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. 1
    Deerhawke says:

    “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.

  2. 2
    Macro Investor says:

    Tim, I think you might be confused. Isn’t fewer sales and pending sales positive for buyers? Or maybe you are mixing up the Y/Y and M/M numbers.

    The weekend is over, man. The liquor should be worn off by now ;)

  3. 3
    Macro Investor says:

    RE: Deerhawke @ 1

    Before the crash (if I am remembering right) inventory was around 5 times what it is today. After the crash many people lost their equity and could no longer afford to sell. Inventory was reduced to people forced to sell, or people who bought a long time earlier. Most of the newcomers, the non-professional flippers, and the wanna-be move uppers had to change into long-term buy/holders.

    My theory is that painful mindset is taking a long time to wear off. So inventory stays low. This further fuels the sit tight mindset, because if you sell you cannot assume you’ll find anything decent to move into. We may be seeing a generational attitude shift where fewer people see housing as an ATM machine. This is not what I expected, but good macro investors are comfortable accepting data that conflicts with their assumptions.

    I agree with you that the higher interest rates could cause a buying panic. Emotions like fear and greed drive actions. How long and how high will rates go? The explosive upward move (greed and fear of missing out) is based on hope that TrumpEnomics means better times ahead. He hasn’t set foot in office so the reality may be much different than the hope.

  4. 4
    jon says:

    The problem with YOY comparisons is they are affected just as much by what happened at one month last year as they are with the latest month. Last November was a blip down in sales that exaggerates what happened this November. That said, I have gotten an unusually large number of unsolicited calls from Realtors (TM) these last few days asking if I am selling my house. The inflation resulting from the Trump stimulus spending and a looming trade war may be sending renters to seek the safe haven of home ownership.

  5. 5
    GoHawks says:

    Tim, would it be possible to plot a chart for the months worth of supply over the past 15 years? It would be interesting to see how low it is been and for how long.

    Thanks

  6. 6

    From the Times article:

    The future isn’t looking much brighter: The number of new-home listings hasn’t kept pace with the strong sales. That’s left fewer homes available on the market, which has the potential to make competition even more fierce.

    They seem to be looking at MOM figures, rather than YOY. Inventory does tend to decline this time of year, but the inventory kept up with only a normal MOM decline even though the sales were high.

    As to why the sales were high without pendings being affected, my one guess is that it might be the blip in FHA appraisals. I’m not exactly sure what’s going on but this summer/early fall some lenders were only promising an appraisal within 60 days! I haven’t had an FHA buyer in the last 2 months, so I don’t know if that has worked itself out, but if it has that could explain at least part of it if a significant number of transactions were taking longer to close, especially if that has been fixed now.

  7. 7

    BTW, on the topic of FHA, for the agents out there, apparently some FHA lenders are now requiring the FHA Amendatory Clause addendum to be part of the original contract. Not sure why the change, but something to think about when writing an offer on an FHA buyer (or accepting an offer from an FHA buyer).

  8. 8
    Brian says:

    I mentioned before California’s Proposition 13, enacted in 1978, that keeps property tax low for long-time owners in California, making them a lot less enticed to sell their homes when prices increase. A potentially very large contributor to San Francisco’s high home prices (for example, Warren Buffet only pays 0.056% on his $4M beachfront property).

    I just looked at property tax rates in Vancouver, BC:

    Vancouver: 0.37%
    Seattle: 0.95% (156% higher)

    Monthly payment for hypothetical $600K home w/ 20% down & a 4% mortgage rate:

    Vancouver, BC: $2477
    Seattle: $2767 (+11.7%)

    That means the payment on a $600K home in Seattle is roughly equivalent to a $670K home in Vancouver. A $1M home in Seattle is equivalent payment to a $1.12M home in Vancouver.

    So when they’re comparing Seattle to Vancouver and San Francisco, it’s not an apples to apples comparison like the media seems to lead on. Low property taxes in both of San Fran & Vancouver help prevent people from needing to sell when their property value increases too much.

  9. 9
    Anonymous Coward says:

    RE: Brian @ 8 – Don’t forget currency differences…

  10. 10
    Deerhawke says:

    Another interesting statistic to me is that City of Seattle closed sales were up 40.6% YOY (according to the Seattle Times), while inventory was flat or down. Really, how does this happen? And what is a bit odder is that there really wasn’t much of a price change (up 2.8%). You would expect that if there was a surge of demand, there would also be a jump in prices.

    As far as I know, FHA is not that big a factor in Seattle sales. But possibly there are financing or other technical reasons why these sales were hanging fire and finally sold. SF home sales in October were only up 4% YOY so maybe we should see that a lot of activity actually was just booked in a different month from when it actually was sold. Again, the looming rise in interest rates may have been the driver here. Maybe loan processors were just overbooked.

    One way or another, that must mean that standing inventory is now functionally zero and should remain that way through the end of the year. I thought the spring market might mean a return to a bit more stability, but now I am changing my mind. I think we might see Seattle prices up again by double digits by April or May.

  11. 11
    Brian says:

    By Anonymous Coward @ 9:

    RE: Brian @ 8 – Don’t forget currency differences…

    Yes you’re right.

    The payment on a $600K Seattle home would be equivalent to a $888K Vancouver home in that case, with property tax and exchange rate factored in. A $1.0M Seattle home equivalent to a $1.48M Vancouver home.

    It’s kind of hard to find the median Vancouver home price (they seem to like to use average), but it appears to be $710K CAD:
    http://www.timescolonist.com/news/b-c/real-time-sales-numbers-show-decline-in-average-vancouver-home-prices-1.2327591

    $710K CAD is $536K USD. Seattle’s median is $612K? Without property taxes factored in, we’re already way above Vancouver in home costs.

  12. 12
    Brian says:

    By Deerhawke @ 10:

    Another interesting statistic to me is that City of Seattle closed sales were up 40.6% YOY (according to the Seattle Times), while inventory was flat or down. Really, how does this happen? And what is a bit odder is that there really wasn’t much of a price change (up 2.8%). You would expect that if there was a surge of demand, there would also be a jump in prices.

    That is interesting. I think it means that more inventory is hitting the market, but more of that inventory is being sold at the same time, so at the end of the month/year, you’re not seeing much of a net change in inventory. The fact that prices increases were small means that the supply nearly satisfied the demand.

  13. 13
    GoHawks says:

    12 posts all focused on real estate and not politics…….Love it!

  14. 14
    ess says:

    RE: Brian @ 8

    I mentioned before California’s Proposition 13, enacted in 1978, that keeps property tax low for long-time owners in California, making them a lot less enticed to sell their homes when prices increase. A potentially very large contributor to San Francisco’s high home prices (for example, Warren Buffet only pays 0.056% on his $4M beachfront property).
    _________________________________________________________________________________________________________________

    The above is more or less correct but with an important caveat.

    A California relative of mine indicated that he was able to transfer his prop 13 tax rate from his more expensive house to a condo that he had bought when he downsized. Further research indicates that for some residents, there is limited ability to do this based upon age and location.

    http://www.sfgate.com/business/networth/article/How-to-transfer-property-tax-from-old-home-to-new-3643095.php

    Same principle with rent control – people are less willing to move if they are in a rent controlled apartment if they can’t get an equivalent rent or proportional rent for a smaller place later in life when they also wish or desire to downsize.

  15. 15
    Screenname345 says:

    Love it. Going to be a strong spring selling season again just as I hoped. Lowes said business is strong and reaffirmed 2017 guidance this morning. Nothing going to stop this freight train for the foreseeable future. Fed is going raise rates next week though and that is probably it for another 6 months or so, hopefully equity markets pull back for a nice dip.

  16. 16
    GoHawks says:

    Feels like another strong start to the year. Up 8-12% for the first 6 months. Is 2017 the crescendo?

  17. 17
    Blake says:

    By Macro Investor @ 3:

    The explosive upward move (greed and fear of missing out) is based on hope that TrumpEnomics means better times ahead. He hasn’t set foot in office so the reality may be much different than the hope.

    You want to know what effect Trump may have on macro economic trends? Read this:
    http://www.forbes.com/sites/nathanvardi/2016/12/05/trump-economic-plan-would-send-u-s-economy-to-most-severe-recession-since-early-1980s/
    … “After the election, the business and financial communities sounded elated and euphoric comparing Trump to Ronald Reagan. The analogy is both wrong and misleading. The two eras are diametrically different in most respects.
    … Today it is hard, if not impossible, to see such tools at America’s disposal in the event of a similar crisis. During Reagan’s era, it took the stock market over six years before it encountered the 1987 crash. If President-Elect Trump follows through on the policy he presented during the campaign as his agenda, such an economic and financial crash will arrive much much sooner.”

    And this interview is something that everyone who voted for Trump should read… and the rest of us as well! Wayne Barrett wrote the definitive book on Trump almost 25 years ago and knows Trump as well as anyone. Best piece I’ve read on Trump this year…
    https://newrepublic.com/article/139094/theres-no-check-trump-except-reality-qa-wayne-barrett
    -snip- When I was writing my book, I sat down with Joe Sharkey, who was the Democratic Party boss in Brooklyn when that really meant something. And I said to him, and he was in his 80s when I interviewed him, “When did you first see Fred Trump at the Federal Housing Administration?” He said, “I went down to Roosevelt’s inaugural and after the inaugural I went over to the FHA and Fred was already there.” These guys were consummate state capitalists. Both father and son, everything that they did benefitted them one way or another by government program. The entire tax abatement program for The Commodore [now the Grand Hyatt New York, a hotel that Trump acquired and renovated in 1980, his first major construction project in Manhattan] was invented for him. It wasn’t like we slotted him into an existing program, we created this entire tax incentive program for Donald.”

    (Sorry if you think this is off topic. We live in a State-Capitalist society whether we like it or not and Trump taking over the State WILL have significant effects on our economy, interest rates and housing here in Seattle… no?)

  18. 18
    Weasel says:

    RE: Macro Investor @ 3 – Or maybe no one is leaving Seattle because tech jobs and its not SF.

  19. 19
    ess says:

    By GoHawks @ 16:

    Feels like another strong start to the year. Up 8-12% for the first 6 months. Is 2017 the crescendo?

    To paraphrase a popular saying:

    From your writings to my retirement plans!!

  20. 20
    sfrz says:

    The group think on this site is staggering. The bulls are calling the sheeple to slaughter. AGAIN

  21. 21
    Blurtman says:

    Zero Hedge.

    Chinese Driven Vancouver Housing Bubble Moves To Seattle – “This Is Vancouver 2.0

    http://www.zerohedge.com/news/2016-12-07/chinese-driven-vancouver-housing-bubble-moves-seattle-vancouver-20

  22. 22
    justme says:

    RE: Deerhawke @ 1
    RE: Deerhawke @ 10
    RE: Brian @ 12
    And perhaps also for Tim:

    There is a huge problem that inventory is foolishly measured in units of PREVIOUS-MONTH-sales-rate. This causes all kinds of anomalies and misconceptions, both MOM and YOY.

    For example, if the inventory and sales are both at yearly peaks in Aug, then the Sep inventory is going to look very tight because the inventory had a seasonal drop but we are still comparing this inventory it to last months year-high sales.

    It would be much better to use absolute counts for sales and inventory, and perhaps use some measure such as “absorption rate” (sales/inventory for the SAME month) as a measure of market condition.

    “Months-of-inventory” clearly does not reflect market condition well. But of course, the REIC loves it.

    PS: Someone asked for historical months-of-inventory. Bad idea. We need historical inventory counts and historical sales counts. Straight up numbers. Plot the curves in the same coordinate system.

  23. 23
    justme says:

    RE: sfrz @ 20

    No kidding. The group-think of realtors, landlords, spec builders, flippers and speculators is almost all you see here.

  24. 24
    Eastsider says:

    RE: sfrz @ 20

    I was going to suggest an update to the affordability index given last few weeks’ sharp rise in mortgage loan rates. Then I realized that Seattle’s median household income just went up 14% in the past year to $80k! So even with more expensive homes and higher mortgage payments, Seattle may actually be more affordable today than a year ago. What a world we live in. SMH.

    That said, I believe the risk/reward ratio does not favor homebuyers in today’s market.

  25. 25
    Cap''n says:

    RE: Eastsider @ 23

    Agreed on risk/reward for current buyers. Particularly if not planning to stay longer term. As for those who bought 2010-2013 with a low downpayment and locked in low 30 yr interest rate, they are primed to benefit from the inflation hedge real estate provides. I do think we will see stronger income gains and increasing inflation. We are close to 2 percent already using the bogus methods that exclude what people primarily purchase and politicians are about to make changes in laws from taxes to environmental regulation that will overheat the system that is already doused in QE gasoline.

  26. 26
    boater says:

    To the folks comparing Vancouver to Seattle. Don’t forget to include sales, VAT and income taxes in the comparison. Oh and now special real estate sales tax for Vancouver.

  27. 27
    resistance says:

    “Vancouver 2.0”

    If you haven’t figured it out yet, please don’t breed. You’re an idiot.

    http://www.zerohedge.com/news/2016-12-07/chinese-driven-vancouver-housing-bubble-moves-seattle-vancouver-20

  28. 28
    Brian says:

    RE: resistance @ 25

    Nothing new in that article vs. other articles posted here.

  29. 29
    redmondjp says:

    By Eastsider @ 23:

    RE: sfrz @ 20

    I was going to suggest an update to the affordability index given last few weeks’ sharp rise in mortgage loan rates. Then I realized that Seattle’s median household income just went up 14% in the past year to $80k! So even with more expensive homes and higher mortgage payments, Seattle may actually be more affordable today than a year ago. What a world we live in. SMH.

    That said, I believe the risk/reward ratio does not favor homebuyers in today’s market.

    You have forgotten to include the yet-to-be-seen but significant tax increases (sales, property, vehicle excise) to be implemented by the passage of Sound Transit III. Personally, I expect my own overall tax increase from this alone to be well over $1K per year. The more expensive your home and cars, the more you will pay.

  30. 30
    js says:

    November Las Vegas sales up ~30%, inventory down ~30%. Is Las Vegas is special too, just like Seattle? Or are both markets primarily driven by global and national economics instead of local/regional factors?

    Remember 2007.

    http://www.calculatedriskblog.com/2016/12/las-vegas-real-estate-in-november-sales.html

  31. 31
    justme says:

    Mandatory reading for bubble-heads everywhere:

    http://wolfstreet.com/2016/12/06/u-s-house-price-bubble-buy-to-rent-ipo-rent-backed-securities/

    QUOTE: The largest player in the field, Blackstone’s Invitation Homes, which spent about $10 billion since the Financial Crisis, or about $150 million a week during the heyday, on about 50,000 homes in 14 metropolitan areas, has confidentially filed for an IPO, according to The Wall Street Journal. But it will face some, let’s say, challenges.

    Some notes:

    1. Blackstone is trying to unload their 50,000 SFH portfolio via an IPO. I guess the crap is about to hit the fan.

    2. Blackstone bought these houses using financing that no regular buyer can get: Easy QE money that the banks got from the FRB.

    3. Without QE, and low interest rates also for regular buyers, the recovery in housing prices never would have happened.

    4. Investors like Blackstone took over about 6% of the US housing stock using financing that we all pay for by getting 0% on bank deposits.

    If you want to see what Blackstone is renting out in seattle-tacoma, have a look at the link below. Presumably these currently open rentals are just the tip of the iceberg, maybe 1/12 or less. All of these dwellings were bought by Wall St using Fed QE-generated funds. This is how the “recovery” happened. This is what a “public-private partnership” looks like. Privatize the profits and socialize the losses.

    http://www.invitationhomes.com/market/seattle-tacoma/

  32. 32
    Eastsider says:

    RE: redmondjp @ 27

    When I wrote that Seattle was becoming ‘more’ affordable, the opposite is true. If you are a long time Seattleite, the city has become less affordable. But Seattle has been overflowing with high-wage transplants even as locals are leaving in droves. There is a bit of gravity defying reality here in Seattle, and it distorts stat such as the affordability index.

  33. 33
    redmondjp says:

    RE: Eastsider @ 32 – I agree with you. For some strange reason, a majority of people in Redmond voted ‘yes’ on ST3, even though 99% of them will never use it. They may regret that after they open next year’s property tax and car registration renewal bills. But most of these people are apparently so rich that another few thousand dollars per year to pay won’t impact them any. For me, it will be like buying one major appliance per year.

    I’d cash out and move, but for this one tiny detail about the jobs being here for both my wife and I.

  34. 34
    Eastsider says:

    RE: redmondjp @ 33 – Unfortunately we can’t teach stupid. This is another reason why we must demand super majority for any tax increase!

  35. 35
    jon says:

    RE: redmondjp @ 33 – That’s exactly right, jobs are the critical factor, and taxes, while important, are secondary. To keep Seattle attractive to companies that provide the best jobs, we need to keep the local transportation system functional. It is on the verge of breaking down already. An improved rail network means more people can commute to area jobs, and that makes the region more attractive to employers as a large talent pool. I decided that the improvement to my property value was more than enough to offset the increase in taxes.

  36. 36
    redmondjp says:

    RE: jon @ 35 – I’m all for a good transit system. But ST3 is the biggest public boondoggle I’ve ever seen – no wait, the high-speed train to nowhere in CA probably is bigger. How is riding a slow-speed choo-choo into south Seattle going to fix anything? You do realize that ST3 isn’t going to help by any appreciable amount, even by their own estimates. Seriously, how many people that work on the Eastside are going to be riding it? We’d be FAR better off by putting in $10B of new roads and another $10B on expanded bus service than on this idiotic train.

    Personally, I’d put two-track elevated monorail right down all of our major roads and over the existing rail right-of-ways (preserving the existing trails below), with stops at the overpasses, and massive park & rides at the same interchanges. But this wouldn’t enrich the big builders around here, so it will never happen.

    ST3 is primarily a political funds redistribution machine. Nice to be a ST employee (job for life plus retirement), or Wright-Runstad and their ilk.

  37. 37
    Macro Investor says:

    By jon @ 35:

    RE: redmondjp @ 33 – I decided that the improvement to my property value was more than enough to offset the increase in taxes.

    Not to attack you personally, but ST3 won’t have any impact on your property value.

    If every voter tried public transit for 2 weeks ST3 would have gone down in flames. It just doesn’t work for enough commuters to make a difference.

    Light rail works in NYC and some European cities because almost everyone can walk to a train, and then walk from the train to their destination. The opposite of this is why the light rail in Seattle has almost no impact on traffic. Most have to drive to it. There’s little to no parking. Even if you live a block away it is up/down big hills and you sweat in your office clothes.

    The buses are no help either, because they sit in the same gridlocked traffic as the cars.

    The one and only way to fix big city traffic is widespread telecommuting. Mandate by law that office employees telecommute at least 1 day per week. You’ve now reduced traffic by 20% — FOR FREE. That may be enough to break the log jams. It would certainly cut billions in wasteful spending on infrastructure. (Not to mention reducing CO2).

  38. 38
    justme says:

    RE: Macro Investor @ 37

    Mandating carpooling 1 day a week would have the same CO2 and oil savings…mandating 2 days even better. You get the idea.

  39. 39
    Ross says:

    By Macro Investor @ 37:

    By jon @ 35:

    RE: redmondjp @ 33 – I decided that the improvement to my property value was more than enough to offset the increase in taxes.

    Not to attack you personally, but ST3 won’t have any impact on your property value.

    If every voter tried public transit for 2 weeks ST3 would have gone down in flames. It just doesn’t work for enough commuters to make a difference.

    Light rail works in NYC and some European cities because almost everyone can walk to a train, and then walk from the train to their destination. The opposite of this is why the light rail in Seattle has almost no impact on traffic. Most have to drive to it. There’s little to no parking. Even if you live a block away it is up/down big hills and you sweat in your office clothes.

    The buses are no help either, because they sit in the same gridlocked traffic as the cars.

    The one and only way to fix big city traffic is widespread telecommuting. Mandate by law that office employees telecommute at least 1 day per week. You’ve now reduced traffic by 20% — FOR FREE. That may be enough to break the log jams. It would certainly cut billions in wasteful spending on infrastructure. (Not to mention reducing CO2).

    The housing will come, apartments will build up in proximity to light rail, the bel-red corridor in Redmond/Bellevue is a good example of what’s already planned.

  40. 40
    Anonymous Coward says:

    RE: jon @ 35 – How exactly is Sound Transit going to do anything to help people commuting to the East Side from the South End and from the North End? It’s not, because the people who designed it put very little thought into where people are traveling and why.

  41. 41

    RE: redmondjp @ 33 – Not to take a possition on ST3 either way, but Eastsiders may be hoping for indirect improvements in traffic many years down the road. Our traffic is so bad it’s all become interrelated.

  42. 42
    bellevuejp says:

    RE: redmondjp @ 36 –

    <>

    It’s really a shame that so many people can’t see that the solution you propose is absolutely, without a doubt, worth trying. Give commuters a guaranteed commute time (on the elevated track) and way to get to it (with massive park&rides and maybe better “last mile” service to neighborhoods and those park&rides) and you just might free up the existing roadways to the point where if you can afford the tolls and end-point parking, you can move along them just fine.

    I’ve been in the NW since 1983 and I never hear actual politicians getting anywhere proposing anything but expensive wastes of money that just don’t help traffic move. It’s really too bad that for whatever reason, this type of idea just can’t be tried out and see whether or it not it would work. I think it would.

  43. 43
    ess says:

    While the debate on the efficacy of funds allocated to ST3 was a very interesting debate, we have now moved on to the implementation phase. The voters have mandated that these funds be allocated to a specific transportation plan over the years, and have decided how it is to be funded.

    To me, the more interesting questions for this forum are as follows:

    What impact, if any, will this transportation scheme have on real estate in general in this area?

    Will housing become more expensive in certain areas as more residents compete for housing near these light rail stations?

    Will buyers of property be more cognizant of the location of property when looking to purchase a residence as it becomes more difficult to travel about by automobile? In the past, living near a bus stop was of some consideration, but will purchasing a residence located near a light rail station become a larger, decisive factor?

    Will there be a point that businesses won’t locate in this area because it is so difficult to get around? Or will businesses locate in areas that are adjacent to Seattle and the Eastside where land is not only cheaper, but there is still the ability to travel by car without constant delays? Or will they seek to locate or expand totally out of the area?

    Will high density residential and commercial centers be constructed adjacent to these light rail stations? Observe what happened in the greater Vancouver BC area when light was introduced to the transportation picture. The light rail terminus area in Richmond, BC was transformed from a sleepy suburb to a high density – commercial area in a matter of years. Is that the future of areas both north and south of Seattle, as well as on the East Side?

    How much of a financial impact will there be on those properties that are adjacent to light rail stations? Will property values for those properties dramatically increase as a result of the desirability of those properties in an area if general traffic gridlock doesn’t improve in the next decade or ever? Will those who reside in single family houses adjacent to light rail stations be impacted to the degree that their areas of single family residences become almost unrecognizable as the demand for redevelopment in these areas becomes insatiable?

    How will this development impact rentals? Will rentals near light rail stations be increasingly desirable and thus command premium rent? Will renters increase their priority of being located near a light rail station over other traditional considerations when looking to for a place to rent? Will renters be satisfied with renting a tiny apartment in a high rise building in a high density area adjacent to a light rail station rather than in a more traditional northwest residence such as a house or in a garden apartment?

    I believe the urban and suburban landscape of this entire area will be radically transformed in the next 20 -30 years. I anticipate that we are going to witness a larger percentage of the population residing in areas such as Belltown in communities scattered all about the Puget Sound area. The tacit war against the traditional single family house with a front and back yard will continue unabated, and will only be reserved for the wealthy who can afford to purchase. Much more density, urbanization, and in many ways the loss of lifestyle and the connection to both nature and the surroundings that many originally moved to this area to enjoy.

  44. 44
    jon says:

    RE: ess @ 41 – Exactly. Seattle is not organized around light rail stations yet because the network is so small. As the network becomes larger, the appeal of living near a station will grow. Macro’s idea for mandatory telecommuting will succeed only in driving business to other locations that don’t have such problems. That’s one approach, but I like the idea of having a lot of great jobs and companies clustered together, and that inevitably leads to congestion.

    Self-driving cars will eventually arrive, and when they do they will have a synergistic effect on the rail system, by solving the parking and walking distance problems. They are not a commuting solution on their own because they don’t help with congestion, unless they are used to get back and forth to stations.

    Ideas like monorails, and other alternatives that are faster than light rail, are fine if the numbers work out. I don’t follow those, but my conclusion from them not being proposed is that experts have looked at the total picture and selected light rail. Off the top of my head I would have guessed bus rapid transit would be the least expensive way to go.

  45. 45
    justme says:

    Self-driving cars help only if they somehow make people less reluctant to carpool.

  46. 46
    Anonymous Coward says:

    By ess @ 41:

    The voters have mandated that these funds be allocated to a specific transportation plan over the years,

    That’s what’s the voters THOUGHT they did, not what they did. All they really did was give Sound Transit authority to raise $50B through a combination of bonds and taxing authority. There was nothing in the initiative on how ST is required to spend the money…

  47. 47
    Just Tom says:

    By Macro Investor @ 37:

    By jon @ 35:

    RE: redmondjp @ 33 – I decided that the improvement to my property value was more than enough to offset the increase in taxes.

    If every voter tried public transit for 2 weeks ST3 would have gone down in flames. It just doesn’t work for enough commuters to make a difference.

    The daily crush loads disagree with you.

    Average daily ridership for Link in October was:

    Weekday: 68,387 (+84.3%)
    Saturday: 42,440 (+90.4%)
    Sunday: 35,769 (+48.6%)

  48. 48
    redmondjp says:

    RE: jon @ 42 – Jon, you are assuming that experts are running Sound Transit – incorrect. It is politicians. And they are not making decisions based upon optimizing mass-transit. You have to follow the money. This idea that they have expects, and that these experts have the “big picture” and have come up with the best solution possible, is simply ludicrous.

    Case in point: watching KOMO news live this morning, with reporter streetside up in Lynnwood – a cable-chain equipped Metro bus attempts to go up hill right behind him – and gets stuck. So some time later, a second Metro bus shows up, goes up the same dang hill, and, (surprise) ALSO gets stuck. So now we have two Metro buses stuck at an angle on a hill, blocking that entire direction of travel. The people depending upon that bus route to get to work were hosed. As a working-class person, try explaining to your boss that Metro/Sound Transit left you in the lurch – you’re still on the hook for not showing up and could get fired because of it.

    You can’t fix stupid.

  49. 49
    Blake says:

    https://www.propublica.org/article/corrupt-foreign-officials-find-refuge-in-united-states
    Congress has continually extended the EB-5 program with minor changes. The program is backed by real-estate lobbyists who argue that it is a crucial source of financing for luxury condos and hotels. The program is expected to thrive in a Trump presidency because the president-elect is a developer and his son-in-law Jared Kushner received $50 million in EB-5 funds….

  50. 50
    ronp says:

    RE: Macro Investor @ 37 – toll all the freeways, that will fix the traffic problem.

  51. 51
    ronp says:

    RE: redmondjp @ 45 – People don’t want more freeways, they destroy the city and cause global warming, induced demand wastes drivers time. Mercer mess is still a mess.

    Sound transit is not perfect by any means but it will work great in many segments, add in transit oriented development around stations and the region can be liveable and somewhat affordable. Not everyone wants a single family house and yard, still should be tons of townhome options and much SFR, etc. https://www.seattletransitblog.com/2016/12/08/our-suburban-city/

    People don’t like sprawl and wasteful leapfrog development.

    Look at the success of the recent U Link extension — https://www.seattletransitblog.com/2016/12/06/october-2016-link-ridership-report-whole-new-world/

    Just Link Light rail will have 18 million riders this year. http://www.soundtransit.org/sites/default/files/Q3-2016-service-delivery-report.pdf

  52. 52
    pfft says:

    By just me @ 43:

    Self-driving cars help only if they somehow make people less reluctant to carpool.

    says who?

    from what I’ve read autopilot cars will have similar effects that roundabouts have. reduced traffic and carbon emissions.

    as for the impact of light rail, the st louis fed actually has a study.

    The research generally finds that rail transit has a positive impact on residential property values, although the impact is relatively small. One study found that property values in Portland, Ore., increased by $75 for every 100 feet closer a home is to a light-rail station,

    https://www.stlouisfed.org/publications/bridges/winter-20032004/lightrail-transit-myths-and-realities

  53. 53
    justme says:

    RE: pfft @ 48

    Collaborating and collaborative cars is not exactly the same as self-driving cars. The former requires networked awareness and coordination. The latter are just sensor-based and reactive.

  54. 54
    Jasper says:

    RE: jon @ 42 – Monorails were proposed, and repeatedly approved. The powers-that-be insisted on revotes until they finally got the result they wanted. After the monorail agency was shut down, Sound Transit was left as the only commuter train company in town.

    In my opinion, the biggest problem with the monorail is that it is an elevated train. Elevated trains cause light and noise problems for the neighborhoods they run in. This causes neighborhoods to either decay, or fail to thrive when they otherwise would.

  55. 55
    jon says:

    RE: pfft @ 48 – Interesting study. It cites some numbers we have, but not the numbers that would really answer the question. You can’t have two cities that are otherwise identical but where one builds light rail and the other doesn’t.

    The value I am looking for is to allow more people to live comfortably within commuting distance, whatever distance that is. Part is increasing the carrying capacity of the transportation system, and part is extending the distance of comfortable commuting by putting people on trains where they aren’t driving. That means that locations distant from the center go up a lot in value. More importantly, the economic health of the region is improved by providing a high quality of home life for professional people and thus making the region attractive to both employees and employers.

    I was surprised by the low impact of price on distance from the station. That may be due to other effects, such as areas close to the stations attracting lower income people and thus pushing down the prices there. Such people have to live someone though, and now they are near convenient transportation.

  56. 56
    redmondjp says:

    RE: Jasper @ 50 – Rubber-tired monorails are very quiet Jasper. And what light, besides the headlight on it?

  57. 57
    Macro Investor says:

    By redmondjp @ 45:

    RE: jon @ 42 The people depending upon that bus route to get to work were hosed. As a working-class person, try explaining to your boss that Metro/Sound Transit left you in the lurch – you’re still on the hook for not showing up and could get fired because of it.

    That’s a big reason why I said if voters actually experienced these commute options, they would have voted ST3 down in flames.

    I was on one of the no-brainer routes — southcenter to downtown. Few stops, mostly freeway and avoiding downtown traffic by using the tunnel. Yet, it often DID NOT WORK. You would be left standing in the rain for an hour. Either the bus wouldn’t show up, or several pass you by without stopping. Luckily my employer didn’t mind. But metro was really a dismal failure far too often.

    I’m sure you’ve all seen how a bus trying to change lanes stops traffic on more than one freeway lane at once. It is possible they hurt congestion more than they help. Possibly all they really do is give poor people and kids a way to get around. Which is fine, if that is your goal.

    Take a ride thru the central district and see how the light rail chugs along at 30 mph. They did a nice job of spiffing up MLK Blvd, which I’m sure is nice for social justice. But if the goal was reducing traffic, it was a total failure.

    Seattle is just not designed well for transportation. You can’t just add a few buses and scatter a train here and there and expect to make any difference. The first class cities have a tunnel infrastructure. Real options cost much more, but at least the money isn’t totally a waste, as it is in Seattle.

  58. 58
    wreckingbull says:

    RE: Macro Investor @ 53 – The idea of everyone commuting to an expensive office and working together in a big ice cube tray, like some sort of dysfunctional extended family, is arcane.

    I worked remotely for over a decade. Saw my co-workers in person occasionally. Was the perfect mix of social interaction and high productivity. Until we discard this relic of the past, we are screwed, as no transportation solution is going to solve our problems.

    And yes, before everyone jumps in with “how does a firefighter telecommute??!!”, I am not advocating this for everyone, just the majority.

  59. 59

    By ronp @ 47:

    RE: Macro Investor @ 37 – toll all the freeways, that will fix the traffic problem.

    Or do the I-405 Hot lane thing, where those of us willing to pay for more lanes get them. Unfortunately that’s rather expensive for the few willing to pay.

  60. 60

    Getting back to the topic of real estate . . . ., I wonder if part of the inventory problem is the fact that only a tiny percentage of houses built since 2000 have 10,000+ square foot lots? That creates a certain neighborhood style that gives some people no place to move too, so they’ll be more likely to upgrade/remodel where they currently live.

    I know that doesn’t create more supply, because the moving owner takes a house and gives one back, but it would create more active listings/sales (churn).

  61. 61
    Hugh Dominic says:

    RE: ess @ 41 – wow, great post. Chilling.

  62. 62
    Hugh Dominic says:

    RE: justme @ 43 – self driving cars are a bit worse for traffic than cars themselves. Mainly because once they drop the passenger off, they drive away empty. Now you have an empty car on the road looking for a cheap parking spot or enroute to another passenger.

  63. 63
    Hugh Dominic says:

    By justme @ 43:

    Self-driving cars help only if they somehow make people less reluctant to carpool.

    If you instead think of self-driving buses, with micro routes, then we may see that effect.

  64. 64
    Hugh Dominic says:

    By pfft @ 48:

    By just me @ 43:

    Self-driving cars help only if they somehow make people less reluctant to carpool.

    says who?

    from what I’ve read autopilot cars will have similar effects that roundabouts have. reduced traffic and carbon emissions.

    as for the impact of light rail, the st louis fed actually has a study.

    The research generally finds that rail transit has a positive impact on residential property values, although the impact is relatively small. One study found that property values in Portland, Ore., increased by $75 for every 100 feet closer a home is to a light-rail station,

    https://www.stlouisfed.org/publications/bridges/winter-20032004/lightrail-transit-myths-and-realities

    There can be an indirect effect of rail through upzoning. If a SFR near a train station is upzoned to NC65 to encourage density near the station, for example, its property value goes up.

  65. 65
    pfft says:

    By Hugh Dominic @ 58:

    RE: justme @ 43 – self driving cars are a bit worse for traffic than cars themselves. Mainly because once they drop the passenger off, they drive away empty. Now you have an empty car on the road looking for a cheap parking spot or enroute to another passenger.

    says who? we don’t even really have them large scale yet.

  66. 66
    Hugh Dominic says:

    RE: pfft @ 61 – assuming we don’t mandate a 100% conversion to automated driving, they would share the road with the usual cars. Then they would operate like taxis. Lots and lots of taxis. Not hard to imagine.

  67. 67

    By Hugh Dominic @ 58:

    RE: justme @ 43 – self driving cars are a bit worse for traffic than cars themselves. Mainly because once they drop the passenger off, they drive away empty. Now you have an empty car on the road looking for a cheap parking spot or enroute to another passenger.

    How exactly is that different from Uber, or a taxi? But it probably doesn’t matter because with Seattle’s zero parking spot requirement for many new residential buildings, pooled self-driving cars or Uber-like systems will be the only option for tens of thousands of people (or more).

  68. 68

    RE: justme @ 23
    Yes Justme

    Reminds me of the establishment Dem/Reps vs Trump…

  69. 69

    RE: Kary L. Krismer @ 63
    Energy Waste

    How can empty cars and buses with engines running with no where to park be environmental?….IMO, only if you’re psychotic. We’d be much better off mixing recyclables all together [Mother Earth: one trip on a 737 equals one year of recycling in carbon footprint].

  70. 70
    Eastsider says:

    A few people have been wondering about the effect of rising mortgage loan rates. Here you go-

    Rising Mortgage Rates Could Threaten Housing Demand in 2017
    Sustained increases could lead to ‘rate lock,’ leaving some homeowners reluctant to trade up or down

    http://www.wsj.com/articles/rising-mortgage-rates-could-threaten-housing-demand-in-2017-1481457602

    Recent history suggests the impact of rising rates can be swift and substantial. In 2013 mortgage rates surged to 4.5% from 3.6% as investors anticipated the Federal Reserve would pull back from its bond-buying program. The pace of sales of previously owned homes declined 8% from July to December of that year, according to the National Association of Realtors.

    The rate of home-price increases around that time was cut essentially in half, to 5% from 9%, according to Black Knight.

    “If 2013 is any guide, we could expect to see a slowdown in [price] appreciation,” said Ben Graboske, vice president of Black Knight’s data and analytics division. “We still think house prices will grow, just more meekly.”

  71. 71

    By softwarengineer @ 65:

    RE: Kary L. Krismer @ 63
    Energy Waste

    How can empty cars and buses with engines running with no where to park be environmental?….IMO, only if you’re psychotic. We’d be much better off mixing recyclables all together [Mother Earth: one trip on a 737 equals one year of recycling in carbon footprint].

    Because they’d be going to their next pickup. And I suspect Seattle would have places for them to park (and shut off their engines) just like they do now for the shared cars.

    And don’t think it’s just the energy the car uses–it’s also the manufacturing and later disposal of the cars. If you could get by with fewer cars that would be better maintained, there could be considerable ecological benefit.

  72. 72
    Screenname345 says:

    T-minus 20ish days until sq. footage $ starts another double digit % rise into the spring. Can I get a hellsss yeah. Go Sounders. PDX sux.
    https://www.altosresearch.com/research/WA/seattle-real-estate-market

  73. 73
    Jasper says:

    RE: redmondjp @ 52 – The “light” problem with elevated trains is that the train tracks shade their surroundings. Also, the pillars are usually ugly, and interfere with movement around them. They create environments that feel unsafe.

  74. 74
    Hugh Dominic says:

    By Kary L. Krismer @ 63:

    How exactly is that different from Uber, or a taxi?

    It’s very similar to having taxis flood the roads.

    Suppose 20% of downtown workers owned self driving cars. They’d drive us to work, and rather than pay $25 for parking downtown we’d send them off (back home?) to park free. The passenger is indifferent to the now empty car’s impact on traffic for everyone else, as he seeks to avoid parking cost.

    Another scenario is that we don’t own those cars but, instead, rent them like taxis. Removing the human driver makes this much cheaper so the amount of this type of use would go way up. Half the time those driverless taxis are running to pick up the next passenger, instead of sitting in a parking garage, off the road.

    More optimistically, driverless mini buses could run dynamic routes and compute how to pick up four people that have similar start and end points. So as said above, it helps so long as the result is carpooling.

  75. 75
    redmondjp says:

    By Jasper @ 69:

    RE: redmondjp @ 52 – The “light” problem with elevated trains is that the train tracks shade their surroundings. Also, the pillars are usually ugly, and interfere with movement around them. They create environments that feel unsafe.

    Are you being serious? Do you also feel scared while underneath the monorail tracks at Disneyland or Disneyworld, or in Seattle for that matter? Two skinny ribbons of concrete 18′ above the ground – the shading and scary homeless encampments would be of a magnitude less of an issue than any existing elevated roadway, bridge, or overpass in Seattle. And if they ran down existing roadways or over existing trails, that will not interfere with any existing movement.

    Watching interest rates with great interest.

    Oh, and if you like quirky, independent films relating to housing and real estate, a locally-filmed one called “The Architect” (2016) is worth a watch – it was filmed up in Mukilteo on the waterfront in a couple different neighborhoods.

  76. 76
    jon says:

    If sending a self-driving car home back over the roads is cheaper than parking, then clearly we need more tolls, because a live roadway space is much more valuable than a parking space (depending on location, of course).

    Actually I could potentially see a lot of value in congestion based tolling, but without self-driving cars to supplement the inadequate mass transit routes and P&Rs, those tolls amount to forcing people to move into high rise apartments.

  77. 77
    Hugh Dominic says:

    RE: redmondjp @ 71 – Jasper is right and you are wrong. 5th ave is not a nice place to be. No trees, just concrete above you and graffiti on the thick, heavy supports. Dark. And several times I’ve been in the wrong lane and unable to turn left due to the supports dividing the street.

  78. 78
    Hugh Dominic says:

    By jon @ 72:

    If sending a self-driving car home back over the roads is cheaper than parking, then clearly we need more tolls, because a live roadway space is much more valuable than a parking space (depending on location, of course).

    Actually I could potentially see a lot of value in congestion based tolling, but without self-driving cars to supplement the inadequate mass transit routes and P&Rs, those tolls amount to forcing people to move into high rise apartments.

    The city’s policy right now is to limit parking and especially reduce the amount of parking in dense areas. Clearly they prefer your self driving car out on the street rather than tucked away under a building. I think tolls are fine, or still higher gas taxes, personally.

    But. Sooner or later we’ll all be trapped in our homes by local policy: inadequate mass transit, no parking, and high tolls. I hope you are an able-bodied urban hipster with a bike and an office job.

  79. 79
    justme says:

    RE: Hugh Dominic @ 70

    >>Suppose 20% of downtown workers owned self driving cars. They’d drive us to work, and rather than pay $25 for parking downtown we’d send them off (back home?) to park free. The passenger is indifferent to the now empty car’s impact on traffic for everyone else, as he seeks to avoid parking cost.

    As you are hinting, cars returning home is an INCREDIBLY BAD IDEA. Both with respect to congestion and with respect to energy usage. By the way, this particular horse was already beaten to death previously in a thread from 2016/07/14. In that thread I pointed out not only that self-driving cars are a far cry from collaborating cars, and not only that, there is the additional problem that collaboration with a myriad of pedestrian is even more difficult.

    https://seattlebubble.com/blog/2016/07/14/around-the-sound-king-county-slightly-less-bleak/#comment-256667

  80. 80
    justme says:

    RE: Hugh Dominic @ 78

    >>they prefer your self driving car out on the street rather than tucked away under a building.

    On that same topic, it takes a lot less space (per passenger) to park buses and railcars than it takes to park cars.

  81. 81
    David B. says:

    By Anonymous Coward @ 9:

    RE: Brian @ 8 – Don’t forget currency differences…

    Also don’t forget differences due to tax and housing policy. In Canada, home mortgage interest is not tax deductible. You also don’t get 30-year fixed mortgages; typically you get a balloon mortgage wherein the entire balance becomes due in five years (I believe). Most homeowners string together a series of balloon mortgages to finance their homes over a longer period of time. With this strategy, you’re not permanently locked into low interest rates.

  82. 82
    ess says:

    By David B. @ 81:

    By Anonymous Coward @ 9:

    RE: Brian @ 8 – Don’t forget currency differences…

    Also don’t forget differences due to tax and housing policy. In Canada, home mortgage interest is not tax deductible. You also don’t get 30-year fixed mortgages; typically you get a balloon mortgage wherein the entire balance becomes due in five years (I believe). Most homeowners string together a series of balloon mortgages to finance their homes over a longer period of time. With this strategy, you’re not permanently locked into low interest rates.

    From my understanding of residing in Canada for a few years, talking to my in laws and Canadian friends about the issue, a residential purchaser in Canada obtains a mortgage that is amortized over a more traditional period (such as thirty years), but the life of the loan itself is for only a few years. Thus the borrower refinances the loan every few years at whatever the current mortgage rate is at the time. Great for the banks when interest rates are rising – they are not stuck providing a 30 year mortgage to a borrower at 4% when mortgage rates rise to 7 -8% or higher.

    This practice has some consequences up there that are different than down here. Home owners are more likely to attempt to pay down their principle as much as possible so when their mortgage is up for renewal they have to refinance less principle in an uncertain interest rate world. In this way, they can handle the new payments in the event there are significant interest rate increases. And I believe you are also correct that interest on home loans are not tax deductible, which provides additional incentive to pay down the principle. But if interest rates rise dramatically, that forces some buyers to walk away from their houses as they can no longer afford to pay the new mortgage with the much higher mortgage rate, even if the underlying property itself has not lost much or any value.

    I would inform my Canadian friends and relatives about 30 year mortgages we had in the states, and they were amazed. They couldn’t believe what a sweet deal a 30 year mortgage holder in the states had.

    On a note closer to home – the Seattle city council is reviewing a ordinance that will limit the security deposit amount that landlords can obtain, but force them to finance the paying of that deposit over a few months time. In addition, pet deposits will be limited to only one quarter the amount of the security deposit.

    I see the following happening as a result of this ordinance.

    Some marginal landlords will sell to developers or large companies, thus reducing moderate priced rental availability.

    Rents will increase to cover the additional costs and risks, and housing availability will be even more limited to marginal renters. Rents should also increase in adjoining areas as there is more competition for rentals as more renters are priced out of the Seattle market.

    Say goodbye to Morris the Cat and Fido – fewer units will allow pets as animals can do a tremendous amount of damage in a short time and the reduced deposit may not be worth the additional risk.

    I look forward to seeing not only what Seattle does, but its effect.

  83. 83

    Most of you are viewing self-driving cars differently than me. With the exception of the elderly who need help driving, I don’t see self driving cars being the norm for cars that are owned, because driving is fun! But then I guess if people cared about driving fun manual transmissions today wouldn’t be effective anti-theft devices.

    But in any case, I view them as being more something that would be a shared device, so you would only pay significant charges when you use it. Think of how airlines don’t want their planes to be just sitting around, and try to minimize the turnaround time between arrival and departures. The planes are just expensive depreciating assets when sitting around. The same is true of cars, although on a lesser scale.

    Finally, with my concept of shared self-driving car you could still show your “special status” in society by upgrading to a luxury self-driving car network, and probably for less than the cost of leasing a fully loaded Lexus, almost no matter how much you drove.

  84. 84
    David B. says:

    By ess @ 82:

    Rents will increase to cover the additional costs and risks, and housing availability will be even more limited to marginal renters. Rents should also increase in adjoining areas as there is more competition for rentals as more renters are priced out of the Seattle market.

    I expect this to happen as well. In fact, I will be very surprised if it does not happen. As a radical lefty myself, the attraction of such measures to so many radical left types (such as Sawant and here followers) has always mystified me. They seem to be a textbook example of the sort of ineffective liberal reformism that radicals have traditionally been critical of.

    Either there’s enough housing supply to satisfy demand, or prices will rise so that demand will be rationed by ability to pay for housing, or some other means of demand rationing (e.g. wait lists and possibly political corruption) will arise. You can pass laws until you’re blue in the face but it won’t change this basic reality.

  85. 85

    RE: David B. @ 84 – The politicians’ goal isn’t to solve the problem. The politicians’ goal is to get reelected. That’s why you only hear anything out of Cantwell’s office two out of every six years, and why most of what you hear is a bunch of trivial nonsense (like whether Best Buy over-sold computer repair services–something which could clearly be handled at the local level).

    As to Seattle, these positions will help the counsel members get re-elected–at least while landlords are in the minority.

  86. 86
    Blurtman says:

    Long equities and RE? Light up that big cigar!

  87. 87
    Action says:

    http://kuow.org/post/king-county-takes-hard-line-urban-sprawl

    This should effectively guarantee no chance of supply exceeding demand on the Eastside for the next 5 years for SFRs. We’re boxed in from the east with the urban growth boundaries. Snoqualmie Ridge and Issaquah Highlands are built out. The only place left in King County to build large numbers of SFRs is Black Diamond which lacks any transportation infrastructure. Now it’s just infill and redevelopment trading existing SFR stock for apartment and town home boxes.

    If you want a detached home with a yard anywhere near Seattle, buy now or be priced out forever!

  88. 88
    Blurtman says:

    Dutch restaurant serves up ‘My Little Pony Burger’ made from real horse meat

    A Dutch restaurant is now serving up some stallion with its scallions.

    The offbeat food truck Keuken van het Ongewenst Dier, which translates to “The Unwanted Animal Kitchen,” now supplies its “My Little Pony Burger” year round to Babbe Hengeveld, a chef who runs her own restaurant Food Guerilla, reports Vice Munchies.

    Keuken van het Ongewenst Die has been serving the burger periodically for years and the patty itself is made from the meat of butchered, aging horses that have worked at a local amusement park, Slagharen.

    http://www.foxnews.com/leisure/2016/12/13/dutch-restaurant-serves-up-my-little-pony-burger-made-from-real-horse-meat/

  89. 89

    Here’s a new Court of Appeals decision on Seattle’s “Just Cause” ordinance regarding the exception that allows a landlord to evict if they plan on selling.

    http://www.courts.wa.gov/opinions/pdf/744348.pdf

    In that case the notice wasn’t sent until after the landlord had mutual acceptance on the purchase/sale agreement, and the notice wasn’t effective. The exact scope of the ordinance isn’t clear, so I would suggest a buyer contact a RE attorney prior to buying any home in Seattle occupied by a tenant prior to making an offer on a property in Seattle that they intend to live in.

  90. 90
    Hugh Dominic says:

    RE: ess @ 82 – Some marginal landlords will sell to developers or large companies, thus reducing moderate priced rental availability.

    I am a marginal landlord that could put an affordable rental on the market. I am not going to. The city has vilified landlords and I choose not to be subject to these kind of laws.

    I think the current city leaders view housing as a public asset and not private property.

  91. 91
    Hugh Dominic says:

    RE: justme @ 79 – I liked the previous thread about self-driving cars. Someone said they would be more efficient because they’d be smaller. Ha!

    If I don’t have to steer, mine is going to have a chair, a desk, and a refrigerator.

    We’re talking about Americans, don’t forget.

  92. 92
    Ross says:

    By Hugh Dominic @ 90:

    RE: ess @ 82 – Some marginal landlords will sell to developers or large companies, thus reducing moderate priced rental availability.

    I am a marginal landlord that could put an affordable rental on the market. I am not going to. The city has vilified landlords and I choose not to be subject to these kind of laws.

    I think the current city leaders view housing as a public asset and not private property.

    Unless you’re planning to leave the property vacant while paying property taxes and upkeep, then either you’re living there, renting it, or you’ll sell it. In all cases (except letting it sit vacant), the total housing stock is the same, the only change is the owner/landlord mix. If you sell a rental property, it’s often to another landlord (no change in mix), or if you sell to a first time buyer, they free up their prior rental while purchasing (typically insignificant change). If you sell to an existing homeowner, then you may be changing the mix, incrementally (depending what happens to their old home).

    In any event, none of these is really a protest against the city’s actions.

  93. 93
    ess says:

    By Hugh Dominic @ 90:

    RE: ess @ 82 – Some marginal landlords will sell to developers or large companies, thus reducing moderate priced rental availability.

    I am a marginal landlord that could put an affordable rental on the market. I am not going to. The city has vilified landlords and I choose not to be subject to these kind of laws.

    I think the current city leaders view housing as a public asset and not private property.

    I hear you. The ordinance that was passed by city council will benefit very few people, and limit the supply of housing for many more.

    Kary is absolutely correct in comment 85 when he stated that this legislation was enacted to get politicians re-elected. There is no empirical evidence anywhere that this ordinance on balance will do anything to alleviate the alleged shortage of affordable housing in Seattle and help financially distressed potential tenants. David B’s comment 84 should have been submitted to the council as some common sense testimony.

    I would be surprised if the city council actually received any empirical studies that placing restrictions on security deposits is going to do any good for tenants. If they did, we would be hearing about those studies ad nauseam. Rather, a few tough luck examples were presented and the council was informed that housing is a “human right”, but no one discussed any real proof of the efficacy of this ordinance.

    So I rather suspect that this legislation was suggested and passed by the council both as a feel good measure to try to solve a problem that will not have any positive effect and to demonstrate to their constituents what wonderful caring councilmembers they are in taking on the evil landlords, who are at the core of the problem of affordable housing.

    What better way to stick it to the landlords by not only limiting the amount the security deposit can be, but by turning the landlord into a financing agency who has to provide interest free financing to the tenant over a 6 month period, while at the same time taking a chance that serious damage will be done to the premises in the first few months and having the tenant skip out. I would assume that last month rent is also out – but I don’t know this for a fact.

    But like a water balloon – squeeze one area, and another area expands in ways that the handler didn’t expect it to. There are other ramifications that were not even explored during the debate and testimony which I observed through the magic of the internet. Below are a few possible negative impacts, and I sure others can come up with other scenarios.

    Rent WILL go up for a number of reasons. Those landlords who are near the break even point will simply sell to developers and move on. Reasonable “affordable” housing will be transformed into expensive housing and there will be even less units available on the lower end of the market. And ironically, more individuals who probably really can’t afford to be renting a place on their own will now try to secure their own apartment rather than sharing with others, increasing demand and shortages at the lower end of the market. Thus rents for those residences will rise because of good old supply and demand which is routinely ignored.

    Those landlords who remain in business will raise their rents in order to cover their increased risk. And ironically – it will turn out that all the other tenants – especially the good long term tenants that don’t cause problems, we be the ones who will subsidize the bad ones by not only having to pay more rent, but being assured that they will now get a rent increase every year. Landlords will have to get more money from everyone to offset the risk that they will have to face sooner or later by those occasional bad tenants who will now be able to rent (at least for a few months until their next financial crisis).

    Furthermore, I would guess that the council did not consider the economic environment that we are in. No – not the crazy real estate environment of Seattle, but the greater environment that will be a byproduct of the Trump presidency. No guarantees – but interest rates are going up, and bonds sooner or later may start to pay a decent amount. Tax rates are probably going to go down, and who knows – perhaps even capital gain taxes will be lowered? Tax rates go down – the write offs for property are less valuable. Some property owners may decide to sell and invest elsewhere. Who needs a bunch of do gooders and fake socialists micromanaging their affairs ,when one can get almost the same return through passive investing? Good bye moderate priced property – hello luxury apartments!

    And other landlords are just going to give their property to property managers to take care of. And as property managers generally make their living as a percentage of the rental take, one can be assured that they are not going to be the soft touches that individual landlords have been for many of their tenants. Rents will be at top market levels, with annual rent increases, and no excuses for anything that goes wrong.

    And those individual perspective tenants who may have strayed from the righteous credit rating path due to a checkered financial past that they are now trying to rectify? Perhaps they did some damage to a prior residence – perhaps they were unable to pay their rent many times, perhaps they had an eviction, or perhaps they failed their credit rating or had a bankruptcy? Many a repentant perspective tenant has hatched a deal with a potential landlord in order to secure a residence, those deals will be now be against the law in Seattle. Perhaps pay 1.5 times the rental amount in a security deposit – perhaps pay two or more months of rent in advance or some combination of both. No more – either move out of Seattle or start looking to buy a really good tent, because those folks aren’t going to be able to rent anything in Seattle anymore. Very few, if any landlords are going to take the risk of helping anyone down the path to credit and tenant worthy salvation if they don’t have the financial protections in place. To paraphrase that famous Californian landlord – “trust – but verify (that the appropriate security deposit for the situation didn’t bounce)”. No longer can those deals be hatched.

    The bill passed unanimously (shocked – I am SHOCKED!), so now we will have to see what the consequences are.

  94. 94
    Blurtman says:

    RE: ess @ 92 – “by turning the landlord into a financing agency who has to provide an interest free loan to the tenant over a 6 month period,…”

    What exactly is the landlord lending the tenant?

  95. 95
    ess says:

    By Blurtman @ 93:

    RE: ess @ 92 – “by turning the landlord into a financing agency who has to provide an interest free loan to the tenant over a 6 month period,…”

    What exactly is the landlord lending the tenant?

    You will noticed that I changed that to interest free financing above. Person A is providing Person B something of value and is getting the costs associated with that object over time – that is financing. The landlord is getting the damage deposit in payments rather than up front. The risk is entirely on the landlord during that time, while there is no additional burden (such as interest payments) on the tenant. Increase risk has to be compensated in other ways by all the tenants, and it will. These policies don’t operate in a vacuum, although Seattle city council may think so.

  96. 96
    Blurtman says:

    RE: ess @ 94 – As you may recall, landlords have had to pay interest on the deposit. The landlord cannot lend what is not his. Person A is paying to rent the something of value. Person B is being asked to take on more risk during the duration of the payment of the deposit, but that is not a loan. The deposit is not the property of the landlord. The landlord does not own the deposit, and therefore cannot loan it to the tenant.

  97. 97
    whatsmyname says:

    RE: Blurtman @ 95
    I suggest you take your theory back down to the city criminal courts. By the same token, they could accept a payment schedule instead of bail. After all, it’s not a loan.

    A deposit is a bailment, which does have value to the possessor. If the landlord is prevented from having that bailment, then he is lending that value to the person who would otherwise need to come up with it.

  98. 98
    ess says:

    By Blurtman @ 95:

    RE: ess @ 94 – As you may recall, landlords have had to pay interest on the deposit. The landlord cannot lend what is not his. Person A is paying to rent the something of value. Person B is being asked to take on more risk during the duration of the payment of the deposit, but that is not a loan. The deposit is not the property of the landlord. The landlord does not own the deposit, and therefore cannot loan it to the tenant.

    The security deposit is part of the deal to move in. Hopefully some or all of the security deposit will be returned. I love it when I can return the entire deposit – I don’t have to screw around with the premises and it just gets back on the market all the faster.

    But the landlord is taking on the risk of damage to the property by the tenant by not obtaining the full security deposit up front, and limiting the amount. Many times the security deposit will not cover the full damage, often the tenant is judgement proof and is not worth pursuing. Now the tenant can do damage to the premises, break the lease and move out before the entire security deposit is paid. It just makes renting in Seattle a riskier proposition. As I said before, the landlord become a financing agent when the full amount that is required at move in is not paid all up front. Thus there are multiple problems.

    One can dismiss the security deposit as property that is not owned by the landlord. This is true until damage has been done and the security deposit is transferrable by statute. We can debate this point all we want, but this ordinance will still result in higher costs for most Seattle tenants. Real estate is just another investment, and all investments must pay a higher rate of return if there is more risk. Otherwise no one would invest in a small cap start up company if they can get the same return from a government bond. And that risk, with its required higher rate of return will be paid by Seattle tenants one way or another.

    I

  99. 99
    ess says:

    By whatsmyname @ 96:

    RE: Blurtman @ 95
    I suggest you take your theory back down to the city criminal courts. By the same token, they could accept a payment schedule instead of bail. After all, it’s not a loan.

    A deposit is a bailment, which does have value to the possessor. If the landlord is prevented from having that bailment, then he is lending that value to the person who would otherwise need to come up with it.

    Try renting a car without a credit card. One must provide a large cash deposit to cover the potential damage to the car. That deposit isn’t the property of the rental car company – but that car isn’t going anywhere until the deposit is received. Can it only be a matter of time before some SJW insists that the deposits be limited or to be able to be paid in installments because some folks can’t afford to pay the deposit? After all – driving (especially a hybrid or an electric car) has to be a “human right” in someone’s mind. And the car is worth only a fraction of a typical residence

  100. 100
    justme says:

    RE: ess @ 92

    If you are going to pontificate at length about the new rental move-in-fee cap law, I think you owe us at least a link. Here is one:

    http://knkx.org/post/seattle-lawmakers-vote-cap-move-fees-renters

    Now, one might or might not like the law, but you say something else that needs to be corrected:

    >>Rent WILL go up for a number of reasons. Those landlords who are near the break even point will simply sell to developers and move on. Reasonable “affordable” housing will be transformed into expensive housing and there will be even less units available on the lower end of the market.

    There is no logic in the above paragraph. Two things are wrong:

    (1) if anything, the price of (purchasing) rental housing should go down because the economic value of the rental housing will be reduced by some (small) amount. That way the break-even point will also be lower. And a big fat boo-hoo for the landlords that bought at the peak and overpaid. They should not have been so greedy. Some people never learn. It never ceases to amaze me how many petite-bourgeois (or grand-bourgeois) capitalists think that PROFIT is an ENTITLEMENT that they have. Entitlement is a dirty word, right? Profit is (should be) something you earn by being skilled and hard-working and better than your competition. It is not something you should get by borrowing money, front-running more deserving people, and fashioning yourself as a clever capitalist.

    (2) why would a developer of luxury apartments buy the “affordable” units and raze them when so many people cannot afford luxury rentals anyway? Are theses developers stupid?

  101. 101
    Ray pepper says:

    Post #100!!! Yeee haaaa! Well….it’s official… they all came back!

    Good Lord what people are paying for crap now! Multiple offers in Black Diamond and Maple Valley! 10-25k OVER asking price on homes in these areas!

    Hope sellers are still not paying 3 % To List. Are they Tim? Have you done this topic? Nobody I know is. Mickey Mouse can list and dump in this environment. Go Trump! Go PNW economy! Go Cheesecake Factory!

  102. 102
    Hugh Dominic says:

    RE: justme @ 99 – when it’s less financially viable to rent a property, it is not necessarily going to become a less valuable rental property. It could be taken off the market, torn down, and rebuilt. That was his point.

    It’s a rental property only because the owner chooses to rent it. If it’s best use is as something else, an owner won’t rent it.

  103. 103

    By Hugh Dominic @ 101:

    It’s a rental property only because the owner chooses to rent it. If it’s best use is as something else, an owner won’t rent it.

    Correct, and this has two sides as to SFR, sort of like the stats above. If more owners decide to sell instead of rent, that will help buyers, but harm renters.

    As to multi-family, this and the new rules on how to screen/accept tenants may get more landlords to bite the bullet and convert to condo, hurting tenants.

    The last thing you want to be is in a group the Seattle City Council tries to help. You will be hurt.

  104. 104

    By Ray pepper @ 100:

    Multiple offers in Black Diamond and Maple Valley! 10-25k OVER asking price on homes in these areas!

    Sounds like they had a listing agent who knew what they were doing and were a seller that listened to good advice. Much better than pricing too high and selling for $30,000-$40,000 less than the original list price. The difference could be much more than the commission you worry about so much.

    Just to throw out some numbers, a house that should be listed for $430,000 might sell for $10,000 or more than that with multiple offers. But the same house listed for $450,000 might sell for well less than $415,000. So that the agent convinced a seller of a better price to list means they made more money, and the difference can often exceed the 3% LOC that you and Craig like to throw around to claim imaginary “savings.”

  105. 105
    Ray pepper says:

    Oh yes. I’m certain the listing agent was directly responsible for the bidding war. Had nothing to do with market factors . Thank the LORD we have such competent listing agents that exist in our state.

  106. 106

    By Ray pepper @ 104:

    Oh yes. I’m certain the listing agent was directly responsible for the bidding war. Had nothing to do with market factors . Thank the LORD we have such competent listing agents that exist in our state.

    Listing agents can screw up listings very easily, although sometimes it’s hard to tell if it’s the listing agent or the seller. Some sellers just won’t listen to advice.

    A listing that is priced too high will not generate a bidding war.

    Surprising that you don’t know that, being an agent and all. Actually, it’s surprising you made the comment comparing a sales price to list price. That’s very amateurish. the type of thing non-agents think is relevant.

  107. 107
    Blurtman says:

    RE: whatsmyname @ 96 – There is no loan of anything being made. When the payments are stretched out, the landlord takes on more risk during the payment period. He is not sufficiently “insured” until then, but f you think you are lending an uninsured driver something, I suggest you brush up on your understanding of finance. And with regards to ownership of the security deposit, please see: http://www.freepatentsonline.com/article/Journal-Property-Management/311380063.html

  108. 108
    Ray pepper says:

    I’m a Broker! No longer a real estate agent! Get my title correct! I worked hard on my clock hours!

    In fact I’m the Managing Broker of The Empire that is …. 500 Realty! Think of that when your tossing and turning at night!

    Even, more exciting is our NEXT big venture that is just about finalized with the State. Waiting Final Inspection at our office! You will be Consumed with AWE that you did NOT do it too. Hang Tight!

  109. 109
    Mack says:

    By ess @ 19:

    By GoHawks @ 16:

    Feels like another strong start to the year. Up 8-12% for the first 6 months. Is 2017 the crescendo?

    To paraphrase a popular saying:

    From your writings to my retirement plans!!

    GoHawks and Ess – The recent sharp rally in interest rates might be enough to scare people into buying. FOMO (fear of missing out) might propel them to pull the trigger on a home purchase in 2017, fearing they may get priced out (due to interest rates) later on. That, coupled with super low inventory in the single-family home market could make for the “crescendo”.

    Mack Research

  110. 110
    Eastsider says:

    RE: Blurtman @ 106

    Let us do a cost analysis here. Assuming that the total move in cost is $5,000. The new policy limits it to $2,000. For a person who can’t afford the $5,000 deposit, his/her credit is likely less than ideal. Without the new city council policy, these tenants will have to borrow $3,000 from (subprime) lenders. The current payday loan interest rate runs at 400% APR. So it will cost them up to $1,000 per month to borrow that $3,000.

    Now why stop at rentals? You can make the same argument that commute is essential for some of the poorest residents. Should the city council be allowed to force car dealers to limit initial down payment on car purchases? You will end up with a city with no car dealers in a hurry.

    You can expect far fewer rental housing stock in Seattle at much higher rent. You can’t force landlords to do your (city) charity work.

  111. 111

    By Ray pepper @ 107:

    I’m a Broker! No longer a real estate agent! Get my title correct! I worked hard on my clock hours!

    I assume you always were a broker before they changed the terminology from broker/agent to designated broker/managing broker/agent. You’ve always been in charge of the empire that is $500 Realty, right? ;-)

    But regardless of the labels the state uses, we’re all still agents.

  112. 112
    justme says:

    …aaaand we got a rate hike to 0.5% today. The 10-year Treasury rate has been rising in anticipation, and today after the announcement it rose again to 2.53%. Mortage rates are rising accordingly.

    Oh, and the FRB/FOMC is now hinting at **3** rate hikes in 2017, not just 2 as before.

    Look out below as for housing prices. Jumbo mortgages of $417k and above were at 4.88% yesterday. Today’s number will be higher, almost certainly.

  113. 113

    RE: Kary L. Krismer @ 71
    The Price Kary

    Yeah, $20/ride to get to work or a bag of groceries [all ya can carry to your condo] is good family budget thinking or psychotic?

  114. 114

    Hey Its Politically Correct Trump Talk Now

    Merry Christmas Bubbleheads!!!

  115. 115

    By justme @ 111:

    Look out below as for housing prices. Jumbo mortgages of $417k and above were at 4.88% yesterday. Today’s number will be higher, almost certainly.

    Countering that a bit for the higher mortgage amounts, the loan limits are going up. Here’s Rhonda’s piece on conforming loans.

    http://mortgageporter.com/2016/11/2017-conforming-loan-limits-for-washington-state.html

  116. 116
    Blurtman says:

    By Eastsider @ 109:

    RE: Blurtman @ 106

    Let us do a cost analysis here. Assuming that the total move in cost is $5,000. The new policy limits it to $2,000. For a person who can’t afford the $5,000 deposit, his/her credit is likely less than ideal. Without the new city council policy, these tenants will have to borrow $3,000 from (subprime) lenders. The current payday loan interest rate runs at 400% APR. So it will cost them up to $1,000 per month to borrow that $3,000.

    Now why stop at rentals? You can make the same argument that commute is essential for some of the poorest residents. Should the city council be allowed to force car dealers to limit initial down payment on car purchases? You will end up with a city with no car dealers in a hurry.

    You can expect far fewer rental housing stock in Seattle at much higher rent. You can’t force landlords to do your (city) charity work.

    I am not supporting the policy and if I were a landlord, I would not be happy. It is a vain attempt to thwart market forces, and to deny economic realities. But these are politicians, after all. Vote!

  117. 117
    uwp says:

    No Kary.
    Only bad news allowed!

  118. 118
    pfft says:

    By justme @ 111:

    …aaaand we got a rate hike to 0.5% today. The 10-year Treasury rate has been rising in anticipation, and today after the announcement it rose again to 2.53%. Mortage rates are rising accordingly.

    Oh, and the FRB/FOMC is now hinting at **3** rate hikes in 2017, not just 2 as before.

    Look out below as for housing prices. Jumbo mortgages of $417k and above were at 4.88% yesterday. Today’s number will be higher, almost certainly.

    time and time again I’ve had to point out that THE TIM pointed out that mortgage rates and interest rates aren’t always correlated. the Fed was furiously lowering rates while the housing market crashed.

  119. 119
    Brian says:

    RE: pfft @ 117

    It’s true that mortgage rates have little correlation to the federal funds rate (that they just raised). However, mortgage rates are closely tied to changes in the U.S. 10-year treasury yield. If the 10-year treasury yield goes up (and it just did, bigly), mortgage rates are very likely to go up the next day.

  120. 120
    justme says:

    RE: Brian @ 118

    Pfft willfully ignored that I was quoting 10Y yields having risen (since July) and having reached 2.53% today. He is more interested in proving to himself that debt funding costs (=short term rates) do not matter, that QE did not matter, etc etc. He is a QE denier if I recall correctly.

  121. 121
    sfrz says:

    The SCMP gets it essentially right. Two extra key points; Hong Kong is pricing itself out – on everything. And the Chinese shopping spree for juicy assets all across the world will only increase. Get those signs ready EASTSIDE!
    http://www.scmp.com/business/companies/article/2054747/rate-rise-prompt-capital-outflows-china-and-hong-kong-say-experts?utm_source&utm_medium&utm_campaign=SCMPSocialNewsfeed

  122. 122
  123. 123
    whatsmyname says:

    By Blurtman @ 106:

    RE: whatsmyname @ 96 – There is no loan of anything being made. When the payments are stretched out, the landlord takes on more risk during the payment period. He is not sufficiently “insured” until then, but f you think you are lending an uninsured driver something, I suggest you brush up on your understanding of finance. And with regards to ownership of the security deposit, please see: http://www.freepatentsonline.com/article/Journal-Property-Management/311380063.html

    If you need a bailment (of any kind) at point A, and you lack the funds or the desire to spend your own funds on it, your only option is to borrow it. That’s how a bail bondsman makes his living, btw. It doesn’t matter if you plan to re-fund it over 6 months, or if the city forces a cramdown on the beneficiary. Those things do not change the nature of the transaction.

    If you would like to refute a different person’s examples, or make dismissive comments about understanding ownership after the term “bailment” has been used; we can probably worry less about my understanding of finance, and more about your understanding of the straw man argument.

  124. 124
    ess says:

    RE: Blurtman @ 115 – It is a vain attempt to thwart market forces, and to deny economic realities.

    Now, that is an excellent summation of the council’s action!

  125. 125

    Okay, so far in this thread we have the Trump election, RT3 and Fed policy increasing rates (and maybe a few other things) as having a potential impact on prices. With the possible exception of RT3, I think it’s hard to argue that those things clearly won’t have any impact.

    So my question is: For those of you who look to the graphs above to predict the future, just where are any of those three things reflected in the graphs?

  126. 126
    Brian says:

    By Kary L. Krismer @ 124:

    So my question is: For those of you who look to the graphs above to predict the future, just where are any of those three things reflected in the graphs?

    The charts above are for November, and hardly factor in any of those things yet, since they all occurred midway through November. But I can already tell from watching the listings closely that people are rushing to buy whatever’s on the market in fret of further mortgage rate increases. Likewise, more people may be holding onto their homes because of “rate lock”. The Estately inventory levels, for what they’re worth, are now about a week ahead of 2015 (meaning they’re lower than this time in 2015).

    Side note, mortgage rate quotes I’m seeing range from 4.250-4.500% today. Up from 3.500-3.625% before the election. Jumping from 3.5% to 4.5% equates to a $231/mo increase in monthly payment on a $500K house, or about a 10% increase.

  127. 127
    Eastsider says:

    10yr treasury yield went as high as 2.63% this morning. Be prepared for 30yr mortgage rate to hit 4.5% before end of the year.

  128. 128

    By Brian @ 125:

    By Kary L. Krismer @ 124:

    So my question is: For those of you who look to the graphs above to predict the future, just where are any of those three things reflected in the graphs?

    The charts above are for November, and hardly factor in any of those things yet, since they all occurred midway through November. But I can already tell from watching the listings closely that people are rushing to buy whatever’s on the market in fret of further mortgage rate increases. Likewise, more people may be holding onto their homes because of “rate lock”. The Estately inventory levels, for what they’re worth, are now about a week ahead of 2015 (meaning they’re lower than this time in 2015).

    Unless you track the Estately numbers, comparing them to the information above is apples/oranges. We are down from the end of the month, but no where near where Estately indicates.

    My point though was more that the past history doesn’t predict the future. It’s things like the items mentioned, and many many more.

  129. 129
    Brian says:

    RE: Kary L. Krismer @ 127

    Whatever Estately’s algorithm/source, even though the exact numbers may be off, the trend seems to follow what I see elsewhere.

  130. 130
    boater says:

    By Blurtman @ 115:

    By Eastsider @ 109:

    RE: Blurtman @ 106

    Let us do a cost analysis here. Assuming that the total move in cost is $5,000. The new policy limits it to $2,000. For a person who can’t afford the $5,000 deposit, his/her credit is likely less than ideal. Without the new city council policy, these tenants will have to borrow $3,000 from (subprime) lenders. The current payday loan interest rate runs at 400% APR. So it will cost them up to $1,000 per month to borrow that $3,000.

    Now why stop at rentals? You can make the same argument that commute is essential for some of the poorest residents. Should the city council be allowed to force car dealers to limit initial down payment on car purchases? You will end up with a city with no car dealers in a hurry.

    You can expect far fewer rental housing stock in Seattle at much higher rent. You can’t force landlords to do your (city) charity work.

    I am not supporting the policy and if I were a landlord, I would not be happy. It is a vain attempt to thwart market forces, and to deny economic realities. But these are politicians, after all. Vote!

    The problem is that for many of the landlords myself included we can’t vote as we don’t live in the city. The only vote we can exercise is with our wallets to sell housing, keep it unrented, go along or break the rules.

  131. 131

    By boater @ 129:

    The problem is that for many of the landlords myself included we can’t vote as we don’t live in the city. The only vote we can exercise is with our wallets to sell housing, keep it unrented, go along or break the rules.

    That’s only fair since many of the policies of the Seattle City Council (e.g. minimum wage) may mainly benefit/harm people who live outside the city! ;-)

  132. 132
    Blurtman says:

    RE: whatsmyname @ 122 – When you find yourself in a hole….. The bail bondsman does in fact make a loan to the accused or associated henchmen (as far as I can tell). But in that case, the bondsman would be analogous to the payday loan company which lent money to the renter. If Gubbernor Inslee said that bail posting could be stretched out to the courts in payments, the court is taking on more risk, but has not lent anything to the accused. I am afraid your Phoenix University MBA may be worthless.

  133. 133
    boater says:

    By Kary L. Krismer @ 130:

    By boater @ 129:

    The problem is that for many of the landlords myself included we can’t vote as we don’t live in the city. The only vote we can exercise is with our wallets to sell housing, keep it unrented, go along or break the rules.

    That’s only fair since many of the policies of the Seattle City Council (e.g. minimum wage) may mainly benefit/harm people who live outside the city! ;-)

    That made no sense and we are all poorer off for having read it.

  134. 134
    pfft says:

    nevermind.

  135. 135
    ess says:

    RE: boater @ 129

    The problem is that for many of the landlords myself included we can’t vote as we don’t live in the city. The only vote we can exercise is with our wallets to sell housing, keep it unrented, go along or break the rules.

    Boater:

    Years ago when we divested our Seattle property holdings, we made a conscious decision to both live and invest outside of Seattle. In retrospect, that is appearing to be a wise decision. As a percentage, property values have almost kept up with Seattle prices, and we have not had to address the ordinance issues that are facing Seattle landlords.

    Back to what Kary alluded to in a prior post, politicians often pass legislation so they can keep their elected posts. Seattle has a large percentage of renters as its voting base. If they have attended any university at all, many have been indoctrinated to believe that capitalism and profits are bad, and that those that achieve success by making investments, whether it is in the stock or bond market, rental real estate, commercial real estate, rare art, or anything else have had to make money at the expense of others. The latest Seattle ordinance limiting rental deposits was aimed at those types of individual voters. The fact that not only will that ordinance do nothing to alleviate the situation for vast majority of renters, but result in higher rents and less inventory is irrelevant. In the world of Seattle councils, as well as much of the do gooders and SJWers in the world, it is not results that matter, but intentions. This is certainly not the first proffered legislation that will do more harm than good, and it won’t be the last.

    I understand your frustrations of having to deal with these ordinances. On the other hand, as with many of these legislative attempts to correct perceived inequity, ultimately you will probably be collecting higher rents, and legally increasing your move in requirements for any new tenant without having to resort to “breaking the rules”.

  136. 136

    By boater @ 132:

    By Kary L. Krismer @ 130:

    By boater @ 129:

    The problem is that for many of the landlords myself included we can’t vote as we don’t live in the city. The only vote we can exercise is with our wallets to sell housing, keep it unrented, go along or break the rules.

    That’s only fair since many of the policies of the Seattle City Council (e.g. minimum wage) may mainly benefit/harm people who live outside the city! ;-)

    That made no sense and we are all poorer off for having read it.

    Just because you can’t understand, it doesn’t mean others won’t. It just means you didn’t understand. In other words, it’s you.

    But to spell it out for you, the people who benefit from Seattle’s minimum wage laws don’t have to actually live in Seattle, may very likely live outside Seattle, and if they are higher quality employees they may force minimum wage workers living in Seattle into unemployment.

  137. 137
  138. 138
    boater says:

    RE: Kary L. Krismer @ 134
    Relax people it was a bad reference to a movie joke. The unfortunate part of posts is tone isn’t always effectively conveyed.

    Where I live I don’t see a raise in the minimum wage having much effect. what price I rent at in seattle is also well above minimum wage so i suspect a rapid drop off in how much it helps me.. I’m nore impacted by random rental rules.

    I still need to dig more into the new proposed cap limitations. From what i read so far i see nothing that says rent needs to be spread evenly across each month and so far all the limits specify first months rent as the basis. Seems gameable.

    All i see the Seattle council doing is repeating the blunder the San Francisco government did. Create a situation where you regulate the heck out of everything so the only folks who can live there are either very wealthy or the completely subsidied poor. Middle class is screwed. On the plus side it was great for property values so I’ll continue to own and rent out a home is seattle.

  139. 139
    Hugh Dominic says:

    RE: ess @ 133 – someone should have this post framed.

  140. 140
    Hugh Dominic says:

    Various points: regarding whether spreading the security deposit is a loan. It has enough of the characteristics of a loan to make it worthwhile to think of it that way. I don’t think it works literally like a bail bond. I think if you jump bail you become liable for the full cost of your bail, plus the fees you paid to borrow it. If you trash a house then you are only liable for that cost, not also the amount of your security deposit.

    regarding minimum wage. it would be nice if the minimum wage drove higher rents, by putting more money into the hands of the renters which they can then use to compete for the best apartments. And then we’d raise the minimum wage to compensate for that. Repeat.

    regarding SFR. I look forward to owning the last SFR in Seattle, merely by not building up even when it gets upzoned to LR-1 along with the rest of the city. As the last place in Seattle to raise a family, it will be worth one billion dollars. Or maybe not, since it will be surrounded by dilapidated apartment buildings that the landlords choose to maintain as cheaply as possible since they are regulated out of any profit,

  141. 141
    whatsmyname says:

    By Blurtman @ 131:

    RE: whatsmyname @ 122 – When you find yourself in a hole….. The bail bondsman does in fact make a loan to the accused or associated henchmen (as far as I can tell). But in that case, the bondsman would be analogous to the payday loan company which lent money to the renter. If Gubbernor Inslee said that bail posting could be stretched out to the courts in payments, the court is taking on more risk, but has not lent anything to the accused. I am afraid your Phoenix University MBA may be worthless.

    Let’s see. There is a discrete financial obligation. There are scheduled payments to meet that obligation over time. And the person to whom the payments are owed is faced with real credit risk. These are the basic elements of lending, but it is not lending because Blurtman calls it increased risk instead.

    My MBA is from a real university. I suspect you never dirtied your hands with a business class.

  142. 142

    RE: whatsmyname @ 139 – How about we just call it a debt? Loan implies money was given to the debtor and the money has to be paid back.

  143. 143
    pfft says:

    We truly are an idiocracy. Larry Kudlow is back in government. We are a banana republic. but hey, EMAILS! emails emails emails.

    Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told.

    Read more at: http://www.nationalreview.com/kudlows-money-politics/2446/bush-boom-continues-larry-kudlow

    this guy was the biggest idiot at CNBC. think about that.

  144. 144
    pfft says:

    This begs the question, why are they doing business at all with Wells Fargo? Isn’t there a local bank or why not just start their own bank?

    Seattle might break ties with Wells Fargo over bank’s Standing Rock investments
    https://thinkprogress.org/seattle-might-break-ties-with-wells-fargo-over-banks-standing-rock-investments-176520bdcad0#.mcyfzcza1

  145. 145
    Blurtman says:

    RE: whatsmyname @ 139 – A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. Of course, the renter is not a borrower, so big fail.

    And what is debt? – Debt is an amount of money borrowed by one party from another. Of course there has been no borrowing by the renter from the landlord. Big fail, again. Please see me after class.

    You are swirling down the bowl of circular logic.

    I have in fact engaged in the folly of obtaining an MBA degree.

  146. 146

    RE: pfft @ 142 – Yet another thing designed to get votes which in the end does nothing. Sawant, with a masters in economics, would know that, but it doesn’t stop her.

  147. 147

    By Blurtman @ 143:

    And what is debt? – Debt is an amount of money borrowed by one party from another. Of course there has been no borrowing by the renter from the landlord.

    I agree there is now borrowing, but debt is much broader than your definition. Debt would include tort claims, such as auto accidents, where no money is exchanged at all.

  148. 148

    To those of you here who think price increases get passed along to consumers, how much do you think real estate commissions will increase if Inslee gets his way? ;-)

    http://www.nwrealtor.com/2016/12/13/governor-proposes-66-increase-real-estate-brokerage-taxes/

  149. 149
    Eastsider says:

    By Blurtman @ 143:

    RE: whatsmyname @ 139 – And what is debt? – Debt is an amount of money borrowed by one party from another. Of course there has been no borrowing by the renter from the landlord.

    I beg to differ. The new city council policy basically forces landlords to loan money to tenants for associated move-in costs. The worst part is that landlords can’t recoup the loan interests. So tenants can expect higher rents to cover the additional risks.

  150. 150

    By Eastsider @ 147:

    By Blurtman @ 143:

    RE: whatsmyname @ 139 – And what is debt? – Debt is an amount of money borrowed by one party from another. Of course there has been no borrowing by the renter from the landlord.

    I beg to differ. The new city council policy basically forces landlords to loan money to tenants for associated move-in costs. The worst part is that landlords can’t recoup the loan interests. So tenants can expect higher rents to cover the additional risks.

    Again, landlords charge all they can, and don’t suddenly charge more just because of increased risk or increased costs. If you disagree, respond to post 146.

    But in this case you’re right for the wrong reason! This policy will allow more people to qualify for the apartment/house because they won’t need as much money upfront. That means there will be increased demand, and that means there could very well be increased prices. Yet another example of the Seattle City Council harming those they try to help.

    I would also question whether with Seattle’s new screening rules if landlords will be able to do anything about those higher risk applicants, which means the increase in demand might exist no matter the landlord’s aversion to risk.

  151. 151
    Brian says:

    RE: Kary L. Krismer @ 146

    If brokers have to increase commission percentages, that will exacerbate their problem with Redfin. If they jack it to 4% per side and Redfin ups their commission but is still offering 3%, then more people will look at Redfin for buying/selling.

  152. 152

    RE: Brian @ 149 – 4% would be far more than required. I think the number to cover the cost would be 3.03% (roughly), assuming a 3% commission. My point though was more that this increased cost, if it happens, won’t be passed along.

  153. 153
    whatsmyname says:

    By Blurtman @ 143:

    RE: whatsmyname @ 139 – A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. Of course, the renter is not a borrower, so big fail.

    What’s the better term, “definitional fallacy,” or “no true Scotsman”? A credit risk is the risk of exposure to a financial loss due to default on payment. If we agree on a $12 deposit to include $6 now and $1 for each of the next six months, and you default on all future payments; the degree of damages I suffer up to the $6 you owe because I didn’t get it up front is a credit loss to me – and that means credit risk. That is the reality of the experience.

    what is debt? – Debt is an amount of money borrowed by one party from another. Of course there has been no borrowing by the renter from the landlord. Big fail, again. Please see me after class.
    .

    I personally think that if you want to be a semantic warrior, you should be armed with a better understanding of the terminology you throw around. If you are unable to understand the reality well enough to choose the words that describe it, or to see the meaning of generic words in terms of the reality that they describe; no amount of schooling will help you . I am not sure if your use here of the term “debt” is directed towards its use in the BlurtmanTM definitional parse of credit risk; or if it is directed to your feeling of victory over Kary’s desire to use that term. Either way: strike four for you.

  154. 154
    whatsmyname says:

    The thing I am surprised to have NOT seen in this discussion of new landlord restrictions is its effect on the single family inventory – which seems to be a major concern of many posters.

    I think this will have an effect of putting more SFR’s on the market over the next 24 months, specifically in Seattle proper. I saw an article recently that mentioned a relocating software person who retained his Seattle house as a rental because, basically, where better could he put the money. I think we will see a lot less of that. As mom and pop investors experience more difficulty in being allowed prudent risk management, more houses will come on the market from this new source. Meanwhile, buyers will be more likely to plan to live in the house. I think this pressure will prove very popular with first time buyers and Seattle Bubble posters. The long term effect will be negative for those who wish to rent or buy a low end house in Seattle, but I guess you can’t make an omelette without breaking a few eggs.

  155. 155

    By whatsmyname @ 151:

    I am not sure if your use here of the term “debt” is directed towards its use in the BlurtmanTM definitional parse of credit risk; or if it is directed to your feeling of victory over Kary’s desire to use that term.

    I’m not sure that was a victory or a desire. Debt is just a better term than loan to describe the situation. I suggested it to end the back and forth.

  156. 156
    pfft says:

    By Kary L. Krismer @ 144:

    RE: pfft @ 142 – Yet another thing designed to get votes which in the end does nothing. Sawant, with a masters in economics, would know that, but it doesn’t stop her.

    I can guarantee you wells fargo does not want to lose a 3 billion dollar account. you aren’t too bright are you? do you just reflexively take the side of big corporations. are you a corporation? isn’t this where you tell me I have a bad memory?

    what would wells fargo have to do kary to make them lose your business?

  157. 157
    Hugh Dominic says:

    RE: whatsmyname @ 152 – yes I think that’s the most obvious second-order effect. Decrease in rental supply, increase in SFR supply. Those might offset if some of the small-scale rentals are sold off, torn down, and replaced with new, higher scale rentals that can recover the lost profit margin (instead of converting to SFR).

  158. 158
    jon says:

    By Kary L. Krismer @ 146:

    To those of you here who think price increases get passed along to consumers, how much do you think real estate commissions will increase if Inslee gets his way? ;-)

    http://www.nwrealtor.com/2016/12/13/governor-proposes-66-increase-real-estate-brokerage-taxes/

    Cost increases get passed to consumers when there is a competitively set price and all the suppliers are faced with the same increase, with some offset due to a reduction in demand. In this example, the price is set by a monopoly and so the commission may or may not increase, based on the separate logic that applies to how cartels behave, including their response to public opinion. I don’t know what the current B&O is for RE, but Inslee is right on target with this increase. If the cartel does not like it, they can stop their monopolistic practices.

  159. 159

    By jon @ 156:

    By Kary L. Krismer @ 146:

    To those of you here who think price increases get passed along to consumers, how much do you think real estate commissions will increase if Inslee gets his way? ;-)

    http://www.nwrealtor.com/2016/12/13/governor-proposes-66-increase-real-estate-brokerage-taxes/

    Cost increases get passed to consumers when there is a competitively set price and all the suppliers are faced with the same increase, with some offset due to a reduction in demand. In this example, the price is set by a monopoly and so the commission may or may not increase, based on the separate logic that applies to how cartels behave, including their response to public opinion. I don’t know what the current B&O is for RE, but Inslee is right on target with this increase. If the cartel does not like it, they can stop their monopolistic practices.

    I agree with you on the first statement–to some extent. Not the second. There’s no monopoly regarding real estate commissions, but instead literally thousands of competitors.

  160. 160
    Hugh Dominic says:

    By Kary L. Krismer @ 153:

    By whatsmyname @ 151:

    I am not sure if your use here of the term “debt” is directed towards its use in the BlurtmanTM definitional parse of credit risk; or if it is directed to your feeling of victory over Kary’s desire to use that term.

    I’m not sure that was a victory or a desire. Debt is just a better term than loan to describe the situation. I suggested it to end the back and forth.

    RE: Kary L. Krismer @ 153

    Look, it’s just a risk transfer. It’s not a debt or a loan. The landlord accepts more risk. Actually let me amend that. The risk that a renter is going to wreck a house is mostly under the renters own control. The renter now has less of an incentive to take care of the property, since his own money is not at risk. So it’s more like risk creation. The landlords must bear it, in exchange for some sort of imagined social benefit. It’s just another in a series of tenant’s rights laws that add risk to landlords.

    Risk is hard to quantify (see: housing meltdown). It’s not clear how landlords will choose to manage these mandates that they accept new risk. I suppose they will raise their rents or get out of the rental business over time; maybe buy some kind of tenant insurance. Generally it should reduce the supply of affordable rentals.

    After that, the city will declare a housing emergency and will start to build and operate its own rentals because private supply has dwindled. Then the risk will be maximized and fully socialized to the taxpayer rather than just weighing down the landlords. That means higher taxes. If our economy ever stops booming, the final stage is to rename the city, “New Detroit”.

  161. 161

    By pfft @ 154:

    By Kary L. Krismer @ 144:

    RE: pfft @ 142 – Yet another thing designed to get votes which in the end does nothing. Sawant, with a masters in economics, would know that, but it doesn’t stop her.

    I can guarantee you wells fargo does not want to lose a 3 billion dollar account. you aren’t too bright are you? do you just reflexively take the side of big corporations. are you a corporation? isn’t this where you tell me I have a bad memory?

    what would wells fargo have to do kary to make them lose your business?

    By does nothing I meant wouldn’t affect Wells Fargo’s activities regarding the pipeline. First, they aren’t going to act based on one customer. Second they’re probably smart enough to know that no matter what they do Sawant will have some additional reason to cut ties with the bank.

    BTW, I really doubt Seattle has $3B of anything. They might have $3B of funds that pass through their accounts every year, but unless maybe they have retirement accounts, I doubt there’s $3B of funds just sitting around at any point in time.

    As to taking sides, I will admit to almost always taking sides against the Seattle City Council, and that goes back years and years. I consider that group to have a collective IQ of less than 80. The best decision I ever made was moving outside the city limits so that their stupid decisions no longer affect me.

  162. 162
    whatsmyname says:

    RE: Kary L. Krismer @ 153 – To rephrase, I am not sure he thought he was clobbering me with his definition of debt because he had used that word in his explanation of credit risk, or because he thought I had used it, when in fact is was you that used it.

    I don’t really care if one describes the object as a loan, or a debt, or a financial obligation. The key for me is the action, which is lending – or rather forced lending; and the additional risks that it brings. All of the lending downsides are there for the landlord. The narrow definition being promoted isn’t even technically correct if you understand bailments, but further is an attempt to redefine the reality of common usage. Blurtman has taught me that you cannot “lend” your credibility to a cause – as you haven’t advanced any money, and there is no change of ownership of credibility. The same thing must apply to lending a hand. People in the credit business often say that loan guarantors are lending their credit to the borrower. Wrong again, I guess, because no money has necessarily changed hands with the guarantor.

  163. 163

    RE: Hugh Dominic @ 158 – It’s a debt of the tenant until it’s paid. If not paid I assume the landlord could sue and get a (non-collectible?) judgment. It also increases the risk of the landlord to have it paid over time–I’ll agree with that. But for the tenant it’s a debt.

  164. 164
    Ryan says:

    RE: Jasper @ 54 – Have you been to Chicago? Everyone wants to live near an El stop and the neighborhoods it runs through are culturally and financially diverse.

  165. 165
    jon says:

    By Kary L. Krismer @ 161:

    RE: Hugh Dominic @ 158 – It’s a debt of the tenant until it’s paid. If not paid I assume the landlord could sue and get a (non-collectible?) judgment. It also increases the risk of the landlord to have it paid over time–I’ll agree with that. But for the tenant it’s a debt.

    Something is not a debt until it is owed. The city has decided that the money is not owed until a later time. The desire of the landlord for the money to be paid earlier, or the fact that it used to be done differently, does not make money that does not need to be paid yet into a debt.

  166. 166
    pfft says:

    By Kary L. Krismer @ 159:

    By pfft @ 154:

    By Kary L. Krismer @ 144:

    RE: pfft @ 142 – Yet another thing designed to get votes which in the end does nothing. Sawant, with a masters in economics, would know that, but it doesn’t stop her.

    I can guarantee you wells fargo does not want to lose a 3 billion dollar account. you aren’t too bright are you? do you just reflexively take the side of big corporations. are you a corporation? isn’t this where you tell me I have a bad memory?

    what would wells fargo have to do kary to make them lose your business?

    By does nothing I meant wouldn’t affect Wells Fargo’s activities regarding the pipeline. First, they aren’t going to act based on one customer. Second they’re probably smart enough to know that no matter what they do Sawant will have some additional reason to cut ties with the bank.

    BTW, I really doubt Seattle has $3B of anything. They might have $3B of funds that pass through their accounts every year, but unless maybe they have retirement accounts, I doubt there’s $3B of funds just sitting around at any point in time.

    As to taking sides, I will admit to almost always taking sides against the Seattle City Council, and that goes back years and years. I consider that group to have a collective IQ of less than 80. The best decision I ever made was moving outside the city limits so that their stupid decisions no longer affect me.

    https://www.theguardian.com/commentisfree/2015/apr/27/divestment-fossil-fuels-apartheid-barclays

    “As to taking sides, I will admit to almost always taking sides against the Seattle City Council, and that goes back years and years. I consider that group to have a collective IQ of less than 80.”

    i bet you were against the min wage hike right? it has been a success. Seattle has a unemployment rate in the 3s so they can’t be that bad can they?

  167. 167
    whatsmyname says:

    RE: jon @ 163
    I can’t wait to inform my friends that the only debt on my house is this month’s payment. That other stuff is some kind of vague higher risk for my mortgagor that is just owed later.

    When the city requires that a portion of the deposit of a size that they allow be payable over time, they have defacto acknowledged that the money is owed.

    Sheesh! It’s no wonder you people can’t buy a house.

  168. 168

    By jon @ 163:

    By Kary L. Krismer @ 161:

    RE: Hugh Dominic @ 158 – It’s a debt of the tenant until it’s paid. If not paid I assume the landlord could sue and get a (non-collectible?) judgment. It also increases the risk of the landlord to have it paid over time–I’ll agree with that. But for the tenant it’s a debt.

    Something is not a debt until it is owed. The city has decided that the money is not owed until a later time. The desire of the landlord for the money to be paid earlier, or the fact that it used to be done differently, does not make money that does not need to be paid yet into a debt.

    You’re confusing when something is due with whether it is owed. For example, your $100,000 mortgage might have a $600 monthly payment. You owe $100,000, but only $600 is due. [Edit: I see whatsmyname already made that point.]

    But more to the point. Is there a point to all this crazy discussion over terminology?

  169. 169
    Just Tom says:

    By Kary L. Krismer @ 165:

    But more to the point. Is there a point to all this crazy discussion over terminology?

    No. Can we just declare everyone wrong and move on already?

  170. 170
    Hugh Dominic says:

    By Just Tom @ 166:

    By Kary L. Krismer @ 165:

    But more to the point. Is there a point to all this crazy discussion over terminology?

    No. Can we just declare everyone wrong and move on already?

    No, because I’m right and someone on the Internet is wrong, and I cannot rest until that is corrected.

    A security deposit is not a fee that has to be paid. It is a bond that is posted as a means to mitigate risk. If the tenant leaves before it is fully funded but causes no damage, the paid balance is released back to the renter and the unpaid balance is void. If the law denies the landlord the right to ask for this bond, or to limit the size of it, then it is forcing the landlord to accept more risk but is not structuring a debt per se. It’s no more of a loan than the rest of the risk to the landlord’s property in excess of the security deposit.

    Now on the other hand, if the ronrefundable move-in fee had to be spread out over months, that would be a loan. The renter is obligated to pay it and liable at the moment he moves in, and could be pursued for the unpaid balance in default.

  171. 171
    Hugh Dominic says:

    Here’s another way to think about it. A landlord might say, “my $500k property is at risk due to the damage you could cause during your tenancy. I require you to buy a $500k bond (insurance) that is collectible in the event of property loss that you cause and name me as the beneficiary.”

    Such a bond might cost $500 from a third party. The renter now must spend $500 more in order to move in. Unlike a security deposit, the third party would not refund this. It’s the price of the insurance.

    Suppose the city comes along and declares that requirement illegal, that is, the landlord may not stipulate such a bond.

    In that case the renter’s $500 cost disappears. But the landlord did not loan the renter $500. Rather, he was forced to accept risk that the market had valued at $500, which is not the same thing.

  172. 172

    RE: Hugh Dominic @ 168 – Those are good points, but I’m not sure there is such insurance or bonding, unless maybe the landlord switches over to AirBNB or some such thing. And that too would hurt normal tenants.

    But what you suggest is similar to what I’ve pointed out in the past where decades ago the Seattle City Council made it illegal to retain security deposits if a tenant did not stay for a certain period of time. That caused landlords to switch to leases, so a $500 security deposit (in those days) was not at risk, but the tenant was on the hook for 12 months of rent. A poor trade-off in my opinion.

  173. 173
    Jasper says:

    By Ryan @ 162:

    RE: Jasper @ 54 – Have you been to Chicago? Everyone wants to live near an El stop and the neighborhoods it runs through are culturally and financially diverse.

    Yes, I have been to downtown Chicago a couple of times. I chatted with some “financially diverse” people in the El Loop. One of them slept (fitfully) on the train, because that was safer than the homeless shelters or the street.

    The Blues Brothers has a great scene showing what it looks and sounds like in an apartment next to the El. The “financially diverse” fellow probably slept better on the train than he would have in that apartment.

    Also, completely unrelated to the problems with elevated trains, there is a huge category of people who refuse to live in Chicago, let alone in the Loop: Families who want their children to go to public schools, but insist that the public schools teach their children how to read. Chicago’s public schools have been bad for over 75 years.

  174. 174
    justme says:

    RE: whatsmyname @ 152

    Yeah, let’s get back on track here. Confidential message to landlords: sell-Sell-SELL! The evil and blatantly communist Seattle City Council is coming to steal your God-given right to PROFIT. Don’t forget, the constitution of the US guarantees your right to a profit no matter how dumb your investment was.

    (Parody alert for the dimwitted)

  175. 175
    pfft says:

    By Jasper @ 170:

    By Ryan @ 162:

    RE: Jasper @ 54 – Have you been to Chicago? Everyone wants to live near an El stop and the neighborhoods it runs through are culturally and financially diverse.

    Yes, I have been to downtown Chicago a couple of times. I chatted with some “financially diverse” people in the El Loop. One of them slept (fitfully) on the train, because that was safer than the homeless shelters or the street.

    The Blues Brothers has a great scene showing what it looks and sounds like in an apartment next to the El. The “financially diverse” fellow probably slept better on the train than he would have in that apartment.

    Also, completely unrelated to the problems with elevated trains, there is a huge category of people who refuse to live in Chicago, let alone in the Loop: Families who want their children to go to public schools, but insist that the public schools teach their children how to read. Chicago’s public schools have been bad for over 75 years.

    I am sorry but you lost paragraph is just ridiculous and completely unsupported. also you ever think that some people just don’t want their kids going to school with non-white people?

  176. 176

    RE: justme @ 171 – Ignoring the parody and terminology issues, is there anyone here who thinks paying deposits over time will actually help tenants? I see a few different routes to it resulting in higher rents, which would offset the benefit of paying over time for those who need that, and only harm those who have funds for a deposit.

    On a related issue, apparently there are some concerns about the terms/details of Seattle’s new ordinance requiring landlords to screen/accept tenants in order of application, and because of those concerns it may be delayed six months.

  177. 177
    Jasper says:

    RE: pfft @ 172 – I think Chicago’s public schools are tragic, not ridiculous.

    The ethnic cleansing (a.k.a. block-busting) of the South Side of Chicago happened circa 1960. Chicago’s public schools were blatantly worse than its Catholic schools at teaching white children how to read by the early 1940s.

    My grandmother did not need statistics or newspaper articles to know this. She could see the nine-year-olds playing on her front stoop. The ones who went to Catholic school could read; the ones who went to public school could not.

  178. 178
    Blurtman says:

    RE: Eastsider @ 147 – You are claiming that landlords are being forced to lend money to tenants for move-in costs? Are they handing over cash, check, gold,..? They are lending nothing. There is no transaction.

  179. 179
    Blurtman says:

    You have erroneously used the term credit risk.

    Here is wiki’s definition. “A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments” https://en.wikipedia.org/wiki/Credit_risk

    I have previously defined “debt” as it is used in the above definition, and to educate you.

    Nothing in the scenario of stretched out move-in deposits meets the criteria of credit risk or debt. There is no loan.

    I assume you were a marketing major. Touchy feely logic does not equal reality.

  180. 180

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

  181. 181
    Eastsider says:

    By Blurtman @ 175:

    RE: Eastsider @ 147 – You are claiming that landlords are being forced to lend money to tenants for move-in costs? Are they handing over cash, check, gold,..? They are lending nothing. There is no transaction.

    Okay, let’s demonstrate this transaction under a free market.

    1. Landlord demands $5k move-in costs.
    2. Seattle city council wishes to help its constituent. So it helps by paying $3k of the move-in costs. The tenant agrees to repay the city’s loan over next few months.
    3. Now we have the same lease transaction without any city mandate.

    By meddling in the free market, Seattle city council mandates that landlords provide tenants free loan to meet lease terms.

    I am pretty certain you are not a landlord. LOL.

  182. 182
    whatsmyname says:

    RE: Blurtman @ 176
    Blurtman, Ha ha ha, – In the words of that erroneous word user, Bill Shakespeare, lend me your ears.

    You are trying to parse one of many credit risk definitions as though it were a statute. Pure sophistry. But wait there’s more.

    You claim you have defined “debt” as used in the above wikipedia “definition” of credit risk. How do you know? The word debt is not defined there. I went to the full wikipedia article. They provide some examples, presented precisely as “examples”, and with no claim to completeness or exclusivity. Even if wikipedia had the ability to statutorily redefine the vernacular, they have not done so here. You’ve simply pulled that out of your posterior.

    Where are your exciting dictionary skills when it comes to the word bailment?

    I thought the super simplified example presented in post 151 would be adequate for a 10th grader. Clearly, I was wrong. Still, dollars and cents are not touchy-feely logic.

  183. 183
    whatsmyname says:

    RE: justme @ 171 – GREAT POST! I thought the word alert seemed a tad extraneous. But take that out, and the whole of it seems SPOT ON.

  184. 184
    redmondjp says:

    I wish I could take you guys and time-travel back to the Clinton/Lewinsky era, where you could get to the bottom of what the definition of ‘is’ is.

  185. 185
    whatsmyname says:

    RE: redmondjp @ 181 – Why not determine it for yourself?

    If I agree that I need to give you $X cash, and
    You agree to take that cash in payments rather than up front, and
    You could lose money if I don’t make the payments….

    Do you have credit risk?

  186. 186

    By Eastsider @ 178:

    Okay, let’s demonstrate this transaction under a free market.

    1. Landlord demands $5k move-in costs.
    2. Seattle city council wishes to help its constituent. So it helps by paying $3k of the move-in costs. The tenant agrees to repay the city’s loan over next few months.
    3. Now we have the same lease transaction without any city mandate.

    I’m not sure that’s the free market, but it is similar to a solution I was thinking of. If you limited the program only to those in some sort of defined “need” it would have much less impact on the rental market on the demand side, and seemingly little or no adverse impact on the supply side. And since pfft thinks Seattle has $3B lying around the city could obviously afford it. ;-)

    Returning to the quality of thinking of members of the Seattle City Council, I was just reminded of this recent story. Sawant’s office was being flooded with calls over a comment she made about Trump and the election. Her “solution?” Report to the press that her office is being flooded with calls! I’m sure that helped. /sarc

    http://www.seattletimes.com/seattle-news/politics/sawant-says-trump-backers-have-flooded-office-in-calls-after-she-urged-protests/

  187. 187
    redmondjp says:

    RE: whatsmyname @ 182 – I don’t need to determine it for myself – I own a home.

    This entire discussion is navel-gazing, when what we all should be very concerned about is the state of the global economy. For example, who is buying all of these US Treasuries that China is dumping? Perhaps the Fed?

    Macroeconomic situations are far more concerning than anything happening locally, and will certainly be a dominant factor in our local real estate prices of the future.

  188. 188
    whatsmyname says:

    RE: redmondjp @ 184
    Would it not have been simpler and less time consuming to simply answer yes or no? If we can’t bring ourselves to answer a simple yes or no question fashioned on only three criteria, it is unlikely we will make much progress solving the complexities of the worldwide economy.

    It is difficult for me to understand how owning your own home makes the question of what constitutes credit risk irrelevant in a discussion on credit risk. Most people I know that are creditors, or work in credit risk management, own their homes also.

  189. 189

    Thanks Tim! for a very Informative post, to me 2004 was a very healthy year soo many Projects were closed till today every thing is still going down on some places but still Digital World is Helping us alot I hope in future we will all close more sales.

  190. 190
    Eastsider says:

    By Kary L. Krismer @ 183:

    I’m not sure that’s the free market, but it is similar to a solution I was thinking of. If you limited the program only to those in some sort of defined “need” it would have much less impact on the rental market on the demand side, and seemingly little or no adverse impact on the supply side. And since pfft thinks Seattle has $3B lying around the city could obviously afford it. ;-)

    I think you mean a ‘section 9’ program… Oh, the federal section 8 program was a voluntary program for landlords, i.e. landlords don’t have to accept it, until the city made it compulsory.

  191. 191
  192. 192
    Blurtman says:

    RE: whatsmyname @ 179 – You are not making a loan in any sense of the word, petite bourgeoisie rentier.

  193. 193

    RE: ess @ 187 – From that article:

    Redfin agents find that low-down payment mortgages are often going not to lower-income people, but high earners who simply don’t have enough savings scraped together yet — or have savings offset by massive levels of student debt, like early-career doctors and lawyers.

    That means lower-income people for whom those products would be ideal must compete with buyers who have other advantages, Richardson said.

    As to the first paragraph, I’m not sure why Redfin agents would know their clients’ income levels. They aren’t mortgage brokers, so why would they ask? Also, the decision on how much to borrow is far more complex. Maybe they just want to preserve savings, or maybe they have business needs for funds and the home loan is the lowest cost option. Or maybe they just want to be leveraged so that their anticipated gains would give them more to brag about.

    As to the second paragraph, I don’t think I’ve run into a situation where the bank said: “Sorry but we’ve loaned out all the funds we have–no loan for you!” The competition may push the interest rates up marginally, but it doesn’t wipe out the funds entirely. The only place I’ve seen that happen is for some of the state’s down payment assistance and similar programs which are limited to people of certain incomes.

    Finally, I do believe the main points of the piece, about how there are a lot of people who are not participating in the run up in stocks and housing. I wonder though how many of those people are ones who did strategic defaults and/or short sales thinking that the real estate market would not recover for years and years?

  194. 194
    ess says:

    By Kary L. Krismer @ 189:

    RE: ess @ 187 – From that article:

    Finally, I do believe the main points of the piece, about how there are a lot of people who are not participating in the run up in stocks and housing. I wonder though how many of those people are ones who did strategic defaults and/or short sales thinking that the real estate market would not recover for years and years?

    Some investors only view the events of the moment, refusing to acknowledge or study the long term trends that have marked both the real estate and stock markets which both tend to rise over time.

    Question – wouldn’t a real estate agent be concerned about the financial ability of a prospective client to successfully obtain financing for a residence?

  195. 195

    By ess @ 190:

    Question – wouldn’t a real estate agent be concerned about the financial ability of a prospective client to successfully obtain financing for a residence?

    They are, but they use licensed lenders to determine what clients are qualified for, and the determination of that amount goes far beyond income (e.g. debt ratios, credit ratings, etc.). A client could have a six figure income but not qualify for even a modest loan if their employment history was negative or they had a ton of consumer debt/defaults.

    If the client is dealing with an unknown lender the agent might ask the client some questions, but it would be more red-flag things like how long have you been working for _________, or getting a copy of a bank statement for providing proof of funds later, etc. Once that information is obtained it would still need to be run by the lender to determine the effect of the information.

  196. 196
    justme says:

    RE: whatsmyname @ 180

    Hah! My sarcasm detector is detecting that you “forgotz” to put a sarcasm alert on your own post. Because only the most deranged could take my post 171, before the parody alert, at face value, right?

  197. 197
    ess says:

    By Kary L. Krismer @ 191:

    By ess @ 190:

    Question – wouldn’t a real estate agent be concerned about the financial ability of a prospective client to successfully obtain financing for a residence?

    They are, but they use licensed lenders to determine what clients are qualified for, and the determination of that amount goes far beyond income (e.g. debt ratios, credit ratings, etc.). A client could have a six figure income but not qualify for even a modest loan if their employment history was negative or they had a ton of consumer debt/defaults.

    If the client is dealing with an unknown lender the agent might ask the client some questions, but it would be more red-flag things like how long have you been working for _________, or getting a copy of a bank statement for providing proof of funds later, etc. Once that information is obtained it would still need to be run by the lender to determine the effect of the information.

    I see – thank you.

  198. 198
    pfft says:

    By Jasper @ 174:

    RE: pfft @ 172 – I think Chicago’s public schools are tragic, not ridiculous.

    The ethnic cleansing (a.k.a. block-busting) of the South Side of Chicago happened circa 1960. Chicago’s public schools were blatantly worse than its Catholic schools at teaching white children how to read by the early 1940s.

    My grandmother did not need statistics or newspaper articles to know this. She could see the nine-year-olds playing on her front stoop. The ones who went to Catholic school could read; the ones who went to public school could not.

    ooooooookkkkkkkkk.

  199. 199
    pfft says:

    By Kary L. Krismer @ 183:

    By Eastsider @ 178:

    Okay, let’s demonstrate this transaction under a free market.

    1. Landlord demands $5k move-in costs.
    2. Seattle city council wishes to help its constituent. So it helps by paying $3k of the move-in costs. The tenant agrees to repay the city’s loan over next few months.
    3. Now we have the same lease transaction without any city mandate.

    I’m not sure that’s the free market, but it is similar to a solution I was thinking of. If you limited the program only to those in some sort of defined “need” it would have much less impact on the rental market on the demand side, and seemingly little or no adverse impact on the supply side. And since pfft thinks Seattle has $3B lying around the city could obviously afford it. ;-)

    Returning to the quality of thinking of members of the Seattle City Council, I was just reminded of this recent story. Sawant’s office was being flooded with calls over a comment she made about Trump and the election. Her “solution?” Report to the press that her office is being flooded with calls! I’m sure that helped. /sarc

    http://www.seattletimes.com/seattle-news/politics/sawant-says-trump-backers-have-flooded-office-in-calls-after-she-urged-protests/

    did you vote for Trump?

  200. 200

    RE: pfft @ 195 – Not sure why that post asks you who I voted for. Because I don’t like an extremist socialist with absurd ideas you assume I favored Trump? In any case I was on the record here before the election comparing Hillary and Trump this year to Bush and Gore in 2000–two lousy candidates who were each the only one who could lose to the other.

    My preferred candidate was my cat Rocky, who ran for President on Facebook for a three month period. Check it out. #RockyforPresident

    As to the election, my views are very similar to this comedy piece (which is NSFW due to A LOT of F-bombs). https://www.youtube.com/watch?v=GLG9g7BcjKs

    “It’s almost as if the political acumen of Beyonce and Jay Z are meaningless.” ;-)

  201. 201
    N says:

    This can’t be good and quite amazing that orders went from 1,432 jets per year to 468 in just two years.

    Boeing has booked just 468 net jetliner orders this year, down from 768 last year and 1,432 in 2014. The figure is also well below Boeing’s target of having sales roughly match the 745 to 750 aircraft Boeing expects to deliver to customers this year.
    http://www.reuters.com/article/us-boeing-layoffs-idUSKBN14826M

  202. 202

    RE: N @ 197 – Probably has a lot to do with the lower price of oil. One main reason to buy new jets is fuel efficiency. And if this is correct, Airbus’ sales are down more for 2016 than Boeing’s (although Airbus did much better last year), which would refute the claim that it’s the dollar.

    https://en.wikipedia.org/wiki/Competition_between_Airbus_and_Boeing#Orders_and_deliveries

    I would also though look at backlogs–if the orders are too far out you would expect orders to fall somewhat (but probably not that much, and clearly that would have no application to the 777).

  203. 203
    justme says:

    RE: Blurtman @ 188

    Yeah, Blurtman, blurt out the lingo, petit-bourgeois rentier indeed.

  204. 204
    pfft says:

    By Kary L. Krismer @ 196:

    RE: pfft @ 195 – Not sure why that post asks you who I voted for. Because I don’t like an extremist socialist with absurd ideas you assume I favored Trump? In any case I was on the record here before the election comparing Hillary and Trump this year to Bush and Gore in 2000–two lousy candidates who were each the only one who could lose to the other.

    My preferred candidate was my cat Rocky, who ran for President on Facebook for a three month period. Check it out. #RockyforPresident

    As to the election, my views are very similar to this comedy piece (which is NSFW due to A LOT of F-bombs). https://www.youtube.com/watch?v=GLG9g7BcjKs

    “It’s almost as if the political acumen of Beyonce and Jay Z are meaningless.” ;-)

    HIllary won more popular votes by a record amount.

    soooo, did you vote for Trump?

  205. 205
    redmondjp says:

    RE: pfft @ 200 – Give it up pfft – you lost, and all of your predictions posted here of a Clinton win were wrong.

  206. 206
    pfft says:

    By justme @ 199:

    RE: Blurtman @ 188

    Yeah, Blurtman, blurt out the lingo, petit-bourgeois rentier indeed.

    rentier as a word is really underrated. shame really. I bet calling someone a rentier back in the day was a big thing.

  207. 207
    pfft says:

    By redmondjp @ 201:

    RE: pfft @ 200 – Give it up pfft – you lost, and all of your predictions posted here of a Clinton win were wrong.

    all of my predictions? I said Hillary would win. that is one prediction.

    I am right though, Hillary won the popular vote by a record margin. did you vote for trump?

  208. 208
    whatsmyname says:

    By Blurtman @ 188:

    RE: whatsmyname @ 179 – You are not making a loan in any sense of the word, petite bourgeoisie rentier.

    If you cannot defend your argument, I see you can still repeat it. You are right in one sense, though. My rentals are not in Seattle proper, and people who need to provide me a deposit will not be providing me with a promise to pay it instead.

    Rentier? Not so much as Marx would have had it. Petite bourgeoise? Perhaps. Would I be wiser to rely solely upon my labor? Or do you fancy you are heaping scorn upon the less fortunate than yourself? You seem bitter. Are you angry that you had the affluence to settle into Sammamish, but not the sense to buy there?

  209. 209
    whatsmyname says:

    RE: justme @ 192 – I didn’t mean that you should eliminate the parody alert. Only the word “alert”. Sorry. Sometimes I just can’t help myself.

  210. 210
  211. 211

    RE: pfft @ 203 – Why are you so interested in who voted for Trump? Don’t you know that voting for President in Washington state is a meaningless/pointless act? It doesn’t matter who anyone voted for, the Democrat will win no matter what. The same is true in many other states, including states where Republicans always win. Are you not familiar with the term “battleground states?”

  212. 212
    justme says:

    So far in 2016, Boeing has eliminated 6800 jobs in Washington state. Bullish!

    http://www.seattletimes.com/business/boeing-aerospace/boeing-cuts/

  213. 213
    justme says:

    And then there is the news that Seattle rents are starting to slow, just like they have in SF and NY and others for months already. Seattle is always a bit slow on the draw, it seems

    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.”

  214. 214

    RE: justme @ 209 – I wonder what the margin of error is in those rent surveys?

  215. 215
    uwp says:

    By Kary L. Krismer @ 206:

    Tom Douglas on Seattle city government.

    http://mynorthwest.com/494015/business-blowback-douglas-and-small-restaurant-owners-upset-with-seattle-city-council/

    ‘ “When we opened the Carlisle Room, we tweeted, ‘Hey we’re open for business, blah, blah, come on down,’” Douglas said of his Pine Street Restaurant. “Instead of Ms. Sawant saying congratulations, thanks for opening another business in our town, we get a tweet saying, “Oh lookit, the fiercest opponent to (the $15 minimum wage) is now opening another restaurant.” ‘

    Hah!
    Multi-millionaire has fee-fees hurt by mean Kshama Sawant.
    Perhaps we should get him a napkin from one of his 13 restaurants to wipe his tears.
    I’m sure the past 5 years have been real hard on him.

  216. 216

    RE: Kary L. Krismer @ 71
    Hybrids Like Prius

    Use rechargeable batteries that destroy the environment from heavy element pollution from just one factory….the toxic destruction is the size of the state of RI.

    Thank God we don’t all drive electric.

  217. 217

    RE: uwp @ 211 – Scoff all you want, but it’s wealthy people who determine where jobs are created and jobs are lost. As far as I know (I don’t go to downtown that much now), downtown Seattle was relatively unscathed during the past recession, but that was due to tech. It was not all that long ago that there were a fair amount of vacancies in downtown retail space. As long as the economy remains cyclical there will be periods when business activity declines, and that can lead to downtown blight. That can be a difficult thing to recover from. Most governments and government leaders understand that and thus try to attract business and not antagonize businesses. But Seattle’s government is not run by the best people–to say the least.

  218. 218
    Hugh Dominic says:

    By uwp @ 211:

    Hah!
    Multi-millionaire has fee-fees hurt by mean Kshama Sawant.
    Perhaps we should get him a napkin from one of his 13 restaurants to wipe his tears.
    I’m sure the past 5 years have been real hard on him.

    A successful businessman in Seattle? Drive him out! Burn him! He took so much from us and our city will never recover!

  219. 219
    Hugh Dominic says:

    RE: Kary L. Krismer @ 213 – Her caustic attitude aside, one thing I like about Kshama Sawant is her support for Seattle as a robotics and automation tech hub. We could see innovations like self-driving cars developed in places like Silicon Valley, but through her regressive employment policies such as the $15 minimum wage she is working hard to bring them here.

    She is helping us bring new tech jobs here by inflating the business case for replacing employees with automation. The new Amazon Go store, developed here in Seattle, is a great example. No cashiers required.

  220. 220
    uwp says:

    By Kary L. Krismer @ 213:

    RE: uwp @ 211 – Scoff all you want, but it’s wealthy people who determine where jobs are created and jobs are lost. .

    Well, I guess we better grovel at their feet so that they bless us with jobs!

    Everyone, make sure you tweet your thanks to Mr. Douglas for allowing us the chance to dine at his incredible establishments. Oh, boy!

    Kary, have you ever considered that demand for those goods and services are what creates that opportunity?

  221. 221
    pfft says:

    By Kary L. Krismer @ 207:

    RE: pfft @ 203 – Why are you so interested in who voted for Trump? Don’t you know that voting for President in Washington state is a meaningless/pointless act? It doesn’t matter who anyone voted for, the Democrat will win no matter what. The same is true in many other states, including states where Republicans always win. Are you not familiar with the term “battleground states?”

    You like making fun of a certain local politician and local politicians in general. just wondering if you voted for trump that’s all.

    I guess from that long paragraph we can deduce you voted for trump.

  222. 222

    By uwp @ 216:

    Kary, have you ever considered that demand for those goods and services are what creates that opportunity?

    Yes, but I would question whether you know what that means. Think back to my last post about tech saving Seattle during the last recession, the economy being cyclical and downtown blight. Then maybe ask yourself why you asked that question.

    As to that topic though, restaurants are likely the least likely type of establishment to leave Seattle, as long as there are people in Seattle. But still if TD has a choice of location for a new restaurant, Seattle will lose out to all other locations, all other things being equal (and the main other things being competition and rental rates).

  223. 223
    pfft says:

    By Hugh Dominic @ 215:

    RE: Kary L. Krismer @ 213 – Her caustic attitude aside, one thing I like about Kshama Sawant is her support for Seattle as a robotics and automation tech hub. We could see innovations like self-driving cars developed in places like Silicon Valley, but through her regressive employment policies such as the $15 minimum wage she is working hard to bring them here.

    She is helping us bring new tech jobs here by inflating the business case for replacing employees with automation. The new Amazon Go store, developed here in Seattle, is a great example. No cashiers required.

    sorry bro, the min wage issue has been well studied and it doesn’t hurt jobs.

    http://ritholtz.com/2016/12/seattle-min-wage-update/

    if more money for the people at the lower rung is bad for the economy perhaps we need a new economic system?

    I saw a good quote on twitter yesterday. paul ryan thinks the problem with the economy is that the rich have too little and the poor have too much. guess what, the republicans are going to cut your social security and take away the health insurance of 14 million people.

  224. 224

    By Hugh Dominic @ 215:

    RE: Kary L. Krismer @ 213 – Her caustic attitude aside, one thing I like about Kshama Sawant is her support for Seattle as a robotics and automation tech hub. We could see innovations like self-driving cars developed in places like Silicon Valley, but through her regressive employment policies such as the $15 minimum wage she is working hard to bring them here.

    Which is interesting, because in the short run (20 or so years) that will hurt the people she is trying to help. In the long run it might mean rather than ask someone what they do for work, you’ll ask them what they do to volunteer.

  225. 225
    pfft says:

    By Kary L. Krismer @ 220:

    By Hugh Dominic @ 215:

    RE: Kary L. Krismer @ 213 – Her caustic attitude aside, one thing I like about Kshama Sawant is her support for Seattle as a robotics and automation tech hub. We could see innovations like self-driving cars developed in places like Silicon Valley, but through her regressive employment policies such as the $15 minimum wage she is working hard to bring them here.

    Which is interesting, because in the short run (20 or so years) that will hurt the people she is trying to help. In the long run it might mean rather than ask someone what they do for work, you’ll ask them what they do to volunteer.

    the min wage doesn’t hurt workers kary, it’s been well studied. it’s a republican economic fallacy.

  226. 226

    RE: pfft @ 221 – BS. Ignoring the fact that the result of the study is often pre-determined by who does the study (or who pays for it) it’s been well studied mainly in cities which are having tech booms, or maybe cities like SeaTac which have captive employers.

    You are ignorant about a lot of topics, and basic economics is just yet another.

  227. 227
    greg says:

    RE: redmondjp @ 201

    To be fair Redmondjp, he is in pretty good company. many of the smartest people in the world thought Hillary would win.

    Instead the American public voted to have a puussy grabbing thug as their leader.

    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.

    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.

  228. 228
    Blurtman says:

    With a growing perception that the Seattle City Council and mayor are hostile to businesses that are facing mandates that increase operating costs, some Seattle business owners including restaurateur Tom Douglas have begun publicly criticizing city leaders for biting the hand that feeds their city.

    “I just feel like this particular mayor and this particular city council looks at business in a negative light rather than the traditional positive light and, maybe, that’s an ebb and flow of how things get done,” Douglas said. “I find it, as a business person, unfortunate.”
    ——
    Douglas, who employs 900 people, said it’s not simply that the city passed mandates such as $15-per-hour minimum wage, sick leave and secure scheduling among others; it’s that the council and the mayor appear to have no time or respect for local business owners who are good corporate citizens, who have set the example for a fair workplace standards and who have helped create good local jobs.

    “There used to be some sort of good feeling about a business person coming and opening a business in your town, creating a liveliness in our downtown core and certainly helping with jobs and that sort of thing,” he said. “And trying to be a good citizen through charitable work and through community activism.

    “And I just feel that from the perspective of a business owner here — I’ve been owning for 27 and working for close to 40 (years) in downtown — that (goodwill) has gone away. There is no respect for that. That’s the feeling I get from my council and that’s where my frustration is.”

    http://mynorthwest.com/494015/business-blowback-douglas-and-small-restaurant-owners-upset-with-seattle-city-council/?google_editors_picks=true

  229. 229
    Blurtman says:

    With a growing perception that the Seattle City Council and mayor are hostile to businesses that are facing mandates that increase operating costs, some Seattle business owners including restaurateur Tom Douglas have begun publicly criticizing city leaders for biting the hand that feeds their city.

    “I just feel like this particular mayor and this particular city council looks at business in a negative light rather than the traditional positive light and, maybe, that’s an ebb and flow of how things get done,” Douglas said. “I find it, as a business person, unfortunate.”
    ——
    Douglas, who employs 900 people, said it’s not simply that the city passed mandates such as $15-per-hour minimum wage, sick leave and secure scheduling among others; it’s that the council and the mayor appear to have no time or respect for local business owners who are good corporate citizens, who have set the example for a fair workplace standards and who have helped create good local jobs.

    “There used to be some sort of good feeling about a business person coming and opening a business in your town, creating a liveliness in our downtown core and certainly helping with jobs and that sort of thing,” he said. “And trying to be a good citizen through charitable work and through community activism.

    “And I just feel that from the perspective of a business owner here — I’ve been owning for 27 and working for close to 40 (years) in downtown — that (goodwill) has gone away. There is no respect for that. That’s the feeling I get from my council and that’s where my frustration is.”

    http://mynorthwest.com/494015/business-blowback-douglas-and-small-restaurant-owners-upset-with-seattle-city-council/?google_editors_picks=true

  230. 230
    greg says:

    RE: Kary L. Krismer @ 222

    Kary you have proved yourself a complete fool when discussing economics, you really should not be throwing stones….

    Or did you forget the hundred times people have schooled you here on really basic stuff. ie believing VAT was used instead of income tax in the EU…. I mean wtf Kary wtf?

  231. 231
    pfft says:

    By Kary L. Krismer @ 222:

    RE: pfft @ 221 – BS. Ignoring the fact that the result of the study is often pre-determined by who does the study (or who pays for it) it’s been well studied mainly in cities which are having tech booms, or maybe cities like SeaTac which have captive employers.

    You are ignorant about a lot of topics, and basic economics is just yet another.

    so kary, it’s well studied.

    “it’s been well studied mainly in cities which are having tech booms, or maybe cities like SeaTac which have captive employers.”

    now you’re just making shhh up.

    how many jobs have lost in seattle since the min wage went up kary? question #2. how many jobs were lost the last time the min wage was raised nationally.

    New Paper Finds Modest Minimum Wage Increases Have Little Impact on Employment
    http://cepr.net/press-center/press-releases/new-paper-finds-modest-minimum-wage-increases-have-little-impact-on-employment

  232. 232

    By greg @ 224:

    Or did you forget the hundred times people have schooled you here on really basic stuff. ie believing VAT was used instead of income tax in the EU…. I mean wtf Kary wtf?

    Nice non-responsive post which doesn’t refute what I said. Try harder next time.

    As to your post, as I have mentioned, I have not purported to be an expert on the tax systems used by every country in the world, nor the health systems of every country. Thus I can make mistakes on such issues. Did you forget I mentioned that already? Apparently you don’t know things that are told to you! Either that or my level of English usage is above your level of comprehension. Probably the latter.

    You’ve found two things I was wrong about out of probably thousands of posts. Don’t pat yourself too hard on the back. You are still just an anonymous troll.

  233. 233
    pfft says:

    By greg @ 224:

    RE: Kary L. Krismer @ 222

    Kary you have proved yourself a complete fool when discussing economics, you really should not be throwing stones….

    Or did you forget the hundred times people have schooled you here on really basic stuff. ie believing VAT was used instead of income tax in the EU…. I mean wtf Kary wtf?

    remember during the Greek crisis when kary said basically all of europe would default?

  234. 234

    By pfft @ 227:

    remember during the Greek crisis when kary said basically all of europe would default?

    Cite please. I know your memory sucks, but other than mentioning the PIIGS, and the crisis which could happen if one of them defaulted, I don’t believe I said any such thing, and clearly I never made a prediction that any one of them would default.

    But do you really believe that a default by a European government of any significant size wouldn’t lead to a financial crisis when they share a currency?

  235. 235
    justme says:

    RE: Kary L. Krismer @ 210

    >>I wonder what the margin of error is in those rent surveys?

    The margin of error is probably the same as during those years when the survey showed increasing rents. Error may in fact be lower, since now there are now more open rentals to survey.

    But the point being, did any of the resident bubblehead petit rentiers question the accuracy of the rental surveys when the survey showed increasing rents? Heck no. And today, none of them want to talk about Boeing’s 6800 lost jobs, nor the dropping rents. They are too busy sticking their head in the sand (or maybe the christmas pudding).

  236. 236

    By pfft @ 227:

    remember during the Greek crisis when kary said basically all of europe would default?

    I think I found it. It was a hypothetical addressing one possible scenario as to why predictions should not be made. It was the second post here.

    https://seattlebubble.com/blog/2012/06/15/friday-flashback-you-will-never-see-a-major-housing-price-crash-here/

    The reason I don’t make predictions is I understand that there are too many variables out there to account for. It’s an impossible task.

    Let’s assume that this email exchange was one year later, and let’s further assume that PIIGS in Europe all default 3 months from now resulting in a catastrophic economic collapse on both sides of the Atlantic. That’s not something you could predict with precision even today, but clearly not four years ago. And international influences are only one of many things which affect real estate prices.

    Yet another thing you don’t understand–English!

  237. 237

    By justme @ 229:

    RE: Kary L. Krismer @ 210

    >>I wonder what the margin of error is in those rent surveys?

    The margin of error is probably the same as during those years when the survey showed increasing rents. Error may in fact be lower, since now there are now more open rentals to survey..

    Agreed, but if the margin of error is 5%, then it might be reporting a decrease when none has occurred. Conversely, it could have reported an increase before when there was really a decrease.

    I think these things are done by calling managers of apartment houses and asking questions, which if so would be somewhat unreliable. Look at the variation you can get from the NWMLS numbers just due to a few agents reporting numbers late!

  238. 238
    pfft says:

    By Kary L. Krismer @ 230:

    By pfft @ 227:

    remember during the Greek crisis when kary said basically all of europe would default?

    I think I found it. It was a hypothetical addressing one possible scenario as to why predictions should not be made. It was the second post here.

    https://seattlebubble.com/blog/2012/06/15/friday-flashback-you-will-never-see-a-major-housing-price-crash-here/

    The reason I don’t make predictions is I understand that there are too many variables out there to account for. It’s an impossible task.

    Let’s assume that this email exchange was one year later, and let’s further assume that PIIGS in Europe all default 3 months from now resulting in a catastrophic economic collapse on both sides of the Atlantic. That’s not something you could predict with precision even today, but clearly not four years ago. And international influences are only one of many things which affect real estate prices.

    Yet another thing you don’t understand–English!

    I believe you said portugal, italy and spain would default. that is a massive chunk of the economic might of europe.

  239. 239
    justme says:

    RE: Kary L. Krismer @ 231

    People can check the methodology behind the Seattle Times article here:

    http://cainapartments.com/

    The web data releases appear to be 8 months delayed for non-paying customers. For example, the web data available 2016-12-20@14:45 is for April 2016. The Times article is based on a non-public copy of the Dec data. About the methodology, it is notable that the survey is only for big owners that own more than 50 units. That is one reason that rents from these surveys always seem high: They are mainly for large corporate-owned complexes that tend to charge higher rents than the mom-n-pop landlords.

  240. 240
    Brian says:

    RE: Kary L. Krismer @ 231

    Doesn’t really matter what the margin of error is for the same survey when you can observe the trend is downward.

  241. 241
    redmondjp says:

    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.

  242. 242

    “Every time interest rates increase 0.5 percent we see these surges because buyers become anxious about increasing rates”

    That pretty much sums up a primary driver for Spring price action.

  243. 243
    Blurtman says:

    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.

  244. 244

    By pfft @ 232:

    I believe you said portugal, italy and spain would default. that is a massive chunk of the economic might of europe.

    Well, first I quoted the language for you, and you still get it wrong. I apparently used the most extreme example of all 5 of the PIIGS defaulting.

    But you really don’t get it, do you? It was a hypothetical situation which would result in house prices declining. I’ve also used a pandemic as an example, and maybe even a terrorist nuclear explosion. It doesn’t mean I’m predicting those things to happen. I’m using them as examples of things which if they did occur they would drive down prices of houses locally, even if the event was far far away.

  245. 245

    By Brian @ 234:

    RE: Kary L. Krismer @ 231

    Doesn’t really matter what the margin of error is for the same survey when you can observe the trend is downward.

    I would agree, but this is just the first down period, so no trend to observe (yet), unless maybe there was something more in the article (or the underlying report) about rents than this.

    What’s more, the average rent actually decreased $12 a month from the third to fourth quarter across both counties, the first quarterly rent drop in two years.

    So your comment would be more applicable to my comment that one of the prior up months (should have been quarters) could have been down.

    Note I am not disputing that rents went down. I have no data of my own to make such a determination. I’m just wondering what the margin of error is since the down amount was relatively small. So it’s similar to wondering if a state that is polling for Hillary slightly might actually go to Trump.

  246. 246

    RE: greg @ 223
    Worship the Golden Debt Cow???

    A false god or the real steel???

    Let’s face it, if California and New York progressives with overpopulation controlled America, kiss our environment, retirement [Social Security and pensions] and wages good bye.

    Thank God for the Electoral College.

  247. 247

    By Blurtman @ 236:

    RE: redmondjp @ 235 – Liberal derangement syndrome. Hillary was a terrible candidate, the chosen candidate of a corrupt DNC..

    More like chosen by the press, who for 8 years worked to convince the populous what an inevitable invincible candidate she was. The mistake of the DNC wasn’t to do things that got Hillary to win the nomination after the primaries started, the mistake was their not trying to find more than three candidates prior to the primaries.

  248. 248

    On the topic of Seattle government not considering who they are benefiting, here’s recent news of of DC. They passed a family law bill, the the opponents (including the mayor) are concerned that most of the benefit goes to non-constituents, people who live outside the city. That concern wasn’t enough for most the council members, because it passed with a veto-proof majority, but at least someone is considering and discussing who is benefiting. That’s a big step up from Seattle government.

    http://wtop.com/dc/2016/12/dc-council-passes-paid-leave-bill/

    From article: “Taxing businesses will pull $250 million in to the District, but $166 million will go home with D.C. workers who live in neighboring states.”

    It’s actually worse than that though, because $250M isn’t being pulled into DC. It’s being pulled from businesses, some of which are based in DC.

  249. 249

    RE: Kary L. Krismer @ 237
    Yes Kary

    We all vote progressive [its not old fashion Scoop Jackson “real steel” Democrat either], because we want overpopulation:

    1. Because about half the home owners in Seattle “don’t work”, they live on multi-generation wealth or retirements and have no “skin” [job] in the game; they’ll want cheap nannies, gardeners, house cleaners and care givers. A lot are retirees like SWE. They want amnesty.

    2. We don’t drive to work, so could care less that the freeways are clogged [I drive from 10A-1P on weekdays].

    Are folks that didn’t really earn their own wealth the savvy investors??? LOL

  250. 250
    Blurtman says:

    RE: softwarengineer @ 242 – What if you are an illegal alien work hard, get a good degree, live sensibly, invest sensibly, and accumulate enough wealth to live off of? Is that bad? What if you are non-Caucasian Caucasian from the lower middle class and do the same? Is that bad?

    Why do you hate Horatio Alger?

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