurt everybody in the world.

  145. 145
    seattlebubbletea says:

    RE: eastsidebuyer @ 1

    You can always tell the lil tyke, dad messed up by not doing the HYPSM -> IB -> Stanford GSB -> PE/VC track of financial greatness for non-founder types so therefore stop playing with the xbox and do you kumon.

    Turn the little kid’s question into a teachable moment of how he needs to get into the 1% via superior academics and cunning.

  146. 146

    Almost 150 posts and I don’t think anyone has mentioned the biggest risk a buyer faces in this market. It’s not paying too much. It’s settling and paying a lot of money for the wrong house, or a house that has some huge negative factor, just so that they can buy a house.

    This is a great time to sell the house with the negative factor. You don’t want to be the buyer who buys such a house because chances are the market won’t be nearly as strong when you go to sell.

  147. 147
    Cap''n says:

    RE: Kary L. Krismer @ 146

    What are the things in your list of huge negative factors?

  148. 148
    Erik says:

    RE: Ira Sacharoff @ 132
    In 2007, the market was way over inflated and they were handing out loans with negative amortization. Seemed pretty obvious that we were way overpriced at that time. I guess I would have expected someone that frequents this website would identify that the market was over inflated and buy when the market was half price.

    I am sure Kary has a lot more money than me, so I live and die by market timing. My thought is that if you can time the market right throughout life, you’ll capture a lot more money than if you didn’t. The whole reason I’m on this site is so I can figure out real estate market timing. Kary is on here all the time and I would hope we all buy and sell at the right time based on tim’s data.

  149. 149

    By Erik @ 148:

    I would hope we all buy and sell at the right time based on tim’s data.

    The best time to buy recently was 2012. People who bought then in many/most areas are now able to sell and pull out significant equity. I don’t seem to recall a lot of people looking at the data back then and saying it’s time to buy! Tim’s data shows the past–it doesn’t show the future.

  150. 150
    Erik says:

    RE: Kary L. Krismer @ 149
    Tim bought early 2011 and said this isn’t the bottom, but we are getting close. I bought shortly after.

    When inventory goes up, that’s when you know we are headed for trouble, which makes right now a bad time to sell. Those that sell right now have extenuating circumstances or really need the money. Prices will go up this year and next because inventory is low. Check in when KC inventory is 6000. Until then prices will be going up.

  151. 151

    By Cap”n @ 147:

    RE: Kary L. Krismer @ 146

    What are the things in your list of huge negative factors?

    Near a freeway or other noisy road. Aluminum wiring. Messy neighbors. Mold conditions in the attic. Poorly done remodels. LP or other failing siding. There’s a lot of things buyers will overlook in this market as they get crazed and impatient.

    The worst one I saw though was a septic system which apparently not been pumped in maybe 10 years, the owners apparently had two kids in that time frame. When tested prior to listing (some relocation companies like pre-inspections) it was determined that the drain field had failed. They conducted a process on that I’d never heard of before, called vacuuming, to resurrect the drainfield. From what I can determine that’s likely a short term fix at best. That house is currently pending, so apparently those facts didn’t put of one buyer. Maybe they have the money to put in a new drainfield, and are taking the risk. That would be okay, but otherwise . . ..

  152. 152
    greg says:

    RE: Sam @ 136
    This is what happens when we allows industries to conduct self oversight. RE operates with very little oversight of the negotiation process.

    If an independent third party was in place to review bids and ensure they were real home prices would drop within days. Time and again from one industry to another, independent review of shady /grey areas results in better practice and better consumer protection.

  153. 153
    greg says:

    RE: Kary L. Krismer @ 142

    don’t put words in my mouth Kary. at no point did I claim getting an RE license is a barrier to entry, I suggest you re-parse and try to figure out where you went wrong.

    What you inferred from my statement is completely without merit it reminds me of a child trying to twist their way out of a lie.

  154. 154
    ESS says:

    By Kary L. Krismer @ 149:

    By Erik @ 148:

    I would hope we all buy and sell at the right time based on tim’s data.

    The best time to buy recently was 2012. People who bought then in many/most areas are now able to sell and pull out significant equity. I don’t seem to recall a lot of people looking at the data back then and saying it’s time to buy! Tim’s data shows the past–it doesn’t show the future.

    ___________________________________________________________________________________________________________

    I recall comments here and elsewhere a few years ago stating that it was a foolish to buy properties, and how many new landlords were just homeowners in distress. How times have changed within just a few years!

  155. 155
    greg says:

    RE: Kary L. Krismer @ 139

    First off Kary, “put up or shut up” is what someone with any strong rebuttal might say.

    But I will play because you set the bar so low one has merely to step over it.

    Kary, you want one example of NAR lobbying etc… here you go
    1, NAR spent a ton of money trying to keep BANKS out of Residential RE sales. The data is there it is extremely well documented .

    The worse part is NAR used “concentration of power ” by banks as their primary rebuttal. I don’t know how they kept a straight face presenting that.

    (Kary you are too damn easy)
    Done.

  156. 156
    ESS says:

    By Erik @ 150:

    RE: Kary L. Krismer @ 149
    Tim bought early 2011 and said this isn’t the bottom, but we are getting close. I bought shortly after.

    When inventory goes up, that’s when you know we are headed for trouble, which makes right now a bad time to sell. Those that sell right now have extenuating circumstances or really need the money. Prices will go up this year and next because inventory is low. Check in when KC inventory is 6000. Until then prices will be going up.

    ____________________________________________________________________________________________________

    I would suggest that rising inventory is not he problem, but lowered demand as related to inventory. If inventory increases, but demand even more so, then it will still be a very healthy market for sellers.

  157. 157

    By greg @ 153:

    RE: Kary L. Krismer @ 142

    don’t put words in my mouth Kary. at no point did I claim getting an RE license is a barrier to entry, I suggest you re-parse and try to figure out where you went wrong.

    What you inferred from my statement is completely without merit it reminds me of a child trying to twist their way out of a lie.

    Well, what barrier to entry do you see? You’re the one who said there were barriers to entry! What are they?

    And what are the lobbying efforts of NAR you don’t like?

    The silence is deafening. You’re just biased against the real estate industry, but don’t have anything specific to say other than general nonsense. An example of the nonsense:

    This is what happens when we allows industries to conduct self oversight. RE operates with very little oversight of the negotiation process.

    If an independent third party was in place to review bids and ensure they were real home prices would drop within days. Time and again from one industry to another, independent review of shady /grey areas results in better practice and better consumer protection.

    Apparently you’ve never heard of appraisers. /sarc

  158. 158
    Erik says:

    RE: ESS @ 156
    Yeah, Tim states months of inventory sometimes. Last I remember, King County was around 1.1 months or something. I would assume that means at the current demand, it would take 1.1 months to consume all the inventory. This is similar to what you are referring to because it takes demand into account.

  159. 159

    RE: greg @ 155 – You’re apparently the only one here who thinks it’s a good thing for banks to expand what they do. Generally states limit the interaction between lenders and real estate firms. So even if the feds increased the areas banks could do business, I don’t see that would be a big change.

    But let’s say they could. The people working for banks would still need to be licensed by DOL as real estate sales people. The people so licensed would likely still need to be members of the NWMLS. I’m not sure what great advantage you see to that. When I get an offer in and the lender is a firm associated with the real estate office writing the offer that is viewed as a slight negative because the quality of that lender is often not very good. And there are some banks which are viewed as negative. Banks are very poorly run entities, with very few exceptions. So what do you want? Buyers and sellers to be represented by agents who are even worse than they are now?

    As to your last comment, don’t pat yourself on the back too hard. You’ve yet to make a single valid point. But continue being a legend in your own mind. It’s good you have high self-esteem, even if it’s not merited.

  160. 160
    ESS says:

    By Erik @ 158:

    RE: ESS @ 156
    Yeah, Tim states months of inventory sometimes. Last I remember, King County was around 1.1 months or something. I would assume that means at the current demand, it would take 1.1 months to consume all the inventory. This is similar to what you are referring to because it takes demand into account.

    Erik – correct, which raises an interesting question – how do they figure demand into the equation? It isn’t so hard to determine inventory – but how do you figure demand? If it is just the number of buyers that real estate professionals are working with? That number doesn’t take into account any “shadow” buyers. Shadow buyers can be a variety of people- those who own but can’t move on because their is no inventory, buyers who don’t want to participate in an “overheated” market, those who can’t afford but would love to buy, and those who can buy but just don’t see anything they want. I would suggest that those who probably don’t figure into the official statistics can vary greatly by location.

  161. 161
    Shoeguy says:

    By Erik @ 94:

    RE: Shoeguy @ 79
    So you don’t like me, but you know that I am able to figure out where we are at in the real estate cycle. I don’t really car what some shoe salesman thinks. I told you before, if I wanted advice on shoes, I’d ask you.

    Hah.

    You take yourself too damn seriously.

  162. 162
    Eastsider says:

    RE: Kary L. Krismer @ 159

    Can we do away with these self serving arguments and just adopt the EU practice? In most EU countries, the agent/legal fees for real estate transactions is about 1%. How can anyone justify the additional 5% imposed on every sale here? If we are concerned about a few bad transactions that cost buyers dearly, we could introduce some insurance scheme which would still be much cheaper.

  163. 163
    greg says:

    RE: Kary L. Krismer @ 159RE: Kary L. Krismer @ 157

    Oh Kary, you asked for an example I gave you one , now you want to argue the merit of the example..

    Instead let us stay on topic.

    I pointed to massive lobbying by the RE industry, to protect yourselves from competitors…

    You went into denial mode , pretended I was making it up, and asked for an example.

    I provided an excellent example. Now instead of taking your lumps like a man you want to argue over whether or not your group was correct to spend those millions maintaining your moat through lobbying against the banking industry becoming competitors.

    Kary every single time you are shown up as being grossly ignorant of your industry you attempt to divert the topic ( I prefer to believe it is ignorance rather than lying)

  164. 164
    greg says:

    RE: Eastsider @ 162

    RE is a textbook case of market manipulation. Its defenders tend to have a vested interest in maintaining the status Quo. And they have been relentless in their efforts to fend off competitors.

    To paraphrase Upton, ….. ” it is difficult to get Kary to understand something when his salary depends on his not understanding it.”

    I have to say whether accidental or purposely designed the RE system of embracing and folding of competitors into the MLS services is absolute brilliance ! Few industries have managed such deft slight of hand. They manage to create the surface illusion of competition while enforcing price control through membership obligations and they do so under the guise of protecting consumers.

    The reality is that the methods used to negotiate sales prices, fees for two agents are intended to be opaque and somewhat complex to the average consumer.

    I still don’t understand why all offers presented to sellers are NOT subject to independent review. As it stands there is virtually no oversight and we are left to rely on the “honor system” for fair play. Agents can fabricate offers with little fear of censor.IF nothing else it would increase confidence in the current system and allow NAR and cohorts to extend their market position for another few years…..

  165. 165

    By ESS @ 160:

    By Erik @ 158:

    RE: ESS @ 156
    Yeah, Tim states months of inventory sometimes. Last I remember, King County was around 1.1 months or something. I would assume that means at the current demand, it would take 1.1 months to consume all the inventory. This is similar to what you are referring to because it takes demand into account.

    Erik – correct, which raises an interesting question – how do they figure demand into the equation? It isn’t so hard to determine inventory – but how do you figure demand? If it is just the number of buyers that real estate professionals are working with? That number doesn’t take into account any “shadow” buyers. Shadow buyers can be a variety of people- those who own but can’t move on because their is no inventory, buyers who don’t want to participate in an “overheated” market, those who can’t afford but would love to buy, and those who can buy but just don’t see anything they want. I would suggest that those who probably don’t figure into the official statistics can vary greatly by location.

    They aren’t using demand in the economic sense. They are really just dealing with volume.

    There is no way to accurately measure demand for houses.

  166. 166

    By Eastsider @ 162:

    RE: Kary L. Krismer @ 159

    Can we do away with these self serving arguments and just adopt the EU practice? In most EU countries, the agent/legal fees for real estate transactions is about 1%. How can anyone justify the additional 5% imposed on every sale here? If we are concerned about a few bad transactions that cost buyers dearly, we could introduce some insurance scheme which would still be much cheaper.

    I can assure you that model doesn’t involve the same services. It’s probably more like what it would be to hire an attorney here–so probably just the legal fees.

    There’s no way anyone could make a living at 1% doing what agents do here–unless maybe the starting price of houses is in the 7 figures, which I don’t think it is.

  167. 167

    By greg @ 163:

    I provided an excellent example. Now instead of taking your lumps like a man you want to argue over whether or not your group was correct to spend those millions maintaining your moat through lobbying against the banking industry becoming competitors.

    I asked you for an example of something they lobbied against that you disagreed with. You came up with an incredibly ignorant example. NAR’s position on that topic was arguably public service, but not knowing much about real estate you don’t understand that.

    I mentioned you are probably the only one here who thinks banks expanding into more areas is a good thing, but that’s largely because people here are anti-bank. But even ignoring how bad a Bank of America real estate agent would be . . ..

    You don’t want real estate agents to be too connected to other service providers. You recognized that above where you wanted some independent third party to somehow be involved in the process (apparently know knowing about appraisers).

    There’s a reason why the standard inspector referral form has a space for agents to refer three inspectors (and why many firms require that).

    There’s a reason why agents have to fill out affiliated business disclosure forms and give them to both sides of a transaction.

    You are apparently not only ignorant of those reasons, but you’re so anti-Realtor that you’re pro-bank on what is a really really stupid idea (banks also providing brokerage services).

    You’ve posted here several times, but you’ve yet to make a single good point. All you’re showing is ignorance and bias. I’ve said I’m not in favor of NAR’s positions on taxes and financing. I’ve said I’m not in favor of the local Realtor entities’ pro-developer stances. You’re just anti-Realtor without any educated basis for your positions.

  168. 168

    By greg @ 164:

    RE: Eastsider @ 162 – I still don’t understand why all offers presented to sellers are NOT subject to independent review. As it stands there is virtually no oversight and we are left to rely on the “honor system” for fair play. .

    Wow, you really don’t understand. What about an appraiser isn’t independent review?

    But why would there need to be independent review? Are people not free to make their own decisions? If someone wants to pay $500,000 cash for a piece of property (no appraiser), do you think that there needs to be some government oversight before they’re allowed to do that?

    Beyond that though, it’s not just an “honor system. ” As an agent I can be sanctioned by the NWMLS, the local Realtor entity and the Department of Licensing. You really don’t have a clue how real estate functions. You just make absurd ignorant statements.

    But finally, it’s impossible to make a biased person understand anything. But I did get a laugh at your thinking my living would be somehow undermined by Bank of America real estate agents.

  169. 169
    greg says:

    RE: Kary L. Krismer @ 168
    there goes KARY shooting from the hip yet again and missing the point once again…

    it is on purpose?

  170. 170
    greg says:

    RE: Kary L. Krismer @ 168

    there you go again Kary,

    You see a post , don’t like the content and start making nonsense up.

    lets be clear, earlier you asked for an example , got one and then went on to cry about the nature it post after post.

    Then you see a post about oversight and jump to the wrong conclusion.

    I think your inability to think beyond your next commission is clouding your mind.

    I clearly stated oversight of ALL offers submitted. We all know how the current system works, unless the buyers agent insists on actually seeing the competing offers the only person who does is the listing agent …

    Now did you understand that much ? too tricky?

    The issue is that there is no oversight in WA. In WA we have no requirement that the buyers agent verifies the next competing offer. (or perhaps you did not know that)

    In many countries the sellers must disclose competing offers to the buyers attorney/escrow/lender (it varies) this keeps everyone honest whether they like it or not.

    Now I think most people understood what I meant, I think you just did not want to understand instead you wished to muddy the waters.

    So lets recap…

    I pointed to 37 million spent by NAR alone last year on LOBBYING our gov to protect fat fees.
    (you lacked any rebuttal because it is a fact)

    I supplied an example to your childish request to show an example.
    (you cried about the quality instead being honorable )

    Now you are confusing appraisers or valuations with independent oversight not in the pocket of NWMLS etc.

    Frankly you are losing the plot. I suggest you read a little slower, let it sink in and try a little harder instead of just stamping your feet.

    Lobbying,
    banks
    independent review.

    Really how hard is that to follow Kary?

  171. 171
    greg says:

    RE: Kary L. Krismer @ 166

    Oh Kary, I know a number of agents in the EU who make a very nice living selling residential properties and they do it on 1-2%.

    the difference they don’t have to split it 4 times. Oh and just like you they cannot give legal advice, and just like agents here in WA they rely on qualified pros to draft contracts which are then used as templates.

    the real difference is that they don’t have cartels controlling access to their databases, and enforcing rules intended to support your huge fees.

  172. 172
    Blake says:

    RE: Marcel @ 124
    Marcel, you wrote: “The bubble will continue to expand as Democrats see that they can manipulate the Fed to artificially increase home values and stock valuations, further lining their pockets. And if a Democrat wins the presidency, the bubble could easily continue to expand 4+ years.”
    So…
    #1. How /why do you think the Democrats can manipulate the Fed? I am really curious… as I noted, the US central bank (Fed) is basically privately held and is more independent than almost any central bank in Europe or Japan.
    #2. IF they could manipulate the Fed, what can they get the Fed to do when interest rates are already near zero? You think mighty Obama can get the Fed to stop raising rates during this election year?

    Also… when you wrote “further lining their pockets” – – it is not clear who “their” refers to… is it the Democrats who are lining their pockets or the Fed? If it’s the Fed, then it shouldn’t be too hard to manipulate them into lining their pockets :-)

  173. 173

    RE: Erik @ 158

    That is called the “absorption rate”

    http://www.investopedia.com/terms/a/absorption-rate.asp

    but is less accurate if the number of sales you are using for average sold is negatively impacted by low inventory. That’s why you see it used more in a buyer’s or balanced market, than in a seller’s market of low inventory with multiple offers, as there might have been more sales if there were more houses to be sold.

    Also I find when running stats over the years that the rate is considerably different depending on price range. Right now it is a good indicator of whether the builders are over building in the luxury market. The undue pressure on the higher market caused by over supply can trickle down, and in some ways that did happen in the last bust cycle.

    Ran some stats on a small scale as an example using the 4 zip codes of Kirkland and Redmond. I use seasonally adjusted averages, so this based on closed properties over the last 15-105 days (allowing 15 days for full reportings) and then using the 1 month sold average. Single Family Homes.

    Under $500,000 has a .68 month supply
    $500,000 to $700,000 has a .77 month supply
    $700,000 to $1,000,000 has a 1.10 month supply
    $1,000,000 to $1,500,000 has 2.94 months of supply
    $1,500,000 to $2,000,000 has 3.86 months of supply
    $2,000,000 + has 8.67 months of supply

    In new construction there is a lot of inventory in various stages of permits and building that are available to be purchased, but not yet listed for sale. This impacts the $850,000 plus market a little more than the market beneath that threshold.

    So if the market continues as it is, it would take 8.67 months to absorb all of the homes for sale for $2,000,000 or more and 3.86 months to absorb (sell) the $1,500,000 to $2,000,000 market in Kirkland and Redmond and 2.94 months for the $1,000,000 to $1,500,000.

    The 1.10 months in the $700,000 to $1,000,000 price group likely starts out lower and expands once past $850,000. But still likely less than 2 months overall.

    It is always important to break down the markets into price tiers that make sense for each specific market as, for example, in this market of the 4 Kirkland and Redmond zip codes, more homes sell for a million to 1.5M than sell for $500,000 or less.

    Usually when an agent does absorption rates, those that do, we are doing it for a specific buyer or seller. So the actual price range is a given. It’s important for a buyer to know if there is a 5 month supply in their given price range, as sellers often don’t consider this fact when negotiating an offer.

    A P.S. to Greg – the buyer does see the offer that caused his offer to “escalate” past the asking price. It is part of the Escalation Clause language. If you are wanting to know this information before you make an offer, then no. But after your offer is accepted at a price higher than asking price, then yes. You absolutely do see it. If you have ever submitted an offer with a 35E Escalation Addendum, go back and read it. Hope that helps.

    Required Disclosure: Stats in this post are hand calculated by me in real time and not compiled, verified or published by The Northwest Multiple Listing Service.

  174. 174

    RE: eastsidebuyer @ 1
    Its Not Gonna Last Long

    Ask San Francisco lately….

  175. 175

    RE: Ardell DellaLoggia @ 173
    Yes Ardell

    If you want a house and there’s multiple bids, do what I did in 1999….push your realtor out the office chair and fill out the full asking offer [pre-approved loan if needed ] and get it into the seller’s hands ASAP!

    Otherwise “kiss the deal good-bye”.

  176. 176
    Erik says:

    Kary,

    What’s the cheapest way to form an llc? Where do I start?

    I heard you can write off hoa dues with an llc. Seems like a good idea to me.

  177. 177
    Erik says:

    RE: Ardell DellaLoggia @ 173
    Thanks for the thorough explanation.

  178. 178
    Cap''n says:

    Hi Tim. You were transparent when you bought with details about the property, comps, etc. I would be interested to hear an update about your property and comps in the neighborhood. At or above peak? Still satisfied with your purchase? Any unusual expenses or regrets? Is now a great time to sell only or are there still good buy opportunities nearby?

  179. 179
    David B. says:

    RE: softwarengineer @ 175 – And in this market any seller with a brain will wait until another offer or two comes in and then there will be a bidding war.

  180. 180

    By greg @ 170:

    RE: Kary L. Krismer @ 168 – I clearly stated oversight of ALL offers submitted. We all know how the current system works, unless the buyers agent insists on actually seeing the competing offers the only person who does is the listing agent …

    You really don’t understand how things work.

    A buyer has no right or need to see other offers, unless they have an escalation clause and a competing offer is used to boost their offer to a higher price. In that case the entire offer needs to be given to the buyer, completely unredacted.

    I’m not even sure why you think a buyer should have access to that information. Is it some mistaken belief that the highest offer is the best offer? When we have multiple offers we go analyze the offers based on at least 13 different concerns, each of which has different weight for different sellers. That you think a buyer somehow needs to see competing offers just shows your ignorance.

    Finally, what an agent discloses about competing offers before accepting one is entirely up to the seller. That is their decision. They could tell their agent to not disclose anything, or to disclose everything, or to do something in the middle. Again that you don’t understand that just shows your ignorance.

    I know you like to keep patting yourself on the back, but you really have yet to make a single point that has any merit.

  181. 181

    By greg @ 171:

    RE: Kary L. Krismer @ 166

    Oh Kary, I know a number of agents in the EU who make a very nice living selling residential properties and they do it on 1-2%.

    the difference they don’t have to split it 4 times. Oh and just like you they cannot give legal advice, and just like agents here in WA they rely on qualified pros to draft contracts which are then used as templates.

    the real difference is that they don’t have cartels controlling access to their databases, and enforcing rules intended to support your huge fees.

    Oh, just how gullible to you think people are? Like anyone would believe a word you say at this point. That’s incredible desperation to prove a point, and proof of nothing.

  182. 182

    By Erik @ 176:

    Kary,

    What’s the cheapest way to form an llc? Where do I start?

    I heard you can write off hoa dues with an llc. Seems like a good idea to me.

    I don’t know, but I suspect you can get the forms fairly cheaply–but I’d recommend an attorney.

    I don’t think putting ownership in an LLC affects your ability to write off anything–it’s your use of the property that affects what you can write off. There may be some liability changes (not as many as people think), but when it comes to owning a condo there is also insurance for most of those types of issues.

    About the only good tax reason I’ve ever heard for setting up an closely held corporation for tax reasons is you can pay yourself wages, withholding taxes, and then avoid paying estimated taxes. That can be advantageous for people without significant savings since the estimated tax schedule requires that you pay 50% of your taxes in a 60 day period, at the same point in the year where you pay any shortage from the prior year.

    I don’t think attorneys charge that much for setting up these entities, and you could get them to answer your questions (including the biggest one whether it’s a good idea or not). So I would suggest getting an attorney to do it.

  183. 183

    By softwarengineer @ 175:

    RE: Ardell DellaLoggia @ 173
    Yes Ardell

    If you want a house and there’s multiple bids, do what I did in 1999….push your realtor out the office chair and fill out the full asking offer [pre-approved loan if needed ] and get it into the seller’s hands ASAP!

    Otherwise “kiss the deal good-bye”.

    I don’t know what the market was like in 1999, but that wouldn’t likely get you to mutual acceptance today. Obviously it depends on the list price, but I don’t think a full price offer is going to get a seller to jump quickly in today’s market. (Oh, and you need an approval letter in any market.)

    Most listing agents today will do something to allow time for offers to come in, and I’ve even heard rumors that DOL might investigate agents who have a pattern of not allowing sufficient exposure to the market by accepting offers too early. So most use an offer review date system. I’m not crazy about that because too many offers can come in at the end, so I request that all offers allow X business days for review. But you clearly need to do something in this market to allow exposure (except maybe the extremely stupid offer review date on a Sunday).

    Of course you could get in a well over list cash offer–that could get a seller to jump early, and they can! The offer review date is unfortunately not binding, although I think it should be. And that’s another reason I like the request to allow X business days to review. That doesn’t set up any impression that you will not accept an offer prior to any point in time.

  184. 184
    greg says:

    By Kary L. Krismer @ 180:

    By greg @ 170:

    RE: Kary L. Krismer @ 168 – I clearly stated oversight of ALL offers submitted. We all know how the current system works, unless the buyers agent insists on actually seeing the competing offers the only person who does is the listing agent …

    A buyer has no right or need to see other offers, unless they.

    Let me stop you right there.

    I never suggested the “buyer” should see a thing, that is something pulled out of your hat..

    What I did suggest was that a THIRD PARTY should be in place to ensure all actors are being honest and above board. Right now the process relies primarily on good faith. When what we need is a system that relies on independent oversight.

    I know you feel threatened, but if you were to slow down and stop reacting like a child you might see it is actually to your benefit.

    Let me repeat that so it can get through to you YOUR BENEFIT .

    By opening up the process to scrutiny it improves public confidence. Many buyers are reluctant to make their full and final offers or provide escalator clauses because the current system provides no proof that they are not bidding against themselves or how close the next best bid was.

    now to be clear, nobody said the buyer sees it, that is something you made up. Nobody said highest offer always wins, that again is something you made up.

    I am talking about improving the offer bid process to make it more transparent, to make it such that a buyer knows that the sellers agent could not be creating phantom bidders or over stating offers to drive up the price for their client.

    It is a problem that could be cheaply resolved, by simply submitting the next best bid to escrow when an escalator is triggered.

    The Escrow company would get a fee for providing oversight through review , documentation or some combination of that.

    The honest agents wins by removing all consumer doubt that some agents might be acting in good faith. The bad actors are kept in check.
    This is not a new idea, in fact it is currently in use and it does reduce phantom offers, and it improves consumer confidence in a simple and easy way.

    Frankly your failure grasp this very simple and widely used concept speaks to your lack of
    professionalism.

  185. 185

    RE: greg @ 184 – You really don’t know who to express yourself, do you. You’ve yet to describe a problem, let alone a solution.

    But just out of curiosity, let’s assume there is this mythical third party who reviews things (that doesn’t exist in the form of the NWMLS, Realtor organizations and the Department of Licensing), just how much do you expect them to make and how do you expect them to get paid?

  186. 186

    By greg @ 184:

    Many buyers are reluctant to make their full and final offers or provide escalator clauses because the current system provides no proof that they are not bidding against themselves or how close the next best bid was.

    . . .
    I am talking about improving the offer bid process to make it more transparent, to make it such that a buyer knows that the sellers agent could not be creating phantom bidders or over stating offers to drive up the price for their client.

    Well first, it’s an escalation clause, not an escalator clause.

    Second, and escalation clause is used precisely because a buyer doesn’t know those things. Not knowing those things wouldn’t make them more reluctant to use such a form, it would make them more likely to use the form! And again, for the form to bump the price due to an escalation clause an unredacted copy of the other offer has to be provided.

    And for the final time (as if anything is final for you), it’s the seller that controls what information gets released about offers. They are going to do whatever they perceive is in their best interests (although they don’t have the right to tell their agent to mis-state the facts). It’s sort of like auctions–there can be different rules at auctions, and different types of auctions. The seller controls that.

  187. 187
    Matt says:

    As my first comment (being new to this site), I’d like to say thanks to all the commenters and to The Tim for the article. I feel like I’ve learned quite a lot already! Kary Krismer addressed the topic I was concerned about (and which brought me to this site). That issue is the ease/ability to sell a SFH that is dated or somehow less than ideal, in this current market. I was a little concerned for this particular house going on the market next week, since it could use some work (or a LOT of work, depending on the buyer). But now I see from all the comments, etc., that the market is hot enough that the location (Green Lake) and the large corner lot should take care of things well enough, despite the house being old and dated…

  188. 188

    RE: greg @ 184

    To be clear, the listing agent acts to the best interest of the seller…always. Back when all agents represented sellers and there were no buyer agents (which is in my frame of reference, my being older than dirt) we owed a duty of “fairness” to the buying public. Once both agents in the transaction were no longer both working for the seller, they struck the word “fair” out of the Code of Ethics, around 1996.

    Honesty is still required. Fairness to the other side of the fence, not. The buyer’s agent owes that duty to the buyer, not the seller’s agent.

    That said, and I’m surprised Kary hasn’t mentioned this which is why I am, The Designated Broker of the Real Estate Firm is the neutral party that can be called in for oversight. In fact when an agent has a pony in the race, it is not uncommon for the Listing Agent to have the Broker oversee the full process of selection, and that is as it should be.

    Yes…I can see a time when the Designated Broker (who usually doesn’t sell real estate) or Managing Broker would have to sign off on multiple offer scenarios. No reason they can’t do that now.

    “I am talking about improving the offer bid process to make it more transparent, to make it such that a buyer knows that the sellers agent could not be creating phantom bidders or over stating offers to drive up the price for their client.”

    They really can’t do that now. Every seller can counter at full price whether there are other offers or not. It is only when the price goes over the asking price that more scrutiny is involved. The buyer limits the amount over another bid by saying “x over” other offers. Then that buyer gets to see the other offer to verify the price paid was accurate. At full price or less there is no reason a seller should show their hand. That’s just a bit silly to expect a seller not to look out for their own best interests.

    You need to describe what’s bothering you because all systems are in place to prevent what you are suggesting. Sometimes I see an agent bringing in an offer well over asking price with no escalation clause causing the buyer to pay more than asking when they are the only buyer in the room. But that is rare and possibly something the buyer instructed them to do. That is the only time I shake my head and ask “why?” But in representing the seller we have no option except to accept that offer over asking price since they omitted the Escalation Clause. Still, it bothers me a bit when that happens.

    Listing Agents don’t pretend they have an offer as much as Buyer Agents err in thinking there are other offers. An Escalation Clause helps protect the buyer in the event their agent (not the seller’s agent) is in error.

  189. 189
    SFraz says:

    Growing demand to “out” ownership by law enforcement officials has been ignored due to intense lobbying by the real estate, legal and accounting industries.

    “We like the money,” said Raymond Baker, the president of Global Financial Integrity, a Washington nonprofit that tracks and condemns the illicit flow of money. “It’s that simple. We like the money that comes into our accounts, and we are not nearly as judgmental about it as we should be.”

    http://nypost.com/2016/02/14/unmask-the-foreign-buyers-stashing-cash-in-american-real-estate/

  190. 190
    SFraz says:

    Stepping up regulation of the real estate industry, and realtors’ facilitation of dodgy transactions, is a cause that’s been doggedly made by some investors and especially former Michigan senator Carl Levin, but it never gained much traction.
    That’s in part because real estate agents have a highly-organized and influential lobbying group, with the ear of many in the US Congress. The National Association of Realtors (NAR), at 1.1 million-strong, is the largest professional organization in the world, and was the eighth-largest political action committee in the US in the last election cycle, contributing to 400 senators and congressmen.
    http://qz.com/341083/the-case-for-treating-us-realtors-like-us-bankers-when-it-comes-to-foreign-cash/

  191. 191
    SFraz says:

    General wisdom suggests that a foreign input of moneys flooding commercial U.S. markets might be a good sign for American corporations — but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country. Overpriced hubs such as San Francisco, New York, Dallas, Denver, Seattle and others are already becoming out of reach to most Americans.
    http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15

  192. 192
    js says:

    By Kary L. Krismer @ 185:

    RE: greg @ 184 – You really don’t know who to express yourself, do you. You’ve yet to describe a problem, let alone a solution.

    He did describe a problem. It costs too darn much in commissions to buy and sell houses because the RE cartel has set up a clever system that stacks the cards against competitors.

    In my opinion, this is one of the reasons there is a supply shortage. With rents high, people would rather become landlords than pay the exorbitant fees required to buy/sell. Not to mention having to deal with the smarmy used house salespeople.

  193. 193
    Dave says:

    I hate to pull this discussion back to macroeconomics but we’re there anyway.
    Tuesday, April 19 2016; Housing Starts Plunge 8.8%, Permits Plunge 7.7%.
    It would seem the upside housing price trend is going to be here awhile.

  194. 194
    Erik says:

    RE: Dave @ 192
    Yay!!! Great news Dave. Thanks,

  195. 195
    AJT says:

    RE: Dave @ 192

    http://seattle.curbed.com/2016/4/18/11452006/seattle-america-fastest-booming-cities-belltown-denny-triangle
    “King County is expected to see more than 13,000 new housing starts and 21,000 new jobs formed in 2016, that’s 3.1 times more new homes and 2.3 times more jobs than the average of the top 100 counties in the country, respectively.”

    This is not to say home prices in Seattle will not continue to the stratosphere but the drop in permits and housing starts is not happening here. Honestly I am not sure if a predicted 13000 housing starts in 2016 would even get this market out of the very red hot, scorching, sun-like, neutron star collapse hotness. The only factor I see denting the pace of appreciation is due East.

  196. 196
    Anonymous Coward says:

    By AJT @ 194:

    “King County is expected to see more than 13,000 new housing starts

    I’d really like to know how many of those housing starts are SFH or have at least 3 bedrooms?

  197. 197
    Anonymous says:

    I just moved to the eastside from away in the Fall. I rent, the house next to me sold 4/2.5 bath for $570k. Now the house two houses down sold for $713k same exact size/layout/shape. So it went up around $140k in 8 months so at 25% appreciation in less than a year. Are we heading to a bust? Could prices go up another 40% as people speculate? So this same home will be $1M in 1-2 years? What about all the new construction selling for $800k nearby?

    I’m not understanding this market at all. Seems red hot but strange.

  198. 198
    pfft says:

    Bernie can’t even win his own state. LOL as the kids say. Who said he’d win the presidency?

  199. 199
    Sam Hunter says:

    But Erik didn’t care what the others thought of him, for he had already planted his hot, warm seed deep the into Ardell. She fancied him really. Not only did he give her a nice 2% commission, but he gave her his own home brewed 2% baby batter concoction. She loved her new man stud in his nice condo which overlooked the water. She knew he would soon be a rich man once he timed the market based on Tim’s data.

    *YOU GOT MAIL* Ardell refused to use a modern email service. She looked at her AOL email and it was from Kary attacking her again! “Curse that useless old man!”, exaimed Erik. He could not figure out why Kary was so obsessed with Ardell and her wrong predictions, I mean she was just a realtor after all what did she know! Little did Erik know Kary was past scorned lover and was looking to soon reignite the spark that was once there.

    To be continued…

  200. 200
    Justme says:

    RE: AJT @ 194

    >> The only factor I see denting the pace of appreciation is due East.

    You mean the leak of radioactive material at the Hanford Nuclear Reservation?

  201. 201
    Erik says:

    RE: Sam Hunter @ 199
    I am a big Ardell fan because she worked insanely hard to get me top price. If someone did that for you, you would talk well about them too. I have had plenty of other realtors. Ardell is the best by far.

    Thanks for turning it into a love story though.

  202. 202
    ESS says:

    By SFraz @ 191:

    General wisdom suggests that a foreign input of moneys flooding commercial U.S. markets might be a good sign for American corporations — but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country. Overpriced hubs such as San Francisco, New York, Dallas, Denver, Seattle and others are already becoming out of reach to most Americans.
    http://www.marketwatch.com/story/foreign-investors-pose-threat-to-residential-real-estate-2015-06-15

    ______________________________________________________________________________________________________________

    Thank you for posting that very interesting article. One can view the results of hyper foreign real estate investing in Vancouver and area. One questions if Seattle will follow their example, especially in light of limitations placed upon foreign investment by the Canadian government. Compared to Vancouver, we have had minimal foreign investment in the Puget Sound area. The Puget Sound area resembles the Vancouver area in so many ways that it is a natural target for foreign investments that are either priced out of the Vancouver area, or prohibited in buying property there, but yet wish to reside in the same type of area.

    Having in-laws that reside in the Vancouver area, as well as attending a few open houses and talking to real estate agents when I visit that area, I can attest not only the rapid rise of real estate prices in that area, but the mixed emotions that some of my relatives have about it all. My contemporaries have all bought residences – none of them rent. But their various children that reside in the area – except for one – rent and I don’t anticipate any purchases by all the offspring in the near term. Thus my relatives take some comfort in their own good fortune, but worry about their children who have been priced out of the single family home market unless they move out of the area. Any home ownership for the children will probably be in condos. And as Vancouver is the only major residential area in British Columbia, they don’t have as many residential choices to relocate as we Americans do in our Western part of the country.

    My relatives in Canada have bitterly complained about the way foreign money is transferred to purchase property in the Vancouver area. Residing here, I did not really keep up with those local events with until recently when foreign money laundering investment schemes started making the news in places such as NYC. But as corruption is rampant in China, it is only natural those investment behaviors transfer to other countries by the wealthy who have experience in their home country in gaming their own system.

    One bought residential real estate in part to weather unforeseen events and sudden price increases in the real estate market. I guess foreign investment is just another unforeseen event. Who would have guessed that one of the greatest communist regimes would transform into a major capitalist (although totalitarian) regime with almost as many billionaires as the US, with large wealthy class that has invested in real estate all over the world? Was it really any shock to anyone that 150 members of the Chinese politburo were recently outed by the Panama Papers owning offshore investment accounts? And who can blame these wealthy Chinese for establishing overseas investment insurance policies? After all, they know their own government the best, and they simply don’t trust that government. And if only a few percentage of the Chinese are making these real estate moves, with 1.4 billion people, that is still a great many of folks who are moving money to other parts of the world. Will we really be affected by all that movement of money? Only time will tell. But it does give individuals in areas such as Puget Sound another reason to own their own residences that was not even contemplated twenty years ago.

    There were complaints in the past about liar loans, houses purchased with nothing down by individuals that had no hope in paying off the mortgage. We can take comfort that with all these cash deals, the foreign investor class won’t walk away from their investments if the market takes a 10-20% negative downward turn. So in that respect, foreign investment is making real estate investment safer for the rest of us. It may be small comfort for those who are hoping to buy, but some good news is better than none.

  203. 203

    By Ardell DellaLoggia @ 188:

    RE: greg @ 184 – That said, and I’m surprised Kary hasn’t mentioned this which is why I am, The Designated Broker of the Real Estate Firm is the neutral party that can be called in for oversight. In fact when an agent has a pony in the race, it is not uncommon for the Listing Agent to have the Broker oversee the full process of selection, and that is as it should be.

    I thought about adding the designated broker into the mix, but they are not typically a neutral third party. They would only be that if the buyer’s agent and listing agent were both from their firm. Other than that, they would either represent the buyer or the seller.

    That said they do have a duty of oversight, and at least some interest in doing that, but I’m not so sure how well that really works in practice.

  204. 204

    By SFraz @ 190:

    Stepping up regulation of the real estate industry, and realtors’ facilitation of dodgy transactions, is a cause that’s been doggedly made by some investors and especially former Michigan senator Carl Levin, but it never gained much traction.
    That’s in part because real estate agents have a highly-organized and influential lobbying group, with the ear of many in the US Congress. The National Association of Realtors (NAR), at 1.1 million-strong, is the largest professional organization in the world, and was the eighth-largest political action committee in the US in the last election cycle, contributing to 400 senators and congressmen.
    http://qz.com/341083/the-case-for-treating-us-realtors-like-us-bankers-when-it-comes-to-foreign-cash/

    First, the obvious point that the legislation could have been really poorly drafted. I’d point out Washington’s distressed property law from about six years ago, where good legislation was turned into incredibly bad legislation when a legislator from Mercer Island and an attorney joined up and added sections and sections of really poorly drafted language (much of which was fixed the next year, but some of which still remains). The bill was supported by Washington Realtors before the change, but unfortunately neither they or anyone else noticed the amateurish language of the extensive amendments because it happened only a day or two before final passage. But the point is Washington Realtors supported legislation that was designed to help stop people being taken advantage of when they were in a foreclosure type situation, but were very opposed to the legislation as it actually passed.

    Second, I’ve read the article, and I don’t know just what is supposed to trip the agent into thinking that the money a foreigner has is suspicious! Seems incredibly racist. Are we supposed to assume Mexicans are drug dealers? Are Saudis less able to use corporate entities than the rest of us? I did have to laugh at “bringing cash to closing.” I don’t know about other states, but the major escrows in Washington will not accept cash, and I’m pretty sure that would trigger a reporting requirement if they did.

    Third, real estate investing is a rather public activity, because everything is available to the public (although not all states report sales price). If there’s a problem it’s with states not giving information about who owns corporations. And that problem would exist for all types of assets and all nationalities of owners.

  205. 205
    Blake says:

    By pfft @ 198:

    Bernie can’t even win his own state. LOL as the kids say. Who said he’d win the presidency?

    WTF? Vermont? He won that easily you pinhead… LOL!
    Bernie does much better than Hillary among independents, who outnumber Dems and Republicans now. But New York is one of the few states with a closed primary where Independents cannot vote… plus anybody who wanted to register to vote in this “all important” election had to have registered as Democrat over six months ago! How’s that for encouraging young people to vote and get involved? (NY is #44 in voter turnout and gets a D- from the CAP for their ridiculous voting laws).

    The clear message this election is that the two party system is rotten and corrupt and serves to maintain their hold on power. It’s important to remember that the Republican and Democratic Parties are not public/governmental institutions, but are PRIVATE institutions funded by private interests that are not at all representative of popular will. This year they have been challenged by insurgent campaigns – Trump and Sanders – but they will prevail… and the people will get angrier. At least the corruption of the system is being exposed more and more…

  206. 206
    Action says:

    By Anonymous Coward @ 196:

    By AJT @ 194:

    “King County is expected to see more than 13,000 new housing starts

    I’d really like to know how many of those housing starts are SFH or have at least 3 bedrooms?

    https://research.stlouisfed.org/fred2/graph/?g=4agx

    ^Here’s a link to data I posted earlier with housing starts (authorized building permits) broken into Total and Single Unit for the Puget Sound Area showing that construction in the Seattle area is still well below pre-recession levels.

    Would be interested to see more detailed construction data numbers for King County breaking down into apartments, condos and SFRs.

    Population in King County has been growing by about 36,000 per year for the past 5 years. At 2.5 average persons per household, this would suggest 36,000/2.5=14,400 housing starts needed just to keep pace with population growth.

  207. 207

    By Blake @ 205:

    By pfft @ 198:

    Bernie can’t even win his own state. LOL as the kids say. Who said he’d win the presidency?

    WTF? Vermont? He won that easily you pinhead… LOL!.

    LOL indeed!

    Also, Sanders reportedly won more counties, so presumably Hillary won in NYC. In a Presidential election how a candidate does in big cities isn’t all that critical because cities will almost always go heavily Democrat. So it’s not really a test of anything.

  208. 208
    Blake says:

    RE: Kary L. Krismer @ 207
    Yes, Bernie won most of the counties in NY… look at this map:
    http://www.cnn.com/election/primaries/states/ny/Dem
    … and lost in the coverage is the fact that Bernie did better against Hillary this year than Obama did in 2008! 42% vs. 40%
    … The Dem Machine will get Hillary the nomination and if the Repugs weren’t so dysfunctional they could have beat her easily. Instead she’ll be up against Trump or Cruz and win easily… with record low turnout! But she will come into office with the highest negative ratings of any President elect in history… and it will get worse from there! The 2018 midterms will be ugly…

  209. 209
    Blurtman says:

    “— but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country.”
    ________________

    But that is the beauty of the international economy. Folks who cannot afford a home in the USA can move to China or India, where they might be able to buy. Shanghai or Beijing is likely out of reach as well, but perhaps a rural home with employment on a farming collective might hold appeal to some.

  210. 210

    RE: Blake @ 208 – It’s shaping up like 2000 when the Ds and Rs each picked the only candidate who could lose to the other party. The primary process is and has been severely broken for years.

  211. 211
  212. 212
    pfft says:

    Bernie was born and raised in Brooklyn. NY is his home state. Can’t you hear that accent?

    Bernie certainly doesn’t cry when he wins the caucuses. They are by far the least democratic ways of electing someone and Bernie owns those. You don’t hear about a rigged system then though…wonder why?

    “Yes, Bernie won most of the counties in NY… look at this map”

    who cares? It’s about the popular vote. Also most counties in NY are conservative because nobody lives in them. Hillary still easily won the popular vote by nearly 20%. So when Bernie wins conservative areas of NY that’s good but not so much when Hillary wins conservative parts of the US?

    Anyone see that Drumpf lost Manhattan? LOL.

  213. 213
    pfft says:

    “In a Presidential election how a candidate does in big cities isn’t all that critical because cities will almost always go heavily Democrat. So it’s not really a test of anything.”

    it’s not a big deal to win cities that are major population centers and therefore can sway an election? Remember that this is NY we are talking about. A Dem will win NY so it doesn’t matter. Anyways remember this is primary election not a general.

    Hillary is going to be the Dem nominee and the next president.

  214. 214
    pfft says:

    By Kary L. Krismer @ 210:

    RE: Blake @ 208 – It’s shaping up like 2000 when the Ds and Rs each picked the only candidate who could lose to the other party. The primary process is and has been severely broken for years.

    What are you talking about? Hillary easily beats Cruz and Drumpf according to polling.

  215. 215

    RE: pfft @ 214 – All three of those are weak candidates. Most Democrats were afraid to run against Hillary for reasons I don’t understand (she has a ton of baggage and isn’t likeable in the least). And the Republicans had some 20 odd weak candidates.

    I’ve come to the conclusion that no one good wants the job anymore.

  216. 216
    Blurtman says:

    By Kary L. Krismer @ 211:

    RE: Blurtman @ 209https://www.youtube.com/watch?v=-KTsXHXMkJA

    Poetry, and perhaps prophetic.

    “Well you’ll work harder
    With a gun in your back
    For a bowl of rice a day
    Slave for soldiers
    ‘Till you starve
    Then your head is skewered on a stake”

  217. 217
    sleepless says:

    By pfft @ 214:

    By Kary L. Krismer @ 210:

    RE: Blake @ 208 – It’s shaping up like 2000 when the Ds and Rs each picked the only candidate who could lose to the other party. The primary process is and has been severely broken for years.

    What are you talking about? Hillary easily beats Cruz and Drumpf according to polling.

    Hitlary rotten cumton is the most corrupt of all. I am not supporting neither Rs nor Ds, I would support Gary Johnson, but c’mon. Anyone voting for hitlary scumbag? It just shows how ignorant most of the people are.

  218. 218
    pfft says:

    By Kary L. Krismer @ 215:

    RE: pfft @ 214 – All three of those are weak candidates. Most Democrats were afraid to run against Hillary for reasons I don’t understand (she has a ton of baggage and isn’t likeable in the least). And the Republicans had some 20 odd weak candidates.

    I’ve come to the conclusion that no one good wants the job anymore.

    OR perhaps Hillary is a very tough opponent? Maybe that is why no serious challenger ran against her and why she’s leading the GOP’s top two candidates? She was First Lady, Senator from NY and Sec of State. There is a reason someone like Joe Biden didn’t run. John Kaisich is relatively unknown and that is why he is doing well in polling. John is as conservative as the rest. Hillary would run against him too and win.

    Hillary is likable enough to become our next President and she will win.

  219. 219
    pfft says:

    By sleepless @ 217:

    By pfft @ 214:

    By Kary L. Krismer @ 210:

    RE: Blake @ 208 – It’s shaping up like 2000 when the Ds and Rs each picked the only candidate who could lose to the other party. The primary process is and has been severely broken for years.

    What are you talking about? Hillary easily beats Cruz and Drumpf according to polling.

    Hitlary rotten cumton is the most corrupt of all. I am not supporting neither Rs nor Ds, I would support Gary Johnson, but c’mon. Anyone voting for hitlary scumbag? It just shows how ignorant most of the people are.

    I can tell by your post that you are projecting. You call Hillary voters ignorant then call Hillary and he supporters names that elementary schoolers wouldn’t use. How old are you? You sound more like a Drumpf supporter.

    btw I get a pass for using Drumpf, that is just John Oliver being John Oliver.

  220. 220
    SFraz says:

    RE: Kary L. Krismer @ 204 – Racist? If I attempt to buy a home with 10 million cash, I will be reported for suspicious activity as a US citizen. If a foreign national buys that same home with 10.5 million cash, they are waved through the process, while I am being investigated. Due to the loophole in the Patriot Act, real estate agents and brokers aren’t required to do due diligence on who the buyers are, and it is fueling the rise of international real estate buyers in the U.S. This is money laundering. It has nothing to do with racism. Don’t pull that card out.

  221. 221
    Blurtman says:

    By sleepless @ 217:

    By pfft @ 214:

    By Kary L. Krismer @ 210:

    RE: Blake @ 208 – It’s shaping up like 2000 when the Ds and Rs each picked the only candidate who could lose to the other party. The primary process is and has been severely broken for years.

    What are you talking about? Hillary easily beats Cruz and Drumpf according to polling.

    Hitlary rotten cumton is the most corrupt of all. I am not supporting neither Rs nor Ds, I would support Gary Johnson, but c’mon. Anyone voting for hitlary scumbag? It just shows how ignorant most of the people are.

    A lot of Bernie supporters will not vote for Clinton, independents and Democrats alike. I haven’t met any that said they’d vote for Trump, either. Many are idealists and committed to The Revolution. Bread and Freedom for All!

    So turnout for Hillary will be less than optimal. If Trump can engineer a larger turnout, we’ll have Trump Supreme Court picks. Doesn’t Jerry Springer have a law degree?

  222. 222
    pfft says:

    By SFraz @ 219:

    RE: Kary L. Krismer @ 204 – Racist? If I attempt to buy a home with 10 million cash, I will be reported for suspicious activity as a US citizen. If a foreign national buys that same home with 10.5 million cash, they are waved through the process, while I am being investigated. Due to the loophole in the Patriot Act, real estate agents and brokers aren’t required to do due diligence on who the buyers are, and it is fueling the rise of international real estate buyers in the U.S. This is money laundering. It has nothing to do with racism. Don’t pull that card out.

    In their defense, they are just used home sellers for the part!

  223. 223
    pfft says:

    I take it all back. Warren for president.

    Warren Unimpressed With ‘Sacrifices’ Cruz Has Made For 2016 Run: ‘Boo Hoo’
    http://talkingpointsmemo.com/livewire/elizabeth-warren-ted-cruz-sacrifices

  224. 224
    SFraz says:

    RE: pfft @ 220 – Those used house salesmen, with their heavy lobbying, ensured their exemption from the final regulations requiring due diligence checks on their customers in the 2001 Patriot Act.

  225. 225
    sleepless says:

    By pfft @ 221:

    I take it all back. Warren for president.

    Hitlary for prison 2016!!!

  226. 226
    sleepless says:

    By pfft @ 218:

    By Kary L. Krismer @ 215:

    RE: pfft @ 214 – All three of those are weak candidates. Most Democrats were afraid to run against Hillary for reasons I don’t understand (she has a ton of baggage and isn’t likeable in the least). And the Republicans had some 20 odd weak candidates.

    I’ve come to the conclusion that no one good wants the job anymore.

    OR perhaps Hillary is a very tough opponent? … Hillary is likable enough to become our next President and she will win.

    It just shows how ignorant you are. I wonder how she can even run for a president, she is a corrupt traitor responsible for thousands of deaths. I guess the sheeple get what they deserve.

  227. 227
    pfft says:

    By sleepless @ 224:

    By pfft @ 218:

    By Kary L. Krismer @ 215:

    RE: pfft @ 214 – All three of those are weak candidates. Most Democrats were afraid to run against Hillary for reasons I don’t understand (she has a ton of baggage and isn’t likeable in the least). And the Republicans had some 20 odd weak candidates.

    I’ve come to the conclusion that no one good wants the job anymore.

    OR perhaps Hillary is a very tough opponent? … Hillary is likable enough to become our next President and she will win.

    It just shows how ignorant you are. I wonder how she can even run for a president, she is a corrupt traitor responsible for thousands of deaths. I guess the sheeple get what they deserve.

    She is going to be a great President. To say she is corrupt or a traitor is the height of ignorance. Yes she made a bad choice in her Iraq War vote but 60% of Americans supported the war. Anti-war people were called traitors not the other way around. Hillary didn’t run the Iraq War. Bush frucked that up.

    Did Bernie give 6 figure speeches and give that money to charity like Hillary did? All of her speech money for the Goldman year was given to charity. Isn’t that what Bernie wants? She took money from the rich and gave it to the very poorest people in the world. There are probably tens of thousand of Libyans who are alive because of her diplomacy. Maybe hundreds of thousands if you compare Libya to Syria.

    Bernie voted to deregulate swap and derivatives. He voted for gun manufacturer immunity. He didn’t even know how he’d break up the big banks. Everyone has their strengths and weaknesses.

    U mad bro?

  228. 228
    Liz says:

    If Harry Dent says it, you can pretty much bet it will not happen.

  229. 229
    redmondjp says:

    RE: pfft @ 218 – Hmmm, pffft reappears, talking about (surprise) Hillary Clinton, not local housing – did you get another check from George Soros? How much do you get paid per comment?

  230. 230
    pfft says:

    By redmondjp @ 229:

    RE: pfft @ 218 – Hmmm, pffft reappears, talking about (surprise) Hillary Clinton, not local housing – did you get another check from George Soros? How much do you get paid per comment?

    hey it’s been awhile since we’ve had someone claim soros pays me. you guys are slipping. I guess nobody could possibly support Clinton, except for the fact that she has a 73% chance of being elected president according to betfair and millions have voted for her.

    you live in a bubble and you’re mad bernie bro!

    http://www.oddschecker.com/politics/us-politics/us-presidential-election-2016/winner

  231. 231
    Blurtman says:

    “Did Bernie give 6 figure speeches and give that money to charity like Hillary did? All of her speech money for the Goldman year was given to charity. Isn’t that what Bernie wants? She took money from the rich and gave it to the very poorest people in the world. ”
    ———–
    What a twit! Charity = The Clinton Foundation.

    “Mrs. Clinton’s financial disclosure forms show that she reported personal income of more than $11 million for 51 speeches in 13 months. Yet she has not defined how she and Mr. Clinton decide which fees are personal income and which go directly to charity. Normally, the IRS doesn’t let taxpayers pick and choose. But this is no normal family, nor is it a normal charity.

    The Bill, Hillary, and Chelsea Clinton Foundation admitted collecting $26.4 million in previously unreported speaking fees from foreign governments, foreign and U.S. corporations. For tax purposes, who is the recipient, and how late can the Clintons decide?

    http://www.forbes.com/sites/robertwood/2016/02/09/hillarys-wall-street-speech-fees-hers-or-clinton-foundations/#1e4a20e36232

  232. 232
    Sony Exec says:

    RE: softwarengineer @ 174

    Everyone that thinks Seattle is going to boom like San Francisco is sorely mistaken.

    There is a major glaring omission in this logic. In San Francisco, property taxes are locked at purchase price — here in Washington State the taxes keep climbing and climbing fast.

    Yeah the all cash buyer is going to plop down and hope the property still gains value, but on that sudden 3M valuation, they get to pay taxes on it. Welcome to reality and there isn’t a hope that the overwhelming amount of renters in Seattle are going to allow locking up property taxes like California. It’s dumb and benefits a small portion of tech businesses and the wealthy.

    These foreign investors are being duped and the people flocking to Seattle more so, but buyer beware. Know what you are getting into — I think there is way to much speculation and shady business in the market up here because of many reasons, one being — where else are the wealthy getting returns on inflation? Nowhere. Of course they’ll do anything to encourage inflation in real estate!

    If you are an exec at Amazon — it’s a no brainier that they would buy real estate in private purchases before announcing more buildings for offices. It’s a scam — plain and simple and Millenials and renters are paying the price.

    So the downward pressure will be property tax and the real estate committees, firms, organizations and more will use PR to pull out all the stops to solve the property tax problem that will put a ceiling on double digit gains YoY and MoM. But they have an opponent just as skilled in PR as they are and its on!

    Game on!

  233. 233
    pfft says:

    By Blurtman @ 231:

    “Did Bernie give 6 figure speeches and give that money to charity like Hillary did? All of her speech money for the Goldman year was given to charity. Isn’t that what Bernie wants? She took money from the rich and gave it to the very poorest people in the world. ”
    ———–
    What a twit! Charity = The Clinton Foundation.

    “Mrs. Clinton’s financial disclosure forms show that she reported personal income of more than $11 million for 51 speeches in 13 months. Yet she has not defined how she and Mr. Clinton decide which fees are personal income and which go directly to charity. Normally, the IRS doesn’t let taxpayers pick and choose. But this is no normal family, nor is it a normal charity.

    The Bill, Hillary, and Chelsea Clinton Foundation admitted collecting $26.4 million in previously unreported speaking fees from foreign governments, foreign and U.S. corporations. For tax purposes, who is the recipient, and how late can the Clintons decide?

    http://www.forbes.com/sites/robertwood/2016/02/09/hillarys-wall-street-speech-fees-hers-or-clinton-foundations/#1e4a20e36232

    forbes? no breitbart or zero hedge? forbes is joke. It’s all about Vanguard. They’ll never give liberal a fair deal. their analysis doesn’t really make sense. you can give all of your income to charity but not all of it will be deductible no doubt.

    She’s going to make a terrific fabulous president. we’ll have so much winning.

    who are you supporting for President? LIke I posted, Bernie has made a mistake or two. He was never a democrat until he wanted to run for president. I am saying this and I love Bernie. He’s an adorable crank who was a great MSNBC guest.

  234. 234
    Som says:

    This explains the frenzy in Eastside:
    https://public.tableau.com/shared/45QHPF8SP?:display_count=yes&:showVizHome=no

    Look at yoy chart

  235. 235
    redmondjp says:

    RE: pfft @ 230 – I don’t live in a bubble. I think Hillary will be the next president. What I don’t understand is why you have to come on a real estate blog and shill for her so hard, if she has such good chances of winning. Logical explanation? You are getting paid to do so.

  236. 236
    Warren Hutch says:

    It’s interesting that those of you who already own homes praise the foreign investment money coming into the Seattle and Puget Sound market because it makes you feel richer, be damned the working families who are trying to actually support their communities but aren’t paid well enough, such as teachers, nurses, firefighters, and police officers…

    Seems like we need higher investor real estate taxes.

  237. 237
    Blurtman says:

    RE: Warren Hutch @ 235 – Hi Warren, I’ve lived in areas where I could not afford to buy a home, either because I wasn’t making enough money, or the home prices were ridiculous. Folks who owned homes there were likely very happy that RE prices had gone up over time. With regards to teachers, firefighters and police officers, they receive something that we are all paying for that most folks do not receive – a pension and the potential for a relatively early retirement. If folks would like to make more money, sometimes a career change, going back to school, etc., are ways to get there. Everything is a trade-off.

    “Bronoske and McGovern retired in their mid-50s, and they are now drawing more than $150,000 pensions every year.

    Hull’s pension is $184,000 annually. He has separately taken a job as the fire chief in the small Pierce County ­ city of DuPont — hired as a “contractor” in a way that doesn’t disrupt his retirement payments — bringing his total current compensation to over $300,000.”

    http://www.seattletimes.com/seattle-news/state-feels-bite-of-workers-pension-spiking/

  238. 238
    Anonymous Coward says:

    RE: Warren Hutch @ 235 – Won’t higher investor taxes just lead to increased rent and/or less maintenance on rental properties? Seems to me, if the goal is to lower the cost of housing, killing the design review process would be a great place to start. Does the design meet the zoning requirements? Does the preliminary design meet the applicable building codes? Yes and yes? Here’s your permits, knock yourself out.

  239. 239
    David B. says:

    RE: redmondjp @ 229 – Since anyone who participates in off-topic political arguments here must by your “logic” (I use the term loosely here) be a paid shill, who’s paying you?

  240. 240
    David B. says:

    RE: Warren Hutch @ 235 – Has the host of this blog “praised” foreign investors? Have I? We both own our own homes. Personally, I’d be very pleased if this market became more balanced between buyers and sellers.

    Stereotype much?

  241. 241
    AJT says:

    RE: Warren Hutch @ 235

    With the slowing of the Chinese economy and increase in capital outflow regs and drop in the RMB some of the monies in the pipeline may be decreasing. May take some time to trickle down but once all the money that got out of the country is spent…..? . If that happens prices will stabilize. Keep your eye on the margins for the first signs of a change.
    http://www.bizjournals.com/seattle/news/2016/04/20/bellevue-broker-sees-definite-slowdown-of-chinese.html

  242. 242

    By pfft @ 218:

    OR perhaps Hillary is a very tough opponent?

    Yes, I hear she did very well in 2008. /sarc

  243. 243

    By SFraz @ 220:

    RE: Kary L. Krismer @ 204 – Racist? If I attempt to buy a home with 10 million cash, I will be reported for suspicious activity as a US citizen. If a foreign national buys that same home with 10.5 million cash, they are waved through the process, while I am being investigated. Due to the loophole in the Patriot Act, real estate agents and brokers aren’t required to do due diligence on who the buyers are, and it is fueling the rise of international real estate buyers in the U.S. This is money laundering. It has nothing to do with racism. Don’t pull that card out.

    How about citing something credible that actually says that? For about the third time, there is no due diligence for anyone. Banks and other entities have reporting requirements for large sums of cash, but when we’re talking about cash buyers that’s not what we’re talking about. Cash buyers typically (always) have large sums deposited in financial institutions.

    That said, there may be rules regarding transferring money from a foreign financial institution to a US institution. I really doubt foreigners are excluded from such a process.

  244. 244

    By redmondjp @ 234:

    RE: pfft @ 230 – I don’t live in a bubble. I think Hillary will be the next president. What I don’t understand is why you have to come on a real estate blog and shill for her so hard, if she has such good chances of winning. Logical explanation? You are getting paid to do so.

    You don’t understand? I can help you with that. The explanation is simple. He’s a troll.

  245. 245

    By David B. @ 239:

    RE: Warren Hutch @ 235 – Has the host of this blog “praised” foreign investors? Have I? We both own our own homes. Personally, I’d be very pleased if this market became more balanced between buyers and sellers.

    Stereotype much?

    If anything it’s been the opposite of praise. It’s bordered on racist, and probably crossed that border a few times.

  246. 246
    ESS says:

    By AJT @ 240:

    RE: Warren Hutch @ 235

    With the slowing of the Chinese economy and increase in capital outflow regs and drop in the RMB some of the monies in the pipeline may be decreasing. May take some time to trickle down but once all the money that got out of the country is spent…..? . If that happens prices will stabilize. Keep your eye on the margins for the first signs of a change.
    http://www.bizjournals.com/seattle/news/2016/04/20/bellevue-broker-sees-definite-slowdown-of-chinese.html

    ————————————————————————————————————————-

    There may be a temporary slowdown of Chinese investment, but as the article indicates, it will never totally dry up. And the examples that were provided were for multi million dollar houses. Perhaps there will be heightened interest in less expensive housing in other parts of Puget Sound. In Vancouver, the example of heavy foreign investments, middle class housing in cities such as Richmond BC were also targets for foreign purchases.

    So remember, every time we purchase goods made in China, we are also indirectly strengthening the local real estate market. That at least provides some comfort to the plethora of goods coming from China.

  247. 247
    redmondjp says:

    By David B. @ 238:

    RE: redmondjp @ 229 – Since anyone who participates in off-topic political arguments here must by your “logic” (I use the term loosely here) be a paid shill, who’s paying you?

    – If you must know, it’s the federal government. For real!

  248. 248
    AJT says:

    RE: ESS @ 245

    Won’t dry up but can slow to a trickle if they can’t get their money out.
    http://abovethelaw.com/2016/03/getting-money-out-of-china-good-luck-with-that/

    The foreign money doesn’t have to completely dissolve to alter the demand side of the equation. If demand from Chinese buyers is curtailed that can calm the frenzy that’s out there currently. Also there has been some chatter of Chinese buyers purchasing our “middle class” homes in the Puget sound area not just high end.

  249. 249
    ESS says:

    It isn’t only the high end housing that is being purchased by overseas buyers, and it isn’t only in the US. Will the less expensive areas of Puget Sound be targeted by overseas buyers? Tune in!!

    http://www.dailymail.co.uk/news/article-2657470/The-REAL-reason-children-afford-buy-house-How-Chinas-middle-classes-snapping-British-homes-Liverpool-Croydon-theyre-built.html

    And to quote one part of the article ——-

    Didn’t she feel any sympathy for the many Britons being priced out of the market by absentee investors from overseas, I asked her.

    She glared at me incredulously. ‘No! Why? There are always ways to save if they really want to,’ she snapped. ‘Be frugal! Work out your finances! Cut down your drinking on Friday nights! Quit smoking! Take fewer holidays!

    ————————————————-

    Not bad advice for many. especially the younger people in the Puget Sound area that complain that housing is too expensive. Actually, for a world class city such as Seattle, housing is relatively inexpensive compared to other world class cities, and some of our suburbs are downright affordable. Everyone has choices in life – it is a matter of which path one chooses to glide down on.

  250. 250

    RE: David B. @ 179
    It Worked for Me

    Its the old axiom….a bird in the “full offer” hand….if a seller stalls on accepting bids, you’re dealing with a crook….move on to a different seller….that one’s too greedy…

    I’d laugh too if the seller stalls and only gets unqualified bidders afterwards….delaying a sale…hey, you can afford to pay for the flip palace place another few months….LOL

    Banks don’t like giving out blank check loans…

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