NWMLS: Mostly Bad News For Buyers In October

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October market stats were published by the NWMLS this morning. They haven’t posted their press release yet, so I don’t have the usual excerpt from that. Let’s take a look at the numbers.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

October 2016 Number MOM YOY Buyers Sellers
Active Listings 3,025 -18.2% -1.3%
Closed Sales 2,514 -0.1% +9.3%
SAAS (?) 0.90 -25.8% -14.3%
Pending Sales 2,829 -3.1% +5.8%
Months of Supply 1.20 -18.1% -9.6%
Median Price* $550,000 +2.2% +14.6%

September was a mixed bag, with some numbers moving in buyers’ favor, but October was pretty much all bad news for buyers. The only news that wasn’t pretty terrible for home buyers was that pending sales were down slightly in a month that often sees a slight increase in other years.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales were basically flat from September to October, and were up nine percent from a year earlier. Demand is still fairly strong.

King County SFH Pending Sales

Pending sales fell three percent in October. In eleven out of the last sixteen years, pending sales have gone up between September and October, so a slight dip is at least not terrible news for buyers. However, we saw about the same drop last year, so it’s probably nothing to get too excited about. Pending sales were still up six percent year-over-year.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Listings are back in the red from a year earlier, falling one percent from October 2015 and eighteen percent from just a month ago. Last year listings fell ten percent between September and October.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Both lines have moved back into sellers’ territory.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price gains shot back up from ten percent the past two months to nearly fifteen percent in October.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

October 2016: $550,000
July 2007: $481,000 (previous cycle high)

The Seattle Times hasn’t posted their article yet. I’ll most likely post some kind of reporting roundup on Monday with the NWMLS press release and any local stories that post over the weekend about the October data.

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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.

470 comments:

  1. 251
    Blake says:

    RE: pfft @ 244
    Praise Obama… Yesterday he decided to do the right thing in Syria… and it is likely that Trump will continue this policy.
    https://www.washingtonpost.com/world/national-security/obama-directs-pentagon-to-target-al-qaeda-affiliate-in-syria-one-of-the-most-formidable-forces-fighting-assad/2016/11/10/cf69839a-a51b-11e6-8042-f4d111c862d1_story.html?tid=sm_tw
    President Obama has ordered the Pentagon to find and kill the leaders of an al-Qaeda-linked group in Syria that the administration had largely ignored until now and that has been at the vanguard of the fight against the Syrian government, U.S. officials said.
    (end quote)

  2. 252
    ess says:

    By whatsmyname @ 246:

    RE: ess @ 241 – All good points, although I read today that some in the incoming regime would like to eliminate federal deductions where state taxes are concerned. Property tax deductions may be safe for now, but boy do things keep changing.

    With “President Elect Trump” ( a year ago if one said that one would think one was spending too much money in our newly legalized marijuana establishments), his policies are all over the board as he really doesn’t have polices but slogans. From what I can tell – Trump is in favor of lowering taxes – and eliminating those types of tax deduction will raise the cost of owning or renting a home. I guess we will have to wait and see what is in store for us. Or as they say – hope for the best – plan for the worst.

  3. 253
    pfft says:

    By ess @ 250:

    By whatsmyname @ 246:

    RE: ess @ 241 – All good points, although I read today that some in the incoming regime would like to eliminate federal deductions where state taxes are concerned. Property tax deductions may be safe for now, but boy do things keep changing.

    With “President Elect Trump” ( a year ago if one said that one would think one was spending too much money in our newly legalized marijuana establishments), his policies are all over the board as he really doesn’t have polices but slogans. From what I can tell – Trump is in favor of lowering taxes – and eliminating those types of tax deduction will raise the cost of owning or renting a home. I guess we will have to wait and see what is in store for us. Or as they say – hope for the best – plan for the worst.

    his tax plan will add between $5-10 trillion to the deficit. that’s on top of the $500 billion trump care will cost(along with the 21 millino who will lose insurance).

  4. 254
    pfft says:

    So trump talked to obama and is going to keep kids on their parents insurance and keep pre-existing condition. the mandate is gone though so people can wait until they are sick to sign up. insurance companies will get an influx of sicker customers and premiums will go through the roof to pay for it. insurance companies are going to go bankrupt. obamacare stabilized hospitals, what is trumpcare going to do?

    you guys thought obamacare was bad?

    you guys though obama was in over his head?

    will any of the people who criticized obama and obamacare at least acknowledge that trump has no idea about policy and how to run the country?

    as for the RE market, medical debts are a big part of bankruptcies and foreclosures.

  5. 255
    Blurtman says:

    RE: pfft @ 253 – We’ll see what actually gets implemented. Who knows, he can punt any real change out into the future, but that will cause a mini-revolt.

  6. 256

    RE: pfft @ 254 – I agree with you on the pre-existing conditions change, and don’t think that will stay. The parents’ insurance isn’t really a big deal as long as it requires that they stay on the insurance.

  7. 257
    Justme says:

    RE: Blake @ 251

    I’d like to thank Blake for all his good posts on this thread. Keep it up, man. Pretty much everything you wrote was spot on.

  8. 258
    Justme says:

    RE: Kary L. Krismer @ 249

    Kary, would you mind telling us exactly which plan that is? It sounds interesting.

  9. 259
    Blurtman says:

    RE: pfft @ 254 – Crazy 8 Ball says: Pharmas – good. Hospitals – bad. Insurers – Wait and see.

  10. 260
    greg says:

    RE: Kary L. Krismer @ 248

    Well Kary, what you said was prices would rise in Canada as a simple function of supply of demand.

    I absolutely 100% proved you completely WRONG….

    And once again rather than man up , you instead go off on a couple long BS rants that have NOTHING to do with your earlier statements.
    (exactly as i predicted)

    shame on you Kary.

  11. 261
    greg says:

    RE: pfft @ 253

    He will not be able to do most of what he promised, and frankly i dont think many people expect him too.

    Just as i doubt anyone really thought Hillary would really make college free for most families……

  12. 262
    ess says:

    RE: greg @ 261

    Just as i doubt anyone really thought Hillary would really make college free for most families……

    _____________________________________________________________________________________________________________

    There go my chances to get a 4th degree from college – shucks!!!

  13. 263
  14. 264
    redmondjp says:

    pfft – were you out protesting in Seattle this week? You seem to have a difficult time with following the rules.

  15. 265
    pfft says:

    By redmondjp @ 264:

    pfft – were you out protesting in Seattle this week? You seem to have a difficult time with following the rules.

    u mad bro?

    :)

  16. 266

    By Justme @ 258:

    RE: Kary L. Krismer @ 249

    Kary, would you mind telling us exactly which plan that is? It sounds interesting.

    I’m not sure what you’re asking. The first part is just how pharmacies charge. If you buy 30 pills 12 times that’s going to cost you a lot more than just buying 360 pills once.

    The rest is the typical deduction you get after your medical provider runs your bill through your insurance company. It’s been that way for decades–you pay the maximum negotiated rate that your insurer would pay even if you haven’t used up your deductible. Back when I was much younger and had a high deductible plan I think the premium was something like only $60 or $70 a month, and sometimes the savings at the doctor was greater than the cost of the insurance that month.

  17. 267

    By greg @ 260:

    RE: Kary L. Krismer @ 248

    Well Kary, what you said was prices would rise in Canada as a simple function of supply of demand.

    I absolutely 100% proved you completely WRONG….

    Yes you did. But you didn’t do as much as you think. You haven’t proven that the Canadian drug theory works. You only proved I didn’t know something specific about health care in Canada. The Canadian drug theory doesn’t work, but for a different reason, one that’s already been mentioned above, but I’ll spell it out for you.

    Before I do though, I don’t know why you think I’m an expert on specific foreign tax systems or every medical system in every country. Not something I purport to be expert in. I knew Canada had a nationalized form of medical coverage. What I didn’t know is that it doesn’t cover prescription drugs. So that means that it wasn’t simply a matter of someone from the US going to Canada and buying drugs up there the same as if they didn’t have insurance down here. In that situation the pharmacy and drug companies charging market price for such sales, while charging a negotiated price for (government) insured transactions. That’s the assumption I was working on, but it may or may not be the facts (I don’t know that the regulated prices apply to non-citizens).

    That it isn’t that fact pattern simply means the economic analysis is different. If it’s not a matter of them paying for the drugs as insurance, but instead regulating prices, that means more and greater shortages as demand increases. It’s just a different economic analysis based on slightly different facts. When you have increased demand you have to increase price. If you can’t increase price you have shortages. But either case the Canadian drug theory doesn’t work.

    But oh, I didn’t know the specifics of Canadian health care. Silly me.

    The thing is, except with generic drugs that have multiple manufacturers, the drug companies are not going to be eager to increase supply to Canada if that means fewer sales down here for more money. Their inclination will be to just keep supplying the same amount of drugs as what they have in the past and then let the Canadians figure out what to do about it. That might be to make the exportation of drugs illegal (if it already isn’t illegal–remember I’m not an expert on Candadian law).

    Totally ignoring standard economic analysis, there’s also the fact that this Canadian drug solution is also an incredibly stupid fix. What it does is move fairly decent jobs filling prescriptions from the United States to Canada. And that’s not only not a great result, it’s not a very likely result after the last election. More likely the solution will be something entirely down here in the United States.

    But hey, you caught me. I didn’t know the specifics of health care in Canada. Guess what? I don’t know the specifics of being covered by the VA or Medicare either. But that doesn’t change the fact that the Canadian drug theory is stupid.

    On a similar topic–buying insurance from out of state–that won’t work either. It used to make some sense before Obamacare because different states had different levels of minimum coverages. So you might get some savings by buying insurance from Arkansas (which I’m assuming had low coverage levels–an assumption which may not be true) rather than Washington (which did have rather high minimum coverages–something I do know). But that is gone. The rest of the cost savings would be due to medical costs being lower in some states than others, but if you open it up to interstate buying, that largely goes away, or at least will make rates rise in that other state, unless maybe the insured had to travel to that state for services.

    The point is, ignoring people traveling to buy drugs or get medical services, simply changing where you buy things isn’t going to change things. You need to fix/change the system.

  18. 268
    Eastsider says:

    Here is some pertinent information on importing Canadian drugs from our President-elect –

    https://www.donaldjtrump.com/positions/healthcare-reform

    7. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

    I hope he will do the same to the existing Real Estate Cartel.

  19. 269
    Justme says:

    Read this article. It is a much more sober analysis than the cheerleading hype from Ess and Seattle Times. It also comes with a historical perspective

    “Each morning on his way to work at City Hall, Seattle’s budget director Ben Noble bikes past two under-construction office towers. Both are slated for completion next year, Noble says, and both ‘are going to deliver a lot of product to the market.’ But he adds, neither building is ‘fully leased, by any means.’ The city isn’t anticipating a repeat of 2008, when the financial crisis caused construction to grind to a halt. The new forecast, issued by Noble’s office in late September (and echoed by King County and several private forecasters) predicts a soft landing: a nine percent decline in construction through 2019, coupled with an even more modest cooling in the city’s broader economy.”

    “While economists start to get nervous when booms stretch past the historic average (around eight years), the opposite is true for most people. The longer the good times keep rolling, the easier it is to buy into the fantasy that they’ll keep rolling, that our tech-fueled economy is, somehow, becoming untethered from national trends and historic cycles. Or as the recent Delta Airlines ad insists, ‘You can’t stop Seattle.’”

    “Arguably, agglomeration is even a stronger force today. It also helps explain why developers have been pumping out new office space — and why they’re so confident that housing demand will remain high. According to real-estate market analyst Dupree Scott, developers expect to bring another 25,000 rental units online by 2019. While wages have been soaring (3.6 percent annually in the Seattle metro area) they’re not rising nearly as fast as rents (9.7 percent) or home prices (11.8 percent). ‘You see rents growing at 15 to 20 percent over the last two years, but show me where incomes have gone up to match,’ says Mathew Gardner, chief economist at Windermere. ‘They haven’t.’”

    http://features.crosscut.com/seattle-tech-economy-recession-vulnerability-boom-bust

  20. 270
    jon says:

    I hope that Trump’s understanding of the benefits of open markets in the case of drugs will someday extend to all products.

  21. 271
    Eastsider says:

    RE: Justme @ 269

    The last time we had so many construction cranes in the area, we saw the collapse of local real estate. Seattle now has the most construction cranes among US cities…

    In the past week, FANG (tech) stocks have declined bigly even as broader stock market gained ground. Given that Seattle economy has been dependent on tech, the stock market reaction does not bode well for the region.

  22. 272
    whatsmyname says:

    By Justme @ 269:

    “While economists start to get nervous when booms stretch past the historic average (around eight years), the opposite is true for most people.

    Surely this boom does not date back to 2009. Or 2010, 2011, or 2012 – at least so far as SFR’s are concerned. This information seems too optimistic. It suggests that based on averages, we should worry about house prices…….. in about 4 years.

  23. 273
    Justme says:

    RE: whatsmyname @ 272

    >>Surely this boom does not date back to 2009.

    Sure it does. That is when the reflation cycle of ZIRP and QE got started in earnest. Must people just don’t notice until prices surpass the previous bubble peak.

  24. 274
    whatsmyname says:

    RE: Justme @ 273
    No; the timepoint of taking stimulative action in a recession is not the same as “boom’. That is still recession. Additionally, housing is a bit of a laggard. For like things, you want to compare like things. On a real estate analysis, you want to focus on the real estate. This very post has charts showing that Seattle houses weren’t reflating until 2012. Certainly, by comparing unlike things, you can make four years into eight years. This will not give you a sound decision basis, though. I’ll confess that another four years does seem excessive to me too, so maybe the eight year average boom argument is not a good one at this time. But it really is not a good one for seeing a near term housing gloom.

  25. 275

    By whatsmyname @ 274:

    This very post has charts showing that Seattle houses weren’t reflating until 2012.

    But the stats are skewed by the distressed sales. I’d have to look up when the non-distressed median started rising.

  26. 276
    whatsmyname says:

    RE: Kary L. Krismer @ 275 – In the interests of accuracy, I think that would be a good idea. In terms of general representation, I feel confident that “the stats are skewed by the distressed sales” at least roughly translates as “not a boom”.

  27. 277
    Justme says:

    RE: whatsmyname @ 274

    Listen, if you insist on being retarded about the meaning of words, then no-one can stop you.

  28. 278
    whatsmyname says:

    RE: Justme @ 277
    Please straighten me out on which words I am retarded about, and what they really mean.
    Thank you so much,
    WMN

  29. 279
    Eastsider says:

    10yr Treasury just hit 2.25% this morning. This was from a low of 1.79% on 11/4. This is a 25% swing in rates in just 10 days! The expected December FED rate hike of .25% now appears to be far behind the curve. Potential homebuyers will be shocked at the drastic increase in mortgage rates. Even cash buyers will likely pull back due to the volatility.

    Edit – Just saw this WSJ article:

    The Mortgage Market Is Changing Fast
    http://www.wsj.com/articles/the-mortgage-market-is-changing-fast-1479080808

    Depending on how far that runs, higher rates could arrest further gains in home prices. While prices have shot up in many U.S. housing markets over the past couple of years, superlow mortgage rates have kept higher prices within reach of many borrowers.
    “The ultimate problem is the impact of rising rates on home values,” said Stu Feldstein, president at SMR Research Corp., a mortgage-research firm. “We’re back into a bubble condition in part because of low rates that have enabled people to buy houses much more expensive than their incomes could afford.”
    He said his firm expects that by the end of 2017 rising rates will have contributed to home values declining in about one-third of the U.S.

  30. 280
    Brian says:

    Hmm, well I was about to stretch my budget to make an offer on a place, but now mortgage rates have gone up .25 to .5% (predicting 4% 30yr rates soon based on rising bond yields). My estimated monthly payment has gone up by 4%, so I’m not sure I’m going to make that offer now. FANG stocks are all taking a hard hit today still.

    I really liked the place… consider me bummed. Knock 4% off the home price to compensate for the higher mortgage rate and I’ll be interested again.

  31. 281
    Doug says:

    RE: Brian @ 280 – Don’t worry. The 40% crash is now all but guaranteed, just wait a little bit longer.

  32. 282

    By whatsmyname @ 276:

    RE: Kary L. Krismer @ 275 – In the interests of accuracy, I think that would be a good idea. In terms of general representation, I feel confident that “the stats are skewed by the distressed sales” at least roughly translates as “not a boom”.

    But the term wasn’t “boom” it was “reinflating.” So the issue is, when did that really start.

    Unfortunately the tool I use to look at non-distressed isn’t the same as the NWMLS system, so it’s not that easy for me to check it out, and I don’t really have the interest right now. What I will say is that in April 2012 I wrote a blog piece about how the market had changed in a manner that allowed homeowners to safely buy first and then sell. So I suspect the “reinflating” occurred prior to then, but I may be wrong about that. I do remember the non-distressed median was at $400,000 +- $25,000 for quite some time.

  33. 283
    greg says:

    RE: Kary L. Krismer @ 267

    No Kary.

    The “point” is once again you rather than just let it go and accept you are wrong, you start a whole new bunch of talking points that directly conflict with your original statements.

    Kary stick to RE, you make a complete fool of yourself when you talk about things outside of RE….

  34. 284
    whatsmyname says:

    RE: Kary L. Krismer @ 282 – Look higher. This conversation is about getting nervous because booms typically don’t last more than eight years. Midway through JM has inserted a fanciful beginning of the “reflation cycle” for start of boom. I don’t buy that. Boom is an exuberant term referring to large and rapid expansions.

    But if I did, I would still have problems with the math. To make things really simple, I will subtract 8 from 2016 so that I may ask: does anybody think that 2008 was the beginning of an economic boom? A real estate boom? If so, why did we call it the great recession?

  35. 285

    RE: Kary L. Krismer @ 211
    Kary I Know You Have Ethics

    I’d vote for you….most immigration attorneys and judges are feeding off overpopulation like drain the swamp pigs gobbling up bribes…

    They need a new job, protecting legal American citizens from overpopulation….the ACLU for amnesty included.

  36. 286

    Sanctuary City Seattle Under Trump’s “You’re Fired” to the NWO

    They could lose emergency federal disaster bailouts after floods and earthquakes, etc…

    Is it worth this “progressive” risk for anarchy against laws on the books?

  37. 287
    Screenname345 says:

    By Brian @ 280:

    Hmm, well I was about to stretch my budget to make an offer on a place, but now mortgage rates have gone up .25 to .5% (predicting 4% 30yr rates soon based on rising bond yields). My estimated monthly payment has gone up by 4%, so I’m not sure I’m going to make that offer now. FANG stocks are all taking a hard hit today still.

    I really liked the place… consider me bummed. Knock 4% off the home price to compensate for the higher mortgage rate and I’ll be interested again.

    Why not look into an ARM then? The FANG stock drop is a buying opp, give it a few weeks though to see if there is a firm bottom. This is just money rotating from one hot sector to another. Investors in financials, materials, biotech etc are pretty happy over the last week.

  38. 288
    Eastsider says:

    By Brian @ 280:

    Hmm, well I was about to stretch my budget to make an offer on a place, but now mortgage rates have gone up .25 to .5% (predicting 4% 30yr rates soon based on rising bond yields).

    The 30yr rate is already at 4% this morning. LOL. (It should really be at 4.1% based on historical model.) Perhaps 4.5% to 5% in 2017 is not too far-fetched.

  39. 289
    Eastsider says:

    By Screenname345 @ 287:

    Why not look into an ARM then? The FANG stock drop is a buying opp, give it a few weeks though to see if there is a firm bottom. This is just money rotating from one hot sector to another. Investors in financials, materials, biotech etc are pretty happy over the last week.

    I strongly advise against ARM if the long term rate is trending higher.

    I also advise against speculating in FANG if you believe they are in bubble territory. When the bubble pops, you’ll need real earnings to justify prices.

  40. 290
    Screenname345 says:

    RE: Eastsider @ 289 – Maybe. I bought my house with an arm when I moved to Seattle. Then did a refi when rates were lower. Rates are going to keep rising if the economy is improving which is the current assumption. If it doesn’t then rates will just drop again. As for FANG stocks, FB is growing 50% year over year. That is the one I want to buy. You are clearly a bear on everything so no use going back and forth I guess. Good luck.

  41. 291

    RE: greg @ 283 – Nice non-response to a single point.

    I’m glad you get your jollies pointing out I don’t know everything about every country in the world. Other than that, you’ve accomplished nothing, and in this case you didn’t even prove me wrong before the Canadian system was pointed out and the analysis corrected.

    Now when you actually have a valid understanding of how things work in the world maybe you can come back here and say something productive.

  42. 292
    Mikitan says:

    By Kary L. Krismer @ 203:

    RE: Eastsider @ 202 – That’s probably due to our insurance system, not monopoly. Unless maybe Japan doesn’t license doctors. (Actually, I doubt that’s even true, unless MRI machines are now a lot cheaper than what they were.)

    I hate to be off topic, but here is some background why their MRIs and many other expensive exams are cheaper. Japanese doctors need to be licensed by Federal level medical board to practice, by the way.

    Japanese government sets the price ceiling of every medical procedure because of single-payer healthcare system. The exams like MRIs, CT scans etc are priced very low. To get that price point, medical providers need cheaper equipment. As a result, there are domestic medical equipment manufactures to make more simplified and cost efficient machines to supply. The manufactures sell more quantities in Japan so that even small clinics have MRI machine in house. On the other hand, GE, for example, only make very luxury expensive “state-of-art” MRI machines to US market. USA prohibits imports those cheap ones from Japan. So it’s not monopoly, but more like oligopoly.

    I know this because I am Japanese and grew up there. I hate to see any misunderstanding of medical/insurance talks about Japan or any other developed countries that have much better system and access than USA. Sorry for the off-topic reply.

  43. 293
  44. 294
    Brian says:

    RE: Eastsider @ 288

    The rise from 3.5% to 4.0% equates to an over 4% gain in home prices in a week.

    For example, for a $2000/mo payment budget:
    $435K house w/ 20% down @ 3.5% = $1998/mo
    $415K house w/ 20% down @ 4.0% = $2000/mo

    435/415 = +4.8% in just one week!

    Major bummer.

  45. 295
    Andrew says:

    RE: Brian @ 293 – thanks for spelling out the numbers for untrained mind (i.e. yours truly). Follow up question, and collective wisdom we have here in this site, what are the likely scenarios that play out if interest rates keep climbing also considering that not all potential buyers in our area are dependent much into leverage?

  46. 296
    Doug says:

    RE: Andrew @ 294 – Long term it’s obviously bad for prices assuming that most people have to finance their home.

    Short term, I believe it will create a panic and increased competition as buyers all rush for the low mortgage rate train before it leaves the station.

  47. 297
    jon says:

    It’s not that house prices went up, but rather the amount of house that a given payment can afford went down. That would obviously tend to lower prices. On the other hand, if the rise in interest rates is a response to expectation of inflation, due to an impending trade war for example, then long term assets become an attractive investment, which would tend to draw demand into real estate.

  48. 298
    Blake says:

    By Eastsider @ 268:

    Here is some pertinent information on importing Canadian drugs from our President-elect –

    https://www.donaldjtrump.com/positions/healthcare-reform

    7. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

    Boy if you really believe that Trump will allow cheap Pharma imports to gouge American Pharma’s insane profits then you really are the rube that Trump thinks you are!!! (Trump thinks people are idiots, so he treats them with contempt and tells them anything he thinks they want to hear… then changes it later.)

    Many people that voted for Trump hated him… so they will not be too surprised. But I find too many Trump voters act surprised when I ask them” “You know he’s a con man right?”
    Mexican border wall – NOT GONNA HAPPEN!
    Deport 11 million illegals – NOT GONNA HAPPEN!
    Allow cheap Rx imports – NOT GONNA HAPPEN!

    You can go through that contract and start crossing things off now Trumpins… SORRY!
    He’s a sleazy lying politician who is in it for the money! Get used to it…

  49. 299
    ess says:

    RE: Brian @ 293

    Plus the loss of the money used for the down payment for the house – don’t forget to add amount into the costs.
    For example, if mortgage rates are going up, so are bond rates as an alternative investment. And if one is going to put 20% down on half a million dollar house – that is one hundred thousand dollars that is lost to other investments. So the loss of the use of the money increases as rates go up.

  50. 300
    StupidLifeDecisions says:

    By Doug @ 295:

    RE: Andrew @ 294 – Long term it’s obviously bad for prices assuming that most people have to finance their home.

    Short term, I believe it will create a panic and increased competition as buyers all rush for the low mortgage rate train before it leaves the station.

    RE: Doug @ 295

    You forgot about the all cash buyers. If housing prices were to decline because of higher interest rates, they get to buy at a cheaper price, so in that scenario, non-cash buyers would continue to be squeezed out assuming the cash buyers are still buying.

  51. 301
    Brian says:

    RE: StupidLifeDecisions @ 299

    Sounds like lose-lose for first time home buyers.

  52. 302

    I don’t know how many of you watch Shark Tank, but this week it had a real estate lockbox.

    https://www.toor.today/

    This would actually be a good product for someone like Craig Blackmon, although I’m not sure of the economics (whether the subscription is $100 a month per agent or per lockbox). The reason–it’s not connected to a MLS so it would allow him to have and control lockboxes on his listings (I’m assuming he can’t do that now because although the lockbox would work for agents getting the key, I don’t think he would be able to put the key in the box or program its hours of operation–maybe Craig can fill us in on that). But it would also be good because it allows consumers to access the box without an agent, assuming the seller gives that permission (without knowing how the company screens buyers, I certainly wouldn’t allow that on my house).

    But what was most interesting about the episode was the hostility between the sharks. One was claiming there was really nothing new about the product, and he was right except for the fact that a motor opens and closes the compartment, rather than a spring and latch mechanism. But the ones that bought into it seemed to think that it’s real estate firms that selects the type of boxes, as opposed to the MLS entities. I’d be surprised if that’s the case anywhere. And the one shark that is in the real estate industry seemed to be most impressed by how the box offered access to a key–very odd. The one shark who didn’t think it was new wished the others “good luck getting your money back.” I think he’s right–they’ll need it.

    Anyway, having looked at the products available a couple of years ago I could see there would be some market for this, but it’s not a huge advance. The current Supra boxes used by the NWMLS do everything this box does except allow consumer access, and except the motorized opening. What the Supra boxes don’t do, even though they are only two years old, is adjust for daylight savings time! That’s pretty pathetic, but Supra doesn’t give a crap about agents. And that’s why there could be an opening for this product.

  53. 303
    Blurtman says:

    Buy now, or be priced out forever!!!!
    —–
    Panic in housing market as Trump effect pushes mortgage rates to 4%

    More selling in U.S. bond markets Monday pushed mortgage rates to a psychological breaking point.

    The average contract rate on the popular 30-year fixed mortgage hit 4 percent, according to Mortgage News Daily, a level most didn’t expect to see until the middle of next year. Rates have now moved nearly a half a percentage point higher since Donald Trump was elected president.

    “The situation on the ground is panicked. Damage control,” said Matthew Graham, chief operating officer of Mortgage News Daily. “People were trying to lock loans quickly last week and are now facing a tough choice to lock today or hope for a bounce. Many hoped for a bounce last week heading into the long weekend and we obviously didn’t get it.”

    Mortgage rates follow loosely the yield on the 10-year Treasury bond. That yield on Monday hit the highest level since December, as investors flooded the stock market and pulled out of the bond markets. The runup on stocks is backed by a belief that the Trump administration will be a boon to the economy overall and the banking sector specifically.

    Higher mortgage rates, however, will throw a wrench into an already shaky housing recovery. Home prices have been rising dramatically in the past few months, largely due to a lack of homes for sale. During housing’s recovery from the worst crash in history, historically low mortgage rates allowed prices to gain quickly and, more recently, to rise far faster than both income and employment growth.

    Economists at the Mortgage Bankers Association are now predicting that rates will, “trend higher than we had previously forecast, which will more quickly decrease refis.” They still predict a strong home purchase loan market, but they say they will have to “assess the impact of policies as they are rolled out with respect to overall growth and housing market implications.”

    http://www.cnbc.com/2016/11/14/trump-effect-pushes-mortgage-rates-to-4.html

  54. 304
    ess says:

    http://www.bloomberg.com/news/articles/2016-11-14/world-s-biggest-real-estate-binge-is-coming-to-a-city-near-you

    Seattle gets honorable mention in article regarding overseas buying of real estate!

  55. 305

    The times is running an article on the graying of homeowners in King County.

    http://www.seattletimes.com/seattle-news/data/king-county-homeowners-getting-a-lot-grayer/

    That could be a good sign for inventory over the very long run as people move out of state after retiring. It’s too bad though they don’t dig up data further back than 2005. I’d like to know that data back to at least 1975.

    Don’t miss the second graph which shows number owner occupied homes vs rental homes. It’s hidden.

  56. 306
    Erik says:

    RE: Blurtman @ 78
    I’m closing in on Sammamish real estate. Once I rack up enough properties in the ghettos, I’m going to cash them in and move in next to you.

  57. 307
    Action says:

    RE: StupidLifeDecisions @ 299
    Yep, rising rates are bad for leveraged buyers but I don’t think it will necessarily cause a drop in prices.

    For one, higher inflation will make real estate more attractive for cash buyers looking for an inflation hedge, or foreign investors wanting to get their money out of weakening currencies.

    Higher interest rates are going to put the brakes on new construction, further constricting supply.

    Higher interest rates will further constrict supply since people who have purchased or refinanced in the last few years are going to be less likely to sell. The “move-up” buyer is not going to want to sell if the interest rate on a new house is 100 basis points higher than their current mortgage. The Babyboomers are also going to have less incentive to downsize and sell if the monthly payment on their 4 bedroom empty nest is still lower than a 2 bedroom condo.

    While a higher rate environment is bad for demand, I see it being even worse for supply. As Doug stated, I think short term, the price gains may accelerate as leveraged buyers realize that the door is closing on their ability to afford a home.

  58. 308

    RE: Blurtman @ 301
    Yes That Should Happen

    When $40/50/hr jobs are reinstated in Boeing 737 parts….made in Kent/Auburn instead of Japan….why did Murry and Reichart allow this? They didn’t support Seattle RE.

    Yeah….the tax revenue alone will allow a mortgage interest rate….soon? Trump’s Senate and Congress with a Ryan/RNC union to Trump will make it slam dunk.

  59. 309
    greg says:

    RE: Kary L. Krismer @ 291

    Now you are just lying Kary.

    You clearly claimed that buying drugs from Canada would fail due to basic supply and demand. I clearly pointed out that Canada has pricing policies in place that restrict pharma .

    Instead of being graceful you came back with some long winded posts discussing completely different points in a weak sauce attempt to change the discuss to one where you felt you might “win”.

    Frankly Kary you come across as a complete dick.

  60. 310
    Blurtman says:

    RE: Erik @ 304 – Come to Trump country, my boy!

    I like where I live in Sammamish, because it reminds me of the Marin hills, but greener and with more rain, and a nice lake. I can see prices being comparable. Folks are snatching up million dollar homes in new developments. For a little over a million, you may find homes in the hills that have lake views.

  61. 311
    Doug says:

    RE: Action @ 307 – We might be seeing the surge in demand already. The number of “Potential Buyers” in my Redfin Owner Dashboard has gone from 1.7k to 2.0k in just the last couple of days. For context, 2.0k was the number during the Summer before slowly falling to 1.7k since then.

    That said, I have absolutely no idea how Redfin calculates that number.

  62. 312

    By greg @ 309:

    Instead of being graceful you came back with some long winded posts discussing completely different points [that being incredibly stupid I am unable to understand.].

    BTW, I will admit that I misstated the timing of arguments issues slightly. In post 208 I pointed out that insurance and price controls both lead to absurd results. When I posted more recently I thought that price controls had already been brought up as a topic for Canada, but now I don’t think it had been. You didn’t start posting on this topic until 243, but you also weren’t the one to point out Canada uses arguably price controls. It was in response to your post I explained that more fully.

    But again, so far you’ve only pointed out that I don’t know every country’s tax and health care scheme in detail. You’ve yet to make a single counterargument to any of my positions when applied to the correct facts.

  63. 313
    Blake says:

    I wonder if the Trumpkins will grab their pitchforks… how long will their honeymoon last?
    “Donald Trump’s closing argument in this presidential campaign was a two-minute advertisement blaming America’s problems on a conspiracy of global financiers like George Soros and Goldman’s Lloyd Blankfein, so it seems fitting that the two leading candidates to be his Treasury Secretary are Steven Mnuchin and Wilbur Ross. Mnuchin is a former Goldman Sachs Group Inc. partner, used to work with Soros, and is in Skull and Bones. Ross was literally the president of a secret Wall Street fraternity that holds black-tie dinners where they perform in drag and make fun of the less fortunate. If you voted for Trump to kick the Illuminati out of Washington, this must be a disappointment.”
    https://www.bloomberg.com/view/articles/2016-11-15/cabinet-jobs-and-fake-news

  64. 314
    Screenname345 says:

    Strong retail sales today. Home Depot reported earnings and are bullish on next year, they also said rising rates has not affected their business so far. You have to wonder what happens when The Donald pushes through his tax cut for 2017. I believe the bubble popping talk will play out now but it’s going to take a few years of him juicing the economy first.

  65. 315
    ess says:

    By Kary L. Krismer @ 305:

    The times is running an article on the graying of homeowners in King County.

    http://www.seattletimes.com/seattle-news/data/king-county-homeowners-getting-a-lot-grayer/

    That could be a good sign for inventory over the very long run as people move out of state after retiring. It’s too bad though they don’t dig up data further back than 2005. I’d like to know that data back to at least 1975.

    Don’t miss the second graph which shows number owner occupied homes vs rental homes. It’s hidden.

    King County may be graying, but it Is graying with folks who affirmatively moved here from other places as adults. Thus this area is viewed as a desirable choice for many of them to stay right through their old age. I know transplants that continue to stay in their single family houses by themselves in this area through retirement even though their kids moved away. When asked, they have no interest in moving as they own their own houses, are settled into the community, and have no desire to leave. For them, Seattle is just a big college town with mild winters compared to where they came from. And Seattle and area actually makes the occasional list of attractive places to move TO in retirement.

    What would be of interest is to view studies that have researched what percentage of older folks in different parts of the country entertain the idea of moving, and the primary reasons for doing so. Is it the weather, harsh winters, taxes, or other factors that result in these changes?
    I know back east it is almost a rite of passage for many to think of and actually head south when they retire. It is a combination of taxation, general, cost of living and harsh winters. I just don’t get that sense from people the same age in this locale. Which is to say that things can’t change – especially with the skyrocketing costs of housing and significant increases in taxes.

  66. 316
    redmondjp says:

    RE: ess @ 314 – Wait until next year when people see the effect of new ST3 and other tax/levy impacts. More and more people are going to wake up and figure out that they can no longer afford to live here.

    Even if real estate prices correct, ST3 taxes will continue indefinitely.

  67. 317
    ess says:

    By redmondjp @ 316:

    RE: ess @ 314 – Wait until next year when people see the effect of new ST3 and other tax/levy impacts. More and more people are going to wake up and figure out that they can no longer afford to live here.

    Even if real estate prices correct, ST3 taxes will continue indefinitely.

    You are correct that sooner or later, property tax increases impact one’s ability or interest in staying in this area. I don’t know if it will be next year’s increases – but the higher taxes and expenses in owning one’s own residence goes – the more it will impact decision making. Alternatively, Puget Sound has lower property tax rates and no state income tax as compared to many states back east and California. From what I have seen in the past few years, I don’t anticipate the decline in voter approved initiatives addressing all sorts of crucial “needs” that will increase property taxes even more.

    One wonders if the renter public who are younger than the home owners will eventually discover that real estate taxes impact their rents in a tight market. Of course the younger tend to be more idealistic and vote for all these “wonderful” projects, and it is much easier to be idealistic when the idealism doesn’t come with a direct cost or is paid by someone else. Besides – much easier to blame the greedy landlord, evil developer. foreign buyer or recent arrival competing for limited housing stock than acknowledging that passing all these tax initiatives also creates an additional expense that all must bear.

  68. 318
    Macro Investor says:

    By redmondjp @ 316:

    RE: ess @ 314 – Wait until next year when people see the effect of new ST3 and other tax/levy impacts. More and more people are going to wake up and figure out that they can no longer afford to live here.

    Even if real estate prices correct, ST3 taxes will continue indefinitely.

    Anybody who votes to tax themselves are idiots. Period. If dot gov wants more money for some pet project, they should cut something less important. It’s called being a grown up.

    Driverless cars are coming MUCH FASTER than this light rail project. Before it is even completed, it will be obsolete. Any money spent will be 100% wasted. The rails and cars will likely sit around rusting. But idiots who voted for this deserve their fate.

  69. 319
    uwp says:

    RE: Macro Investor @ 318 – Do driverless cars magically not cause traffic?

  70. 320
    redmondjp says:

    Now this is interesting – a REIT is closing and selling all of their properties, including one in Bellevue for a loss:

    http://www.seattletimes.com/business/real-estate/bellevues-civica-office-complex-fetches-193-million/

    https://www.hines.com/news/hines-reit-announces-liquidation-plan

    I wonder if they think that the commercial RE market has peaked and they are cashing in their chips? This quote would tend to indicate that:

    “After our management and Board of Directors considered a variety of strategic alternatives to maximize stockholder value through a liquidity event, we are confident that the plan of liquidation achieves that goal.”

  71. 321
    greg says:

    RE: redmondjp @ 316

    I agree.

    For a lot of older folk living on fixed incomes asking another $1,000 a year can be a pretty big ask. In fact we have reached a point where property taxes are simply too high and WILL drive away lower paid jobs, lower paid workers , older folk on pensions etc.

    To me it seems grossly unfair to allow a simple majority for such a massive and on going expenditure.
    The tyranny of the majority has gotten completely out of hand. The Gov uses referendums to shift responsibility away from themselves. And placing the burden on property owners is just BS. 50-100 billion should be an across the board INCOME tax, hitting employers and employees alike. I wonder how much money MSFT GOOG and AMAZON would have pumped into the ST3 yes campaign if they knew their taxes would go up?

    I would add that allowing industry to fund a campaign of taxation is stunningly stupid and not what was ever intended . It is high time the public got some sense and tried to ban corps from funding anything related to voting in any way shape or form.

  72. 322
    jon says:

    Driverless cars will make carpooling more popular, by having software match up people on an ad hoc basis instead of having to wait until the other people in your carpool are ready. Pooling like that could have a big impact on traffic, but it is going to cost more per mile than bus or rail. By having a combination of driverless car and rail, it seems like commute times will be much faster than sitting in traffic and still be low cost.

    ST3 will reduce overall housing costs in the long run by eventually increasing the distance that will be an acceptable commute. The positive impact will not be felt for a long time, but it might keep prices from getting too high in the interim. Still, housing in the core will increase in price, because it will make the region more competitive with other job centers, and thus attract high income management types. It is on the periphery where low cost housing will become practical.

  73. 323
    redmondjp says:

    RE: jon @ 322 – Jon – have you looked into how SLOOOOOW the choo-choo train is? You’d be far better off on an existing Sound Transit express bus. When you can sit in traffic and still beat the train, that is a problem.

  74. 324
  75. 325
    Macro Investor says:

    By redmondjp @ 323:

    RE: jon @ 322 – Jon – have you looked into how SLOOOOOW the choo-choo train is? You’d be far better off on an existing Sound Transit express bus. When you can sit in traffic and still beat the train, that is a problem.

    Yep. I did that. I missed the train, and would have been late for a meeting. So I got back in my car and beat the train downtown. BY A LOT. With plenty of time to find parking and walk. This light rail is fatally flawed.

    Driverless cars will solve the traffic problem. Not because of ride sharing. Because nervous/bad drivers cause most of the gridlock. When you see freeway traffic just stop for no reason — that is because some idiot suddenly slammed her brakes and moved over 3 lanes at once. Computers won’t do that. Computers can tailgate at very fast speeds with no risk that someone will “slam” and cause a massive pile up. That means 2-3x more cars can comfortably share the same road.

    Glad I moved out of insane seattle king. But I’ll visit just to see the empty trains sitting and rusting, while you imbeciles who voted for it keep paying billions in taxes.

  76. 326
    ess says:

    https://list.juwai.com/news/2016/11/what-hong-kong-s-tax-change-tells-about-chinese-property-demand

    I did not know this until recently – but Vancouver BC is not the only metropolitan area to place a significant tax upon foreign real estate buyers.

  77. 327
    Blake says:

    By Doug @ 324:

    Big believer in this ZH piece: http://www.zerohedge.com/news/2016-11-15/secular-trend-rates-remains-lower-yield-bottom-still-ahead-us

    Don’t think higher rates will last.

    That piece brings up some very interesting counterpoints to the dominant narrative… thanks for posting! Markets tend to overreact and I agree that the long term trend is still for low rates and we’ll probably see bonds prices rebound in the months ahead.
    -snip-
    Demographics
    As Japan knows and we are just getting into, aging demographics is an unmovable force against consumption, solved only with time. The percent of the population 65 and over in the United States is in the midst of its steepest climb. As older people spend less, paired with slowing immigration from the new administration, consumer demand slackens and puts downward pressure on prices.

  78. 328

    RE: Blurtman @ 310
    Sammamish RE Inventory Low

    This also means owners that sell are stuck picking thru limited $1M raunchy units….almost all that I’ve seen are like 2-3 times the size a retired couple actually needs and have the health to clean and maintenance….they’ll need a $100K a year maid and care giver staff to clean the McMansion too???? LOL

    Even the rich elite are screwed.

    Talks are underway to punish Seattle for being a Sanctuary City [forget rural property outside of Seattle in Was St, that’s all red Trump dominated]. Why should federal dollars continue to pay for illegal alien schools, prisons, welfare, food stamps, etc. in Seattle, when most of America voted Hades No.

  79. 329

    MSM Sums It Up for Me

    “…SEATTLE, WASHINGTON:
    Median home price: $422,100

    Monthly mortgage payment: $1,908

    Salary needed to buy: $81,770

    https://www.yahoo.com/finance/news/income-afford-house-15-largest-185720762.html

    LOL….you can afford a home forking out 50-60% of your NET PAY…..no wonder we’re in-sourcing hoards of replacement foreign workers in Seattle….they’re the only investors that are “brainless”, clueless and consider this a great opportunity. The legal citizens [and their foreign replacements too] in Seattle are shafted.

  80. 330

    RE: Blake @ 298
    The Wall Isn’t Gonna Happen?

    Remember, we have the tarriff gun and NAFTA elimination threat….what power does Mexico have to avoid paying for the $10B wall???? They’re screwed now.

    La Raza and the Chamber of Commerce??? LOL They’re has been dinosaurs now. Update your plans now….its gonna happen with a Trump controlled and voter majority [with electorial College] Republican House and Senate….Microsoft and Boeing [gosh they used to be Republicans…..now they’re Progessive Anarchist NWO monsters] need “cry towels”. The middle income legal citizens smile.

  81. 331
    greg says:

    RE: softwarengineer @ 330 – i assume you are doing your tongue in cheek bit again.?

    Mex, china, eu ,india all have the power to laugh in our face should Trump decide to “bully ” them…. They know his power is limited, just as every pres is limited. They 100% know Trump is all bluster and big talk, in fact many are delighted to narrowly avoided Hillary. She was a very real threat, to them on the international economic stage. Trump will likely sell us down the river if he thinks it will make him popular….

    I have no doubt that Trump is willing to damage the USA in order to make a short term gain.

  82. 332
    Blurtman says:

    RE: softwarengineer @ 329 – You have to consider a two wage earner family.

  83. 333
    uwp says:

    By softwarengineer @ 329:

    MSM Sums It Up for Me

    “…SEATTLE, WASHINGTON:
    Median home price: $422,100

    Monthly mortgage payment: $1,908

    Salary needed to buy: $81,770

    https://www.yahoo.com/finance/news/income-afford-house-15-largest-185720762.html

    LOL….you can afford a home forking out 50-60% of your NET PAY…..no wonder we’re in-sourcing hoards of replacement foreign workers in Seattle….they’re the only investors that are “brainless”, clueless and consider this a great opportunity. The legal citizens [and their foreign replacements too] in Seattle are shafted.

    Can you walk me through the math on that “Net Pay” percentage?
    2k per month is 24k, which is 60% of 40k.

    My math says a couple earning 80k with a 400k house should have about 20-25k in deductions (interest, taxes, exemptions), so you end up with a 8-10k fed tax bill, and 6k in SSI/M. Leaving you with around 65k, and you end up spending pretty close to 35% on the house.

  84. 334
    Ess says:

    By softwarengineer @ 329:

    MSM Sums It Up for Me

    “…SEATTLE, WASHINGTON:
    Median home price: $422,100

    Monthly mortgage payment: $1,908

    Salary needed to buy: $81,770

    https://www.yahoo.com/finance/news/income-afford-house-15-largest-185720762.html

    LOL….you can afford a home forking out 50-60% of your NET PAY…..no wonder we’re in-sourcing hoards of replacement foreign workers in Seattle….they’re the only investors that are “brainless”, clueless and consider this a great opportunity. The legal citizens [and their foreign replacements too] in Seattle are shafted.

    The good news is that most of the major west coast cities require even higher incomes to purchase a residence than needed in Seattle. San Francisco has almost double the income requirement of Seattle, and San Diego and Los Angeles both have higher income requirements. And Portland’s real estate prices are rapidly escalating and are becoming less of a bargain.

    Furthermore, the entire Bay area is extremely expensive. Unlike Seattle which still has a variety of reasonably priced areas within commuting distance of Seattle, the Bay area has no such options. Go 30-40 miles out of Seattle and housing is less expensive for the purchaser. Travel 40 miles south of San Francisco and one ends up in San Jose which can be just as expensive.

  85. 335
    Erik says:

    RE: Blurtman @ 310
    Honestly, there is no reason for me to live in the gated community of the east side since I do not work in the computer industry, whine about everything, and suck down Diet Coke all day. I’m not saying to move to Everett. I wouldn’t send my dog there. Alki is nice and I like Greenlake. Not tons of yuppies here, which is kinda nice too. I felt a little trapped on the east side to be honest. I got tired of the programmers whining and complaining about everything. East side would be nice if you could somehow get rid of the computer people.

  86. 336
    David B. says:

    RE: softwarengineer @ 330 – Suddenly cancelling NAFTA and slapping tariffs on Mexican goods would shoot the USA in the foot by triggering economic crises on both sides of the border. Mexico being poor, the economic crisis there would trigger political instability, and having an unstable nation on our southern border is a big minus for the USA.

    That Trump is enough of an idiot to even float the idea is reason enough to be afraid for the future.

    It’s really amusing to see self-professed conservatives act as if government can magically and quickly solve all problems without being subject to the Law of Unintended Consequences.

  87. 337
    pfft says:

    By uwp @ 319:

    RE: Macro Investor @ 318 – Do driverless cars magically not cause traffic?

    yes as a shorthand answer.

  88. 338
    pfft says:

    By David B. @ 336:

    RE: softwarengineer @ 330 – Suddenly cancelling NAFTA and slapping tariffs on Mexican goods would shoot the USA in the foot by triggering economic crises on both sides of the border. Mexico being poor, the economic crisis there would trigger political instability, and having an unstable nation on our southern border is a big minus for the USA.

    it would just send more illegal immigrants our way. last time we made it harder to cross the border illegal immigrants just stayed. they used to cross back and forth until it was too hard to.

  89. 339
    David B. says:

    RE: Macro Investor @ 318 – LOL, driverless cars can’t do anything about THIS problem:

    https://images.duckduckgo.com/iu/?u=http%3A%2F%2Fstreets.mn%2Fwp-content%2Fuploads%2F2014%2F09%2Fcar-vs-bike-vs-bus.jpg&f=1

    Tellingly, Uber supported ST3. That’s because self-driving technology actually helps facilitate the use of mass transit. It helps complete the “last mile” between residences and suburban rail stations (send the car back home after it drops you off, no need for parking at the station). It could radically lower operating costs for running buses (labor is typically the #1 item on transit agency budgets).

  90. 340
    Blake says:

    By pfft @ 338:

    By David B. @ 336:

    RE: softwarengineer @ 330 – Suddenly cancelling NAFTA and slapping tariffs on Mexican goods would shoot the USA in the foot by triggering economic crises on both sides of the border. Mexico being poor, the economic crisis there would trigger political instability, and having an unstable nation on our southern border is a big minus for the USA.

    it would just send more illegal immigrants our way. last time we made it harder to cross the border illegal immigrants just stayed. they used to cross back and forth until it was too hard to.

    Yes exactly! … more Mexicans went back to Mexico last year than came into the US! Hah!
    I really REALLY hope Trump is stupid enough to slap a huge tariff on Mexico, build a wall and provoke a trade war with China!! We are overdue for a recession anyways and that would just make the Trump recession THAT MUCH WORSE! We need to see him go down in flames…
    And, judging from his statements during the campaign, he is not very well-informed AND he is arrogant! Ignorance and arrogance… seems to go hand in hand?

    Go Donald! Build up those walls!

  91. 341
    Blake says:

    RE: Blake @ 340
    btw: “But between 2009 and 2014, some one million (Mexicans) returned to their country of origin, while 870,000 headed to the U.S., according to the report.”
    http://www.wsj.com/articles/mexican-immigration-to-u-s-reverses-1447954334

    I find it so odd that Software Engineer and other Trump supporters bashed Obama when his administration deported more illegals and cracked down on immigration more than any President EVER!!?? And they’ve been braying about immigration these past years while it has reversed!?
    Ignorance and arrogance…

    “Since coming to office in 2009, Obama’s government has deported more than 2.5 million people—up 23% from the George W. Bush years. More shockingly, Obama is now on pace to deport more people than the sum of all 19 presidents who governed the United States from 1892-2000, according to government data.”

  92. 342

    By David B. @ 336:

    RE: softwarengineer @ 330 – Suddenly cancelling NAFTA and slapping tariffs on Mexican goods would shoot the USA in the foot by triggering economic crises on both sides of the border. Mexico being poor, the economic crisis there would trigger political instability, and having an unstable nation on our southern border is a big minus for the USA.

    Not all the illegal traffic across the border involves citizens of Mexico, but to the extent that the economy of Mexico does better there will be fewer people from Mexico trying to cross (or maybe more people from countries further south taking advantage of the Mexican economy and culture). If the US economy was bad enough and Canada’s considerably better, Canada would have a more significant border problem.

  93. 343
    Blurtman says:

    RE: Blake @ 341 – It’s time to play WHO SAID IT! Hint: It wasn’t Hillary.

    “All Americans, not only in the states most heavily affected but in every place in this country, are rightly disturbed by the large numbers of illegal aliens entering our country,” WHO said during the speech. “The jobs they hold might otherwise be held by citizens or legal immigrants. The public service they use impose burdens on our taxpayers.”

    ‘That’s why our administration has moved aggressively to secure our borders more by hiring a record number of new border guards, by deporting twice as many criminal aliens as ever before, by cracking down on illegal hiring, by barring welfare benefits to illegal aliens,” WHO continued

  94. 344
    Justme says:

    RE: Blurtman @ 343

    Bill Clinton said that! The main reason that right-wingers are so deranged about anything Clinton is that Bill Clinton outdid them in being a right-winger, and got the campaign donations from Wall St and the top 0.1% to prove it. Clinton basically muscled in on their turf, and boy, did that hurt! THAT is why Repugs tried their best to get rid of him (and Hillary) by any means imaginable.

    Myself, I dislike Clinton just for all the bad things he did while being a right-wing mole in the white house, and Hillary for all the bad things she did (Ukraine, Libya, Syria) while she was secretary of state.

  95. 345
    Eastsider says:

    From Bill Clinton’s 1996 platform –

    “We cannot tolerate illegal immigration and we must stop it. For years before Bill Clinton became President, Washington talked tough but failed to act. In 1992, our borders might as well not have existed. The border was under-patrolled, and what patrols there were, were under-equipped. Drugs flowed freely. Illegal immigration was rampant. Criminal immigrants, deported after committing crimes in America, returned the very next day to commit crimes again. President Clinton is making our border a place where the law is respected and drugs and illegal immigrants are turned away.”

    Both Hillary and Obama also voted for the Secure Fence Act of 2006, which put up a 700 mile fence along the US-Mexican border.

    For more clarity, you may be interested in reading the following article “You Are Still Crying Wolf”.

    http://slatestarcodex.com/2016/11/16/you-are-still-crying-wolf/

  96. 346
    uwp says:

    By Blake @ 341:

    RE: Blake @ 340
    btw: “But between 2009 and 2014, some one million (Mexicans) returned to their country of origin, while 870,000 headed to the U.S., according to the report.”
    http://www.wsj.com/articles/mexican-immigration-to-u-s-reverses-1447954334

    I find it so odd that Software Engineer and other Trump supporters bashed Obama when his administration deported more illegals and cracked down on immigration more than any President EVER!!?? And they’ve been braying about immigration these past years while it has reversed!?
    Ignorance and arrogance…

    It’s because they don’t care about actual policy.

    Do you think a GOP congress is going to fight on the debt limit when it is tax cuts and military spending that bring deficits?

  97. 347
    Blurtman says:

    RE: Justme @ 344 – I tend to agree with your claim of why right wingers hated Bill Clinton. Recall Clinton’s welfare reform act and also the deregulation of the financial industry. But is border enforcement and immigration control really a right wing issue?

  98. 348
    Blake says:

    To bring this back on topic… THE big question that will affect house prices in the near future (and years to come) is whether Trump will pass tax cuts and a spending/infrastructure plan that is revenue neutral or if he – like Reagan – blows a hole in the budget passing tax cuts and spending plans that drive the deficit much higher.

    Trump’s “Contract with the American Voter” stresses that his American Energy and Infrastructure Act “leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral…

    But IMHO, if he wants to stimulate the economy and “be like Ronnie” he needs a massive fiscal stimulus. How will this square with his promises and with those tight spenders in his party in Congress?

    Mr. Market has reacted already and thinks what he wrote in his contract about “revenue neutral” is bunk… But how will it play out? If he passes a massive spending and tax cut plan, the economy will be juiced, but if he wants it to be revenue neutral… then he’ll probably serve only one term and the Trump/Repuglican recession will hit the housing market HARD. I’m rooting for Paul Ryan and the bond mavens… “Starve the Beast!” :-)

    Btw: Trump’s situation is not really comparable to Reagan in ’81: Interest rates were high and could be cut and Carter had shrunk the deficit as a % of GDP to under 2%… So the country was ready for a Keynesian stimulus and Reagan drove the deficit to almost 7% of GDP within a few years! WWTD???

  99. 349
    pfft says:

    By Justme @ 344:

    RE: Blurtman @ 343

    Bill Clinton said that! The main reason that right-wingers are so deranged about anything Clinton is that Bill Clinton outdid them in being a right-winger, and got the campaign donations from Wall St and the top 0.1% to prove it. Clinton basically muscled in on their turf, and boy, did that hurt! THAT is why Repugs tried their best to get rid of him (and Hillary) by any means imaginable.

    Myself, I dislike Clinton just for all the bad things he did while being a right-wing mole in the white house, and Hillary for all the bad things she did (Ukraine, Libya, Syria) while she was secretary of state.

    you think libya was bad? and what about Ukraine did you not like?

  100. 350

    By pfft @ 349:

    you think libya was bad? and what about Ukraine did you not like?

    I hear Libya is now a great vacation destination. You should go check it out. Maybe get a flight where you can look down over Ukraine! Everything is wonderful in both countries. Very close to utopia.

  101. 351
    Blake says:

    By pfft @ 349:

    you think libya was bad? and what about Ukraine did you not like?

    http://nationalinterest.org/blog/chaos-libya-the-rising-isis-threaten-europe-15801
    -snip- “Libya is in chaos due to the power vacuum left behind by the 2011 air campaign that removed former Dictator Muammar Gaddafi – cities are in ruins and more than 4,000 people have been killed. Gadhafi’s weapon arsenal has fed the Syrian civil war, and ISIS has thrived in Libya by exploiting the unsettled political and military situation.”
    … Nice job Hillary!

    Hillary’s point person on Ukraine regime change was assistant Secretary of State for European and Eurasian Affairs and Victoria Nuland, who previously served as Dick Cheney’s Principal Deputy National Security Advisor!! Prior to the coup that brought down the Ukraine government, Nuland was recorded dictating who the next Prime Minister should be… Arseniy Yatsenyuk. Indeed “Yats” became the Prime Minister of Ukraine on February 27, 2014, a month after that phone conversation. Freedom!
    http://readersupportednews.org/opinion2/277-75/22758-meet-the-americans-who-put-together-the-coup-in-kiev
    … Ukraine lies in ruins today… if you haven’t noticed!?

  102. 352
    sleepless says:

    Are the rents leveling off? I can see the trends start to reverse. The units take longer to rent, some units rent at the same price as year ago (we are currently looking at unit, the tenants moved out, and lord raised the price and has no takers and decided to move forward with us at the same price as 1.5 year ago). Some units sit empty for months…

    http://www.bizjournals.com/seattle/news/2016/11/16/seattle-bellevue-everett-tacoma-apartment-rents.html

  103. 353
    sleepless says:

    By Kary L. Krismer @ 350:

    By pfft @ 349:

    you think libya was bad? and what about Ukraine did you not like?

    I hear Libya is now a great vacation destination. You should go check it out. Maybe get a flight where you can look down over Ukraine! Everything is wonderful in both countries. Very close to utopia.

    Kary, stop feeding the troll!!!

  104. 354
    pfft says:

    By Blake @ 351:

    By pfft @ 349:

    you think libya was bad? and what about Ukraine did you not like?

    http://nationalinterest.org/blog/chaos-libya-the-rising-isis-threaten-europe-15801
    -snip- “Libya is in chaos due to the power vacuum left behind by the 2011 air campaign that removed former Dictator Muammar Gaddafi – cities are in ruins and more than 4,000 people have been killed. Gadhafi’s weapon arsenal has fed the Syrian civil war, and ISIS has thrived in Libya by exploiting the unsettled political and military situation.”
    … Nice job Hillary!

    Hillary’s point person on Ukraine regime change was assistant Secretary of State for European and Eurasian Affairs and Victoria Nuland, who previously served as Dick Cheney’s Principal Deputy National Security Advisor!! Prior to the coup that brought down the Ukraine government, Nuland was recorded dictating who the next Prime Minister should be… Arseniy Yatsenyuk. Indeed “Yats” became the Prime Minister of Ukraine on February 27, 2014, a month after that phone conversation. Freedom!
    http://readersupportednews.org/opinion2/277-75/22758-meet-the-americans-who-put-together-the-coup-in-kiev
    … Ukraine lies in ruins today… if you haven’t noticed!?

    you are crazy if you think libya was not a success. the government was attacking it’s own people. so I guess when that was happening it wasn’t chaos? benghazi was about to be leveled. people will criticize hillary about ANYTHING. liby was a success. consider Iraq versus Libya…

    “cities are in ruins and more than 4,000 people have been killed.”

    um, in Iraq and Libya HUNDREDS of thousands have been killed. Libya is a success story.

    on ukraine, did you really post an op-ed?

  105. 355
    pfft says:

    “Ukraine lies in ruins today… if you haven’t noticed!?”

    seriously? Eastern Ukraine is the scene of fighting but as for Western Ukraine, no.

    All you have is the same two links you’ve been posting for months. one is an op-ed. you probably just googled “libya in chaos” for one of them. I bet that op-ed is the only thing you know about Libya.

    nobody has any perspective.

  106. 356
    bingo says:

    RE: Blake @ 348

    Bring this back on topic?

    LOL.

    What is the topic of this thread?

    It started with this “NWMLS: Mostly Bad News For Buyers In October”.

    From the comments posted apparently the Bad News for Buyers in October was that Trump got elected, Canadian drugs are cheaper than American, illegals may or may not be sneaking across the border, the electoral college is rigged, and, the Clintons might be criminals. The only salient point I’ve seen is that the higher interest rates since Trump has been elected may affect home prices.

    What will the topic for November be… “Mostly Bad News” or “Mostly Good News” for Buyers in November?

  107. 357

    RE: greg @ 331
    Damage America, Seeking Fair Trade

    LOL….that Sativa you’re inhaling dulls your senses?

  108. 358

    RE: bingo @ 355

    “What will the topic for November be… “Mostly Bad News” or “Mostly Good News” for Buyers in November?”

    Even worse news for buyers in November.

  109. 359
    Andrew says:

    The increasing interest rates produced creative lender marketing materials such as “good news is you are facing less competition, … prices in Seattle & Bellevue areas will keep climbing, …”
    Is there any source of information that shows the number of customers going through preapproval process? Curious to see buyers interest trend (i.e. buyers who are not willing to pay all cash).

  110. 360
    Brian says:

    RE: Andrew @ 358

    I know I’m just one guy, but the increase in interest rates has definitely dampened my spirits and the thought has ran through my head to sit back for a while. But apparently not for everyone, unless some haven’t yet realized the rates have increased. Just missed out on a place today that had 4 offers and went for 3% over list, one month free rent-back, and no inspection. A week ago, with lower rates, I could have afforded that offer, since the payment was 4% lower w/ 3.5% vs. 4.0% mortgage rate.

    Granted, I’m in the $300K-350K range. I wonder if buyer interest has dropped more in the upper range, since increased mortgage rates obviously have a greater impact on larger mortgages. Could be that I’m seeing such competition in my target range because more and more people are being squeezed out of ranges above that.

  111. 361

    RE: bingo @ 355 – Well if you want some real estate related stuff . . . here’s an update on something I said before. Back on August 19 I showed a client 9 houses in Thurston County. As of today only three of them are closed sales, four are pending, one went pending inspection just yesterday and one cancelled. The cancelled listing was re-listed with a different agent at a higher price and is still active.

    That was with what was roughly two months of inventory at the time. It’s a much more relaxed market where buyers actually have time to think and are probably subjected to fewer multiple offer situations. The point is, it won’t take all that much more inventory to see a noticeable improvement for buyers, but things still won’t be bad at all for buyers (unless you consider having to wait more than a week to go Pending Inspection bad).

  112. 362
    Eastsider says:

    The latest update from Mortgage News Daily –

    “The most prevalent conventional 30yr fixed rate quote is now 4.125% on top tier scenarios, and more than a few lenders are already up to 4.25%.”

    Note that I have been writing about this since Nov 9 here in the comments. The era of sub-4% mortgage rate is behind us. Expect the rate to be between 4%-4.5%/(possibly even 5%!) in 2017. Nationwide home prices will “stabilize” (and likely decline in real term) going forward. There will be far fewer “cash” buyers. Actually, this finally feels like a normal housing market. Hooray!

  113. 363
    whatsmyname says:

    RE: Eastsider @ 361
    Each half point on a million dollars is $5,000 per year additional interest. If I were a Bay area techie, it would be one more reason to move to Seattle – where houses are half price.

  114. 364
    Doug says:

    RE: Eastsider @ 361 – What has fundamentally changed about our economy to drive those kinds of rates?

    10y UST at 2.35% is a buying opportunity and if it doesn’t correct at that level I could see it running to 2.75% before rallying all the way back under 2%.

    Just really tough for me to get excited enough about our fragile economy to warrant sustained higher rates.

  115. 365
    Eastsider says:

    RE: Doug @ 363

    “What has fundamentally changed about our economy to drive those kinds of rates?”

    One word – Expectation!

    The FED has failed to raised (inflation) expectation for years. Somehow ONE person manages to change perception singlehandedly less than 2 weeks ago! And this is done without QEs and trillions in government spending.

  116. 366
    Eastsider says:

    By whatsmyname @ 362:

    RE: Eastsider @ 361
    Each half point on a million dollars is $5,000 per year additional interest. If I were a Bay area techie, it would be one more reason to move to Seattle – where houses are half price.

    The passage of ST-3 etc will cost you as much, if not more, in (property/auto) taxes. LOL.

  117. 367
    Bob says:

    RE: Eastsider @ 361

    Eastside,

    You make an important factual point. Rates have risen, which makes housing harder to finance and puts pressure on home prices. I’ll add in one more important fact. The RMB has dropped considerably against the USD during the last few months and especially the last few weeks. This gives Chinese and other foreign currency holders less firepower to influence U.S. housing prices. This double-whammy isn’t good. If you think the Seattle market has been propped by low interest rates or foreign money, you’ve just seen two big warning signs.

  118. 368
    Doug says:

    RE: Eastsider @ 364 – I actually do find that incredible and comical. Yellen should call Trump and ask for some tips. Actually, all central banks for that matter. It turns out monetary policy is useless in a vacuum and requires fiscal spending as well. But again, higher rates will be short-lived as they inevitably carry this rickety economy back into recession.

    Re: ST3…”In January, sales tax will go up half-a-percent, car tabs will more than triple, and property taxes will jump over $300 per year in the Sound Transit district.”

    Can people like pfft pay my share since they want it so bad?

  119. 369
    StupidLifeDecisions says:

    By Doug @ 367:

    RE: Eastsider @ 364

    Re: ST3…”In January, sales tax will go up half-a-percent, car tabs will more than triple, and property taxes will jump over $300 per year in the Sound Transit district.”

    Can people like pfft pay my share since they want it so bad?

    I think that pfft’s of the world should pay your share and the share of everyone else who doesn’t want it. If they think these increases are so wonderful, they can put their money where their sanctimonious mouths are. The stupider a person is, the more dangerous they are.

  120. 370
    whatsmyname says:

    RE: Eastsider @ 365

    Very interesting. Let’s do some numbers.

    I saw a blurb on zillow that the median San Francisco house is $1.149MM. Quickly then, 20% down is $229,800 down leaving a mortgage of $919,200. Your projection of 5% mortgages means interest expense of $45,960 annually.

    I think the Seattle proper median is around $650,000; so less 20% of $130,000, your mortgage is $520,000 where a 5% rate means$26,000 in interest.

    The San Francisco RE tax rate just dropped to 1.174% – so $13,489 on the median house. The Seattle 2015 rate was 0.925%, so $6,012 on the median.

    So median-to-median; moving to Seattle means $99,800 less downpayment and $19,960 less annual interest, and $7,476 less in pre-ST3 real estate taxes. I have neglected to quantify the effects income tax deductions for these last two, but in broad strokes I would say it will cost you $100,000 up front for the opportunity to spend an extra $20,000 after-taxes per year in San Francisco; and that’s ignoring CA income tax. I didn’t and don’t support ST3, but unless you’re planning twin Lambo’s, I don’t know how that can break even.

  121. 371
    Eastsider says:

    By StupidLifeDecisions @ 368:

    I think that pfft’s of the world should pay your share and the share of everyone else who doesn’t want it. If they think these increases are so wonderful, they can put their money where their sanctimonious mouths are. The stupider a person is, the more dangerous they are.

    I would blame the people who shoved such proposals onto us. They are your irresponsible progressive/socialist politicians and corporations. A number of well connected cronies have their lives set for next two decades courtesy of you and me. It is great that we are draining the swamp… Nevermind, that is for the other Washington.

  122. 372
    Eastsider says:

    RE: Bob @ 366

    Actually USD has become incredibly expensive against just about every currency out there. We are likely to see Euro parity and beyond within next year or within months. The last time we had such an increase in interest rate and USD, we had Arab Spring! We now have a giant vacuum sucking USDs out of global economies (- remember the trillion dollar repatriation and reverse job/investment migration). We have just embarked on that trend and are not even facing trade wars yet!

    Huge volatility is baked in. Anything else is just impossible to predict. I’m not sure Trump knows what he’s getting into. I can only wish him (and America) well.

  123. 373
    Eastsider says:

    By Doug @ 367:

    RE: Eastsider @ 364 – I actually do find that incredible and comical. Yellen should call Trump and ask for some tips. Actually, all central banks for that matter. It turns out monetary policy is useless in a vacuum and requires fiscal spending as well. But again, higher rates will be short-lived as they inevitably carry this rickety economy back into recession.

    Knowing Trump, if these central bankers proved so mediocre and incompetent after nearly a decade of QEs and bloated balance sheets, he would surely fire them all. No?

  124. 374

    RE: Eastsider @ 371
    Its a Good Time to Travel Abroad

    A strong dollar.

  125. 375
    Brian says:

    Here’s some more math (I like math) with interest rates going from 3.5% to 4% and the addition ST3 taxes, since I didn’t include ST3 earlier.

    Example situation:
    – $650,000 median price
    – 20% down with 1% property tax, 0.3% insurance, $0 HOA
    – Estimated +$30/mo for ST3 (source: http://soundtransit3.org/calculator)

    Before the election, 3.5% w/ no ST3 = $3039/mo
    After the election, 4.0% w/ ST3 = $3217/mo

    The after-the-election payment is equivalent to the payment for a $688,000 house before the election. Since sellers are still asking the same price or more, the median price for buyers essentially just went from $650,000 to $688,000 (+5.8%) due to the election .

    Or conversely, someone who could afford the payment on a $650,000 house before the election can now only afford the payment on a $613,000 house (-5.7%) after the election.

    Prices have been going up about that much percent every 6 months, so I guess there’s a chance this won’t affect things that much. We will see.

    Regarding the devaluing of the Yuan vs. USD causing Chinese investors to be scared away… I think it could go one of two ways:
    1) Chinese investors are scared off because U.S. real estate essentially costs more and they could sell and get more Yuan now.
    2) Chinese investors are more attracted because the Yuan is expected to continue to decrease in value vs. the dollar and thus storing money in a U.S. asset is better than holding Yuan or other Chinese assets.

  126. 376
    N says:

    By Brian @ 359:

    RE: Andrew @ 358

    I know I’m just one guy, but the increase in interest rates has definitely dampened my spirits and the thought has ran through my head to sit back for a while. But apparently not for everyone, unless some haven’t yet realized the rates have increased. Just missed out on a place today that had 4 offers and went for 3% over list, one month free rent-back, and no inspection. A week ago, with lower rates, I could have afforded that offer, since the payment was 4% lower w/ 3.5% vs. 4.0% mortgage rate.

    Granted, I’m in the $300K-350K range. I wonder if buyer interest has dropped more in the upper range, since increased mortgage rates obviously have a greater impact on larger mortgages. Could be that I’m seeing such competition in my target range because more and more people are being squeezed out of ranges above that.

    Interest rates jumped quickly but keep in mind they are no higher than they were in January 2016. If they do keep trending up it will be interesting to follow but its not the first time they have spiked a little. I am in your shoes of possibly waiting too, after a 75% run up the last 5 years plus 1 month of inventory the risk appears to be high, unless you buy what every realtor tells you that the good times will just keep on forever now.

  127. 377
    redmondjp says:

    By Eastsider @ 372:

    By Doug @ 367:

    RE: Eastsider @ 364 – I actually do find that incredible and comical. Yellen should call Trump and ask for some tips. Actually, all central banks for that matter. It turns out monetary policy is useless in a vacuum and requires fiscal spending as well. But again, higher rates will be short-lived as they inevitably carry this rickety economy back into recession.

    Knowing Trump, if these central bankers proved so mediocre and incompetent after nearly a decade of QEs and bloated balance sheets, he would surely fire them all. No?

    You are either being sarcastic or you don’t understand how our government works. The president has no power over the Fed – in fact, the reality is the opposite. Our country is run by global banking interests; the president is merely a figurehead.

    The creation of the Fed in 1913 is when we lost control of our country. Several founders of our country warned about the dangers of giving central bankers too much power. That ship has long since sailed.

  128. 378
    Brian says:

    The SFH data on Seattle Bubble has had a recent significant change following the election.

    Back on 11/11/2016, inventory was down 6.4% year-over-year or 2547 vs 2720 units (-173).
    Now on 11/19/2016, inventory is now nearly the same year-over-year 2484 vs 2490 units (-6).

    It was looking to set up to be a much worse winter than last year for inventory, but maybe not so much anymore.

  129. 379
    Eastsider says:

    RE: redmondjp @ 375

    “You are either being sarcastic or you don’t understand how our government works.”

    Do you think Yellen will survive a twitter storm unscathed from the Man? Even before he takes office, some high level officials have submitted their resignations. Some have also publicly stated that they would not serve in his administration. Maybe you don’t understand how politics work? LOL.

    P.s. Yellen’s current term ends in Jan 2018.

  130. 380
    Eastsider says:

    RE: Brian @ 374

    Maybe Trump would crackdown on the EB-5 immigrant investor program? There goes your Chinese cash buyers….

  131. 381
    Justme says:

    RE: Brian @ 376

    Are you comparing inventory on specific days in different years, Brian? Do you have any opinion on how noisy (high variance) such data may be?

    Your post made me think about the general question of how inventory should be measured. For example, is the published data generally from one sample at the end of month (EOM)? One could argue that such a methodology will lead to artificially low inventory numbers due to a larger number of sales closing right before end of the month.

    I’m starting to think that some other measures are needed. Some candidates might be Days on Market (DOM), median DOM, sales/inventory, average inventory, unsold inventory, delisted inventory. pending inventory, inventory histogrammed by DOM (0-10 days, 10-20 days, etc)

    You sometimes see DOM and pending inventory stats, but the RE industry seem to focus on the measure that maximally makes the case for claiming tight supply, namely EOM active(+pending?). That choice does not surprise me, since RE basically thrives on inflating prices and creating artificial buying pressure. How can one argue with “tight inventory”, right? Well, I think you can.

  132. 382
    jon says:

    RE: Brian @ 374 – The Chinese who are buying houses are not worried about making or losing a few percent. They are avoiding the risk of being reduced back to poverty.

  133. 383
    Brian says:

    RE: Justme @ 379

    I’m looking at YOY based on week/day of the month. So I’m comparing:
    11/11/2016 (2nd Friday of the month) to 11/13/2015 (2nd Friday of the month)
    11/19/2016 (3rd Saturday of the month) to 11/21/2015 (3rd Saturday of the month)

    I think this methodology makes the comparison fairer since it takes out the factor of normal interweek cycles (increasing inventory at the end of the week) that may affect things if I looked at 11/11/2015 (2nd Wednesday of the month) instead.

    Here’s a graph of the YOY change in inventory with this principle, going back to Sept 24th. You can see a significant uptick in inventory since 11/11/2016 (vs 11/13/2015).

    http://i.imgur.com/YT7UDk6.jpg

  134. 384
    AJT says:

    Been seeing a lot more incentives for renting in the apt and townhouse market and now starting to see a significant increase in the number of SFH’s for rent as well. Some even with incentives!
    http://www.zillow.com/homedetails/2143-32nd-Ave-NE-Issaquah-WA-98029/61766491_zpid/
    Where’s ess??? He/she does make a valid point that high rent prices support high home prices. I would think the converse is true as well. On the Eastside there are so many more rental options now than I have seen in three years. I would rent a townhouse just as easy as a house even with three kids if the price was right.
    I was going to buy this winter but if I have more rental options at a reasonable price I am in no hurry to buy in this crazy market.

  135. 385
    AJT says:

    Been seeing a lot more incentives for renting in the apt and townhouse market and now starting to see a significant increase in the number of SFH’s for rent as well. Some even with incentives!
    http://www.zillow.com/homedetails/2143-32nd-Ave-NE-Issaquah-WA-98029/61766491_zpid/
    Where’s ess??? He/she does make a valid point that high rent prices support high home prices. I would think the converse is true as well. On the Eastside there are so many more rental options now than I have seen in three years. I would rent a townhouse just as easy as a house even with three kids if the price was right.
    I was going to buy this winter but if I have more rental options at a reasonable price I am in no hurry to buy in this crazy market.
    If there truly is a lot of Chinese buyers purchasing homes and then putting them on the rental market it will slow price appreciation. I think one tell is there are homes that recently sold show up on Zillow rental page.

  136. 386
    sfrz says:

    The wealthy Chinese EB5s are not renting out. They are buying and leaving empty as an investment. Trump probably won’t hamper the EB5 program as their investments most likely have been in his building projects.

  137. 387
  138. 388
    Doug says:

    RE: whatsmyname @ 385 – Link isn’t working. Can you paste the relevant section?

  139. 389
    Justme says:

    RE: Brian @ 381

    Thanks, appreciate your response. It may be reasonable to use Nth Friday of the month, as you say. In terms of day-of-year you would be off by at most 6 days when comparing different years, which is not huge relative to the length seasons, but not entirely insignificant either.

    PS: Can view the imgur graph, but not download it. Is that intentional? :)

    Still wondering about DOM and other measures. The Tim does not seem to collect such data, and I am not sure who else might be.

  140. 390
    Justme says:

    RE: AJT @ 382

    I think Ess is busy contriving some reason why more rentals is good news for the housing resale market :-).

  141. 391
    whatsmyname says:

    RE: Doug @ 386
    “Are you a Seattle-area renter who feels like rents have been going up too quickly the last couple of years? There’s a great article by Eric Pryne this morning in the Seattle Times that you should read: Ballard’s apartment boom comes with risks
    It’s definitely worth reading the whole thing. It definitely sounds like the apartment rental market is going to get a lot more competitive (in renters’ favor) soon.”

    Links to a Seattle Times article on the surplus of apartments being built, incentives, and the potential “disaster” for apartment owners in Ballard – coming late 2013 to 2015. Comments, as always, are great too.

    If you use Tim’s Archives function, just go to November 2012, and the post is easy to access.

  142. 392
    whatsmyname says:

    RE: Justme @ 387
    If you click on the Altos graphs in the sidebar, they show DOM plus price per square foot. They show both 7 day and 60 day totals/medians. And you can pick by City – so you get a better focus on say, Seattle vs Bellevue vs Federal Way. A lot of big differences get blended within the King County medians.

  143. 393
    Brian says:

    By Justme @ 387:

    PS: Can view the imgur graph, but not download it. Is that intentional? :)

    No intentions, I was just trying to post a photo of my graph. If you copy and paste the URL into the address bar then you should be able to right click and save it.

  144. 394
    ess says:

    By AJT @ 382:

    Been seeing a lot more incentives for renting in the apt and townhouse market and now starting to see a significant increase in the number of SFH’s for rent as well. Some even with incentives!
    http://www.zillow.com/homedetails/2143-32nd-Ave-NE-Issaquah-WA-98029/61766491_zpid/
    Where’s ess??? He/she does make a valid point that high rent prices support high home prices. I would think the converse is true as well. On the Eastside there are so many more rental options now than I have seen in three years. I would rent a townhouse just as easy as a house even with three kids if the price was right.
    I was going to buy this winter but if I have more rental options at a reasonable price I am in no hurry to buy in this crazy market.

    I would not put too much stock into that one rental ad as proof that the market is declining. Rather, it is a good marketing tool to get people into the rental towards the end of the month where there is a major holiday looming and we are entering a holiday season where people are occupied in keeping other parts of the economy going. No one likes to lose a month of rent – losing half a month while getting a good tenant is preferable. I have gone that route a number of times over the years.

    Real estate tends to get more expensive over time, in a stair step like fashion. We have taken many steps up over the past few years – a breather in prices, or even a decrease in prices would not come as a terrible shock to anyone. If more people decide to rent and not buy, the housing market will correct itself over time as less units are built for sale.

    One important issue is not only the question if more people are renting rather than buying, but if they are staying in the area and others continue to migrate into the area. The fact that more potential buyers wish to rent rather than buy only makes the rental market stronger, as there is more competition from good tenants for rentals. The best tenant is one who has the money to buy their own house, or is planning to do so in due term, but does not wish to right at this time for a variety of reasons. The real troubling issue for everyone in the real estate business is if the area is losing population due to factors such as unemployment. I have been through a few population contractions and higher unemployment situations – that is much more difficult, and that is when one see rents start to decline, rather when the real estate market is cooling off.

    The choice to purchase or to rent is a personal one based upon many factors. It is akin to deciding whether one should take social security benefits at age 62 or wait until later. As most of you know – social security benefits increase approximately 8% a year for every year that benefits are delayed until the age of 70, and those increases include all future COLAs. The answer is that there is no definitive answer (although most experts indicate generally it is best to wait). The decision depends on the financial situation of each individual, and what the future will hold in terms of income, health and other factors. And one can never be sure when the maximum time to take social security is, because for the most part no one knows how long they are going to live. If a person is going to be in the area for a number of years, the issue of buying or renting a house is very similar. It all depends on lots of factors – some out of control of the individual. But like social security, those decisions can be made with a variety of assumptions that generally make sense over the long haul for the most number of people.

    Will housing prices go up or down in value, or will it plateau over the next few years? What will our new president’s policies bring us that will effect housing one way or another such as inflation and higher interest rates? Trumps election have forced 30 year mortgages up almost 50 basis points – will that amount stay, return to prior rates or go higher? If one pays 2000 dollars a month rent for three years rather than buying a residence at present – will one have done better paying 72,000 dollars in rent that one will never see again, not have any tax write offs, and not participated in any potential increase of the value of the real estate vs the costs and risks of buying a residence? If one purchases a residence and in three years the value of the house drops 10% or more, will the buyer have lost money as compared to renting at 2000 dollars a month? What if one’s job becomes precarious and one has to relocate? Does the individual mind that he/she is renting long term in a place that he/she can’t treat as their own, and do with as they wish? Will interest rates continue to rise and price the potential buyer out of the market if housing continues to increase in costs? Will interest rates continue to rise and make the price of housing more affordable because housing will drop in price to offset the increased amount of borrowing money? Will the increase of interest rates offset the decrease of the price of housing? Will rich foreigners buy property with all cash deals that make the issue of interest rates irrelevant for a large percentage of the buying public? Will Seattle become another Vancouver BC? Will REITS and equity firms continue to buy single family houses to rent, thus limiting the supply of smaller first time houses that will reach the market? Will foreigner buyers increase or decrease their purchases in this market? Who knows? Not me.

    Serious issues for many people who are thinking about buying and don’t know what to do. These are questions I am glad I don’t have to grapple with.

  145. 395
    Justme says:

    RE: AJT @ 384

    Here it is. Ess is getting so nervous about the rental situation that he wrote a 899-word magnum opus with no content to explain that there is no need to worry. His dissertation included such RE chestnuts as

    –Real estate tends to get more expensive over time, in a stair step like fashion.
    {it just does, debt bubbles and serial bubble-saves has nothing to do with it, ZIRP does not matter. Bullish!]

    –The fact that more potential buyers wish to rent rather than buy only makes the rental market stronger [Here it is: As I predicted, Ess is trying to spin increased rental supply as BULLISH. You can’t make this stuff up, I tell you.]

    –The choice to purchase or to rent is a personal one based upon many factors
    [Great chestnut or bromide flavor on this one. It is ok to buy an overpriced house and get into lots of debt if it is RIGHT FOR YOU]

    –Will rich foreigners buy property with all cash deals that make the issue of interest rates irrelevant for a large percentage of the buying public? [A bit of FUD always helps, never mind that USD/CNY is rising sharply and China, and that Australia is experiencing a sharp drop in Chinese buyers].

    So there you have it.

  146. 396
    Justme says:

    RE: AJT @ 384

    Of course, the truth of rental demand being lower than rental supply is clear: Too many rentals, or not enough renters moving in. Pick your poison. On top of that: Renters have not been buying a lot of houses (low inventory and transaction volume, remember?), because then those same houses would not be for rent (part of the new supply), would they?.

    Overall it sounds to me like a housing downturn in progress, just like the one SF is having, but with a small delay.

  147. 397

    RE: Justme @ 396
    Keep Your Basements Empty Baby Boomers

    The Millenial adult children are coming back with degrees from the college dorms…they need $40/50/hr starting jobs to afford the rent, who’s fooling who?

    Amazon or Boeing [even the stealth layoffs at MSFT….my neighbor got the axe from MSFT last month after 20 years experience] pay $12/hr LOL bottom NWO slave tier wage for the “Basement Dwellers”. Ya can rent a YMCA room for that…

  148. 398
    Brian says:

    I haven’t looked at rentals since July, but interestingly on the Eastside there seems to be more now within my price range. Maybe it could just be the difference in season though.

  149. 399
    greg says:

    RE: sfrz @ 386

    leaving properties empty is not “investing” it is gambling.

    The empties matter, the signal a market out of control.

  150. 400
    Blurtman says:

    RE: Brian @ 398 – If you work in the city, you may want to try a few mock commutes. Traffic is only getting worse.

  151. 401
    whatsmyname says:

    RE: greg @ 399
    It’s not investing or gambling. It’s Insurance.

  152. 402
    redmondjp says:

    Wow, this is epic! 400+ comments at SB. In the words of our president-elect, “this is yuuuuuuge!”

    Happy turkey day this week! This is also the week when, back in 1997, I found my current house in the newspaper, and notified my agent that I wanted to go see it. It was a bankruptcy/foreclosure/divorce/mess, and it didn’t close until February of the next year.

  153. 403
    whatsmyname says:

    RE: Justme @ 396

    Check this out:
    http://www.bizjournals.com/seattle/morning_call/2015/12/report-finds-alarming-deterioration-of-seattle.html

    “The big warning sign for landlords is what the report says is “price resistance” in the most expensive submarkets: the downtowns of Bellevue and Seattle, including Belltown and South Lake Union, and Sammamish/Issaquah. After increasing during the first three quarters, rents dropped this quarter in all but South Lake Union, with the average decline hitting $59 a month. Further, when all of these submarkets are considered, the average vacancy rate increase was nearly a full percentage point.

    Meanwhile, across all markets, more landlords are offering tenants sweeter incentives, such as free rent. The average value of incentives is $15 a month this quarter, which is nearly double what it was last quarter, when 16 percent of landlords were offering incentives. Now 20 percent are.

    Apartment Insights surveys apartment properties with 50 or more units, and found that the vacancy rate in both counties now is 4.3 percent, up from just over 4 percent last quarter.

    “This quarter’s alarming deterioration of the most expensive submarkets may be a prime indicator that the market is getting softer and will continue to do so,” Apartment Insights’ Tom Cain wrote in the report. “A near doubling of rental incentives and a quarter point increase in the vacancy rate also portend a slowdown.”

    The only problem? This article is a year old. And here’s the money quote:
    ” This, too, would indicate a market slowdown, but Cain said that’s not the case because the fourth quarter often is the weakest of the year, with rents actually declining each fourth quarter over the last four years.”

  154. 404
    ARDELL says:

    RE: greg @ 399

    In Kirkland there have always been quite a few “rainbird” owners who live in them summer only. They stay vacant during the rainy season.

  155. 405
    Justme says:

    RE: whatsmyname @ 403

    Could you get any more bogus with your arguments? You lie to the reader, then gloat about having lied. This really shows your true nature.

  156. 406
    whatsmyname says:

    RE: Justme @ 405
    Problem with reading comprehension?
    I link the article headlining your argument.
    I quote the article regarding your argument.
    I contextualize the article regarding your argument.
    You made sectoral a call on a seasonal factor. But you could be right. This time could be different.

    Where is the lie?

  157. 407
    Blake says:

    https://www.bloomberg.com/news/articles/2016-11-21/shih-says-china-faces-yuan-float-if-capital-controls-fail-q-a

    … if the yuan floats next year look out below!! Massive capital outflows right now, but that may end abruptly with Chinese capital controls in last ditch effort to peg the yuan.

  158. 408
    Eastsider says:

    RE: Blake @ 407

    Agreed. Despite Trump’s campaign rhetoric, his administration will WANT China to keep the yuan strong contrary to its market value. LOL.

  159. 409
    Sam Hunter says:

    “The big warning sign for landlords is what the report says is “price resistance” in the most expensive submarkets: the downtowns of Bellevue and Seattle, including Belltown and South Lake Union, and Sammamish/Issaquah. After increasing during the first three quarters, rents dropped this quarter in all but South Lake Union, with the average decline hitting $59 a month. Further, when all of these submarkets are considered, the average vacancy rate increase was nearly a full percentage point.

    Meanwhile, across all markets, more landlords are offering tenants sweeter incentives, such as free rent. The average value of incentives is $15 a month this quarter, which is nearly double what it was last quarter, when 16 percent of landlords were offering incentives. Now 20 percent are.

    Apartment Insights surveys apartment properties with 50 or more units, and found that the vacancy rate in both counties now is 4.3 percent, up from just over 4 percent last quarter.

    “This quarter’s alarming deterioration of the most expensive submarkets may be a prime indicator that the market is getting softer and will continue to do so,” Apartment Insights’ Tom Cain wrote in the report. “A near doubling of rental incentives and a quarter point increase in the vacancy rate also portend a slowdown.”

    The only problem? This article is a year old. And here’s the money quote:
    ” This, too, would indicate a market slowdown, but Cain said that’s not the case because the fourth quarter often is the weakest of the year, with rents actually declining each fourth quarter over the last four years.”

  160. 410

    RE: Blurtman @ 400
    Yes Blurtman

    And that expanded single track of multiple train stops still won’t help….you still need a taxi to get from the train station to work….grab another $20/day to get to work if you don’t drive and take the train.

  161. 411
    ess says:

    http://www.businessinsider.com/americans-with-roommates-are-skyrocketing-2014-11

    While this article is a year old, it does indicate a significant percentage of individuals who are sharing an apartment or a house, rather than living on their own. I had no idea the percent was so high. In Seattle, there has been a significant increase of shared housing in the last fifteen years. One wonders if there will be increased individual household formation, and its impact on both vacancies and rents, as more individuals aspire to reside in their own residence as they approach middle age.

  162. 412
    Deerhawke says:

    By Ardell DellaLoggia @ 358:

    RE: bingo @ 355

    “What will the topic for November be… “Mostly Bad News” or “Mostly Good News” for Buyers in November?”

    Even worse news for buyers in November.

    Ardell, c’mon don’t be coy. Tell us the why as well as the what. Why do you think so?

    My own feeling is that you are right. I am a spec builder and really can’t find anything to buy that makes any sense.

    Ardell, you introduced everyone on this site to the rule of thirds in single-family construction. Generally over the long term it is a good rule. The dirt (usually a teardown) should cost a third or less of the retail price of the house listed a year or so later.

    In most core neighborhoods right now, a lot is $600k plus. Do you think we will be seeing new construction this spring in Wallingford, Green Lake, Phinney etc at $1.8-1.9 million? Or do you think when the value of the land gets too high, the multiples don’t work any more?

  163. 413
    Doug says:

    RE: Justme @ 396 – Not so sure about that. While I saw price declines in October across every real estate site, November is looking like a M-o-M gain of 1-2%. And again, I’m still seeing a spike in potential buyers on Redfin.

    On the rates side, the 10y UST selling momentum has paused. For what it’s worth, I did previously mention the 10y at 2.35% is a buying opportunity. Until proven wrong, I still believe the recent spike in rates was nothing more than a knee-jerk reaction to Trump and will slowly come back down.

  164. 414
    Doug says:

    RE: Deerhawke @ 412 – Good question. Is a builder still profitable at 2-2.5x?

  165. 415
    Macro Investor says:

    By StupidLifeDecisions @ 369:

    By Doug @ 367:

    RE: Eastsider @ 364

    Re: ST3…”In January, sales tax will go up half-a-percent, car tabs will more than triple, and property taxes will jump over $300 per year in the Sound Transit district.”

    Can people like pfft pay my share since they want it so bad?

    I think that pfft’s of the world should pay your share and the share of everyone else who doesn’t want it. If they think these increases are so wonderful, they can put their money where their sanctimonious mouths are. The stupider a person is, the more dangerous they are.

    Don’t forget the $15/hour minimum wage and Obamacare increases. Everything you buy will be going up rapidly. Food, services, rent, auto repairs, etc…

    Suck it liberal idiots. Happier and happier I moved out.

  166. 416
    Doug says:

    RE: Macro Investor @ 415 – Liberals are generally well-intentioned, but also generally lack basic math skills.

    How does libertarianism not just intuitively make sense to everyone?

  167. 417
    Eastsider says:

    RE: Macro Investor @ 415

    Retirees will soon move out of WA en masse…

    “…Social Security recipients will receive a cost of living (COLA) increase in 2017, after no increase in 2016. The bad news is that next year’s 0.3-percent COLA increase is the smallest in history. This means a retired worker who currently receives the average $1,350 per month benefit will see only $4 more per month from the COLA increase”

    http://www.marketwatch.com/story/the-good-news-and-the-bad-news-about-the-2017-social-security-increase-2016-10-19

  168. 418
    Kit says:

    RE: Doug @ 416

    When you’ve got people like Gary Johnson at the head of the party who does not cite what services he will keep and what he will slash, there is not a lot of traction. When it comes down to why that matters and not slashing everything, because I don’t inherently trust companies or people to do the right thing – laws and regulations with money and teeth to enforce it allows me to have greater trust in the things I don’t grow/make myself.

    For example, I worked for a large medical device company. They had a device where essentially, plugging it in or out would rarely cause some second-degree burns. I know this from the reports on it given to us. When they wanted to update the product, they didn’t bother doing the audit for that. Legally though, they had to per FDA regulation. That is how my team found this flaw. Of course, they essentially tried to bury this finding and the lack of mitigation and I believe they got away with it. You could argue that over time, people will stop using the 60k device, but realistically, not for a while: 1. they paid a lot and 2. it takes time aka victims to find out. There are some other stories I have of companies where they got caught and had to fix some fatal flaws either because they did the testing they thought they didn’t need (but the FDA requires) and caught it themselves or the FDA caught them trying to pull a fast one. Having worked with various companies and the FDA at various points, it isn’t a high bar to pass – they are pretty reasonable about risk vs. reward/benefit of release. You can look at all sorts of stories from all sorts of industries to see where various regulatory bodies help: the aloe lotion story, food inspections, etc. However, the benefits of mass scale seem to outweigh the sustenance kind of lifestyle. I trust people with a paid job over most organic organizations because money has to come from somewhere – when we pool it together, I think they are more likely to be fair. No major group is without flaw, but that is where I disagree with libertarians often.

    My personal ideal is a mix of democrats and libertarians (if not more ideal parties). I am probably wrong, but that is my current idea: we should always question the value of things (for example, there is a limit to what you can spend on education before the benefits are just not worth it), but there is a lot we can do with government programs and rules to help keep some minimal quality of life that will keep us progressing. I have a few start-up ideas, but I wouldn’t risk my nice healthcare to pursue any full time. Better coverage may free up some people to take risks and I believe we can afford it. I also wonder what kind of impact it would have on crime: people who can afford their insulin rather than stealing from the hospital ER. Healthcare isn’t a right by any means, but in a complex society and economy like this, I do believe that a rising tide lifts all boats. Again, could be wrong. I’m sure someone will call me an idiot or other mean things. But I’m putting this out there.

  169. 419
    Deerhawke says:

    RE: Doug @ 414

    In the current market, this is the way it looks. At 2x, you lose money. At 2.5x you actually do OK. I am guessing that many builders are tossing out the 3x multiple and just trying to make sure they show a 15% margin so their bank will keep doing business with them

    And Macro Investor, given your attitude we are happier and happier you moved out too!

  170. 420
    StupidLifeDecisions says:

    By Macro Investor @ 415:

    By StupidLifeDecisions @ 369:

    By Doug @ 367:

    RE: Eastsider @ 364

    Re: ST3…”In January, sales tax will go up half-a-percent, car tabs will more than triple, and property taxes will jump over $300 per year in the Sound Transit district.”

    Can people like pfft pay my share since they want it so bad?

    I think that pfft’s of the world should pay your share and the share of everyone else who doesn’t want it. If they think these increases are so wonderful, they can put their money where their sanctimonious mouths are. The stupider a person is, the more dangerous they are.

    Don’t forget the $15/hour minimum wage and Obamacare increases. Everything you buy will be going up rapidly. Food, services, rent, auto repairs, etc…

    Suck it liberal idiots. Happier and happier I moved out.

    You should read the SeattleTimes article about how our joke mayor who wants Seattle to be a sanctuary city to illegal immigrants who are also criminals is complaining that Trump might pull federal funding because he (joke mayor) refuses to do anything but protect them. Joke mayor also said in the same article that he dearly wished he could pass a state income tax so we could pay for all of his and city council’s agenda and the illegal criminals who are not citizens, but he is being suppressed on that (for now, but give it a year or two).

    I must be extra dumb and extra evil, since even though I come from an immigrant family that includes some Mexicans, I have zero issue with criminals being deported. I’m not as smart as all the people who support our joke mayor, his dreams for a state income tax, and his need to protect criminals though.

    I wonder if there will ever be any uproars about how seattle city council has done nothing but chase the poor and middle class American citizens out of seattle. Probably not, just more taxes and more fu’s to the middle class (anyone who is not a software engineer or an illegal criminal or a cash rich citizen of china). Trump really needs to revise his tax plans with a clause about increasing tax rates for companies like amazon, too bad he won’t do that because that is the best thing he could do for the middle class.

  171. 421
    pfft says:

    By Macro Investor @ 415:

    By StupidLifeDecisions @ 369:

    By Doug @ 367:

    RE: Eastsider @ 364

    Re: ST3…”In January, sales tax will go up half-a-percent, car tabs will more than triple, and property taxes will jump over $300 per year in the Sound Transit district.”

    Can people like pfft pay my share since they want it so bad?

    I think that pfft’s of the world should pay your share and the share of everyone else who doesn’t want it. If they think these increases are so wonderful, they can put their money where their sanctimonious mouths are. The stupider a person is, the more dangerous they are.

    Don’t forget the $15/hour minimum wage and Obamacare increases. Everything you buy will be going up rapidly. Food, services, rent, auto repairs, etc…

    totally unsupported by research or links…yet people fall for it every time.

  172. 422
    pfft says:

    By Doug @ 416:

    RE: Macro Investor @ 415 – Liberals are generally well-intentioned, but also generally lack basic math skills.

    How does libertarianism not just intuitively make sense to everyone?

    some of us have read about the 1800s.

  173. 423
    AJT says:

    When this takes effect Jan 1 we will see how safe US property is to Chinese nationals that owe monies to the Chinese government.
    https://www.bloomberg.com/news/articles/2016-11-22/china-tax-reform-may-raise-revenues-from-earnings-of-wealthiest

  174. 424
    Eastsider says:

    By Deerhawke @ 419:

    RE: Doug @ 414

    And Macro Investor, given your attitude we are happier and happier you moved out too!

    IMHO, you are missing the point. This region is becoming unaffordable to many people. Young people are being pushed out of the area. Vancouver BC is what Seattle will become. We do have a problem that can’t be solved by ‘raising’ minimum wage when cost is out of control. I predict Seattle will experience the highest inflation rate among major cities in 2017.

  175. 425
    Deerhawke says:

    RE: Eastsider @ 422

    In my opinion, it has been a long time since you actually spoke to a young person. Do you know any?

    Yes it has become more expensive, but I sure have not seen any young people giving up on Seattle and flocking to the Red States.

    On the contrary, that great sucking sound you hear from the plains is all the young talented people giving up on the Dakotas, Montana, Idaho, Wyoming, Utah, etc. and heading to Seattle. Sure they complain about the cost of a share on Capitol Hill or the U-District , but going back to the small minded, rural American West is inconceivable. They are not even interested in the suburbs and exurbs. They would much rather live in grungy Georgetown or Delridge than Lynnwood or Everett.

    Raising the minimum wage is going to take a bit of money from people like me and making their lives a bit easier. It is actually having an overall positive effect and making the city more (not less) attractive to young people.

  176. 426
    Justme says:

    RE: Eastsider @ 422
    RE: Deerhawke @ 423

    I personally know two 20-somethings that moved from the west coast to Ohio in the last 6 months. It is almost enough that I feel a trend coming on.

  177. 427
    justme says:

    RE: whatsmyname @ 392

    By the way, no Altos Resarch link in my sidebar. I found some via google, though.

  178. 428
    Blurtman says:

    RE: Justme @ 424 – Ay, oh, way to go, Ohio

  179. 429
    Brian says:

    U.S. 10-year treasury has currently broken through 2.400%, highest since July 2015. I expect mortgage rates will be a solid 4.125-4.250% now if this holds.

  180. 430
    Eastsider says:

    RE: Deerhawke @ 423

    I suggest you are living in a bubble.

    “Seattle’s median household income broke the $80,000 mark in 2015, jumping nearly $10,000. It was the highest rise of any major U.S. city.”

    http://www.seattletimes.com/seattle-news/data/80000-median-wage-income-gain-in-seattle-far-outpaces-other-cities/

    “Since 2010, census data show a slight uptick in the percentage of whites in Seattle — the fifth-whitest big city in the nation.”

    http://www.seattletimes.com/seattle-news/data/from-ocean-to-idaho-border-state-becoming-less-white/

    Despite the increase in the minimum wage, (low income) families are being pushed out of the city. Seattle now sports one of the highest percentage of adults living alone in the country. It is becoming less diverse in ethnicity and income against the trend elsewhere in the state.

    Sure you are seeing many young well-paid high-tech workers (which accounts for maybe 1% of young population.) But the majority of young people (99%?) are being pushed out as living cost increases relentlessly.

  181. 431
    Eastsider says:

    RE: Brian @ 427

    I’m not liking what I see in the financial markets today. The drastic increase in USD and interest rate is increasing chances for dislocations. It is near impossible for any business/country to operate under this kind of volatility.

    Note I am not saying that dislocations will happen. But if it does happen, you hear it here first.

  182. 432
    Bob says:

    RE: Eastsider @ 429

    The 10 year rate is only back to where it was earlier in 2016.

  183. 433
    Eastsider says:

    By Bob @ 430:

    RE: Eastsider @ 429

    The 10 year rate is only back to where it was earlier in 2016.

    The S&P 500 also went from 2044 on 12/31/15 to 1869 in three weeks, a decline of 8.5%. During that period, 10 yr rate went from 2.27% to 2.07%. In the past 2 weeks, 10 yr rate went from about 1.8% to 2.35%. Changes of this magnitude can cause severe stress. Who knows if some hedge fund may be busted right now…

  184. 434
    Deerhawke says:

    RE: Eastsider @ 428

    So you are saying that I live in Seattle…. and Seattle…. is a bubble? What a novel concept! Why not start a website to explore the idea? Think of the possibilities!

  185. 435
    Deerhawke says:

    RE: Eastsider @ 428

    Sorry, that was just too much of a slow pitch right over the plate to avoid playing home-run derby with it.

    But really the question is what you actually mean by saying Seattle is a bubble. Does that mean we are cut off from the rest of the country or the world? Does that mean that it is unsustainable and it is going to pop? Be a bit more specific.

    And what is your point in about the median income going up in Seattle? This is a bad thing? Really? And you think it is news that Seattle is white? Of course it is white. It has always been a really white city. Do you really think anybody other than really, really white people would ever consider eating something as disgusting as lutefisk?

    But on the other hand, if you want diversity, move to the Rainier Valley. Zip codes 98118, 98178 and 98188 are the real mixing pot of the area. That is where the real social experiment is taking place.

    And guess what? As young people from the rest of the country pour into the area, that is where they are moving. Rainier Valley, Columbia City, South Seattle, Delridge, Georgetown– even White Center. And they are coming here not just to write code, but to start farm-to-table restaurants and found urban lifestyle companies. Two young guys I know moved here from Ohio and started one called Graypants. Check them out. http://www.graypants.com/

    And yes there may be a few who throw in the towel and move back to Ohio, but that is a really good thing. In fact, we should strongly encourage the trend. That way we can spread the spirit to the rest of the country. In the process maybe we could get the Electoral College back in sync with the popular vote so we can get rational leadership again.

  186. 436

    RE: greg @ 399
    Yes Greg

    Its called vagrants, rats, leaks and mildew….the house can be destroyed quickly without house sitters and heat.

    You’ll need a security system, hire a property manager [about $300/mo?] and ground/structure maintenance is 365 days/year [its not cheap either].

  187. 437

    RE: Deerhawke @ 433
    Average King County Income Makes More Sense

    Since the average home owner [50%] in Seattle does not work….what good are the numbers???

    Now….the average per capita income in King County is about $40K….1.2 workers per household average means $48K/yr. Use that number, not $80K….I bet the “trust worthy MSM” gave ya that other number. LOL

    http://www.usa.com/king-county-wa-income-and-careers.htm

  188. 438
    justme says:

    RE: softwarengineer @ 435

    Good data and observations. Do you have a source of the 50%-is-a-landlord-or-retired number? That is highly interesting.

    Update: I think I found it: Male 53%, Female 46% employed
    http://www.usa.com/rank/washington-state–employed-male-civilian-percentage–county-rank.htm?hl=King&hlst=WA&yr=9000

    Great website, did not know about it before.

  189. 439
    uwp says:

    What kind of bizarro world do you guys live in?

    Ohio is LOSING people. Net migration is negative.
    Washington is gaining people.

    https://www.washingtonpost.com/news/wonk/wp/2015/12/28/the-states-that-are-seeing-a-boom-in-population-and-the-states-that-arent/

  190. 440
    justme says:

    RE: uwp @ 437

    I posted an anecdote about 2 people moving from west coast to Ohio. You call that “bizarro”, and post an old article from 2014-2015 about westward migration, already outdated and actually with no data about Ohio versus Washington.

    Alrighty, then.

  191. 441

    RE: Deerhawke @ 412

    Sorry for missing this. On vacation in L.A. from 19th until the 30th.

    Seasonal factors always dictate worse for buyers, and increasingly so, from October 15 to January 15 or so. It’s part of the real estate cycle.

    As to the 3X Lot Rule of Thumb, the rule never changes. A teardown seller gets 1/3rd of what a new house would sell for at the time the teardown seller sells. Sometimes they can add a bit, same as an appraiser adjusts for continued future market upswing, to project what the house will sell for by the time the builder is building. In low inventory the builders will still go for that.

    If builders start getting less than 3 x lot then the price of land will decrease. If builders start getting more than 3 x lot then the price of land will increase. The rule never changes. The price of a lot changes.

    Hope that makes sense. Still surrounded by my children and their families until after I return on the 30th. By then we’ll have new graphs to show if November was better or worse for buyers than October. Answer should be worse.

    This does not apply to one level condos, but does often apply to townhomes in addition to single family homes. One story condos have a different annual cycle.

  192. 442

    RE: justme @ 436
    My Source for Most Seattle Area Home Owners are Singles [Over 50%]

    Came from the Seattle Times about a year ago, the 1.2 workers per household for the Seattle Area came from the BLS. Of course MSM overlooked the data….they wildly allege Middle Class is $250K/yr….and it wasn’t only Democrats spouting this lie….Bush did it too [he said $10/hr was good pay].

    The 50% don’t work is a NYTs’ reference made around 2014. All Sanctuary Cities have a high percent of home owners with no “skin in the game’….IOWs have no job to survive. No wonder this rich elite support slavery wages….LOL

  193. 443

    RE: uwp @ 437
    Workers or Rich Elite With Multi-Generational Money?

    Eventually and soon this house of cards needs first time Millenial Home Buyers. What can we sell them? $100K homes????LOL

    My investment Kansas City Home tripled in value:

    http://www.realtor.com/realestateandhomes-detail/1126-S-49th-Dr_Kansas-City_KS_66106_M75465-10217

    Hey Eric, my Kansas foreclosure made me about $50K in 2 years, Money for Nothing….LOL

  194. 444
    uwp says:

    RE: justme @ 438

    I’m sorry we don’t have 2016 data yet.
    Do you have anything other than anecdotes?
    Because it is going to take more than those two people you know to turn around the current trends.

    http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

  195. 445
    justme says:

    RE: uwp @ 442

    So you are retracting your “bizarro” comment then?

  196. 446
    Andrew says:

    There has not been new post from Tim since 24 days ago! This starts to feel like the shortage of housing inventory itself :)

  197. 447
    Eastsider says:

    By uwp @ 442:

    RE: justme @ 438

    I’m sorry we don’t have 2016 data yet.
    Do you have anything other than anecdotes?
    Because it is going to take more than those two people you know to turn around the current trends.

    Today’s Seattle Times has an article on this exact topic. As I suggested earlier, quite a few people here are living in a bubble.

    Newcomers pour into King County, while Washingtonians quietly exit
    http://www.seattletimes.com/seattle-news/data/newcomers-pour-into-king-county-while-washingtonians-quietly-exit/

    Last year, for the first time in at least a decade, the number of native-born Washingtonians in King County declined.

    Between 2014 and 2015, their number fell by more than 17,000 — a 2 percent drop. There are now 850,000 Washington-born residents in the county, or 40 percent of its total population…

    The data suggest that more longtime residents are leaving …

    “When we lived in Seattle, money was a huge stress,” she said. “It felt like we’d have to live above our means to have the kind of house that we wanted.”

    But in Austin, they found a brand-new four-bedroom home in a great neighborhood with highly rated schools for — are you sitting down, Seattleites? — less than $350,000.

    Sartor, who’s had a second child since the move, is able to stay at home with the kids. Back in Seattle, she worked as an academic adviser.

    “We’re not worrying about money down here. We can put money in savings for our kids’ college and things like that.”

  198. 448

    Apparently Washington state’s tax enticements to Boeing have received attention from the WTO.

    http://www.wsj.com/articles/wto-rules-against-boeing-in-ongoing-trade-battle-between-u-s-and-eu-1480348782

  199. 449
    justme says:

    RE: Eastsider @ 445

    Yes, and there is nothing preventing Amazon, Google and Microsoft from setting up shop in Austin. So the working age population may move there as well. Austin is culturally a good place, and it has lots of technology companies.

  200. 450

    RE: Kary L. Krismer @ 446
    Yes Kary

    We subsidize Boeing, meanwhile they stomach punch us the last 15 years moving aluminum cutting out of Seattle….just like Detroit…90% of the life cycle cost of a 737 [parts]. We’re brainless dolts with NWO Senators and Congressmen blindly watching out for us…LOL

    I’m qualified to state this….I worked aerospace manufacturing for 36 years….lived in Seattle all my life. Where’s the Scoop Jackson Senators that actually supported Seattle citizens?

  201. 451

    RE: Andrew @ 444
    Yes Andrew

    I wonder if Tim’s busy on more important matters.

    Like survival….

  202. 452
    uwp says:

    RE: Eastsider @ 445

    And yet, people are moving to Washington faster than they are leaving it.
    Net positive migration.

    Why don’t you quote from the other parts of the article?

    But the multitude of newcomers to Seattle from around the country and the globe tends to have a very different take: Ask about their newly adopted hometown, and they start to gush.

    “It’s gorgeous,” said Adam Rio, who settled into a Capitol Hill apartment six months ago after moving here from New York City.

    Rio scoped out jobs in Seattle for a year, waiting for the right one to finally open up. When it did, he jumped on it.

    He spent much of the summer taking off on camping and hiking trips in his newly purchased car — what else? — a Subaru Outback.

    “I can afford to have a car here, whereas that wasn’t even an option in New York,” he said. “I feel like almost everything is easier here.”

    There are potential issues with the Seattle housing market. I agree, rates going up will most likely have a negative effect on housing prices (although everyone has been saying rates are going up for the last 10 years too).

    But it doesn’t sound like the city is emptying out while folks head for Ohio: “The Land of Opportunity.”

  203. 453
    AJT says:

    RE: uwp @ 450
    And then there is this study from Metro. Basically the article states there is significant pent up demand but neg population growth with a slowdown in job growth. Once pent up demand gets worked through there may be an increase in inventory and the changes that accompany said increase

  204. 454
    Eastsider says:

    RE: uwp @ 450

    Sure you can look at it that way. The ex-New Yorker left NYC for Seattle, and the ex-Seattleite left Seattle for Austin. Did I mention that Seattle median family income increased by $10k in just one year? (No, Seattle workers did not receive that kind of wage increase in one year.) At this rate, even the new arrivals from NYC will find this place prohibitively expensive in a few years. (Just look at Vancouver!) But well before that, you will be packing your bags too. Maybe this never came to your mind? Again, quite a few people are living in a bubble here… ;-)

  205. 455
  206. 456
    justme says:

    RE: uwp @ 450

    >>But it doesn’t sound like the city is emptying out while folks head for Ohio: “The Land of Opportunity.”

    Nobody claimed that. Do you know anything except exaggeration?

  207. 457
    greg says:

    RE: Eastsider @ 380

    EB-5 is widely abused and should have been fixed or shut down years ago.

    Min investment should fully exclude all forms of RE or have a min floor of at least 3-5 million. It is very widely abused .

  208. 458
    greg says:

    RE: ARDELL @ 404
    Ardell ,

    I did not mean to imply seasonal homes were an issue . I do not believe they are. I meant to say that empties can indicate that we have moved to a more speculative market where owners are willing to have higher carrying costs and are focused on price inflation\growth as their primary means of profit.

  209. 459
    greg says:

    RE: N @ 376

    the key is monthly payments… Homes cost more now than they did last jan thus the monthly payment for home “X” is now higher even at the same interest rate. this is why many think increasing rates will cap prices.
    Buyers tend to buy based on monthly payments more than anything else. Of course that is changes as you go up market …

  210. 460
    greg says:

    RE: justme @ 447
    if Trump lives up to his promise (blocking H1b etc) we might well find the techs decide to focus growth outside his reach…
    They need talent and will do what it takes to get it, if the visas are blocked like Trumpy promised it will mean those 60,000 hires will just be made outside of the USA . maybe a few will stay onshore, but mostly they will just build out their non domestic sites….

  211. 461
    Eastsider says:

    RE: greg @ 455

    Agreed. Many Chinese ‘investors” bought their green cards (and citizenships) thru $500k bond in the 520 bridge. Basically that was what Clinton wanted – open border.

  212. 462
  213. 463
    Deerhawke says:

    With 2196 new listings for the month in King County, it seems like we are following last year’s supply curve pretty closely. We might be a dozen more or less, but that is really just a rounding error.

    In the Seattle market, I don’t have good data, but it seems that the number of listings is down again. I have heard that with Insignia being sold out, there is a lot more competition among buyers of single family homes in the city. Building permit intakes and issuance are also both down year-on-year so no help there. I can tell you from personal experience that it continues to get harder and harder to get a permit and get a building through the battery of inspections. They just keep making the race longer and adding more hurdles.

    Even with a quarter point increase, the spring market is likely going to be the same as we have seen for the past few years. Little inventory, strong demand, increasing prices.

    I have been wrong in my estimates the past couple of years (not irrationally exuberant enough). But I will stay the course and estimate that after the spring bump, we will see prices up “only” 8 percent year-on-year by June.

    Anyone else care to weigh in? If you have an opinion, give a real number and tell us what factors you think will affect the 2017 market.

  214. 464

    RE: greg @ 456

    Greg,

    Coincidentally, I had brunch with a friend here (still on vacation) up by the beach yesterday and the topic of a mutual friend came up. He bought this house in 1975 for $135,000 (not sure Redfin is accurate on that as I thought he bought it in 1981, but close enough). Current value about $5 Million. House on the end of row corner built in 1991 is listed for sale for $15 Million. Personally I think $4 Million for Bob’s and $12 Million for the 3 X lot factor is a bit more accurate than the numbers online.

    This example fits your definition fairly well as the owner hasn’t lived in it or rented it out for as long as i can remember. The photo on Redfin suggests he may have gutted it and expanded it, but it was pretty much a tear down last time I was in it (and still is) even though it was large.

    Anyway, the owner lives nearby in modest housing and has owned this for a large portion of his life without using it primarily as an income property or a residence. Just banked his $135,000 there some 40 years ago and left it vacant most of the time.

    Not sure if the current value of $4 M to $5 M beats all other investment types, but I don’t think the owner cares either.

    https://www.redfin.com/CA/Manhattan-Beach/3100-The-Strand-90266/home/6710560

  215. 465
    ess says:

    RE: Deerhawke @ 461

    Here is one possible hint as to the immediate future of housing prices in this area:

    http://www.seattletimes.com/business/real-estate/seattle-tops-the-nation-in-home-price-growth-for-first-time/

  216. 466

    RE: ess @ 463 – Actually, that’s about the recent past. But if you want to predict something about the future, I predict this news will cause a new post from Tim. ;-)

    One other thing. Inventory appears to be trailing down again similar to last year. Comment based on NWMLS data, but not compiled or guaranteed by the NWMLS.

  217. 467
    N says:

    I know I am in the minority but I don’t see much further price increases in 2017, especially if rates trend up. The rent to income ratio and price to income ratios are getting out of wack. I have been to a lot of open houses and the realtors that are more honest seem to be saying they think the market is turning. Windermere’s economist is predicting a downturn no later than 2018. It could all be wrong but it makes me nervous and has me thinking twice about buying. Banks apparently aren’t throwing money at Seattle commercial projects like they were 3 years ago either. While Seattle will do better than other cities this stuff goes in cycles and 75% in 5 years is not sustainable.

    http://features.crosscut.com/seattle-tech-economy-recession-vulnerability-boom-bust

  218. 468
    Macro Investor says:

    Case Shiller came out today. Guess rip van Tim is still sleeping. Or maybe I’ll start a rumor that he’s in rehab, due to being unable to sell his house in a down market.

    BTW, that is why the Amazon employee attempted suicide. He is stuck with a rapidly depreciating home and is financially ruined. Many others to follow.

    News from a very accurate crystal ball, 2 years hence.

  219. 469
    pfft says:

    If you don’t have obamacare you still might lose your insurance or see premiums sky rocket under repeal.

    repealing the individual mandate immediately while keeping the protections for people with pre-existing conditions would likely lead to immediate chaos in the insurance market.

    Why The GOP Is Still Playing With Fire With Obamacare Repeal And Delay
    http://talkingpointsmemo.com/livewire/obamacare-repeal-and-delay-risks

    good job all you morons who voted Drumpf.

    If Democrats could have passed obamacare w/o the mandate they would have. republicans aren’t going to suddenly find a new system. instead they passed Romneycare!

  220. 470
    Matt says:

    RE: Macro Investor @ 466

    Unless the entire tech economy implodes, I don’t think you will see Amazon engineers financially ruined by a slump in housing here. Momentarily humbled by the fact that many have made a poor investment, sure, but even in this market, very few tech workers are banking on home equity to see them through. One advantage of being an Amazon or other major tech company employee is that many can out-earn their bad decisions–probably even in a downturn of the tech industry.

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