NWMLS: Closed Sales Strong (For A November)

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November market stats were published by the NWMLS this morning. Here’s their press release:

Real Estate Brokers Expect No Holiday Breather
Sales Stay Strong and Supplies Remain Low

Pending sales of homes hit an all-time high for the month of November according to the latest statistics from Northwest Multiple Listing Service. The report covering 23 counties around Washington state also shows the number of new listings added during the month plunged to the lowest level in 11 months, prompting MLS leaders to predict a busy winter for residential real estate as buyers compete for the smallest inventory since March.

“November’s pending sales for the four-county area of King, Snohomish, Pierce and Kitsap were the highest since 2005. There were 44 percent more pendings than new listings,” noted J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, who described market activity as a mini power surge. “Every time interest rates increase 0.5 percent we see these surges because buyers become anxious about increasing rates – but on a historical basis rates are still amazing,” he remarked.

You can always count on Lennox. Breathless as usual.

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):

November 2016 Number MOM YOY Buyers Sellers
Active Listings 2,309 -23.7% +0.3%
Closed Sales 2,249 -10.5% +29.2%
SAAS (?) 0.81 -10.5% -16.0%
Pending Sales 2,224 -21.4% +4.8%
Months of Supply 1.03 -14.7% -22.4%
Median Price* $550,000 0.0% +10.0%

Pretty much all the stats moved against buyers in November. Inventory was just barely above last year’s level, but closed sales were considerably higher than a year ago. The nearly thirty percent surge in closed sales compared to a year earlier was the largest year-over-year move we’ve seen since October 2012. It is also a little strange, considering that pending sales haven’t increased more than eight percent any time in the past twelve months. I’ll be looking into that in the coming days to try to understand what’s going on there.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell slightly from October to November, but were up dramatically from a year ago, as mentioned earlier.

King County SFH Pending Sales

Pending sales fell twenty-one percent in November, but were still up five percent year-over-year.

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

King County SFH Inventory

Listings followed pretty much exactly the same path as last year, ending up the month just slightly above the same level as November 2015.

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

November saw the strongest move into seller’s market territory that we’ve seen in a long time for demand.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price gains fell from nearly fifteen percent in October back to ten percent in November

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)

Here’s the article from the Seattle Times: ‘Panicking’ Seattle home buyers, spooked by rising interest rates, rush to buy

If this “interest rate panic” story sounds familiar, it’s because we’ve heard it a few times before.

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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.

421 comments:

  1. 251
  2. 252
    kenmorem says:

    can people, like kary, be banned from posting? seriously. it’s annoying to read thread after thread with 20% of the comments coming from klueless kary.

  3. 253

    By kenmorem @ 245:

    can people, like kary, be banned from posting? seriously. it’s annoying to read thread after thread with 20% of the comments coming from klueless kary.

    If you have an issue with something I post, refute it. Even if it’s incorrect or irrelevant like greg or pfft. Otherwise you’re just being more of a troll than them claiming I’m clueless. Do you like being a below average troll? No need to answer that–we all know the answer.

  4. 254
    greg says:

    RE: Kary L. Krismer @ 226

    My point stands Kary.

    Despite your denials there are plenty of examples of you displaying profound ignorance on many of the topics you choose to debate.

    Simply put you should stick to RE because almost every time you stray from that field you show us gaps in your education that would could drive a bus through. I can’t imagine you would want any potential client to see this site. You have so many posts where you come as an argumentative and stubborn man child.

    Surely at some level you must already know this but can’t overcome your own need to be ‘right” ….

  5. 255

    By greg @ 247:

    RE: Kary L. Krismer @ 226

    My point stands Kary.

    Despite your denials there are plenty of examples of you displaying profound ignorance on many of the topics you choose to debate.

    First, you never made a point. Why do you think I called your post non-responsive.

    Second, give some real examples of the “many topics” where I am wrong You again didn’t, so you again are non-responsive.

    I think I’m going to take back my claim that Kenmorem is such a below average troll, because you’re not that great yourself. The Canadian healthcare issue wasn’t even something you knew about–you only learned of that from a prior poster. So you’ve caught only one thing, and incorrectly classify that as being economics.

  6. 256
    ronp says:

    RE: softwarengineer @ 212 – Dude, the planet is melting due to not leaving oil and coal in the ground. Batteries are nothing compared to our current CO2 problem.

  7. 257
    Blurtman says:

    RE: kenmorem @ 245 – Kary is suffering from unrequited love for Maria Cantwell. She had to take out a restraining order.

  8. 258
    uwp says:

    I appreciate Kary’s posting, even when I disagree with him.

    What would Seattle Bubble be without the local Seattle RE Superstars?
    I treasure each post from Kary, Ardell, Ray Pepper, David Losh…

    I like to think of each comment as a GEM!

  9. 259
    pfft says:

    By redmondjp @ 235:

    RE: greg @ 223 – You’re hilarious and a complete hypocrite, greg. Obama brought dozens of thug rappers into the white house who have penned lyrics 10x worse than that one private comment made by Trump, especially worse when considering that this garbage is listened to by millions of impressionable youth.

    And nobody seemed concerned at all about the Clinton Foundation Pay To Play game, yet people are now freaking out about what Trump might do.

    Complete hypocrisy.

    there wasn’t any pay to play scheme and what donald trump said wasn’t a fictional rap song…he has a dozen or so accusers.

  10. 260
    pfft says:

    By Blurtman @ 236:

    RE: redmondjp @ 235 – Liberal derangement syndrome. Hillary was a terrible candidate, the chosen candidate of a corrupt DNC. Most amazing, the whiners are complaining about the one-sided exposition of their corruption. “Hey, no fair! They are corrupt, too.”

    Trump was an outsider who had zero support from his party’s establishment. He was and is labeled a racist with zero proof of that. His locker room talk was taken as absolute truth by the narrow minded, while other statements were dismissed as bragadaccio.

    His election should serve as an eye-opener, but that is not happening.

    that was not locker room talk and people came forward and said that was exactly what he did.

    also hillary won the popular vote…

    “He was and is labeled a racist with zero proof of that. ”

    ‘No Vacancies’ for Blacks: How Donald Trump Got His Start, and Was First Accused of Bias
    http://www.nytimes.com/2016/08/28/us/politics/donald-trump-housing-race.html

  11. 261
    pfft says:

    By Kary L. Krismer @ 246:

    By kenmorem @ 245:

    can people, like kary, be banned from posting? seriously. it’s annoying to read thread after thread with 20% of the comments coming from klueless kary.

    If you have an issue with something I post, refute it. Even if it’s incorrect or irrelevant like greg or pfft.

    let’s examine your track record. you said most of the PIIGS would default. you said the min wage would hurt jobs(it didn’t). you said obama was hurting the economy by telling bailed out banks maybe they shouldn’t go to vegas right now. you said obama was hurting jobs even though we had one of the fastest recoveries from a financial crisis of all time. you threw every criticism you could at obamacare and it still caused the uninsured rate to plunge and has been a general success(of course there are always things that could be better like lower deductibles and etc.).

  12. 262
    Blurtman says:

    RE: pfft @ 253 – Rachel Crooks, client of ambulance chaser Lisa Bloom. Want to get your 10 seconds of fame and possibly some money? Please provide a link regarding fines or convictions for criminal sexual behavior.

    ‘No Vacancies’ for Blacks: How Donald Trump Got His Start, and Was First Accused of Bias – proof that he is a racist, I think not.

    Take some meds for the hysteria. Losing objectivity is never good.

  13. 263
    Blurtman says:

    Oh, those Deplorables….

    U.S. Economic Confidence Inches Up to New High

    WASHINGTON, D.C. — Americans’ confidence in the economy continues to gradually strengthen after last month’s post-election surge. Gallup’s U.S. Economic Confidence Index averaged +10 for the week ending Dec. 18, marking another new high in its nine-year trend.

    The latest figure is up slightly from the index’s previous high of +8 recorded in both of the prior two weeks. The first positive double-digit index score since the inception of Gallup Daily tracking in 2008 reflects a stark change in Americans’ confidence in the U.S. economy from the negative views they expressed in most weeks over the past nine years.

    Last month’s election of Donald Trump not only marked a change in the country’s political power structure but also significantly improved Republicans’ economic confidence — pushing the index into positive territory for the first time since March 2015.

    Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all Americans were to say the economy is doing poorly and getting worse.

    http://www.gallup.com/poll/200126/economic-confidence-inches-new-high.aspx

  14. 264
    greg says:

    RE: uwp @ 251

    Ardell provides real value to this site. Kary is mostly noise and ego his posts when talking about RE can be reasonable and sometimes even have limited value. But virtually everything else he comments on is little more than a public display of ignorance and a never ending stream of fallacious rubbish.

  15. 265
    greg says:

    RE: softwarengineer @ 239

    Not sure what you are trying to say, but I assume you are suggesting that the economic engines of NY and CA are the driving forces that make America such a successful and powerful nation?

    The math clearly shows that BLUE states carry the Red states and provide the monies that support most of the RED “taker” states.

    In fact when you think about it, it is no wonder those Red states are Red, they are mostly poor, struggling with brain drain and have bleak futures .

    Thank any random deity for states like CA NY WA…. without those states we would be a has been low tech manufacturing country , in fact we would be a low cost producer….

    So YEP I agree with you …. Well done to the peoples of NY and CA.

  16. 266
    Macro Investor says:

    By Kary L. Krismer @ 177:

    RE: Blurtman @ 176 – Anyone missing the political discussions yet? ;-)

    Point well taken. Over 100 comments about the semantics of vendor financing.

    Most computer professionals are borderline autistic. One good “tell” is they geek out about minutiae or semantics, and can go on and on for a very long time. Because of the autism, they don’t notice they’ve lost their audience’s attention and become annoying after the first 30 seconds. People with normal social skills notice the body language and stop.

    Revenge of The Nerds was a documentary, except in real life only a few ever become rich.

  17. 267
    Blurtman says:

    RE: Macro Investor @ 259 – I have nothing against computer professionals. Their above average incomes are driving home prices in the area.

  18. 268
    AJT says:

    It’s gotta start somewhere. Not positive but I would assume there is some correlation between rents and housing prices.

    http://wolfstreet.com/2016/12/21/even-single-family-rentals-sink-in-once-hot-markets/

    http://www.seattletimes.com/business/real-estate/turning-point-for-seattle-rent-hikes-some-hot-areas-see-rents-drop/

    “The hottest markets — typically the first to be impacted during a slowdown — are seeing the biggest rent decreases: Compared to a quarter ago, rents are down 3.5 percent in the University District, 3.1 percent in Queen Anne/Magnolia and 2.8 percent in downtown Seattle. And on the Eastside, the pricey West Bellevue area saw rents dip 3.8 percent, while rents are down 3.5 percent in Kirkland and 3 percent in Redmond.”

  19. 269

    By pfft @ 254:

    let’s examine your track record. you said most of the PIIGS would default.

    No I didn’t, as I proved above. That you still claim otherwise shows you’re either illiterate or a liar.

    you said the min wage would hurt jobs(it didn’t).

    The evidence isn’t in on that, and that also has been addressed. So again either illiterate or a liar.

    you said obama was hurting the economy by telling bailed out banks maybe they shouldn’t go to vegas right now. you said obama was hurting jobs even though we had one of the fastest recoveries from a financial crisis of all time.

    He did, but why don’t you try to go convince those workers who lost hours he didn’t harm them. As to the rest, apparently you don’t realize that this recovery has been called “The jobless recovery.” You apparently can’t recognize when I’m right, but at worst we disagree.

    you threw every criticism you could at obamacare and it still caused the uninsured rate to plunge and has been a general success(of course there are always things that could be better like lower deductibles and etc.).

    Apparently you don’t realize that it’s about to collapse as a result of it’s own weight. And as I’ve previously demonstrated, the lowering of the uninsured rate was due almost entirely to changes in Medicare which were not dependent on messing up the private insurance industry. And you’re totally ignoring the people who were previously insured but cannot afford $100 premium increases every year. So again at worst we disagree, but not something I was wrong about.

  20. 270

    RE: greg @ 257 – Apparently you don’t understand what I mean by being responsive. Pfft at least gave it a try, but failed miserably. You don’t have the intellect to even try, and but that doesn’t stop you from calling others stupid (e.g post 223) where you said:

    If you decided not to vote or if you voted for anyone other than Hillary , you have no one to blame for the losses you will likely suffer under Trump’s regime. Most of the people who voted for trump voted against their own interests but are simply too dam stupid to figure it out.

    Just because you disagree with someone’s political position, that doesn’t make them stupid. That you think that makes you an ignorant _________. But realize, many people voted for Trump because they were voting against Hillary, or they voted for Trump because their trigger issue was something where he was clearly better in their minds (e.g. gun control). That doesn’t make them stupid.

    Also from post 223–

    For the top 5% -10% Trump will be a financial windfall. For the rest, well enjoy watching the gap widen, for that is exactly what you voted for.

    The first sentence may very well be true, but the second sentence is ignorant partisan nonsense. Did it ever occur to you that the gap widened under Obama at an incredible rate and that people did not like that? Voting for Hillary would be voting for more of the same, but some people like you are too gullible to realize that. They buy into the partisan nonsense that one of the two political parties shoots out.

    Now, there you have an example of being responsive to a post. Try to rub two brain cells together and see if you can post something halfway intelligible. I doubt you can, but try.

  21. 271

    RE: Blurtman @ 243
    Intelligent White Man or Any Other Ethnic Race For That Matter

    Is impossible to measure now. This nation is now packed with “incompetent” human relations departments that wouldn’t know degreed valuable experience skills from a high school level job [like Microsoft], ask high school diploma Gates. Ask our Fire Department and Police why a degree gives them better work performance….LOL…another high school level job down the toilet….for no reason.

    We don’t have enough work to do, period.

  22. 272

    Returning to the topic of real estate . . . .

    One thing I’ve noticed is new construction and flippers building/working on lots that are in less than desirable locations. With new construction selling again at a premium I think the buyers of those less desirable locations will face a double whammy when/if the market declines. For the builders I can understand that they don’t have a lot of choice of lots, and in this market location isn’t currently their biggest concern (particularly if they can pick up the lots cheap). But I really don’t understand the flippers buying a property where their upside is limited and then trying to price at absurd levels (in one case above nearby new construction in better locations).

  23. 273

    Seattle Home Owners Need McMansions for Room for Their 30+ Old Kids

    After they get degrees, a job at Applebees cleaning tables, and college loan bills come due….its about 50% of the Millenials now that are basement dwellers…

    I hope you enjoy cohabiting with your kids forever….LOL

  24. 274

    By Macro Investor @ 259:

    By Kary L. Krismer @ 177:

    RE: Blurtman @ 176 – Anyone missing the political discussions yet? ;-)

    Point well taken. Over 100 comments about the semantics of vendor financing.

    Most computer professionals are borderline autistic. One good “tell” is they geek out about minutiae or semantics, and can go on and on for a very long time.

    I could see that a focus on minutiae and semantics would be useful for programming, and programmers don’t necessarily need to understand the big picture.

    On the issue of the security deposit payments I doubt the average landlord is that concerned about the increased risk from delayed payments, regardless of the terminology used, because they don’t typically take a hit early on in a lease. They’re probably more concerned about the mechanics of having to deal with monthly payments into the security deposit trust account, particularly when the tenant only gives them one check to cover rent and the deposit installment.

  25. 275

    RE: Kary L. Krismer @ 267RE: Kary L. Krismer @ 267
    Yes Kary

    The details of contracts can easily bite you.

    One thing’s for certain [ask me about Kansas City Codes for Real Estate Investing], they tell us nothing and its our responsibility [or your attorney’s] to figure out the legal details anyway…..even the retirement bureaucracy mimics this “tell ’em nothing” attitude. I’ve had to threaten lawsuit indirectly and use innocuous legal maneuvers, that most do not understand, just to get the right thing done for my household….otherwise you’re shafted.

    BTW, the tax laws and bureaucracy change every year….when did life get so unnecessarily complicated?

    Go Trump! Now we need the Senate and Congress butcher axing this red tape too…

  26. 276
    Blurtman says:

    RE: Kary L. Krismer @ 267 – Except now Seattle rentiers will be forced to rent to the first bomb making jihadi with a decent credit score that comes along. Sawant!!

  27. 277
    Just Tom says:

    In the past I have encouraged others with an interest in Seattle real estate to visit seattlebubble specifically for the insightful commentary. I seriously hope no one has taken my advice for the first time recently. The same tired political arguments and ego-stroking you find everywhere else has permeated this forum as well it seems.

    The important thing is that we all show up with our opinions firmly entrenched and remain ever vigilant in case the other side misspells something. That’s how you win on the internet.

  28. 278
    pfft says:

    By Kary L. Krismer @ 262:

    By pfft @ 254:

    let’s examine your track record. you said most of the PIIGS would default.

    No I didn’t, as I proved above. That you still claim otherwise shows you’re either illiterate or a liar.

    you said the min wage would hurt jobs(it didn’t).

    The evidence isn’t in on that, and that also has been addressed. So again either illiterate or a liar.

    you said obama was hurting the economy by telling bailed out banks maybe they shouldn’t go to vegas right now. you said obama was hurting jobs even though we had one of the fastest recoveries from a financial crisis of all time.

    He did, but why don’t you try to go convince those workers who lost hours he didn’t harm them. As to the rest, apparently you don’t realize that this recovery has been called “The jobless recovery.” You apparently can’t recognize when I’m right, but at worst we disagree.

    you threw every criticism you could at obamacare and it still caused the uninsured rate to plunge and has been a general success(of course there are always things that could be better like lower deductibles and etc.).

    Apparently you don’t realize that it’s about to collapse as a result of it’s own weight. And as I’ve previously demonstrated, the lowering of the uninsured rate was due almost entirely to changes in Medicare which were not dependent on messing up the private insurance industry. And you’re totally ignoring the people who were previously insured but cannot afford $100 premium increases every year. So again at worst we disagree, but not something I was wrong about.

    almost 12 million jobs is a jobless recovery? man.

  29. 279
    pfft says:

    By Kary L. Krismer @ 263:

    RE: greg @ 257 – Apparently you don’t understand what I mean by being responsive. Pfft at least gave it a try, but failed miserably. You don’t have the intellect to even try, and but that doesn’t stop you from calling others stupid (e.g post 223) where you said:

    If you decided not to vote or if you voted for anyone other than Hillary , you have no one to blame for the losses you will likely suffer under Trump’s regime. Most of the people who voted for trump voted against their own interests but are simply too dam stupid to figure it out.

    Just because you disagree with someone’s political position, that doesn’t make them stupid. That you think that makes you an ignorant _________. But realize, many people voted for Trump because they were voting against Hillary, or they voted for Trump because their trigger issue was something where he was clearly better in their minds (e.g. gun control). That doesn’t make them stupid.

    Also from post 223–

    For the top 5% -10% Trump will be a financial windfall. For the rest, well enjoy watching the gap widen, for that is exactly what you voted for.

    The first sentence may very well be true, but the second sentence is ignorant partisan nonsense. Did it ever occur to you that the gap widened under Obama at an incredible rate and that people did not like that? Voting for Hillary would be voting for more of the same, but some people like you are too gullible to realize that. They buy into the partisan nonsense that one of the two political parties shoots out.

    Now, there you have an example of being responsive to a post. Try to rub two brain cells together and see if you can post something halfway intelligible. I doubt you can, but try.

    hey kary, inequality widened under obama because he/we had a great recession to contend with. plus republicans in congress wouldn’t work with him at all. he couldn’t pass bills that would lessen inequality because republicans would block them. still he drastically lessened healthcare inequality. he raised taxes and that helped inequality. he also had to contend with a system that he inherited from bush like his 2 unpaid tax cuts for the rich.

    1. did you vote for trump?

    2. who would be better for inequality hillary or trump? it’s clearly hillary.

  30. 280
    pfft says:

    By Just Tom @ 270:

    In the past I have encouraged others with an interest in Seattle real estate to visit seattlebubble specifically for the insightful commentary. I seriously hope no one has taken my advice for the first time recently. The same tired political arguments and ego-stroking you find everywhere else has permeated this forum as well it seems.

    The important thing is that we all show up with our opinions firmly entrenched and remain ever vigilant in case the other side misspells something. That’s how you win on the internet.

    hey man…we are 270 posts in. what do you expect?

  31. 281

    By pfft @ 271:

    almost 12 million jobs is a jobless recovery? man.

    First, you know you can delete text right? You don’t have to copy an entire post to respond to a small portion.

    Second, yep, that is a pretty pathetic number and doesn’t even keep up with population growth. Part of that is due to conditions at the beginning of his term, but employment (Jobs) never really took off.

  32. 282

    Reading this case I don’t get a good feel for whether the landlords or the tenants were at fault/unreasonable, but it does make me question why anyone would want to be a SFR landlord in Seattle. Two plus years of fighting, two levels of appellate court decisions, and being subject to an award of attorney fees, none of which would have occurred outside Seattle (that I know of–maybe some other jurisdictions have just-cause ordinances). And they’re still not done!

    http://www.courts.wa.gov/opinions/pdf/929785.pdf

    And I don’t see this being all that good for this tenants either. Until this decision they were on the losing end, and that had to be stressful. Beyond that though, I suspect that even if the tenants ultimately win, the existence of the unlawful detainer action will come back to haunt them if/when they try to rent another place.

  33. 283
    uwp says:

    By Kary L. Krismer @ 274:

    By pfft @ 271:

    almost 12 million jobs is a jobless recovery? man.

    Second, yep, that is a pretty pathetic number and doesn’t even keep up with population growth. Part of that is due to conditions at the beginning of his term, but employment (Jobs) never really took off.

    Here are two simple graphs that help explain why employment recovered, but may have been somewhat disappointing:
    https://fred.stlouisfed.org/graph/fredgraph.png?g=ccwt
    https://fred.stlouisfed.org/graph/fredgraph.png?g=ccwv

    I’ll let you guess which one is the government job loving liberal.

  34. 284
    greg says:

    RE: Kary L. Krismer @ 263

    Kary,

    Politics, you are a foolish and profoundly ignorant man.

    Economics, you have about a 4th grade grasp of concepts and get them muddled time and again.

    social contracts, safety nets etc, you have a weak and narrow view of the world. You lack the knowledge to express worthwhile opinions

    Real estate, you know a lot more than I do about RE law, rules regs. But damn all else, I would rather have a dual agent than deal with you in the real world. My guess is you are known as someone who is hard to work with and a bit of a deal sinker…

    But you at least provide a floor to these boards… Any fight, any trolling any problems and there you are, bickering with one person after another, year after year.

  35. 285

    RE: greg @ 276 – greg, no one cares about your baseless opinions of me. Try to develop some balls (I know brains are out of the question) and come up with some actual ideas and thoughts.

    But your guess about me is exactly wrong. I’m someone who gets deals done, even when they are difficult. And I do deals with agents who I’ve worked with in the past without any concern by the other agent. Your ignorance knows no bounds, but that doesn’t stop you from sharing your baseless opinion of things you don’t have a clue about (which is just about everything).

    Finally, go look in a mirror and ask yourself why you’re just a below average troll. Because that’s all you are–a low-information troll.

  36. 286
    pfft says:

    Imagine what the number would be w/o obamacare or all those min wage increases?

    Q3 GDP Revised Up to 3.5% Annual Rate
    Read more at http://www.calculatedriskblog.com/2016/12/q3-gdp-revised-up-to-35-annual-rate.html#BmeBKi5K3gDvMQKB.99

  37. 287
    pfft says:

    By Kary L. Krismer @ 274:

    By pfft @ 271:

    almost 12 million jobs is a jobless recovery? man.

    First, you know you can delete text right? You don’t have to copy an entire post to respond to a small portion.

    Second, yep, that is a pretty pathetic number and doesn’t even keep up with population growth. Part of that is due to conditions at the beginning of his term, but employment (Jobs) never really took off.

    pathetic? it’s a very good number coming out of the recession and obama had no help. in fact republicans were throwing roadblocks his way.

    “Second, yep, that is a pretty pathetic number and doesn’t even keep up with population growth.”

    link.

    ” but employment (Jobs) never really took off.”

    umm, 12 million? his monthly average was pretty good especially considering what he inherited.

    “First, you know you can delete text right? You don’t have to copy an entire post to respond to a small portion.”

    just quoting to remind myself later to dismantle everything you said point by point. I’ve got probably about 10 links when I get to it.

    my gosh, kary do you know all the data and studies we have on min wage?

  38. 288
    Hugh Dominic says:

    By Just Tom @ 270:

    In the past I have encouraged others with an interest in Seattle real estate to visit seattlebubble specifically for the insightful commentary. I seriously hope no one has taken my advice for the first time recently. The same tired political arguments and ego-stroking you find everywhere else has permeated this forum as well it seems.

    The important thing is that we all show up with our opinions firmly entrenched and remain ever vigilant in case the other side misspells something. That’s how you win on the internet.

    Ahem, the word “Internet” is supposed to be capitalized. Your opinion is invalid.

    P.S. Trump! Amirite?

  39. 289
    Hugh Dominic says:

    By pfft @ 273:

    By Just Tom @ 270:

    In the past I have encouraged others with an interest in Seattle real estate to visit seattlebubble specifically for the insightful commentary. I seriously hope no one has taken my advice for the first time recently. The same tired political arguments and ego-stroking you find everywhere else has permeated this forum as well it seems.

    The important thing is that we all show up with our opinions firmly entrenched and remain ever vigilant in case the other side misspells something. That’s how you win on the internet.

    hey man…we are 270 posts in. what do you expect?

    That’s a good point. The quality of our discourse depends on how often The Tim posts something interesting for us to talk about.

  40. 290
    Hugh Dominic says:

    By Kary L. Krismer @ 275:

    Reading this case I don’t get a good feel for whether the landlords or the tenants were at fault/unreasonable, but it does make me question why anyone would want to be a SFR landlord in Seattle. Two plus years of fighting, two levels of appellate court decisions, and being subject to an award of attorney fees, none of which would have occurred outside Seattle (that I know of–maybe some other jurisdictions have just-cause ordinances). And they’re still not done!

    http://www.courts.wa.gov/opinions/pdf/929785.pdf

    And I don’t see this being all that good for this tenants either. Until this decision they were on the losing end, and that had to be stressful. Beyond that though, I suspect that even if the tenants ultimately win, the existence of the unlawful detainer action will come back to haunt them if/when they try to rent another place.

    Wow that was stressful to read. The gist of it is that the landlord wanted his house back so his mother could live there. The tenants wanted a trial where they could argue that his intentions were not true, but the landlord just wanted to settle it by filing a sworn statement and having a simple hearing. Two appeals later, it looks like the tenants have won their right to the trial.

    The Seattle Just Cause ordinance seems crazy. A landlord can’t have his house back?

    Correct me if I’m wrong Kary, but I think it only applies in the case of a month-to-month rental. At least that would make it less ridiculous.

  41. 291
    justme says:

    RE: Hugh Dominic @ 282

    >>The tenants wanted a trial where they could argue that his [the landlord’s] intentions were not true, but the landlord just wanted to settle it by filing a sworn statement and having a simple hearing.

    Wouldn’t it be great if one could get out of every legal quandary simply by filing a “sworn statement” to the effect that “nah-ah, I didn’t”?

    In this particular case, the sworn statement was to the effect that the landlord needed the house for his frail mother. Except that said frail mother lived in Colorado, was not frail, and had exhibited signs that she was planning to stay put in Colorado.

    Somebody needs to take their petit landlord blinders off.

  42. 292
    Hugh Dominic says:

    RE: justme @ 283 – I’m not debating whether or not the Landlord complied with the Just Cause ordinance. I’m debating whether such an ordinance should exist. A landlord should be able to terminate a tenancy by giving due notice, without any need to justify and prove why. It’s his house.

  43. 293
    ess says:

    Article about housing and rent prices in the US. Seattle gets a nice mention.

    Happy Holidays to all!

    http://www.builderonline.com/money/prices/home-values-rise-fastest-since-2006-in-november_o

  44. 294

    By Hugh Dominic @ 282:

    Correct me if I’m wrong Kary, but I think it only applies in the case of a month-to-month rental. At least that would make it less ridiculous.

    I’ve never had to deal personally with the just cause ordinance, so I don’t know it’s scope, but it might apply at the end of leases. Not sure.

  45. 295

    By justme @ 283:

    RE: Hugh Dominic @ 282 – In this particular case, the sworn statement was to the effect that the landlord needed the house for his frail mother. Except that said frail mother lived in Colorado, was not frail, and had exhibited signs that she was planning to stay put in Colorado.

    Somebody needs to take their petit landlord blinders off.

    By Hugh Dominic @ 284:

    RE: justme @ 283 – I’m not debating whether or not the Landlord complied with the Just Cause ordinance. I’m debating whether such an ordinance should exist. A landlord should be able to terminate a tenancy by giving due notice, without any need to justify and prove why. It’s his house.

    As to Hugh’s comments, the allegations either way were unproven, and in an ordinary lawsuit a hearing would have clearly been required. But unlawful detainer actions are a bit different, and that’s what resulted in the conflicting rulings.

    As to Justme’s comments, yes, apparently the Seattle City Council saw situations where people were thrown out of their homes because the landlord no longer wanted to rent to them, and they decided to increase the rights of tenants. I suspect it’s relatively rare that landlords want to get rid of tenants outside of situations where the just cause ordinance allows them an exception (sales, living their themselves, etc.) This particular case seems to be one where the landlord and tenant simply didn’t get along beforehand, but I would guess there are other situations where a landlord’s hands are wrongly tied–e.g. suspected drug dealing (something which can be difficult to prove to the satisfaction of a court).

    But the other concern is these relatively rare situations might get tenants in trouble, like in this case where they now have an unlawful detainer action on their record. Their decision to contest in hindsight was clearly risky, and sometimes attorneys advise people into those risky situations. For example, an owner in an HOA near me was advised to sue their HOA and then ended up with a six figure debt for the HOA’s attorney fees and ultimately ended up in bankruptcy. If this Supreme Court decision had come out the same way as the Court of Appeals, the tenants here could have been in a similar situation, and Seattle’s efforts to help might have hurt them even more than it already has.

  46. 296
  47. 297
    justme says:

    RE: Hugh Dominic @ 284

    Well, then you should have argued against the law in general. and not have resorted to to misrepresenting the facts of the case.

  48. 298

    RE: AJT @ 287

    I just checked the stats for Bellevue and North Seattle privately owned rentals and while “sink” not necessarily the correct word, rent prices do seem to be flat to slightly down from 2015 to 2016 YOY. This using matched pairs. 30% to 40% increases from 2009-2010 to present, but flat to down 2015 to 2016 on those rented in the last 30 to 60 days.

    (Required Disclosure – Stats in this post hand calculated by Ardell in real time and not calculated, verified or published by The Northwest Multiple Listing Service.)

  49. 299
    justme says:

    RE: Ardell DellaLoggia @ 289

    >>This using matched pairs.

    That sounds like good methodology, kind of the rental-market analogy of the same-house-resale methodology of Case-Shiller index. Sometimes I wish I had NWMLS access and could do some data-mining myself.

    A remark: Your results of flat-to-down rents in North Seattle and Bellevue are not necessarily inconsistent with the other reports about significant rent reductions in Hot Areas (TM), ref. post 209 and 233. As noted, the methodology for the CainApartments study is to survey landlords with 50+ units, whereas I think your MLS-based methodology captures more of (or only?) the small (petit :)) landlord mom-n-pop rentals. I think it is also it is well known that the large (haute :)) landlords are quicker and more aggressive both with rent increases and and reductions, and also concentrated in different locations than the small landlords.

    References: posts 209 and 233

    “The hottest markets — typically the first to be impacted during a slowdown — are seeing the biggest rent decreases: Compared to a quarter ago, rents are down 3.5 percent in the University District, 3.1 percent in Queen Anne/Magnolia and 2.8 percent in downtown Seattle. And on the Eastside, the pricey West Bellevue area saw rents dip 3.8 percent, while rents are down 3.5 percent in Kirkland and 3 percent in Redmond.”

  50. 300
    ARDELL says:

    RE: justme @ 290

    I agree, except increases for renewing tenants seem to be significantly less than prices for new tenants. This seems to be true for both large complexes and individual tenant-landlord relationships.

    I should also have noted that I made no distinction between apartments and single family homes when I did my stats. There didn’t seem to be a difference worth noting.

    The sampling size was larger than I expected, and large enough to be quite tedious. :)

  51. 301
    AJT says:

    RE: ARDELL @ 291

    Thanks for doing that Ardell. I always appreciate your input.
    P.S.
    Looking to purchase this spring so I’ll be giving you a call :)

  52. 302
    justme says:

    RE: ARDELL @ 291

    >>The sampling size was larger than I expected, and large enough to be quite tedious. :)

    Which also seems to imply that there is quite a bit of turnover, yes? By the way, to get same-property comparables do you have to have to use a 12-mo or 13-mo stride in your data collection, or do you just match on equal addresses and derive the %/yr increase from the duration between ads?

  53. 303
    ess says:

    By AJT @ 287:

    RE: ess @ 285

    http://www.seattletimes.com/business/real-estate/turning-point-for-seattle-rent-hikes-some-hot-areas-see-rents-drop/

    http://wolfstreet.com/2016/12/21/even-single-family-rentals-sink-in-once-hot-markets/

    What is your take on these articles?

    I am not surprised that the rental market is taking a breather. Rental increases over the past four years have not only been significant, but in some cases outpaced increased income, and there has been a great deal of new rental housing that has been brought to the market. So it would not surprise me that rents in some areas of Seattle in certain types of dwellings are not increasing as much as they were before. And can rents actually decrease? Yep – has happened before, and will happen again.

    A temporary glitch or a longer trend? Who knows – we will have to wait and see. But any longer view of most markets suggests that both housing prices and rents tend to increase over time, unless there is a total residential devastation such as Detroit underwent. It is my guess that Seattle and area is not going to be the next Detroit in the next few years.

    There is probably still a unmet demand for housing, as a recent article in the Wall Street Journal indicated. Something like close to 40% of millennials are residing with their parents – numbers not seen as before World War 2. While one’s parents may be nice people to hang out with – that must get old after a while. Add the 12% of Seattle residents who are sharing digs with someone not a member of their family, and that results in many younger people who are still not residing in their own rental residences as working adults. Sooner or later some of those folks are going to want to reside in their own place, even if it is a small one bedroom apartment. It must be tiring to be pushing 40 years of age while sharing kitchen and bathroom facilities with strangers. And when those folks get married and have kids – they are going to want a single family house – and those are going to be in even shorter supply as both rentals and homes to purchase.

    The moderately priced, single family 1000 -1500 sq. foot house on a decent size lot has not been built for years in any great numbers in this area. Sure there are many expensive one and two bedroom rentals under 1000 sq. feet available which may be facing pricing pressure as supply increases. But the moderately priced single family rental unit located on its own lot is becoming a smaller percentage of the housing market universe as the renting and buying population increases in the area. I would be interested in determining if “modest” rental houses are also having the same overall rental income pressures. Modest is in quotes because the average sized single family house years ago was something on the order of 1000 sq. feet. People need that much space these days just for their “stuff” when they purchase those much larger houses that dominate the current market.

    Property owners have gone through much worse than a slight downturn in rental income. Recall the major employment bust of the 1970s, or the excesses of the last decade. Most property owners made it through those times just fine. They may have had to take lower rent, they may have not been able to rent to a tenant with the most pristine credit history in the world – but those who held on are still here with property worth more than it was back then.

    What will the immediate future bring for real estate? Who knows? But as I have said many times before, property, as most investments, tend to trend higher over time. How high and how fast is anyone’s guess as there are too many unknowns. Buying is always risky – one might lose money in a real estate deal, and some people have over the years. Renting is generally not risky for a tenant – they know they will expend money that they will never see again, and those expenditures will probably increase over time. So other than having to relocate if the property owner has other plans for the residence, tenants know exactly what they are facing in terms of the amounts they are spending. And for some, that is comforting.

    But everyone has to make their own decisions as what they think will happen and what they should do, and that is what makes life so interesting besides wondering if we will have a snowy Christmas!!

  54. 304
    ARDELL says:

    RE: justme @ 293

    First, I am looking at actual, finally agreed upon rent price. Not ads. I can see the asking against actual, and price reductions as well. But I used the rented at price and not the asking price. In many cases the flat to down was caused by the owner not getting their hoped for increase, as evidenced by the higher askings with no takers.

    Second, I can see about 10 to 11 years of history for any address. Agent tools are a bit different than on public sites. Data is kept for 10 years or more, all photos for less and maybe half that time, so we can see if higher prices are the result of remodeling or not. On the older ones without interior photos we can examine improvements worth noting in the comments.

    I do think the sizable steady increases for 6 years prior to 2015 did cause increased turnover. At first I thought more owners were using agents than usual, which is also a sign of market weakness. But when I calculated the overall numbers, that was not the case. Though a sizable number were new purchases being rented immediately after purchase and those had no previous rental history for me to compare 2016 rent against prior years.

    Still the sample was large enough and the data clearly supported the claims made in the articles posted here. I always double check news sources by calculating my own data, even reputable sources.

  55. 305

    RE: greg @ 258
    Average Pay from NYTs Recently

    $10.92/hr per capita and 28 hr weeks with no medical….thank you NY, CA and WA for providing us lower tier jobs that only high tech can provide? LOL

  56. 306
    sleepless says:

    By pfft @ 271:

    almost 12 million jobs is a jobless recovery? man.

    Right…94% of which were part time

    8.7 Mil jobs were lost during “Great Recession”, meaning Nobama only “created” 3.3 Mil jobs. Considering the fact that 94% of those jobs were part time and people holding multiple part-time jobs are at record high we can conclude that we are, probably’ still net short. If you take into account mutlidecade high level of out of labor force rates, and historically high number of welfare participants, we can say Nobama was a complete failure!

  57. 307
    sleepless says:

    RE: ARDELL @ 294 – I can confirm that the rents flattened. We are renewing our lease in january DT Bellevue area. We found apartment with the asking price of $2450 (3br2bth in DT area), we offered $2200 (our current price we pay for the identical unit in the same community). The landlord agreed to $2250, which was the price last tenant paid who rented the apartment for 1 1/2 year prior. Our lease is 1 1/2 year as well, meaning the landlord will have had his rent flat for 3 years. I also see a ton of overpriced apartment sitting unrented for months with no price reductions. The trend has turned for sure, i can say if not falling, the rents are no longer rising…

  58. 308
    sleepless says:

    By Kary L. Krismer @ 277:

    RE: greg @ 276 – greg, no one cares about your baseless opinions of me. Try to develop some balls (I know brains are out of the question) and come up with some actual ideas and thoughts.

    But your guess about me is exactly wrong. I’m someone who gets deals done, even when they are difficult. And I do deals with agents who I’ve worked with in the past without any concern by the other agent. Your ignorance knows no bounds, but that doesn’t stop you from sharing your baseless opinion of things you don’t have a clue about (which is just about everything).

    Finally, go look in a mirror and ask yourself why you’re just a below average troll. Because that’s all you are–a low-information troll.

    I don’t agree with Kary on everything, but he has a point. Pttf and greg have yet to come up with a valid argument to prove him wrong. It is pretty much the tactics of any libtard, just keep whining, b1tching, call people names, but have no real argument to disprove the one. Greg and pttf have been rebutted so many times already and just keep making fools of themselves.

  59. 309
    sleepless says:

    By greg @ 258:

    Thank any random deity for states like CA NY WA…. without those states we would be a has been low tech manufacturing country , in fact we would be a low cost producer….

    Except the only producers in those states are the IT. Think of Microsoft, Google, Amazon, Apple, etc. Remove the IT companies from those states and they will be no different. I agree, the IT is booming in the US, but, unfortunately, it is the only industry that is booming and the rest of the country is in decline. If you are are not in IT or biotech, you are out of luck. The only reason CA NY and WA are booming is because they are the IT hubs. But IT can only employ so many people, what about the rest of the country? Moreover with AI, robotics, selfdrving cars, etc most of the country will be soon unemployed as well as the IT industry. Once the major company makes a program good enuf to write other programs, the programmers will become obsolete, just like any other worker that has been replaced by automation.

  60. 310
    sleepless says:

    By Blurtman @ 260:

    RE: Macro Investor @ 259 – I have nothing against computer professionals. Their above average incomes are driving home prices in the area.

    What about Chinese buying up Seattle Metro. West Bellevue has pretty much become a China town. I heard, we are Vancouver 2.0, i can definitely witness that.. I work in IT at one of the major employer and I have been in IT long enuf and know many people to tell you that even IT wages don’t support the current Seattle housing prices.

  61. 311
    Blurtman says:

    RE: sleepless @ 299 – A neighbor who works in IT sold his home to folks from China. They paid the asking price in cash. He bought at the right time and made a nice return.

  62. 312
    AJT says:

    RE: Blurtman @ 300

    I am curious of how the Chinese influence on Puget Sound real estate prices will play out next year as previously capital controls were relatively loose. From what I have been reading recently capital controls are now no joke due to the falling yuan and massive depletion of forex reserves in China. With the Feds tightening that will put further pressure on the yuan and cause even more distress in the Chinese economy and either further deprecate the yuan or there will be even tighter capital control making getting funds out of china challenging to say the least.

  63. 313
    ARDELL says:

    RE: sleepless @ 296

    Well it’s nice to see we all agree on something for a change. Merry Christmas everyone!

  64. 314
    ess says:

    By sleepless @ 299:

    By Blurtman @ 260:

    RE: Macro Investor @ 259 – I have nothing against computer professionals. Their above average incomes are driving home prices in the area.

    What about Chinese buying up Seattle Metro. West Bellevue has pretty much become a China town. I heard, we are Vancouver 2.0, i can definitely witness that.. I work in IT at one of the major employer and I have been in IT long enuf and know many people to tell you that even IT wages don’t support the current Seattle housing prices.

    If that is true about the rate of foreign buyers on the East Side – and foreign buyers keep on flooding the market, then the correlation between income and housing prices won’t be as strong as it once was. This has happened in Vancouver BC, which has one of the worst affordability issues in the world. So if Seattle and area becomes another magnet for foreign money – housing prices may not correlate or matter to what the income level in the area is. When the market gets back on track this spring – it will be interesting to see what actually happens..

    Just as an aside, when I met my wife in Vancouver BC, she was 21 years old, employed as a secretary and was renting a small two bedroom apartment on her own in a nice area of Vancouver BC. I doubt she afford to do that now at a similar job. I mention that only because last night we attended a holiday party ( didn’t spot Santa), and I talked to two individuals in their 30s, both with professional masters degrees, both employed in their professional fields. Both were in shared housing situations in the Puget Sound area, and one indicated that with the level of student debt, purchasing a place to live was not even on the radar. This student loan debt issue is just the icing on the cake for folks that have little or no chance of buying in an expensive market such as Puget Sound (let alone renting a place on their own) and may impact the rental and sales market here for years.

  65. 315
    justme says:

    RE: ess @ 303

    Jesus Christ. Ess went to an Xmas party and discovered a couple of “professionals” that could not afford to buy. Mix that with another anecdote from Vancouver BC, 20-30(?) years ago, and clearly, therefore, house prices and rent has nowhere to go but UP! Because people can NOT afford to buy.

    Could you get any more disingenuous? Never mind all the conditions documented on this thread, about increasing interest and mortgage rates, 6800 lost Boeing jobs locally in 2016, and falling rents (posts 22, 31, 111, 119, 174, 208, 209, 233) and others. Not to mention further evidence of flat-to-dropping rents by Ardell (289) in less central areas.

    Ess, you should put an empty Christmas sock and a few lumps of coal in your big propaganda petit rentier mouth. For god’s sake man, stop playing with people’s livelihood and financial well-being. It is getting obscene.

    Job-free asset inflation for all rentiers!
    Wage-less asset inflation for all rentiers!
    Wage-less rent inflation for all landlords!
    And a headless chicken running into every pot!

  66. 316
    Hugh Dominic says:

    RE: justme @ 304 – based on ess’ forecasts I have chosen to become a petit rentier. I will arrogantly refer to myself as a “petit rentier” so that everyone will know how well educated I am. They will deeply reflect upon my superiority while justme and I dine on foie gras and mock the deplorables.

  67. 317
    Hugh Dominic says:

    And by the way, have a very Kary Krismers everyone!

    I bet he never gets tired of that.

  68. 318
    justme says:

    RE: Hugh Dominic @ 305

    You should change your name to Yuuuge Rentier instead of Yuuuge Dominic. And send me some of that foie de deplorables, I heard it is good. Soylent Green is not good enough for me anymore.

  69. 319

    RE: justme @ 304
    Justme….You’re One of the Basket of Deplorables

    Welcome to the basket, we’re a friendly bunch and hate fake news….the truth shall set you free [Bible propaganda….LOL]

  70. 320
    Blurtman says:

    RE: AJT @ 301 – Momentum, acceleration, deceleration. The data knows.

  71. 321
    AJT says:

    RE: Blurtman @ 309

    Simple, elegant and right on the money.

  72. 322
    Corndogs says:

    Tim – You may want to limit the number of posts on this site like you did before, not fun wading through 125 comments from one dufus to find something interesting or funny.

  73. 323

    RE: Corndogs @ 311 – If only there were a way to stop reading after the first 2-3 words which appear after the avatar of the poster. /sarc

  74. 324
    Som says:

    Was window shopping in Bellevue. Guys in a car on the street shout, “Go home. We are taking our country back. Trump 2017…more inaudible stuff follows”. Thankfully I was alone and not with my kids.

    Wtf. Wonder if it will get worse. If only the Trump population had been empowered before and shown their colors, most of us would have never even come to USA, let alone become citizens. Human dignity is more important than material pleasures.

  75. 325

    RE: Som @ 313 – There always have been A-holes, but they may be feeling a bit more empowered right now. I suspect it will return more to normal rather than get worse, but that might depend on the lack of significant future terrorist events. Even before Trump, terrorist events could cause other incidents.

  76. 326
    Corndogs says:

    RE: Som @ 313 – In all likelihood it will get worse, much like you see in the middle east with beheadings and such. I’m very worried.

  77. 327
    ess says:

    http://www.seattlepi.com/local/article/Zillow-report-Home-values-growing-fastest-since-10812266.php

    Article about both housing and rents in the Puget Sound area.

    Article focused on the lack of new single family housing. Most new single family housing construction, unless really out in the tulies will probably be more than the typical first time buyer can afford. So unless there is a major collapse of new housing prices as well as all single family housing prices – new construction isn’t going to help the first time buyer.

    Also compared to “rat race” for renters trying to keep up with rents and save for a house. I think a more appropriate description is that of being on a treadmill with someone increasing the speed, making it more difficult just to keep up. But no matter – we get the point of the article.

  78. 328
    justme says:

    RE: ess @ 316

    Ess posts some rubbish, gets called on it (post 304) , and then just keeps going without a second thought. That’s just how Ess is. About the Zillow/PI/Rao article

    1. article is looking BACKWARDS at 2016.

    2. no mention is made of rising 10Y bond and mortgage interest rates

    3. no mention is made of job losses in 2016.

    4. no mention that Amazons crappy AWS (their only significantly profitable business) has been under significant price pressure in 2016/Q4.

    5. article claims yo-yo increasing rents of 8.3% but zillow source says 1.5%. HUGE blunder, and rents are FALLING now.

    6. article as usual wanks the inventory argument to the max, because that is the ONLY thing they have. BTW, no mention that the small downward blip in inventory may be due to mortgage rates rising and some people clamoring to close a deal.

    7. No mention that hedge funds are getting ready to unload their portfolio of previously foreclosed homes.

    In short, a total BS commentary on flawed article about a flawed (or at least misquoted) backward-looking statistic release. Included for free is Ess giving his less-than-brilliant take on the article.

    ‘Also compared to “rat race” for renters trying to keep up with rents and save for a house.’

    Uh, HELLO? If that is true, then there will be LESS demand for SFH houses, will there not? Your logic this year seems to be that

    -rents are up? Bullish for SFH!
    -rents are down? Bullish for SFH!
    -rents are flat? Bullish for SFH!

    “unless there is a major collapse of new housing prices as well as all single family housing prices – new construction isn’t going to help the first time buyer”. HUH? Are you a genius or something? “unless prices go down, rising prices are not going to help”.

    Here’s what I think: People planning to sell had better get their house on the market on soon after Jan 1, and at a competitive price, or the house will languish all year unsold.

  79. 329
    Som says:

    RE: Corndogs @ 315 – Considering the not too distant past of the “civilized” world, your saracasm lacks taste. There are plenty of shades of grey between harmony and savagery.

  80. 330
    Blurtman says:

    OK, Bubbleheads, if you were to cash out your winnings, and buy a home for cash in the $500-600k range, where would you buy?

  81. 331

    RE: justme @ 317 – You could have saved a lot of words by just pointing out that the article is based on something out of Zillow–the ultimate source of bad information on real estate. TM.

  82. 332

    RE: Blurtman @ 319
    Kansas City!!!

    I’ll let you Seattle buffoons wait in line on the 1960s freeway system built for 1/5th the local population today….

  83. 333

    A Seattle Times article on the newly released Case-Shiller numbers. Not a bad article, it mentions the NWMLS data and the fact that C-S is a few months behind.

    http://www.seattletimes.com/business/real-estate/seattle-keeps-crown-as-nations-hottest-housing-market-for-2nd-straight-month/

  84. 334
    justme says:

    RE: Kary L. Krismer @ 322

    QUOTE (from the PI article): Before topping last month’s report, Seattle hadn’t been the nation’s hottest housing market since 2007.

    There’s is some food for thought right there. The last time Seattle was the hottest housing market in the nation, doom was impending.

  85. 335

    RE: justme @ 323 – At that point other markets were dropping, and had been. Here’s the real signal to look for.

    https://seattlebubble.com/blog/2009/06/17/revisiting-jim-cramers-2007-prediction-for-seattle-real-estate/

  86. 336
    Blurtman says:

    RE: Kary L. Krismer @ 324 – Seattle lagged on the rise and on the fall.

  87. 337
    ess says:

    An interesting article about the largest group in the United States. Understandable why there is so much anger these days about their own personal financial situation.

    While the housing market may have less millennials participating as buyers, they will make comprise the backbone of the rental market for at least the next decade, if not beyond. And if most of the new rental construction is focused on higher end rentals (as most statistics indicate) then there will be even more shortages of moderately priced rentals in the following years. We have already seen this phenomena in Seattle.

    http://blog.credit.com/2014/10/the-millennial-debt-sentence-will-they-ever-escape-99964/

  88. 338
    Burton says:

    RE: softwarengineer @ 321 – Your Dear Leader will rebuild roads bigly. So we are all good.

  89. 339

    RE: ess @ 326

    A fair number of people employed here received their education in a Country where education was free. I think there is a strong case for free college, but that only helps in fields where the place of education is not a consideration when hiring. I don’t think it matters in IT, but there are fields where a degree from Harvard will still have more weight than merely having the required pre-requisite education.

    Does where you went to college matter in IT?

  90. 340
    MGSpiffy says:

    RE: ess @ 326 –

    One other thing I have heard expressed is that while millennials are stuck on the lower ability to save to for higher priced homes treadmill, they (I guess it’s primarily women) are pushing up against their biological time limits (by mid-30s?) for family formation. Once you have kids, the preference for a house instead of an apartment shoots way up, yet the kids compete for money that goes to pay off debt or get saved for a home.

    I don’t have any numbers, but it seems like a demographic trend that would further shrink the pool of younger buyers while putting more pressure on rentals suitable for families and starter homes.

    re: ardell @ 327

    It almost never matters where you went to college when it comes to IT. You specific skills that you are current in are what gets a recent grad in the door.

  91. 341
    QA Guy says:

    RE: Ardell DellaLoggia @ 327 –
    Ardell,

    I can call myself one of those people who are employed in Seattle area and received college education for free in another country. To be fair though, I continued and finished my IT education in US. Typically, it does not matter which college person went to, if they show their knowledge well during interview. For that reason I rarely pay any attention to candidate’s education details before my interview with them. However, colleges compete with each other in strength of their programs. They try to hire best teachers and attract talented students. If they produce graduates that get hired by greatest IT companies, this is becoming a chicken-and-egg problem: IT companies would go recruiting only to strongest schools and skip less known ones. Or recruiters look at resumes from well-known schools first.

    In regards to free education, Having first hand experience in both education systems (free & paid) I am not convinced it should be entirely free. First of all, it can’t be free — it will come back in form of taxes on every citizen. Second, US is a service economy and not everyone needs to get a higher education (or get taxed on it). I grew up in environment where everyone was getting a very small paycheck, but received free mediocre medical service and free education (K through 12 through post-grad). There was no sense of competition between colleges or accountability for quality (it’s all government money, why care?) At the same time, I think education should be affordable for those who want to get it. Today there are so many budget “I want this and that” that education was loosing the fight and funding level has been dropping.

    College debt, IMHO, is largely in part because of bad money habits and greed. I have seen many students who bought new cars (that they don’t really need), yet, put $20K on their student loan. If I look at a problem from a 30,000ft view I think student loan bubble is exactly same as the housing bubble: Creditors know that they will get paid either through students or government guarantee; people do want better houses education, so they will pay whatever price tag; creditors just need to make sure that plenty of loans are available to take. And students do take them. Which at the end raises price of education for everyone.

    My two cents :)

  92. 342
    justme says:

    RE: ess @ 326

    Is ESS able to construct a coherent argument about anything? Try to compare 304, 316 and 326 for starters, and see if you can make any logical sense of it. Then expand to other cockamamie posts that Ess has made earlier. Be warned, your head may explode from too high exposure to the rampant schizophrenia embedded in the comments you read.

  93. 343

    By Ardell DellaLoggia @ 327:

    Does where you went to college matter in IT?

    THE place to learn about “the cyber” is Trump University!

  94. 344
    ess says:

    RE: Ardell DellaLoggia @ 327RE: MGSpiffy @ 328

    One other thing I have heard expressed is that while millennials are stuck on the lower ability to save to for higher priced homes treadmill, they (I guess it’s primarily women) are pushing up against their biological time limits (by mid-30s?) for family formation. Once you have kids, the preference for a house instead of an apartment shoots way up, yet the kids compete for money that goes to pay off debt or get saved for a home.
    I don’t have any numbers, but it seems like a demographic trend that would further shrink the pool of younger buyers while putting more pressure on rentals suitable for families and starter homes.
    —————————————————————————————

    MG – Or as I read when doing research on a subject I am writing about, the latest thing is for women to have their eggs frozen. According to one source I referenced, it is all the discussion in places such as NYC where many women are occupied with their careers, and have not met the “one”. It is expensive, not always successful, but they are pushing out the biological age of having children. Isn’t modern advancement in science grand? But I don’t know if I would want teenagers running around in my house when I was in my 50s and 60s.

    As to pressure on rentals suitable for families and starter homes, our smallest rental house is the king of all starter homes. It is really small. Over the years we have usually rented it out to one or two people, although three people could legally inhabit it, and a couple of time we have had 3 person families in there. But last time it was available – all sorts of parties with four people were interested – either two parents with two kids – or even two couples. We never had that kind of response before – apparently it is a result of the declining availability of smaller, moderately priced single family homes for rent. Readily apparent when one attempts to locate “starter” homes for rent or sale. They just are a smaller part of the housing universe.

    Ardell: -Now I hear that I could have gotten at least one of my three degrees for “free”. Oh well – water under the tuition bridge!

  95. 345
    Kmac says:

    Free?
    Perhaps for you, but SOMEBODY had to pay for it.

    I would hope most adults realize that there is no such thing as FREE.

  96. 346
    pfft says:

    By Som @ 313:

    Was window shopping in Bellevue. Guys in a car on the street shout, “Go home. We are taking our country back. Trump 2017…more inaudible stuff follows”. Thankfully I was alone and not with my kids.

    Wtf. Wonder if it will get worse. If only the Trump population had been empowered before and shown their colors, most of us would have never even come to USA, let alone become citizens. Human dignity is more important than material pleasures.

    that’s the deplorables being deplorable.

  97. 347
    pfft says:

    By Kmac @ 333:

    Free?
    Perhaps for you, but SOMEBODY had to pay for it.

    I would hope most adults realize that there is no such thing as FREE.

    I am all for free college.

    think of it as basic math. a college educated person makes 1 million more over their lifetime than a non-college grad. if you get just 10% of that back in taxes it’s worth it. plus it will make our society more of a meritocracy and lessen income inequality.

    I’ve been reading a lot about a basic income too. sounds good to me. Social security is basically a basic income for seniors. when SS kicked in the number of seniors in poverty dropped like…the number of uninsured in america when obamacare kicked in.

  98. 348
    S-Crow says:

    Flippers bring value to a market in cleaning up homes that are abandoned and otherwise eyesores. They also incur risk. However, when inexperienced flippers (ie, those that are among the masses that enter into “real estate group think” of everlasting yellow brick roads) bid up housing prices to absurd levels then flipping can artificially inflate entire neighborhoods and values can drop: It only takes a house or two in an immediate neighborhood to sell under pressure of longer market times because that “cash” flip purchase that was really “financed” by hard money starts to eat you up.

    What are you all hearing at the Barber Shops and watering holes? Or, standing in line for your chair at Stevens Pass or Crystal Mountain? What does Robert Shiller say about this? Or, will the Trump era bring about a housing boom like we’ve never seen and ignore equity market multiples of the S&P 500 etc.?

    From Marketwatch: http://www.marketwatch.com/story/as-home-prices-rise-house-flippers-stage-comeback-2016-12-28

    Are articles like this a contrarian or bullish signal?

  99. 349
    OA says:

    Hey Everyone,

    First time post. I’ve been visiting this site for the last 4-5 months and find the insight here pretty valuable.

    I’m currently in the middle of making a decision and would like to know your thoughts on what I should do. I don’t and have never worked in construction and/or real estate so have been learning A LOT as I go.

    My wife and I (no kids yet) rent a condo in Issaquah. A little more than 2 years ago we bought an undeveloped lot in Issaquah (up on squak mountain, close to front street) with the intention of building our future home there. We have don’t have a loan on it as we paid with cash. We bought it for a really favorable price as the lot is sloped, but definitely build-able. The neighborhood that it’s in is not necessarily our dream neighborhood, but the area itself is highly sought after (great schools, location, etc).

    This past year, I’ve worked with architect/engineer/city on the house plan and it is currently in the permitting stage with the city (permit will probably be approved by February 2017). Knowing how expensive construction labor currently is, I’m estimating that the house (about 3,600 sq ft) will cost at least $500,000 to build, which is at least $140 a sq ft. This is taking into account that it’s sloped (foundation cost will be higher) and both my dad and I will be the GCs. I’m sure that it will take at least a year to build, so will probably be done by March 2018 if I start in February or March of 2017. Also, I’ll have to get a construction loan to finance a good part of the build.

    My other option is to sell the lot with the approved permits. I’m sure that I can make a $150k profit if I sell, and this is after I’ve consulted with an agent that knows the area really well and specializes in selling land.

    I’m truly on the fence about what to do. The easier route is to sell, pocket the money, wait for the Seattle real estate market to change in 1-2 years (I’m being hopeful) and buy in a couple of years. We like the eastside and would prefer to live here and start a family.

    On the other hand, homes in Issaquah (especially new construction) are selling for $950k and more. If I end up building, it will probably cost me 65% of that. However, building a house is a stressful process that I know most people would rather avoid.

    Let me know your thoughts, thank you!

  100. 350
    Screenname345 says:

    Why no Case Shiller post yet? Seattle is the hottest real estate market in the country I need some Timmy analysis.

  101. 351
    pfft says:

    By Screenname345 @ 337:

    Why no Case Shiller post yet? Seattle is the hottest real estate market in the country I need some Timmy analysis.

    I want an index named after me.

  102. 352
    justme says:

    RE: pfft @ 335

    >>a college educated person makes 1 million more over their lifetime than a non-college grad.

    Only if they studied something that is useful and difficult, and studied it well.

  103. 353
    justme says:

    RE: S-Crow @ 336

    >>that “cash” flip purchase that was really “financed” by hard money starts to eat you up.

    I never understood the logic of the term “hard money” and “hard money lender”. Seems to me it is more like “easy money with draconian conditions interest rates”, or a shark loan. Yes?

  104. 354
    MGSpiffy says:

    Re: ess @ 322

    I totally believe your experience with your smallest rental is the new normal (for the moment anyway).

    I’ve been renting homes in a nice area for the last few years, and getting to know friends and neighbors who are also renting, and it’s clear the SFH rental market is getting tighter -sometimes a lot.

    There’s a lot of anxiety among renters as everyone we know personally knows someone who had to move because the house was sold – and yes it is a foreign buyer 50% of the time (granted we are in a more desired location). I’ve encountered 2 nearby homes (> $2m) that are part-time occupied by children of rich foreigners who go to school here.

    When we had to move last time (the 1800 sq ft house we were renting was being re-occuped by the owners), the house right next door came up for rent, and we jumped on it the day it was listed. We paid application fees, did the showing with the re/max agent and were told we had it, When it came time to show up and sign the lease though, the agent was AWOL. It turns out, another couple, who was moving here from Virginia to work at Amazon, offered OVER the listed rental price. I found this out by innocently striking up conversation with our new neighbor before moving – nice enough people, but very strongly motivated by schools, etc.

    As this is happening to us in the $250k+/dual income tech couple income bracket, it’s forcing many of our peers and less fortunate neighbors to seek ‘cheaper’ or move farther out. That’s has to be putting pressure on housing stock all the way down the price chain.

    I know you don’t get as many renters here on the blog – I used to be a frequent poster on Ben Jones’s blog back in the previous bubble, before we moved here from flyover country.

  105. 355
    pfft says:

    By justme @ 339:

    RE: pfft @ 335

    >>a college educated person makes 1 million more over their lifetime than a non-college grad.

    Only if they studied something that is useful and difficult, and studied it well.

    no, many people study something “worthless” but go into an unrelated field.

  106. 356
    ess says:

    RE: MGSpiffy @ 341

    Interesting information MGSpiffy, and thanks for the info. I am not located in those types of areas – although the house we reside in at present – a small former rental is les than two miles away from million plus dollar houses near the waterfront and with the views of the mountains and sound. I spent 6 months remodeling it when it was converted from rental to primary residence – my molding installation skills improved the further along I went, not to mention our kitchen cabinet resurrection skills. We had decided long ago that Seattle was not for us, recent density and taxing events there have only confirmed that decision. House prices and taxes – although not as cheap as in prior years are not as high as in Seattle or the East Side where we are located.

    We bought years ago when we were working “real jobs”. Oh boy – did I hate the “real job” world. As a matter of fact – the real estate investments enabled us in part to quit the real jobs, take off for over a year to travel around the US and overseas, and form our own business together. Being one’s own bosses – we shut the business down every year for a month during the slow season and picked a nice country in Europe to visit or went to a nice warm climate for a cruise. Real estate investments help make that possible for us, so we are very happy we bought all those years ago, even though what we bought wasn’t all that fancy and they needed work.

    On the other hand – who knows what the future will hold – especially the immediate real estate situation? We can handle the ups and downs of the market because there is so little debt on what we own. There may or may not be a decline in real estate, and we may be at the temporary top, or perhaps the market will continue its upward climb -especially if those rich foreigners you alluded to keep on buying. On the other hand – there are some nice areas a bit away from Seattle/East Side that are not as expensive. Only problem is that even houses under half a million dollars are getting kind of hard to locate in this market that are with hailing distance of the Seattle/East Side area. Some of the houses that are for sale may need some attention – but one person’s mess is another person’s opportunity. Every house save one I/we have bought has needed some attention, and the sales price reflected that. But I know decent houses in that price range are there – I have attended a number of open houses to have a look to see what is happening in the hood(s) where I own. And there were some nice ones in the past year or so that went for under half a million.

    We would never allow our rentals to be part of a bidding war, because for years we have done the first come first rented to for a qualified renter. Only one application at a time, thank you. We have never taken multiple applications and fees so we could “weigh them for the best” or let the house enter a bidding rental war. It is a waste of time and money for many prospective tenants. Being a former tenant – I try to treat people the way I want to be treated if I was a prospective tenant.

    Good luck to you – things will eventually work out one way or another I am sure.

  107. 357
    js says:

    RE: MGSpiffy @ 341:

    It turns out, another couple, who was moving here from Virginia to work at Amazon, offered OVER the listed rental price.

    This is not the first time I’ve heard of attractive rentals going for over asking.

    Maybe an opportunity here for a rental auction app? City of Seattle would love it.

  108. 358

    By js @ 344:

    Maybe an opportunity here for a rental auction app? City of Seattle would love it.

    It might violate Seattle’s new ordinance which requires approving people in the order of application.

  109. 359
    justme says:

    RE: ess @ 343

    It must me difficult to balance those two competing interests in your head. The greedy petit rentier that wants asset inflation and rent inflation. And the Loving Landlord whose grand largesse of humanitarian benevolence is that he oh-so-thoughtfully charges only one rental application at a time.

    Seems petit rentier wins 95% of the time, whereas loving landlord pays some lip-service 5% of the time.

  110. 360
    justme says:

    In other news, pending home sales are way down (-2.5%) after the post-election mortgage interest rate shock. Contrast that number against an expected 0.5% rise.

    http://www.mortgagenewsdaily.com/12282016_pending_home_sales.asp

    These are nationwide numbers, but I think we will in not too long find out how extra special Seattle is or is not.

  111. 361
    Blurtman says:

    RE: softwarengineer @ 321 – What about SLC? You get a lot of bang for the buck.

  112. 362

    RE: justme @ 347 – I would never trust the NAR nationwide numbers because of issues regarding their collection, and also because different MLS systems probably have different rules (like the NWMLS one Tim mentions as having changed several years ago). Those are concerns that go beyond them not being local.

  113. 363
    ess says:

    By Kary L. Krismer @ 349:

    RE: justme @ 347 – I would never trust the NAR nationwide numbers because of issues regarding their collection, and also because different MLS systems probably have different rules (like the NWMLS one Tim mentions as having changed several years ago). Those are concerns that go beyond them not being local.

    Yep – people can do anything they want with figures – whether they be house sales or residential rentals. The ones I trust from personal experience are the prices that housing has sold for in any given area, or the number of people milling about waiting for an open rental house showing.

    It is interesting to note that a half percent rise in mortgage interest rates knocks many people out of the buying process. What ever happened to the old maxim of “living below ones means”? And it is not like 4.25% interest rates for a 30 year mortgage is outrageous in the historical scheme of residential financing. I clearly remember mortgage rates over eleven percent – which at the time had decrease from even higher.

    The silver lining for landlords is that some of the best tenants will remain renters. It has been my experience that those who are seriously looking to purchase a residence not only have the means to pay rent, but will not jeopardize their good credit rating by not paying their bills or doing damage.

    Of course other real problems with the market can be attributed to the lack of new housing, especially on the lower end of the financial spectrum. New housing starts have not kept up with demand as of the last recession and this tepid recovery. Any slowdown in demand will have the resultant consequences in the future as builders start to reduce the number of homes they build, which will reduce availability all the more.

  114. 364
    js says:

    By Kary L. Krismer @ 345:

    Maybe an opportunity here for a rental auction app? City of Seattle would love it.

    It might violate Seattle’s new ordinance which requires approving people in the order of application.

    Only allow applications after the bidding process is complete. “Rentier Gold Mine” might be a good name for the app.

  115. 365

    By ess @ 350:

    Any slowdown in demand will have the resultant consequences in the future as builders start to reduce the number of homes they build, which will reduce availability all the more.

    Or depending on the extent of any slowdown, the builders could greatly overshoot, as occurred in 2008. The builders don’t coordinate their activity, and the entire process from the point of buying land to completing construction can take years.

    I’ll repeat what I said earlier though, which is similar to what you’re saying, but a different market. The builders are not creating a lot of move-up product for people who don’t want to live on a postage stamp size lot. So that means a lot of existing owners won’t be putting their homes on the market, even if their home was bought as a starter home.

  116. 366

    RE: ess @ 326
    Millennial Renters In Seattle???

    LOL….do you have a news reference or data track on this….I do….

    Approximately half of Millenials live with parents at age 30+….how many laid off moms and dads want to move in Millennials too???? LOL

    Like my neighbor, axed from 20 years with MSFT….he’s jobless now….

  117. 367
    ess says:

    By Kary L. Krismer @ 352:

    By ess @ 350:

    Any slowdown in demand will have the resultant consequences in the future as builders start to reduce the number of homes they build, which will reduce availability all the more.

    Or depending on the extent of any slowdown, the builders could greatly overshoot, as occurred in 2008. The builders don’t coordinate their activity, and the entire process from the point of buying land to completing construction can take years.

    I’ll repeat what I said earlier though, which is similar to what you’re saying, but a different market. The builders are not creating a lot of move-up product for people who don’t want to live on a postage stamp size lot. So that means a lot of existing owners won’t be putting their homes on the market, even if their home was bought as a starter home.

    By Kary L. Krismer @ 352:

    By ess @ 350:

    Any slowdown in demand will have the resultant consequences in the future as builders start to reduce the number of homes they build, which will reduce availability all the more.

    Or depending on the extent of any slowdown, the builders could greatly overshoot, as occurred in 2008. The builders don’t coordinate their activity, and the entire process from the point of buying land to completing construction can take years.

    ________________________________________________________________________________________________________________________________________________

    From what I have read, the complaint now is that builders are not building enough housing for what is required. Certainly the yearly figures of completed new housing is significantly lower than in the days leading up to 2008.

    And I have also read that home owners, even in modest size houses, are reluctant to buy a larger residence because of both the increased costs of selling, as well as giving up their lower mortgage rates for higher one, even if they can find another home in a limited market. As a result, it appears that many homeowners are spending significant amounts of money to remodel either by expanding their current footprint, or upgrading their homes. The cost of some of the remodels I have viewed around here are as expensive as the entire cost of a house in a less expensive part of the country.

    I don’t observe too much new single family housing constructed in this area for individuals of modest means. And based upon the prices for new housing, the operational definition of “modest” appears to be expanding.

  118. 368

    By softwarengineer @ 353:

    Approximately half of Millenials live with parents at age 30+….how many laid off moms and dads want to move in Millennials too???? LOL

    I think it was “The FYI Guy” at the Seattle Times who ran a piece suggesting renting out empty bedrooms in houses owned by boomers would be a good solution for our housing shortage. It might be a good solution for people in financial distress, but other than that I can’t really see a lot of people wanting to rent out rooms in their homes to strangers. I had a friend who actually enjoyed that lifestyle, because the tenants made his home more interesting and allowed him to fund renovations faster, but I really don’t think it’s for most people. Most people don’t want to even live with family if given a financial choice.

  119. 369
    Macro Investor says:

    By Corndogs @ 315:

    RE: Som @ 313 – In all likelihood it will get worse, much like you see in the middle east with beheadings and such. I’m very worried.

    Funny how all the false claims were drive bys. In this case they shouted “Trump 2017” so we’d know who to blame. That sounds so much like the typical adolescent hooligan I surely believe it.

    Also, notice almost NOBODY is out walking this time of year. And exactly nobody is driving around with the windows rolled down, letting the rain and cold air blow in sideways. But hey — this som fellow is just a very unlucky guy. Poor him. Safe space.

  120. 370
    Hugh Dominic says:

    This reporter finds that Seattle has overbuilt multifamily housing and will overshoot in 2017. “Normal ebb and flow.”

    http://www.djc.com/news/re/12095949.html

  121. 371
    NOBODY says:

    By Macro Investor @ 355:
    Also, notice almost NOBODY is out walking this time of year. And exactly nobody is driving around with the windows rolled down, letting the rain and cold air blow in sideways. But hey — this som fellow is just a very unlucky guy. Poor him. Safe space.

    Dumbest thing I’ve read this week.

    NOBODY.

  122. 372
    Screenname345 says:

    By Hugh Dominic @ 356:

    This reporter finds that Seattle has overbuilt multifamily housing and will overshoot in 2017. “Normal ebb and flow.”

    http://www.djc.com/news/re/12095949.html

    Matt Gardner sort of agrees.

    http://www.windermere.com/blogs/windermere/posts/what-s-in-store-for-the-2017-seattle-housing-market

    I think he’s wrong about 8.5% real estate appreciation. If inventory doesn’t seriously pick up we will have a stronger year than 2016 if anything.

  123. 373
    Hugh Dominic says:

    I’m thinking SFR will keep going up even while rents flatline. Because SFR is getting torn down to make way for multifamily, making it more scarce, while more 1BR units pour onto the market.

  124. 374
    justme says:

    RE: ess @ 350

    >>Yep – people can do anything they want with figures –

    Let us see what and how Ess does with figures and numbers, by going back in time about 6 months to another thread, namely

    https://seattlebubble.com/blog/2016/06/07/nwmls-strong-demand-pending-sales-hit-time-high/

    In that thread, Ess/ESS has the following to say

    1. Post 71: Ess brags about Avalara leasing 100k ft2 space (enough for 1000 workers). ‘And while this one company is “only” adding 1000 jobs, it all adds up as each job supports a few others’.

    Truth: Their total employment is 1000 workers. They are not adding 1000 jobs. They already have about 330 employes in Seattle. They have room for another 670 jobs, but only 72 current job listings on linkedin as of 2012/12/29. Maybe more employees are commutiong from Bainbridge, and not living in Seattle?

    2. Post 121 by Ess: “Who am I to indicate that interest rates are at all time historical lows, and that the low interest rates offset the higher prices?”

    Who indeed, see below about rising mortgage interest rates.

    3. post 309 by Ess: Links article free-lunch-is-over-for-tenants-1000-hikes-hit-some-older-seattle-rentals

    Now, compare the above three items point-for point with what has been documented in the current thread:

    1. Post 208 Justme says: Boeing lays of 6800 workers in Seattle area in 2016.

    No comment from Ess, he just ignores the bad news of job losses.

    2. Post 350 Ess sez: “And it is not like 4.25% interest rates for a 30 year mortgage is outrageous in the historical scheme of residential financing.”

    Aha. Before, low 3.8% interest rates allowed higher prices. But now higher interest rates are bullish, because they are “not outrageous”. Good one.

    3. Post 209 (Justme) and Post 294 (Ardell): Especially the latter post addresses older/outlying rentals as being flat-to-down, whereas newer more central rentals are definitely down. So much for rising rent in older rentals.

    Summary: Ess does nothing but prattle landlord happy-talk about asset-inflation and rent-inflation, and he ignores any evidence to the contrary, or somehow manages in his head to convert bad news into good news. Ess indeed “can do anything with figures”, or even without figures, based on one couple he met at an Xmas party (post 303).

  125. 375
    Deerhawke says:

    By Deerhawke @ 1:

    “Inventory was just barely above last year’s level, but closed sales were considerably higher than a year ago. The nearly thirty percent surge in closed sales compared to a year earlier was the largest year-over-year move we’ve seen since October 2012. It is also a little strange, considering that pending sales haven’t increased more than eight percent any time in the past twelve months. I’ll be looking into that in the coming days to try to understand what’s going on there.”

    This kind of imbalance between inventory and sales makes a lot of sense if you are in a period of recovery from a recession and there is a substantial body of built-up (standing) inventory met by pent-up demand. But we have been hacking away at standing inventory since 2012. There hasn’t really been any to speak of for the past 2 years.

    One other explanation that makes sense is that people are on a binge — caused by the rise in interest rates perhaps– and there will be a month-or two hangover after which things can get more back to normal.

    Maybe. But generally when we see this kind of depleted inventory in the late fall market, it means that we are in for a rocket ride when everyone else joins the party after the New Year. I think this is more than a short-term phenomenon.

    We will be interested in your take on this Tim.

    This is where this thread began. And here it is the end of the month and still no word from the Tim. We are on our own, I suppose.

    Looking at the Estately inventory figures to the right of the page, we have 1632 active listings. Perhaps we will get a few more before the end of the month, but last December, we had, what, about 1900? It looks like we are in for a substantial drop this month.

    I think Hugh Dominic is right that we will continue to see some weakness in the apartment market as people realize there is excess inventory, especially studio and one bedroom units. But there really is no inventory of single family homes and new construction adds very little.

    Screenname 345 posted a link above and Matt Gardner is always worth listening to.

    http://www.windermere.com/blogs/windermere/posts/what-s-in-store-for-the-2017-seattle-housing-market

    I think Gardner may be a bit on the conservative side, but even if you agree with his 8.5% appreciation figure, we are talking about a median KC sale price of $600K and a Seattle median of around $700K. Objectively I realize that we are still a lot cheaper than the Bay Area, but those kind of prices make me wonder if we are going to start to catch up sooner or later.

  126. 376

    RE: Deerhawke @ 360 – Just a reminder, the Estately numbers are low. I had a mid-point period from about a week before Xmas last December that I could compare to this year and we were tracking last year pretty closely at that time.

    Also, the Seattle Times has an article on apartment building and the number of units coming on the market. Amazingly they think the additional supply will moderate price increases. /sarc

    http://www.seattletimes.com/business/real-estate/seattles-record-apartment-boom-is-ready-to-explode/

    Beyond the gross numbers, and the fact that many of the Seattle units are “luxury” units, one interesting takeaway was that that South Seattle and South King County are not seeing an apartment building boom.

  127. 377

    Here’s an interesting take-down of often mentioned here Nate Silver, by Nathan Robinson.

    https://www.currentaffairs.org/2016/12/why-you-should-never-ever-listen-to-nate-silver

    Robinson had a really interesting piece back in February about how a Clinton nomination would lead to a Trump win. Reading it after the election it was incredibly accurate.

  128. 378
  129. 379
    StupidLifeDecisions says:

    By Kary L. Krismer @ 377:

    Here’s an interesting take-down of often mentioned here Nate Silver, by Nathan Robinson.

    https://www.currentaffairs.org/2016/12/why-you-should-never-ever-listen-to-nate-silver

    Robinson had a really interesting piece back in February about how a Clinton nomination would lead to a Trump win. Reading it after the election it was incredibly accurate.

    Get ready for a lot more of this over the course of the next four years. I will enjoy every second of watching the rug being swept from under the feet of the sanctimonious. The more you enjoyed the last 8 years, the more you are going to hate the next four.

    Happy New Year! Good luck to all you bulls out there, hopefully you have something to hedge your optimistic speculation on! I’m not one of you, so I probably have a lot to look forward to.

  130. 380
    ess says:

    Another article confirming the heading of this thread………….I guess I really need to thank my Vancouver B.C. area in laws if they supported the 15% tax on housing for foreigners.

    http://www.theepochtimes.com/n3/2203283-the-housing-bubble-comes-to-seattle/

  131. 381
    justme says:

    RE: ess @ 380RE: ess @ 380

    Somebody seems to have forgotten to tell the Chinese investors about the FIRPTA law of 1980, which imposes *income* tax on any gain from sale of US real estate by foreign owners. Let me repeat that: The gain is treated as regular income for taxation purposes, which means that the marginal tax rate can be as high as 39.6% (2016). Moreover, none of the standard income deductions are allowed, so you pay tax from the first dollar. Mandatory withholding of 15% of the full sales price is in effect, unless the seller can document that the rate should be lower based on the amount of gain. Check wikipedia for more background information on FIRPTA.

    Note: The law was enacted to make nonresident foreigners pay taxes on US real estate gains. Any foreigner who is a legal resident always had to pay gains taxes, even before FIRPTA of 1980.

  132. 382
    Anonymous Coward says:

    RE: justme @ 381 – Let me get this straight, you think Chinese buyers are buying overseas properties because they want to flip them? Or I’ll ask it another way, why do you think Chinese buyers are so interested in purchasing properties outside of China?

  133. 383

    RE: justme @ 381 – Are you sure they don’t get capital gains rates? I’m not that familiar with the taxation of non-residents, but I suspect that to the extent they get income here in the US it would be taxed, but that there would be no standard deduction or exclusion for dependents, etc. So basically taxed from the first dollar. But I’m not seeing that the rate would be different. Do you have a cite?

    But also, they might be buying with the hopes or even concrete plans of becoming resident aliens, or even citizens, so not be worried about FIRPTA.

    As an aside, does anyone know what the rule is for this hypothetical involving a US citizen: They live and work in Washington state, earning $100,000 up here, but also have an activity down in California that earns them $20,000. Does CA tax them on the first dollar of the $20,000? I would suspect that they do.

  134. 384

    By Anonymous Coward @ 382:

    RE: justme @ 381 – Let me get this straight, you think Chinese buyers are buying overseas properties because they want to flip them? Or I’ll ask it another way, why do you think Chinese buyers are so interested in purchasing properties outside of China?

    The other option would be renting them. In any case, I don’t think flippers (or at least active flippers) get capital gains rates, regardless of how long they hold the property. Unless something has changed in the last 25 years I think the property is effectively treated as inventory.

  135. 385
    justme says:

    RE: Kary L. Krismer @ 383

    >> Are you sure they don’t get capital gains rates?

    I suggest you start with the wikipedia page and follow the references there.

    https://en.wikipedia.org/wiki/Foreign_Investment_in_Real_Property_Tax_Act

    QUOTE: Internal Revenue Code section 897, as enacted by FIRPTA,[4] treats the gain on a disposition of an interest in United States real property as effectively connected income subject to regular federal income tax.

  136. 386
    justme says:

    RE: Anonymous Coward @ 382

    The tax applies whether you flip or not, which means you don’t have a point. In fact you lose a point for being glib and attempting a put-down.

  137. 387

    By justme @ 385:

    RE: Kary L. Krismer @ 383

    >> Are you sure they don’t get capital gains rates?

    I suggest you start with the wikipedia page and follow the references there.

    https://en.wikipedia.org/wiki/Foreign_Investment_in_Real_Property_Tax_Act

    QUOTE: Internal Revenue Code section 897, as enacted by FIRPTA,[4] treats the gain on a disposition of an interest in United States real property as effectively connected income subject to regular federal income tax.

    I don’t think that necessarily means what you think it does. Even if you think “connected income” doesn’t qualify for capital gains, that is the issue I was asking about.

  138. 388

    RE: justme @ 385 – BTW, this is the sentence which may be more applicable from your link, but it is ambiguous: ” Nonresident alien individuals are subject to tax on such income at regular graduated tax rates for U.S. individuals.” Does “regular” mean not capital gains rates? Unfortunately the examples I’ve found in IRS publications doesn’t answer the question.

  139. 389
    justme says:

    RE: Kary L. Krismer @ 388

    I think the phrase “ordinary income” is the correct one to use to distinguish, well, “ordinary” income (wages, salaries, commissions and interest, etc) from capital gains income. The phrase “regular income” seems wooly to me. Hence you may very well be correct that Wikipedia is wrong (or ambiguous) in its description. I did some googling and found writings taking either side of the argument. TBD, I guess.

  140. 390
    Anonymous Coward says:

    RE: justme @ 386 – The tax only applies when you sell, because unless you sell, you don’t have income. If Chinese buyers are buying to hold for the long term, then the tax implications of the sale would have little to no impact on their willingness to buy. So I’ll ask it again: why do you think Chinese buyers are so interested in acquiring overseas real estate?

  141. 391
    QA Resident says:

    This was an interesting property. It got highlighted in Curbed Seattle and had multiple offers. It ended up going $99k over ask….for 900 sf.

    I’m not sure if the new owner will ever get it back, but may be they just loved it and had to have it.

    https://www.redfin.com/WA/Seattle/1804-10th-Ave-W-98119/home/17081068

  142. 392

    By justme @ 389:

    RE: Kary L. Krismer @ 388

    I think the phrase “ordinary income” is the correct one to use to distinguish, well, “ordinary” income (wages, salaries, commissions and interest, etc) from capital gains income. The phrase “regular income” seems wooly to me. Hence you may very well be correct that Wikipedia is wrong (or ambiguous) in its description. I did some googling and found writings taking either side of the argument. TBD, I guess.

    Yep, I imagine that’s quite a specific tax specialty. I don’t remember anything even being mentioned on the taxation of non-resident aliens, either in business school or law school.

  143. 393

    By Anonymous Coward @ 390:

    RE: justme @ 386 – The tax only applies when you sell, because unless you sell, you don’t have income. If Chinese buyers are buying to hold for the long term, then the tax implications of the sale would have little to no impact on their willingness to buy. So I’ll ask it again: why do you think Chinese buyers are so interested in acquiring overseas real estate?

    The other half of it is why would they care that much–it’s only a tax on the gain. Only getting to keep $70,000 out of every $100,000 of gain (or whatever the percentage) is hardly a problem that needs to be avoided. The withholding issue is a bigger problem–but I think even that can be avoidable if there is no gain.

    This is sort of the flip side of people who think that someone can spend money with impunity because the expense is deductible. One thing I do remember from business school is an accounting professor mocking doctors who flush $100 down the toilet to save $30 in taxes.

  144. 394

    Happy New Years Bubbleheads!!!

    May 2017 bring you prosperity, peace and hope through MORE American ingenuity, security and manufacturing high paid jobs brought back to America….why would anyone oppose this unless they were neurotic?

  145. 395
    ess says:

    By Kary L. Krismer @ 392:

    By Anonymous Coward @ 390:

    RE: justme @ 386 – The tax only applies when you sell, because unless you sell, you don’t have income. If Chinese buyers are buying to hold for the long term, then the tax implications of the sale would have little to no impact on their willingness to buy. So I’ll ask it again: why do you think Chinese buyers are so interested in acquiring overseas real estate?

    The other half of it is why would they care that much–it’s only a tax on the gain. Only getting to keep $70,000 out of every $100,000 of gain (or whatever the percentage) is hardly a problem that needs to be avoided. The withholding issue is a bigger problem–but I think even that can be avoidable if there is no gain.

    This is sort of the flip side of people who think that someone can spend money with impunity because the expense is deductible. One thing I do remember from business school is an accounting professor mocking doctors who flush $100 down the toilet to save $30 in taxes.

    We are also talking about individuals who are repositioning both their assets, as well as their lives from a totalitarian regime to a democratic society. Capital gains and other tax issues may not be on their minds as much as other overriding issues, such as freedom for themselves and their families.

  146. 396
    Hugh Dominic says:

    By Anonymous Coward @ 390:

    RE: justme @ 386 – The tax only applies when you sell, because unless you sell, you don’t have income. If Chinese buyers are buying to hold for the long term, then the tax implications of the sale would have little to no impact on their willingness to buy. So I’ll ask it again: why do you think Chinese buyers are so interested in acquiring overseas real estate?

    Security and stability of their money is a primary interest, and a chance for some appreciation too. Americans with less than $250k never worry about their money. It’s in the safest place on Earth – a US bank, secured by FDIC. If you have a lot of money in China, or Venezuela, etc. you do not have access to that level of stability. You want to put your money in US dollars, or dollar-denominated assets. Foreign real estate is a great way to park a few million dollars somewhere safe.

    That’s why London and NYC real estate rises in times of crisis. They are viewed as safe havens.

    I think there are also some benefits towards US immigration if you hold or invest in US real estate. I don’t recall the specifics. But better yet if you are sending your daughter to the US to study, since she can occupy your investment.

  147. 397
    justme says:

    RE: Anonymous Coward @ 390

    Try asking some honest question, instead rhetorical ones. Or just explain your arguments yourself.

  148. 398
    Sam Zell says:

    @ Hugh Dominic. Great points. Just out of curiousity I did a search on how many Chinese students are enrolled at UW and found this link: https://iss.washington.edu/statistics

    So in 2014 there were 4000 students from China. Wonder what the number is now.

  149. 399

    RE: ess @ 394

    I have seen this to be the case for decades and even before I was in real estate. Moving money out of their countries was more about possibly losing it all due to some form of government taking in their County. Thus the tax treatment or even potential loss due to market downturn was not of considerable focus when considered against potentially losing it all in their own Country.

    The first time I saw it was a woman from Hong Kong back in the late 70’s and/or early 80’s. Yes, she did have a child in school in the U.S. A younger child that was a music prodigy. But the main reason she put the child in school here was as an excuse to move money out of the Country.

    So while many are looking at this as the student here being the reason for the real estate purchase here, it sometimes is the reverse as to motivation.

  150. 400
    justme says:

    RE: Hugh Dominic @ 395

    Well, except that

    1. NYC and London real estate is DROPPING and has been for most of 2016, especially higher-end properties.

    2. RMB is and has been dropping, and buying in USD has become increasingly expensive

    3. RMB capital controls are becoming increasingly stringent

    https://www.ft.com/content/87d8a7e8-cfe8-11e6-b06b-680c49b4b4c0

    4. Chinese citizens have burned their fingers on real estate in Australia, Vancouver, NYC, London and probably a few more places (Dubai?).

    Bullish?

  151. 401
    Deerhawke says:

    A friend built two homes on a subdivided lot in Ballard. Both sold to Chinese families. One family had a son at the UW and the other had a daughter there.

    It is hard to say if the figures for the number of Chinese students given out by the UW are accurate. They have all kinds of off-the-books programs. Four years ago, the UW was in such dire financial straits that they were turning down local kids who were national merit semifinalists (top 1% of SATs) to take Chinese students who were paying full out-of-state tuition. My wife was working at the UW at the time and when I went to pick her up, it was like driving onto the campus of Beijing University.

    I don’t blame the Chinese for wanting to leave and buy their way out of that pressure cooker and into our system. I think that Chinese are known throughout the world for being shrewd investors, but Hugh Dominic and Ardell are right that a great return may not be the primary motivation for buying here.

  152. 402
    S-Crow says:

    As a side note to Chinese buying real estate……largest Earnest Money walkaway since I’ve been in escrow biz happened this past year. Signed then refused to close. Walked away from EM like it was nothing.

  153. 403
    David B. says:

    RE: softwarengineer @ 393

    why would anyone oppose this unless they were neurotic

    The devil, as they say, is in the details.

  154. 404
    David B. says:

    RE: ess @ 394

    from a totalitarian regime to a democratic society

    At least for another few weeks…

  155. 405
    jon says:

    The joint venture between UW and Tsinghua U will open in Bellevue later this year, and that will open up even more spaces for Chinese students. But the purchases can turn into dumping quickly if the Chinese debt bubble pops, like it did for the Japanese. The following article claims it won’t happen suddenly, because the Chinese banks are nearly all government owned: http://www.barrons.com/articles/chinas-debt-bubble-why-the-bears-are-wrong-1480046488 . A controlled return to proper debt levels would still mean a long period of stringent capital outflows though.

  156. 406
    AJT says:

    RE: jon @ 404

    All of the business/economic sites I follow that has an Asian subcategory have more and more articles regarding increasing capital controls, shutting down underground or shadow banks, more stringent reporting of forex transactions, etc….. With all the anecdotes about Chinese buyers, shouldn’t that have some marginal pressure on RE appreciation? The reason I think this is relevant is because it is the only factor effecting RE prices that I see changing in the near term. The jobs picture is strong and appears to have stability heading into 2017 and the interest rates would have to increase by another 100 bps to really have an effect.

    http://m.scmp.com/news/china/economy/article/2058580/china-steps-scrutiny-individual-forex-purchases-new-year
    http://m.scmp.com/news/china/economy/article/2053184/what-china-has-done-stem-flow-cash-out-country
    http://www.caixinglobal.com/2016-12-30/101032182.html

    I could paste articles all day long. My question is are we going to see an effect in the Puget Sound RE market? I guess we’ll find out this spring.

  157. 407
    justme says:

    RE: S-Crow @ 401

    Perhaps a sign that the Money was not so Earnest? (Sorry, that joke was just too easy).

  158. 408
    OA says:

    Hey Everyone,

    First time post. I’ve been visiting this site for the last 4-5 months and find the insight here pretty valuable.

    I’m currently in the middle of making a decision and would like to know your thoughts on what I should do. I don’t and have never worked in construction and/or real estate so have been learning A LOT as I go.

    My wife and I (no kids yet) rent a condo in Issaquah. A little more than 2 years ago we bought an undeveloped lot in Issaquah (up on squak mountain, close to front street) with the intention of building our future home there. We have don’t have a loan on it as we paid with cash. We bought it for a really favorable price as the lot is sloped, but definitely build-able. The neighborhood that it’s in is not necessarily our dream neighborhood, but the area itself is highly sought after (great schools, location, etc).

    This past year, I’ve worked with architect/engineer/city on the house plan and it is currently in the permitting stage with the city (permit will probably be approved by February 2017). Knowing how expensive construction labor currently is, I’m estimating that the house (about 3,600 sq ft) will cost at least $500,000 to build, which is at least $140 a sq ft. This is taking into account that it’s sloped (foundation cost will be higher) and both my dad and I will be the GCs. I’m sure that it will take at least a year to build, so will probably be done by March 2018 if I start in February or March of 2017. Also, I’ll have to get a construction loan to finance a good part of the build.

    My other option is to sell the lot with the approved permits. I’m sure that I can make a $150k profit if I sell (after cap gains tax), and this is after I’ve consulted with an agent that knows the area really well and specializes in selling land.

    I’m truly on the fence about what to do. The easier route is to sell, pocket the money, wait for the Seattle real estate market to change in 1-2 years (I’m being hopeful) and buy in a couple of years. We like the eastside and would prefer to live here and start a family.

    On the other hand, homes in Issaquah (especially new construction) are selling for $950k and more. If I end up building, it will probably cost me 65% of that. However, building a house is a stressful process that I know most people would rather avoid.

    Let me know your thoughts, thank you!

  159. 409
    ARDELL says:

    Before you decide, see if you can get approved for a construction loan. Usually the GC needs a proven track record of successful building projects. Maybe your father or you do. But if not, finding out if you can get a construction loan might answer your question.

  160. 410
    OA says:

    RE: ARDELL @ 407

    I can get one, I’ve been pre-approved with Washington Federal. They have a loan type “build to live” that doesn’t required a GC license, and once the construction is finished it becomes like a regular mortgage.

  161. 411
    Eastsider says:

    RE: OA @ 406

    It sounds like you are changing your mind about building your own home. If you are selling it now, timing wise you have made a good investment. But if you are serious about having your own home, my advice is to proceed with your original plan. You have got a great deal on land. The current mortgage loan rate is at a historical low. You also save on the capital gains tax ($50k?) and additional RE transaction costs ($25k?) if you build the house. Finally, trying to time market is an impossible task IMO.

  162. 412
    Deerhawke says:

    OA the biggest problem with these dollar/SF costs is determining what is included. Is that soup to nuts? Does that include all the “soft costs” such as pre-planning, architecture, engineering, permits, etc. Does it include putting in sewer, water, electrical and gas?

    From my experience, $140 PSF is a good figure if you are not including all soft costs and lot development/ utility costs. But even then you are getting Frigidaire Gallery appliances, Home Depot tile, and IKEA cabinets.

    Your biggest issue is finding the right subs who can produce quality on time. Why should top quality subs come and work on a your project rather than one of mine? I have been working with these guys for 5-10 years. I pay them on time, or if they are in a pinch, 20 days early on the day of completion.

    Every contractor can tell horror stories about their first project on their own. I won’t bore you with the horror stories of bad subs or good subs who went bad. But remember that experience is the result of painful bruises.

    Good luck!

  163. 413

    RE: Deerhawke @ 412 – Your comments remind me of an old neighbor’s remodel project. The neighbor didn’t have a clue about critical path, nor was he good at evaluating contractors. It was a disaster and he never really finished the project.

    But he was sure that he could save money being his own general contractor. Another example of “you don’t know what you don’t know.”

  164. 414
    David B. says:

    RE: Kary L. Krismer @ 413 – I played GC for some move-in renovations at my current place. It turned out OK, but:

    * It still was a far bigger pain than I had anticipated, and
    * It worked out OK in part because the stuff I wanted to do was fairly simple.

    There’s a surprising amount of domain-specific expertise that a GC has, such as knowledge of what can be done simultaneously with what else, plus a good working relationship with a number of subs.

  165. 415
    OA says:

    RE: Deerhawke @ 412

    Thank you for your comments.

    I’m assuming it will be at least $140/sq ft to put up the actual structure on the lot. All costs related to pre-planning and architecture have already been paid are not included in the $140 number. Permits haven’t been paid yet as they’re still going through the approval process. Electrical and gas will be less than $2,000 to connect to.

  166. 416
    Jasper says:

    RE: OA @ 408 – Have you designed your house to handle a 7.4 earthquake very close by? Your location is practically on top of the Seattle Fault.

    A major advantage of custom-building a home is that you can insist on having a house that can handle realistic earthquake risks, instead of the out-of-date assumptions used in our local building codes. Fortunately, the local building codes use assumptions that are in the correct ballbark, but the codes are not as strict as in places that have actually experienced the kinds of earthquakes that we are at risk for.

  167. 417
    Kmac says:

    If the house is engineered, which is quite likely in OA’s case, it will most likely be built to sustain life even with an earthquake of California proportions.

    My engineer stated that most people don’t understand what designing for an earthquake is all about.
    He stated that it is less about the house remaining standing after the “big one” but much more about creating many voids within the “rubble” to help sustain the survivability of the quake.
    Instead of being a pile of toothpicks, the structure will remain in large portions, albeit most likely not in an inhabitable condition.

  168. 418
    OA says:

    RE: Kmac @ 417

    Yes, the house has been engineered and that part has been reviewed and approved by the city already.

  169. 419

    RE: Kmac @ 417 – I was in Santa Cruz a few months after the World Series quake. Many of the houses destroyed did look like piles of debris, but I can’t be sure they weren’t bulldozed after the quake. It was interesting how many of the houses destroyed were all in a wandering line. Either way it did almost look as if some drunk with a bulldozer went through the neighborhood.

    Their older downtown area was pretty well devastated too, but those were mainly brick buildings of a type you wouldn’t expect to do well.

  170. 420
    Deerhawke says:

    When I built my house, I asked the foundation sub to double up the steel and to order stealth fiber mesh. I did the same with the slab guy and made sure he tied the slab to the foundation walls. Then I framed it to California Code Plus and had 2 inches of rigid poly foam sprayed into the walls. It is incredibly warm and uses very little gas to heat it. But more importantly, we could have a doozy of an earthquake and I think this house will be just fine. Total additional cost of about $10k. In the last ten years I have probably made half that back on the lowered heating cost. But peace of mind is priceless.

    Put your money into great structure, excellent systems and top notch insulation. Live with cheap used appliances until you can afford what you really want. People will think you’re quirky but who cares?

  171. 421
    Kmac says:

    A novice builder needs to be mindful not to venture too far from the engineered specs, regardless of if you feel something is superior.
    Building dept. surely won’t approve of it, not to mention the now null and void engineering you just paid thousands for.

    One of the biggest offenders has got to be the call out of 16d common nails (3-1/2 x .162 dia) at plate to stud connection (and the use of “common’ nails in general), that NOBODY uses.
    Common nails are about 40%larger than typical nail gun nails, thus stronger
    Everybody thinks I’m nuts because I follow the engineering specs to the T.

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