NWMLS: Nearly everything about the Seattle-area housing market continued to tilt in sellers’ favor in October

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October market stats have been published by the NWMLS. Here’s a quick excerpt from their press release:

Key indicators for Western Washington housing still rising, but brokers detect slowdown and uncertainty

Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.

“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region.”

Compared to spring months, Scott expects volumes in the next few months will be at 30-to-50 percent of spring totals. “The stage is set once again for a frenzy housing market after the first of the year in the price ranges where there is a shortage of active listings for sale.”

Lennox sure likes that word “frenzy.” He seems to think that it has positive connotations. Personally I think it’s exactly the opposite. People do irrational and stupid things in a frenzy that they usually regret later. Is he saying that’s true of the current housing market? Maybe we actually agree more than I thought…

Now let’s dive into the numbers for October.

CAUTION

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

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

October 2017 Number MOM YOY Buyers Sellers
Active Listings 2,619 -15.6% -13.4%
Closed Sales 2,441 -2.8% -2.9%
SAAS (?) 1.03 -11.7% +14.3%
Pending Sales 2,760 +0.9% -2.4%
Months of Supply 1.07 -13.2% -10.8%
Median Price* $630,000 +0.8% +14.5%

The only tiny shred of kind-of good news for buyers is that closed sales and pending sales are down slightly from a year ago. Of course, listings are down considerably more than sales, so the market overall is still trending in sellers’ favor.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell three percent between September and October. Last year over the same period closed sales were down just a tenth of a percent. Year-over-year closed sales were down three percent.

King County SFH Pending Sales

Pending sales were up one percent from September to October, and were down two percent year-over-year. Year-to-date pending sales are down four percent from 2016. Meanwhile year-to-date closed sales are up one percent. I still don’t know exactly why that’s happening, but my guess would be that fewer pending sales are collapsing this year than last year.

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

King County SFH Inventory

Inventory fell sixteen percent from September to October, and was down about the same amount from last year.

Here’s the chart of new listings:

King County SFH New Listings

One tiny bit of good news: new listings were up eleven percent from a year ago.

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

Still nothing new here. It seems like it’s been the same story forever: It’s a great time to be a seller and a terrible time to be a buyer.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year price changes fell a couple points between September and October and are still sit at a very high level.

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

Up slightly from September, but not quite back to the all-time high hit in July.

October 2017: $630,000
July 2007: $481,000 (previous cycle high)

Here’s the article from the Seattle Times: Seattle home prices jump nearly 18 percent; West Bellevue median hits $2.6 million


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.

548 comments:

  1. 251
    Brendan says:

    RE: Kary L. Krismer @ 85
    Actually, those two roads were built by different agencies. Mercer is owned and was designed by the state i.e. WSDOT.

    The road through columbia city is owned by the city and the new design is according to Seattle DOT. They actually do traffic studies and figured out that 2 lane roads with a dedicated turn lane is faster than a 4 lane road without one.

    On the other hand WSDOT’s general solution to traffic is just to add more lanes… and ignore the fact that the road just turns into a parking lot because of bottlenecks down the line. They are also responsible for the new 99 tunnel and the new alaskan way design.

    They also did retime the lights to make it harder to get across mercer just as you suspected…

  2. 252
    ronp says:

    RE: Timbo @ 228 – yes, those roads need improving as well, but the bulk of the revenue for rural roads comes from the west, at least according to this older article (probably even more imbalanced now) http://www.thestranger.com/seattle/welfare-state/Content?oid=6686284 .

    Federal fuel taxes raised $35.2 billion in Fiscal Year 2014 and a lot of that money goes to rural roads and highways.

    We need a carbon tax to spend more on infrastructure, support wind and solar, help farmers deal with climate change, build protected urban bike lanes, etc.

  3. 253
    ronp says:

    RE: Bubble Trouble @ 240 – Nothing wrong at all with living in the country, rural people can be sexier and more sustainable than urban people, no doubt.

    Limited choice of private schools out there though.

  4. 254
    Weasel says:

    RE: Kary L. Krismer @ 24 – More roads? Cant say I agree there. The idea of everyone driving a personal car to work is just redonkulous :-) How many lanes of freeway and multi story carparking buildings (for which there is nowhere to put them) would it take to have delay free commutes?

    I’ve been commuting to work in Seattle 100% on public transit since moving here over three years ago, the thought of having to drive my self to work 5 days weeks is unappealing now, its a chore. I let the conductor and engineer worry about that while I look out the window or get some work done ;-)

  5. 255
    Benvolio says:

    By Brendan @ 248:<


    Actually, those two roads were built by different agencies. Mercer is owned and was designed by the state i.e. WSDOT.

    Mercer is a city street and the Mercer project was most definitely designed and built by the city. The only state involvement was coordinating the connection points at the 520 ramps, the north portal to the new tunnel, and the hwy 99 overcrossing

  6. 256

    By Weasel @ 251:

    RE: Kary L. Krismer @ 24 – More roads? Cant say I agree there. The idea of everyone driving a personal car to work is just redonkulous :-) How many lanes of freeway and multi story carparking buildings (for which there is nowhere to put them) would it take to have delay free commutes?

    I’ve been commuting to work in Seattle 100% on public transit since moving here over three years ago, the thought of having to drive my self to work 5 days weeks is unappealing now, its a chore. I let the conductor and engineer worry about that while I look out the window or get some work done ;-)

    Well, you can either build roads for the world as it exists, or for some fantasy world where there is adequate public transit that people actually use. 405 SB south of Bellevue is a mess starting at about 2:00 p.m. 169 to/from Puyallup north is also a mess a large portion of the day.

    It it were just “rush hour” that would be a different matter–we can’t build roads based on just peak periods. We’re to the point now that the roads don’t even deal with the average daytime usage. And that is somewhat dangerous. I’ve noticed we’re getting to the point where significant congestion doesn’t necessarily slow traffic–I remember that occurring in CA about 15-20 years ago.

  7. 257
    Erik says:

    There are less than 2000 houses currently for sale in king county. This spring bump is gonna be over 10% in king county for sure. Yay for the intelligent people that own real estate in king county!

  8. 258
    N says:

    @Erik 254 –

    Pretty similar to last year.

    2016: King County SFH went from approx 3,300 in October to approx 2,200 by Thanksgiving
    2017: 3,000 in October to approx 1,950 Thanksgiving week.

    Look at what happened around 2007 and I would submit that what happens in the winter months tells you very little about the next spring. You could have what you had in 2007 where lots more people decide they want to cash out and ask far to much and the market turns or you could have as you suggest and the inventory stays low and prices rise.

  9. 259
    Doug says:

    RE: N @ 255 – Winter might not mean anything as it relates to the following Spring season, but we’re down >18% Y-o-Y and last year was already an all-time low.

  10. 260
    Dave says:

    RE: Kary L. Krismer @ 253
    Agreed. Having moved to North Seattle from the traffic nightmare that is the 405/10 freeway area in Los Angeles several years ago I can assure you that Seattle is following the Los Angeles playbook perfectly.

    Traffic there really didn’t become ugly until the 1990’s and grew almost unbearable in the early 2000s. My co-workers made fun of me for moving close to where I worked (rent slave) while they made their daily hour long commute (each way) from their homes in the beautiful San Fernando valley (insert bill murray ghostbusters joke here). Since I escaped and bought here just after the 2009 crash, they don’t joke about me anymore (the Tim was right.)

    I respect those who troll the boards and are playing the rent wait and see game. Los Angeles congestion and traffic drove me to rent and eventually, when the economic tide turned, leave most of my friends behind. Now we can all sit back and watch the same game replay here in Seattle. Best of luck all, this should be interesting!

  11. 261
    Joe_Clave says:

    Long time reader, seldom poster.

    I do not own property and I am in a general state of dismay about the market these days, so my opinion is obviously biased. So, I want to run this by ya’ll regarding the following factors:

    HQ2
    GOP tax plan
    FED raising the interest rate
    a couple years of meteoric home price increase
    Stock prices outstripping financial indicators

    Don’t all of these point to a frantic sell-off in the Spring and a subsequent… adjustment?

    A few other things:
    Similar issues in OR with GOP tax plan, except also losing income tax deduction
    Similar issues in CA with GOP tax plan, except also losing income tax deduction
    Boeing layoffs/outsourcing
    Subsidized Bombardier competition to the 737

    So, here’s my question, is this all wishful thinking?
    -or-
    Is the Seattle area an unstoppable juggernaut, constrained geographically?
    Is the Hirst decision never going to be fixed?
    Is Boeing just holding it’s breath for a minute before exploding into the second century?
    Will the trend toward high-paying double income households continue, or will that burnout?

    I guess if we knew the answers to all these questions, we could all get rich…

    I feel like conventional wisdom is that the business cycle is about 10 years, and we are right there. If it were easy to see these things coming, everyone would see it coming. There are always reasons for Bears and Bulls to feel confident. The thing that gets me is that the market, both housing and stock, seems speculative (more wishful thinking?), which makes it vulnerable to an unforeseen disruption. My theory is that people always point to some anomalous, disaster creating, out of nowhere event to explain crashes while ignoring the fact that a non-speculative market would be more resilient against such a disruption. In other words, it seems like people blame the wind for knocking over the house of cards.

    Am I crazy?

    Thanks for reading. I always appreciate the excellent comments in this site.

  12. 262
    ARDELL DellaLoggia says:

    RE: N @ 255

    After 8/3 of 2007 jumbo loans were almost impossible to get for 6 months and zero down loans became obsolete. It had nothing to do with what buyers and sellers were doing in terms of personal decisions. It had more to do with what lenders wouldn’t let buyers do and sellers got caught up in that.

  13. 263
    Erik says:

    RE: N @ 255
    You should have compared 2007 to 2017. Your analysis doesn’t make the right comparison. 2007 inventory went up thanksgiving week and prices went down that next spring. 2016 and 2017, inventory went to record lows and prices went way up in 2017. I would expect a similar response in spring 2018 as what happened in 2017 since they have a similar inventory story.

  14. 264
    Erik says:

    RE: Doug @ 256
    Supply and demand is in full effect when it comes to real estate. Supply is down and demand is up, you can bet your a$$ prices will be up assuming we don’t get nuked or credit doesn’t crash.

  15. 265

    The Superior Court ruled Seattle’s income tax unconstitutional. Nothing surprising. The court agreed with my analysis above that Line 22 of form 1040 is a summation of net income figures, and thus net income (see page 20 of decision). The court didn’t decide the constitutional issues because the matter could be decided on the basis of a statute.

    https://www.documentcloud.org/documents/4277768-17-2-18848-4-Order-on-Cross-Motions-for-SJ.html

    Now onto the state Supreme Court, where they too will need to get around the statute to reach the constitutional issue.

  16. 266
    Hugh Dominic says:

    RE: Kary L. Krismer @ 261 – The court easily shredded every one of the city’s arguments. This was such a waste of taxpayer money. It was just virtue signaling by the CM’s. Some say it’s ground for a recall on the basis that the CM’s broke their oath of office.

    Also note: HoH and widower was included in the final legislation.

  17. 267

    By Hugh Dominic @ 262:

    RE: Kary L. Krismer @ 261 -Some say it’s ground for a recall on the basis that the CM’s broke their oath of office.

    Also note: HoH and widower was included in the final legislation.

    I doubt a recall would impact anything–I don’t think they would not be voted out of office. I would even guess that if they put the tax to a vote in Seattle it would pass.

    Where do you see HoH and widower included?

    Also, I probably should repeat something I said a long time ago here. I would support a constitutional amendment which made an income tax legal while making a sales tax illegal (with transition provisions). I don’t think it would be appropriate for the state Supreme Court to reverse prior caseholdings, particularly when they have been so long standing. There’s a policy of assuming that the legislature consents to a court interpretation of statutes after a period of time, and I don’t know whether the same applies to constitutional interpretations, but it should. That the people had not amended the constitution after all these years should mean something.

  18. 268
    Justme says:

    RE: Hugh Dominic @ 262

    >>Also note: HoH and widower was included in the final legislation.

    Translation please. I searched Kary’s link and fund nothing.

  19. 269

    RE: Weasel @ 251
    Seattle Hates Cars?

    Hey Weasel….I’m proud of you….you walk the talk.

    I hate these open border progressives demanding “I trade in my Dodge Charger for an electric vehicle”….LOL, I ask them what they drive and they point at a gasoline truck engine. If ya don’t walk the talk, I don’t respect your word, its that simple.

    IMO Weasel, almost all folks would move out of Seattle rather than spend hours each day waiting at bus stops in the rain [getting work done?], and electric cars are a joke too. Sorry Tim, but if we started buying more of them the ELECTRICAL GRID in the Seattle area would black out….electric cars already blacked out the grids in the SW states [during peak electric air conditioning].

    We’ll need like a MULTITUDE of Trillions of dollars in electric POWER PLANTS [smelly COAL] before electric cars are even remotely possible. Ignore SWE, he’s just speaking science truth, Progressives call that Racist Fascist *!%#& now…LOL

    Believe the lies.

  20. 270

    By Justme @ 264:

    RE: Hugh Dominic @ 262

    >>Also note: HoH and widower was included in the final legislation.

    Translation please. I searched Kary’s link and fund nothing.

    I found it. The link I posted was apparently just an early version of the bill. Here is the ordinance as enacted. http://clerk.seattle.gov/~scripts/nph-brs.exe?s3=&s4=&s5=%22income+tax%22&s1=&s2=&S6=&Sect4=AND&l=0&Sect2=THESON&Sect3=PLURON&Sect5=CBORY&Sect6=HITOFF&d=ORDF&p=1&u=%2F~public%2Fcbor1.htm&r=1&f=G

    Nice that they treat head of household and the same as a single person. /sarc

  21. 271
    Justme says:

    RE: Kary L. Krismer @ 266

    What does HoH and widower have to do with whether the State constition and/or specific statues disallow a Seattle income tax or not?

    Terminology:

    HoH – head of household taxfiling status category
    Widower = filing status category.

  22. 272

    By Justme @ 267:

    RE: Kary L. Krismer @ 266

    What does that have to do with whether there can be a Seattle income tax?

    It has little to do with whether there can be a tax, but a lot to do with how much they actually thought about the matter. After paying $30,000 to draft this ordinance you’d think that someone would have actually read a tax form and thought about the issues.

    If you go back, one of my original comments about the ordinance is that they didn’t spend much time looking at the tax forms. That they didn’t include HoH and widowers was telling. They apparently caught that in the final, but they made head of household (and widows) the same as single. The IRC treats HoH in between single and married filing jointly (at least as to SD, I didn’t check rates). Seemingly Seattle could have done the same thing by maybe making the threshold $375,000, or perhaps even giving them the full $500,000. That would seemingly be better social policy, because they are supporting dependents.

    Note I didn’t comment on widow/widower, who the IRC treats as married, and that’s because I’m not really sure of the basis for doing that, other than some outdated idea that widows are all elderly old women who probably never worked a day in their lives, or some such thing. I’m not really sure what modern theory would support such a policy.

  23. 273
    Bubble Trouble says:

    Just a clarification….the judge didn’t rule the income tax unconstitutional. He ruled it illegal. He specifically did not rule on the constitutionality of it. This matters because if it’s simply illegal, state law can simply be changed to make it legal. And with a full Democrat controlled legislature and imbecile Inslee, that can easily be done. Changing the constitution on the other hand, a lot more effort.

    And before everyone celebrates too much, this is going to be appealed and eventually the supreme court will decide. And given how far left the state supremes are, expect it to be found A-OK.

    So what will happen is the law is changed and then the new law is found constitutionally legal.

    End result: get ready to pay!!

  24. 274
    Bubble Trouble says:

    By Kary L. Krismer @ 263:

    By Hugh Dominic @ 262:

    RE: Kary L. Krismer @ 261 -Some say it’s ground for a recall on the basis that the CM’s broke their oath of office.

    Also note: HoH and widower was included in the final legislation.

    I doubt a recall would impact anything–I don’t think they would not be voted out of office. I would even guess that if they put the tax to a vote in Seattle it would pass.

    Where do you see HoH and widower included?

    Also, I probably should repeat something I said a long time ago here. I would support a constitutional amendment which made an income tax legal while making a sales tax illegal (with transition provisions). .

    Here’s a radical idea. Cut spending and then you won’t need either!! bbbut then that means children will die on the streets right? Not really. New Hampshire has neither sales or income tax and last I checked it has roads, schools, hospitals, police protections, etc.

  25. 275

    By Bubble Trouble @ 269:

    Just a clarification….the judge didn’t rule the income tax unconstitutional. He ruled it illegal. He specifically did not rule on the constitutionality of it. This matters because if it’s simply illegal, state law can simply be changed to make it legal. And with a full Democrat controlled legislature and imbecile Inslee, that can easily be done. Changing the constitution on the other hand, a lot more effort.

    Correct on constitutional vs. illegal–I don’t know why I wrote that in the first sentence above. I guess the wrong word came into my head. But what I wrote right after that is correct. That because it was decided on a statute the court didn’t reach the constitutional issue. So you’re incorrect on how easy it is to be changed, because the court did not rule it was constitutional.

    This is sort of like the Hobby Lobby case, where the Supreme Court decided that a statute was applicable which determined how another statute should be interpreted. The former statute effectively makes it difficult to ever have a ruling on the constitutional issue. The same is true here as to local jurisdiction taxes. Unless the court finds some way to avoid the application of the statute, such as finding it had been been improperly enacted, it won’t get to the constitutional issue regarding income taxes. I really doubt any court would ever conclude that line 22 of Form 1040 is not a line of “net income” at least for many taxpayers.

  26. 276
    Hugh Dominic says:

    RE: Bubble Trouble @ 269RE: Justme @ 264 – mm, not really. The law can’t be changed to something unconstitutional, which a graduated income tax would be in WA.

    Here’s my summary of the ruling.

    City of Seattle: Despite how we named it, it’s not an income tax, it’s an excise tax. And it’s not on net income, it’s on total income. Then City attorney Holmes takes a long drag on his blunt, and relaxes, satisfied that hundreds of thousands of dollars in legal fees were well spent.

    Judge: it can’t be an excise tax, because earning income is a human right and not a privilege that is granted and licensed by Seattle. I mean how stupid an argument is that. Although the 1040 form says “total income” on the line you’re referring to, it’s the sum of net incomes. The sum of net incomes is still net income. Are you serious. This was the easiest ruling I’ve made all year.

  27. 277

    RE: Hugh Dominic @ 272 – The only difficult parts of that case, that would require any significant research, would be the parts that attacked the enactment of the income tax preemption statute. There are specific rules which need to be followed, most of which are rather archaic, but at least one of which has an actual purpose–the anti-logrolling roll. That requires bills (and initiatives) to have one purpose so that you don’t get 40% voting in favor due to X and 10.1% voting in favor for Y.

  28. 278
    Bubble Trouble says:

    Hugh and Larry,

    You’re both misunderstanding my point.

    1. The judge ruled the income tax illegal because a state law forbids it.

    2. The state legislature now full Democrat control, changes that law to allow Seattle’s tax. Any state law can be changed or amended after all.

    3. Imbecile Inslee signs new law.

    4. Seattle passes income tax again. It is no longer illegal since the old law is no longer in place.

    5. Then it gets challenged again on constitutional grounds. And there, the state supreme court will twist itself into a pretzel to allow it.

    It’s really hard to change the constitution but it’s very easy to change/amend a law. So while this is a nice temporary victory, long term it’s meaningless. The judge took the cowardly way out. Had he ruled the law is unconstitutional it would have meant something.

  29. 279

    2017 Tax Reform

    Is making high taxed Sanctuary City areas like Seattle reconsider continuous “NY-style” Progressive local tax hikes for immigrating unlimited uneducated minions into America’s social welfare network designed for own legal citizens [like schools and hospitals]. This brainless continuous tax hikes is definitely Fascist in my book.

    Example: My 2018 property tax just came in $5/mo less for my Kansas City home….while my SE King County property taxes came in about $30/mo more…with a 33% 2018 King County assessment increase making it hypothetically for 2018 about $50/mo….no end to the tax hike fun! Hey those monthly bills add up each year.

    Have ya seen I-5 South in Tacoma lately…it looks like a demolition derby with cement barriers in the middle of the lanes and reflector lines rubbed off [very dangerous at night and in the rain]….a 3rd world trashed freeway. Its been that way for years now, EQC is a parking lot in a TOTAL construction mess/maze that never gets finished [and keeps getting worse]…drive [5 mph for 5 miles?] further south on the “apocalypse end of the world Tacoma freeway” and ya hit beautiful McChord military base….a complete parking lot of military family cars, its horribly overpopulated. I’m doing Thanksgiving this Monday at 10A-1PM to visit Olympia, after the holiday rush turns that decrepit freeway system into a HORRIFYING decayed swamp.

    Your state tax dollars hard at work?

  30. 280
    Bubble Trouble says:

    RE: softwarengineer @ 275

    Dude, without the diversity of 3rd World illegals, we’d lose all our strength!

    And it’s amazing how liberals with a straight face will tell you everyone in the world should move here and then in the next breath complain about overcrowding. and urban sprawl.

  31. 281

    By Bubble Trouble @ 274:

    The judge took the cowardly way out. Had he ruled the law is unconstitutional it would have meant something.

    But to reach the constitutional decision the judge would need to have found that the statute didn’t apply. It is very well established that courts should not make unnecessary decisions of constitutional law, so if a statute invalidates another statute or ordinance, the court should not make a decision regarding the constitution. That is what the judge expressly did here. See the bottom half of page 25 of the decision. There was no analysis at all of the 1930’s cases.

    But you’re right the statute could easily be repealed. I would add that it only applies to local governments, not the state, so the state could just enact its own income tax. I would disagree though on how likely it is that the current Supreme Court would reverse course on this topic. There is a significant likelihood that they would uphold the prior case law, either because they agreed with it or just based on stare decisis.

    https://www.law.cornell.edu/wex/stare_decisis

    Washington courts have a fairly decent history of not being too judicially active. For example, they declined to follow the US Supreme Court’s decision on the lack of a need for a warrant to search an automobile, based on prior Washington decisions being more restrictive. And Washington has one of the most restrictive rules on the need for a proper legal description in a purchase and sale agreement, and they don’t seem to care at all that virtually no other state follows that rule, because we have clearly established that rule. A counter example though would be where the state Supreme Court threw out the felony murder rule based on virtually nothing beyond their own preferences–an action where the legislature had to act to reverse them (as to new cases).

    Finally, again I think it would be risky for the state to impose their own income tax, unless it was for a very small amount of the total budget, because it would be too risky. If struck down the state would be in a budget mess.

  32. 282
    jon says:

    The Seattle law that was struck down was just a straw man to show everyone that the new all-Democrat legislature needs to repeal the income tax law. Then Seattle can submit the same tax bill again, and have the State Supreme Court step over the constitution again and allow the law. Then Seattle can then revise the tax to lower the income threshold to middle class levels to get some real revenue going.

  33. 283
    whatsmyname says:

    RE: Bubble Trouble @ 276 – What’s really amazing is the number of red state goobers who have to move here to get a job; and then tell us we’re wrong for not running our state like a red state.

    RE: softwarengineer @ 275 – Actions speak louder than words. We’ll know you really think the KC way is better when you move there. Write if you get work.

    Still encouraged to see the housing market so well balanced that other concerns are more pressing, even on a housing bubble blog.

  34. 284
    Hugh Dominic says:

    By whatsmyname @ 279:

    What’s really amazing is the number of red state goobers who have to move here to get a job; and then tell us we’re wrong for not running our state like a red state.

    Yeah, and how about those immigrants always moving here too, amirite? We blue staters are so superior.

  35. 285

    By jon @ 278:

    The Seattle law that was struck down was just a straw man to show everyone that the new all-Democrat legislature needs to repeal the income tax law.

    I wouldn’t assume Olympia is as hyper-partisan and dysfunctional as DC, or that Washington legislative districts are as Gerrymandered as the federal districts. The Republicans couldn’t get an amendment through eliminating the word “net” from the statute this year, so I wouldn’t assume that the Democrats could totally eliminate the statute next year. They would probably lose some Democratic votes and maybe even pick up some Republican votes (although more of the former). The main support would probably be hyper-local in the King County area, and I’m not sure that would be enough to get it through.

  36. 286

    By Bubble Trouble @ 276:

    And it’s amazing how liberals with a straight face will tell you everyone in the world should move here and then in the next breath complain about overcrowding. and urban sprawl.

    I wonder if even half those cities bidding for Amazon’s HQ2 really had a clue what they were biting off.

    Also, I wonder if even half those cities bidding could actually deliver on what they promised. Assuming it would require either state or local political action, I could see some fierce opposition once a city is actually selected. The problems here and in the Silicon Valley are fairly well known.

  37. 287
    Anonymous Coward says:

    By whatsmyname @ 279:

    What’s really amazing is the number of Californians who have to move here to afford a place to live; and then tell us we’re wrong for not running our state like California.

    Fixed that for ya. And this has been true my entire life…

  38. 288

    Only just over 1900 SFR active listings in King County right now, so we may well come in significantly below last year at the end of the month. The median CDOM for those listings is almost 2 months and the mean almost 3 months, so seemingly many of them have “issues” of some sort.

    The number of new listings may be the key stat when the numbers come out.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  39. 289
    uwp says:

    By Kary L. Krismer @ 284:

    The median CDOM for those listings is almost 2 months and the mean almost 3 months, so seemingly many of them have “issues” of some sort.

    Yikes.

  40. 290

    RE: Kary L. Krismer @ 284 – I just checked, and less than 20 of those are short sales, and ditto on bank owned, so the former is not what is contributing significantly to those times on market stats.

    Same disclaimer as referenced post.

  41. 291
    Deerhawke says:

    My view is that there are a good many reasons why things are hanging on the market right now, but ultimately it often comes down to

    1) the Redfin/Zillow effect, and
    2) price.

    I know of three listings where an old person died and left the property to their kids. The kids have all read the stories in the papers and so want every last dollar– and then some. They have rejected their agents’ advice and insisted on a listing price that is beyond greedy, it makes absolutely no sense.

    I know of one person who is convinced that her house is worth $150,000 more than it is. Why? Her house is nicer than the one only a block or so away, has somewhat more square footage and a larger yard. The agent has pointed out the problem of being right on a super busy street and being more than a block away, but she clings to the Zestimate instead.

    Having access to the internet can lead to a particular kind of real estate stupidity.

  42. 292

    RE: Deerhawke @ 287 – By “issues” I meant something broader than price, although price can be the solution to all issues! ;-)

    But I was thinking more about condition, including things like the busy road you mention, but also things like siding, foundation or slope issues. In this market buyers will overlook a lot of that (particularly siding), and that will come back to haunt them if they need to sell when the market is not super hot. But there are some houses with a collection of issues where buyers just are not willing to take it on, and where there’s no margin for flippers.

  43. 293

    Wow, John Carlson actually had a useful thought. A lot of his piece on the income tax puts the cart before the horse, but the one good thought is that if an income tax comes to be there will likely be a state initiative. And that initiative will attract a lot of conservative voters outside the Seattle area. If done during a Presidential election year that could clearly swing the makeup of the Legislature, but we might also even end up with a Republican Governor. That is basically how he gets to his conclusion that an income tax would be good for Republicans. I would only note that would be a very short term, one election, thing.

    http://crosscut.com/2017/11/seattle-income-tax-help-gop-washington-republicans/

  44. 294

    Here’s an early article on Case-Shiller. No surprises–Seattle is up a lot again.

    https://www.seattletimes.com/business/us-home-prices-leapt-in-september-by-the-most-in-3-years/

  45. 295

    This is prompted by a Facebook reminder of a link I posted two years ago. Watch it and then come back and tell me that your selection of agent doesn’t matter.

    https://www.youtube.com/watch?v=n6XKCThOU0Y&feature=youtu.be

    Starting at about the 3:00 mark Annie Fitzsimmons talks about what happens because the buyer’s agent did not properly send their client’s acceptance of offer in the proper manner. This is not in any way something that is difficult to do, but in my experience less than half the critical documents are properly sent by agents. It’s a very sad commentary on the quality of agents, and it runs across all firms and experience levels.

    https://www.youtube.com/watch?v=n6XKCThOU0Y&feature=youtu.be

    Do to some of the crazy legal situations that can result, particularly on inspection notices, I pressed the NWMLS to add in language allowing agents to accept delivery of improperly delivered documents, and they have now done so. So at least now agents can correct the mistakes of the other agent if they and their client wish to do so. And that is a good thing for everyone.

  46. 296
    Doug says:

    RE: Kary L. Krismer @ 290 – Can you paste the meat of the article? I’m out of free SeattleTimes articles. :)

    But, I’m seeing Seattle CS to have declined 0.28% in September.

  47. 297

    RE: Doug @ 292 – I think this is the same article:

    http://komonews.com/news/local/us-home-prices-soar-by-the-most-in-3-years-led-by-seattle

    BTW, you can get around most limits like that simply by using a different browser.

  48. 298
    Doug says:

    RE: Kary L. Krismer @ 293 – Thanks.

    Yeah, Y-o-Y is up big, but it was up even bigger as of last month’s report. If these negative monthly declines continue Justme’s prediction of the peak in 2017 could be correct! Could you imagine?

  49. 299

    RE: Doug @ 294 – Even though it’s three counties and a three month moving average, the C-S number is highly correlated to the NWMLS King County SFR median, and that is seasonally down too.

    I seem to recall that C-S has some seasonally adjusted numbers–might be worth looking up.

  50. 300

    RE: whatsmyname @ 279
    Amazon HQ2 Will Move to Kansas City or Another Location in 2018

    From Seattle….how can Seattle gain jobs and Kansas City lose them then?

    Brainwashed by the Seattle area Open Border Village Idiots that this is good that Amazon is leaving Seattle too??? LOL….pig headed Open Border Progressives heading for the apocalypse.

    Become brain dead and buy its NWO video game this Christmas….LOL

  51. 301

    RE: Kary L. Krismer @ 293
    Boeing Left Internet Explorer for Firefox

    I did too….the new Firefox is faster now too…imagine that…the village idiot “high school level” programmer [MSFT/Apple S/W source code is a trade secret not taught in any college] foreign H-1B S/W developers actually made a product faster??? LOL

    MSFT needs its “legal American voter majority” NW area high school kids back again. America First!

  52. 302
    uwp says:

    By Kary L. Krismer @ 295:

    RE: Doug @ 294 – Even though it’s three counties and a three month moving average, the C-S number is highly correlated to the NWMLS King County SFR median, and that is seasonally down too.

    I seem to recall that C-S has some seasonally adjusted numbers–might be worth looking up.

    Seasonally adjusted it’s up .5% for September compared to down .3% non-adjusted.

    I would guess that if the majority of inventory that’s out there right now is flawed stuff that’s sitting, it makes sense the median might drift a bit until the season starts again next year. And as Kary said, with the NWMLS putting out the monthliy numbers the CS reports are never very surprising.

  53. 303
    S-Crow says:

    Agents: I’ve lost count on how many times we have received PSA’s that are incomplete and or have no buyer contact information whatsoever. How do you expect escrow/title to “find” the buyer in your transaction? Just ask a random person on the street? Google the name? Facebook?

    How hard is it to put their email, current address or phone on the PSA?

  54. 304
    ARDELL DellaLoggia says:

    RE: S-Crow @ 299

    It is more common these days for the seller to not want the buyer to have their cell phone number or email address. Somewhat due to so many waived inspections. Parties’s personal info is sent separately vs on the contract.

  55. 305

    By S-Crow @ 299:

    Agents: I’ve lost count on how many times we have received PSA’s that are incomplete and or have no buyer contact information whatsoever. How do you expect escrow/title to “find” the buyer in your transaction? Just ask a random person on the street? Google the name? Facebook?

    How hard is it to put their email, current address or phone on the PSA?

    I think the agents want to control that information–not necessarily to keep it from the escrow, but to keep it from the other party and their agent. So the answer to your question is: You ask the agent.

    The only critical piece of information for the parties is their address, in case there’s an EM dispute.

    On this topic, recently I had an escrow copy the buyer and seller into the same email. Terribly bad practice, IMHO, because for one thing someone might hit reply all and say something they shouldn’t say!

  56. 306
    whatsmyname says:

    RE: softwarengineer @ 296 – There is no HQ2 yet, anywhere. How can it be moved? In addition to the space under construction, didn’t Amazon recently sign a lease for about three quarter million square feet in Seattle? Do you suppose that they will spend millions on space to leave empty, so that they can even spend even more money on space they don’t need to pay for? Fantasy Island? LOL.

    RE: Anonymous Coward @ 283 – Alas, I have been too slow to pick up on what it is that the Californians want us to do different. I suppose they are used to doing things that generate enough money, and spread far enough around, that prices have room to go up. I don’t know if I hate that.

    RE: Hugh Dominic @ 280 – Over the past few years I’ve had the opportunity to get to know people who migrated into our NW metro; from Mexico; from Canada, (the French speaking part); and from Idaho. Lovely people all, and such interesting cultures.

  57. 307
    Ron Swanson says:

    Fannie Mae is increasing limits to 677,000 from 592,500 last year for King County. Should help drive some more demand next year especially in the further out areas.

  58. 308

    RE: whatsmyname @ 302
    The Old Obama Tax Deductions Made Abandoned/Unused Corporation Buildings Like That a Tax Write Off Anyway

    The new “simplified/post card” Trump tax cuts gives Amazon a 20% corporate tax…..more money to spend in i.e., Kansas City and affordable rent for employees there too. Win/win for Amazon.

    Why would Amazon inflict high Seattle rent on American workers in this case? Get the Hades out of the Seattle “high taxed” overpopulated quagmire.

  59. 309
    Deerhawke says:

    RE: uwp @ 298

    I am sure savvy realtors could play a game with houses in areas they know. Let’s call it “In This Crazy Market, Why Hasn’t that House Sold?”

    Ding. On a super busy street. Extra points. It is on the corner of two busy streets.
    Ding. There is an alcohol and drug rehab center next door and the bus stop bench where they hang out is right in front.
    Ding. Priced as a remodel, but the foundation has 40-50 open cracks. Extra points. That is how the rats got in.
    Ding. Zoned single-family, but has big apartment buildings on two sides blocking all light.
    Ding. They already sold off most of the lot. Whats left is only 2100 sf.
    Ding. She died in the summer but her family didn’t miss her til Thanksgiving.
    Ding. Their pricing reflects the idea that the cannabis place next door is an amenity
    Ding. The house is red-tagged until it is moved back from the slope.

    Really. I have looked at all of these. In this market, if something isn’t selling, there is always a story.

    Kary, Ardell. Care to play?

  60. 310

    RE: Deerhawke @ 304 – Not based on recent personal examples, but some of my favorites have been:

    My price is based on a multiple I use of the county assessed valuation.
    My price is based on the list price of a house down the street (which has been on the market for two months).
    My price is based on the cost of the extensive amount of wallpaper I had installed throughout the house. (BTW, odd choices of granite or marble can be even worse.)
    My price is based on what I need in net proceeds to be able to . . ..

    On a personal example we did recently see a house that cosmetically was really very nice, but it had a driveway sloping toward the house and then next to that more slope right into a vent. I’m not sure if it’s related, but the house did have four significant foundation cracks (although not big enough for mice–yet). It was new on the market and if I had to guess it probably went quickly.

  61. 311
    redmondjp says:

    RE: Kary L. Krismer @ 305 – Yeah, that massive water funnel (AKA downward-sloping driveway) directed right at the garage is a puzzling feature of all-too-many homes in our area. Two out of the six homes in our cul-de-sac get water in the garage during heavy rains because of this design flaw.

    I just cleaned out the drain line that handles my driveway – that’s the good news. The bad news is, it goes right underneath the house! So I have a sump pump behind the house which keeps the crawl space from becoming a swimming pool. How this drainage system ever seemed like a good idea is beyond me, but in the mid-1970s, it apparently passed muster.

    That’s one reason why this time of the year is a great time to check out homes – if there is a water problem, now is when you are going to see it (or smell it).

    And I just drove from Carnation to Preston this morning, through the floodplain. Even out there, houses that should be selling for the value of the farmable land beneath are going for $500K. I passed two which were recently sold that are commonly surrounded by water every few years. Crazy.

  62. 312

    RE: redmondjp @ 306 – I just re-worked my drainage this year. A prior owner apparently rerouted part of it rather than just figuring out where it was clogged (or maybe to build a sidewalk over the existing drain opening???). And given I was doing that work I replaced the drainage on the other side of the house too.

    I also live on the end of a cul-de-sac, so I check the street drains to clear leaves going about 2 blocks up. My driveway itself doesn’t get that much water, but if the street drains are clogged it can overflow the drain (or at least could before my repairs), sending water around the house–fortunately on the garage side where there is no crawl space.

    As to new construction, it sometimes amazes me how close to the ground some houses are built, even when the land slopes into the house. Given that people tend to add dirt over time, it just seems to be asking for trouble. Also, I prefer a taller crawl space area inside, so adding an extra foot to the foundation perimeter would be nice for that reason too (assuming they dug out as deep).

  63. 313
    Erik says:

    Getting rid of the capital gains tax exclusion for homeowners would be a major setback for me. Everyone in real estate would make less.
    https://therealdeal.com/2017/05/19/future-is-unclear-for-us-homeowners-capital-gains-exclusion/

  64. 314

    RE: Erik @ 308 – I don’t think anyone is talking about making that go away, but just tightening it up a bit so that you may need to hold it longer and can do it less frequently. Probably not a big problem because most people can’t get even $250,000 of gain (after costs of sale) in either two or three years.

    And that would only apply to peoples’ residences, not things like your rental units. For those you’d be concerned about them changing capital gains rates, unless maybe the personal rates dropped to the point where that didn’t matter much.

  65. 315
    whatsmyname says:

    By softwarengineer @ 303:

    RE: whatsmyname @ 302
    The Old Obama Tax Deductions Made Abandoned/Unused Corporation Buildings Like That a Tax Write Off Anyway

    The new “simplified/post card” Trump tax cuts gives Amazon a 20% corporate tax…..more money to spend in i.e., Kansas City and affordable rent for employees there too. Win/win for Amazon.

    Why would Amazon inflict high Seattle rent on American workers in this case? Get the Hades out of the Seattle “high taxed” overpopulated quagmire.

    Sorry, Virginia; there is not that kind of Santa Claus. Mixing Obama’s name with business deductions that vastly predate him does not magically make all your other wrong statements true.

    There is no magic tax wand for space you rent. If Amazon pays out one real dollar in rent, they could get up to an effective 20 cents back in lower taxes – and 80 cents out of every dollar is gone, hopefully for necessary business use.

    Amazon is leasing 475,000 sf in the Macy’s Building. When are they moving in? 2018.
    Median class A rents downtown exceed $40/psf/yr. (that’s $19 million out the door per year, and leases on prime space tend to run 10 years)- Whatever their actual rent; it’s a contract. No biggie on $19million if you can get a $3.8million tax break?

    Amazon is also taking 722,000 sf in the new Rainier Tower. Math works the same way, except it’s likely more expensive space. That building opens in 2020. Amazon is running away? Amazon was so excited about HQ2 that they decided to throw tens of millions of dollars per year at Seattle real estate they won’t use? They’ve been very upfront about planning more people here. The spaces we are talking about could be 8,000 people just by themselves.

    Here is some interesting math. You’ve decided that rather than pay $40psf for space to use in Seattle, Amazon will pay $40 contractual obligation for space to sit empty plus $20 for equivalent space somewhere cheaper. Win, win – except that paying $60 is not the same as paying $20, and not better than paying $40.

    Why would Amazon “inflict” high Seattle rents on their $100K+ employees? Why would the sun want to come up? I don’t know, but it’s a fact. That doesn’t change because you don’t approve.

  66. 316
    ess says:

    Tonight I was listening to NBR, and they had a report on increased housing prices. Prices are going up – same old story – high demand, low inventory. But they also indicated that the lower end of the market had a much higher rate of price increase than the rest of the market. They listed some cities that had significant differences between lower end and higher end price increases – Seattle was not referenced.

    I have observed a decreased number of houses for sale, as well as less lower priced houses available in the local area I follow, but did not notice any dramatic sudden price increases. Have those of you in the business observed any sudden increase of prices in the lower part of the market that you service, and that there is increased pressure on the prices of the lower end housing market as was suggested by the NBR piece? Or is that phenomena occurring in other areas of the country, but not in Puget Sound?

  67. 317
    Erik says:

    RE: Kary L. Krismer @ 307
    I hope my rentals are excluded. I also like to live in a condo and flip it every couple years for extra cash. That takes care of my negative cash flow and then some. If that perk changes I’ll have to change my game plan.

    Eitherway, thanks for the info. I’ll sit and wait to see what happens. Charge forward for now.

  68. 318
    Blake says:

    Excellent post!
    … more like this!!

  69. 319

    RE: whatsmyname @ 310 – It’s interesting to see the different approaches the tech companies are taking. Microsoft will be investing a lot of money into redeveloping their Redmond campus, while Amazon is spending money putting their people into expensive space downtown.

    I’ve never understood the appeal of downtown. As an attorney it was nice to be closer to the courts, but that was mainly due to the uncertainty of travel across “The Car Strangled Spanner” a/k/a the 520 bridge. And a lot of that advantage went away with the introduction of electronic case filing. I used to comment about how I had an office across the street from the bankruptcy court, but I could be doing what I was doing from a beach in Mexico.

    I wonder what the most common choice is in companies where work location can be chosen. Downtown or corporate campus?

  70. 320

    By whatsmyname @ 310:

    There is no magic tax wand for space you rent. If Amazon pays out one real dollar in rent, they could get up to an effective 20 cents back in lower taxes – and 80 cents out of every dollar is gone, hopefully for necessary business use.

    Amazon is leasing 475,000 sf in the Macy’s Building. When are they moving in? 2018.
    Median class A rents downtown exceed $40/psf/yr. (that’s $19 million out the door per year, and leases on prime space tend to run 10 years)- Whatever their actual rent; it’s a contract. No biggie on $19million if you can get a $3.8million tax break?

    I’m not really following you. The 80 cents of every dollar is rent. Spending a dollar to save 20 cents is hardly a good business move, so the rent better be a “necessary business use.”

    And if you increase that by 19M, it doesn’t make the analysis somehow different. Yes saving $3.8M is nice, but not at the cost of spending $19M. That $15.2M still needs to provide you a return.

  71. 321
    whatsmyname says:

    RE: Kary L. Krismer @ 320 – You say you don’t follow, but the things you point out are exactly the points I was trying to make. Is my writing that bad? I should probably stop.

  72. 322

    RE: whatsmyname @ 321 – I thought that was where you started (basically refuting SWE), but it didn’t seem to be where you ended up! Maybe I read it wrong, or maybe it wasn’t clear, but I guess it doesn’t matter if we’re both at the same place.

  73. 323
    Drone says:

    By Kary L. Krismer @ 319:

    It’s interesting to see the different approaches the tech companies are taking. Microsoft will be investing a lot of money into redeveloping their Redmond campus, while Amazon is spending money putting their people into expensive space downtown.

    I’ve never understood the appeal of downtown. […]

    One benefit is that, while Amazon is certainly the biggest employer, there are a lot of other smaller companies and startups congregating around them (particularly in SODO). There’s a very real networking/hiring advantage to locating your startup close to other startups. For the engineers, they get to go chase their dream for a while and then move to (or move back to) Amazon when they run out of money. Later, easily leave Amazon and repeat for another cycle. These employees are probably already renting apartments in a downtown high-rise so they keep the short commute and cycle between different jobs / bars.

    The more interesting question is what happens when the Amazon hiring wave ages a bit and wants a family + land. I think Google has the advantage here, with a nice campus in SLU and Kirkland, so they can chase the employees as life stages change.

  74. 324
    LongJohn says:

    The tech company strategy for the future seems to be to hire new grads at lowest cost possible and pack them into tiny luxury studios around the corner from work so they put in long hours. Then when they realize they should not be settling for $70k and stock options or want to start a family they will get spit out for the next crop. Most of these kids want to be in the city where the social opportunities are highest.

  75. 325

    RE: Drone @ 323 – That seems like an advantage for the startups and a disadvantage for Amazon. But I’m not so sure the distances are so great that it would be considerably different for Microsoft. If Symantec is still located in Central Point Oregon, that could be an advantage for them on employee retention, but maybe a disadvantage on employee recruitment???

  76. 326

    Well there wasn’t a surge of new listings after the Thanksgiving week, so the inventory number should be pretty pathetic when released next week.

  77. 327
  78. 328
    Doug says:

    RE: Kary L. Krismer @ 325 – This is when prices go parabolic, Canada-style.

  79. 329
    ess says:

    By SKC @ 326:

    http://www.seattlepi.com/realestate/article/Report-Seattle-is-9th-least-affordable-housing-12393162.php#photo-12608583

    Not to be too critical, but I disagree with the headline.

    Housing is not unaffordable in Seattle. Whatever inventory is made available, it is snatched up immediately, often obtaining multiple offers.

    Housing may cost more per square foot than in other parts of the country, and certain individuals may not have the resources to buy into the market, but the Seattle housing market is not unaffordable.

  80. 330

    RE: ess @ 328 – It’s not the headline that is objectionable, it’s the article. Seemingly an opinion piece, not a news article. As to the headline, it just notes a listing in order of affordability, and doesn’t claim anything, even the worst city, is unaffordable.

    Also, WTF is going on with the P-I’s website? So many elements loading it’s difficult to scroll up and down.

  81. 331

    As far as web-based material about real estate, this one is not too bad, and covers at least two of the topics we covered above. I would not necessarily agree with the part about lower land cost–at least not completely.

    http://realtormag.realtor.org/sales-and-marketing/feature/article/2016/07/what-sellers-need-know-about-comps#!#sf174900860

  82. 332

    One of the plaintiffs in the Seattle income tax case is seeking attorney fees on the basis that the City’s position was frivolous.

    https://www.dropbox.com/sh/g1xufhj2go7m9xa/AABk1wOiA1qjTRFA4vXeg5RYa?dl=0&preview=Kunath+Motion+for+Sanctions.pdf

    Maybe Seattle will actually pay a cost for its nonsense.

  83. 333
    boater says:

    By Kary L. Krismer @ 319:

    RE: whatsmyname @ 310 – It’s interesting to see the different approaches the tech companies are taking. Microsoft will be investing a lot of money into redeveloping their Redmond campus, while Amazon is spending money putting their people into expensive space downtown.

    I’ve never understood the appeal of downtown.

    I wonder what the most common choice is in companies where work location can be chosen. Downtown or corporate campus?

    Downtown. It’s just the cost of talent acquisition. Because if you want the top talent you have to offer them a location they want to be at. Right now that is downtown.

    You can break headquarters decisions down by when was a company founded and what was the expectation of engineers at that time. Pre late 1990’s the engineers expected to go where the cool company was. The companies colocated themselves near other tech manufactures and silicon production facilities, The Suburbs. The engineering pool was on average older and more established so this fit well. Then Internet came, Netscape went public and dot coms became a thing. Now all the advances in technology did not rely on deep knowledge of existing systems. The advantages of an older experienced engineer and a newly minted one dropped substantially. After all no one in the field had five plus years experience in the technologies because many of the things you’re working on are less than three years old and changing rapidly. Youth became king. Where do young people want to be, out where their parents live or in downtown? Downtown.
    Amazon started in downtown but I think that had more to due with Bezos being a finance guy in a former life. He wanted to be where he was comfortable.
    Microsoft is founded pre internet. The could expect the worlds engineers to come to them because they were the best. Now they are excellent and the best in many areas but talent has options now. They can find something interesting, challenging and financially rewarding where they want to live. The don’t have to travel.
    Google starts in the Valley because it’t near Stanford and I think that’s because norms for engineering graduates expectations hadn’t changed yet. They still expected to go work at the coolest company. They did not expect the coolest company to come to them. So Google stays in the valley. Fast forward a decade and that changes. New graduates are king. First they were chased with either perks or money. Then both. Now both and they want to work where they want to work. Companies realize to get the best talent they have to be where the best talent wants to work and that is downtown right now.
    I agree Google has an advantage in the Seattle area by virtue of having large offices on both sides of the lake. That’s almost totally and accident. They had a choice when they looked to build their major campus. They could do downtown or the Eastside. They at least in part picked the Eastside because at the time if they had picked downtown the engineers in Mountain View(their headquarters) would have gone apeshit and demand an office in downtown San Francisco. They did NOT want to do that at that time. So you got in 2007 a major campus on the Eastside and a oversized sales office in Fremont that housed some temporary engineering. Eventually that changes and both become sizable campuses.

    I know in the mid 2000’s the thinking was open offices where ever you can find top talent. Now I think that is getting pulled back on. I think they are seeing that remote offices do not utilize talent as efficiently as ones in the major campuses. I suspect that is why Amazon wants a second large headquarters and is not announcing 20 substantial satellite offices.

  84. 334

    This letter from Gov Inslee was mentioned on the news tonight. In it he claims that only 30% of Washington tax filers deduct state and local taxes. That for all practical purposes means that only about 30% itemize. I find that somewhat encouraging that the number is so low–that only 30% of fax filers own a house with a large enough mortgage and tax bill to be able to itemize. I suspect though that the vast majority of those 30% are in King, Snohomish, Pierce and Kitsap counties.

    http://www.governor.wa.gov/sites/default/files/Gov%20WSAC%20ltr%20to%20Delegation%20re%20SALT%2010.23.17.pdf

    I wonder how low that number would go if the tax bill passes with a doubling of the standard deduction (assuming also no change in the mortgage interest deduction).

  85. 335

    RE: softwarengineer @ 300
    United Kingdom MSM Tattles on the Amazon Company Real News: HORRIFYING WORKPLACE CONDITIONS

    http://www.mirror.co.uk/news/uk-news/amazon-bosses-give-exhausted-staff-11629106

    Ya won’t read this in the Seattle Times….LOL

  86. 336

    RE: Kary L. Krismer @ 333
    I heard its a minority of 20% of rich elite wealthy sucking at the federal tax dollar milk outlet tax deductions…

    Personally, retired and on a fixed income; my federal taxes went down approximately $2-4K, the biggest raise I ever got in my whole life…plenty of cash to save and even some goes to Washington State local taxes through more consumer purchases I make not online because of the wealth effect.

  87. 337

    RE: softwarengineer @ 335 – Well clearly it’s the more wealthy that benefit the most from the MID, although I think at lot of that is also what we would consider the middle or upper-middle class. Not only can they afford higher mortgages, but their tax rates are also higher.

    Not sure what the bias is of this site, but it purports to show which states benefit the most–and not surprisingly Washington is fairly high up.

    https://taxfoundation.org/home-mortgage-interest-deduction-state-2017/

  88. 338
    jon says:

    I happen to think that a sales tax makes a lot more sense than an income tax, but canceling the income tax for just one company seems like one of the worst ideas.

    “Chicago wants to give over $1 billion in taxes from workers at Amazon’s new headquarters back to Amazon”

    http://www.businessinsider.com/amazon-headquarters-hq2-city-incentives-taxes-2017-11

    It boggles the mind what a bad idea that it is. How do they plan to provide services to the new residents? The recognition that an income tax drives successful companies away is refreshing, but why not make it across the board, like you know, Washington state does?

  89. 339
    ronp says:

    RE: boater @ 332 – It does seem somewhat unique that Google will soon have 620,000 sq feet next to Lake Union and 375,000 in Kirkland. Facebook has 250,000 sq ft (?) just a five minute Lime bike ride away on Dexter, Amazon Doppler, Day One, Rufus etc, also a bit farther — a 8 minute bike ride from Google lake union or Amazon on Dexter?

    Light rail to Redmond will be done in 2023, should take 34 minutes, Westlake to Microsoft. Really no need to drive a car anywhere if you have software skills. Would be nice if we had more mid rise two and three bedroom apartments close to transit for people who are not too excited about single family detached housing and car commutes.

  90. 340
    ess says:

    RE: jon @ 337

    Jon – don’t worry about Chicago and their ability to provide services – the financial multiplier effect of each job that Amazon potentially brings to any area will offset any tax goodies that any jurisdiction is willing to part with in wooing Amazon to their location. It will be all the new jobs that the Amazon business creates locally that will bear the brunt of taxes.
    Amazon understood it was growing at such a fast rate that Seattle could not accommodate their space requirements regardless of the local political and tax climate. A stroke of genius in having a public competition for an additional location, and calling it a second but equal headquarters. Amazon is probably licking its chops as to the future tax savings and economic benefits it will reap in its “second” headquarters. In addition Amazon will be able to plan for future benefits from both Seattle and Washington State by threatening to relocate more jobs to its “second headquarters. It is Boeing 787 and South Carolina all over again. There is a reason why Amazon has grown into one of the great companies of all time in such a short time.

  91. 341
    jon says:

    By ess @ 339:

    RE: jon @ 337

    Jon – don’t worry about Chicago and their ability to provide services – the financial multiplier effect of each job that Amazon potentially brings to any area will offset any tax goodies that any jurisdiction is willing to part with in wooing Amazon to their location.

    That argument would be more convincing if Chicago was showing a tax surplus on the jobs they had already, such that they demonstrate they could make a return on such an investment. In fact they are circling the drain of insolvency, and so it is a desperate last gasp to sucker in some deep pockets into the city upon which they will raise taxes on later to pay for their unpaid pension plans.

  92. 342

    By jon @ 337:

    “Chicago wants to give over $1 billion in taxes from workers at Amazon’s new headquarters back to Amazon”

    Amazon might actually break even on that, after accounting for training expenses to replace employees who get shot. And they won’t need non-compete agreements.

  93. 343

    Its Not Just New York

    They’re leaving Sanctuary State California in orange groves too because of high local taxes there. Seattle sports a lot of retirees keeping things a bit more stable [?]…..but that won’t last long [they die].

    http://beta.latimes.com/local/california/la-me-lopez-vegas-transplants-20171203-story.html

  94. 344
    Justme says:

    http://www.seattletimes.com/business/signs-hint-at-slowdown-in-regions-economy/

    The Seattle Times in Washington. “The strong economic growth of Seattle and Washington state appears to be downshifting. This assertion comes with plenty of qualifiers and questions, but early data are undeniable. I’m also skeptical that slower growth, or even an outright recession, would have much long-term effect on house prices in the city or the most desirable parts of the metro area. We’re now part of the enduring West Coast levitation seen from San Diego to San Francisco, lately in Portland, seemingly forever in Vancouver, B.C.”

    “On the other hand, a growth slowdown might hurt. If it gets weak enough, we land in a ‘growth recession.’ That’s not an actual recession, where output goes into negative, but a slowdown significant enough that it shocks the economy. If a car suddenly goes from 90 mph to 25, you’ll feel it. Your face might hit the dashboard.”

    The above is funny stuff. Columnist Jon Talton can prevaricate just as well as some of the seattlebubble regulars from the rentier class.

  95. 345
  96. 346
  97. 347
    whatsmyname says:

    RE: Justme @ 343
    You are right. Talton has it totally wrong. He has confused velocity with acceleration. This is not like going from 90 to 25. This is like going from 90 and accelerating to 93, to going 93 and accelerating to only 95.

    I feel safer knowing that you are out there watching. :)

  98. 348

    Its Time for SWE’s Investor Report for Non 2017

    Nov 0.19% (0.11%) 3.07% 2.90% 1.06%
    YTD 2.12% 3.33% 20.49% 17.67% 23.44%
    Last 12 mo 2.33% 3.49% 22.87% 19.80% 27.69%

    Long term CDs, Long term Bonds, US Stocks, Foreign Stocks, Foreign Stocks

    Trump’s agenda did not make stocks sky rocket since his election…..it was all Obama’s credit….LOL

    How long will this red hot bull market last under Trump? My estimate, assuming we take back our i.e., Manufacturing Engineering from Japan control of Boeing’s 737 fabrication; forever. It will slow down when outsourcing corrections “jobs back to America” are complete.

  99. 349

    By softwarengineer @ 345:

    How long will this red hot bull market last under Trump?

    I watched the Sunday morning news shows this week to see what they’d say about the tax bill. One argument I found surprising, I think by George Stephanopoulos if I recall correctly, is that the tax bill wouldn’t generate the GNP gains because we’re already 7-9 years into a recovery and that’s about as long as they ever last. It struck me as odd that someone opposed to the tax bill would set up the argument in advance that if the economy falters it’s not the Republican’s fault, or if the economy goes great the next 8 years that it was due to the Republican tax cuts.

  100. 350
    uwp says:

    RE: Kary L. Krismer @ 346 – Maybe he was being honest instead of trying to couch it all in politics? Shocking, I know!

    (Also, Neoliberals, like Stephanopolus, love corporations and tax-cuts almost as much as the GOP does, they just might want to structure them a little different.)

  101. 351
    Insights says:

    RE: Insights @ 343 – Why is my comment is waiting moderation?

  102. 352
    Cap"n says:

    Low and mid tier also rising due to Chinese buyers!

    “Investigators say the way this works is that suspects find average homes, pay for them with cash, move in and fill them with marijuana plants.”

    http://komonews.com/news/local/big-grays-harbor-county-bust-80m-in-pot-54-arrests-and-counting

  103. 353

    By Kary L. Krismer @ 333:

    This letter from Gov Inslee was mentioned on the news tonight. In it he claims that only 30% of Washington tax filers deduct state and local taxes. . . .
    http://www.governor.wa.gov/sites/default/files/Gov%20WSAC%20ltr%20to%20Delegation%20re%20SALT%2010.23.17.pdf

    I wonder how low that number would go if the tax bill passes with a doubling of the standard deduction (assuming also no change in the mortgage interest deduction).

    Apparently the 30% is also a national figure (or Inslee maybe was using a national figure but not realizing that). This NYT’s article indicates some expect the number itemizing to drop to 10%. That in effect would mean that 90% of tax payers would be better off under the new tax bill (whichever one they’re discussing) due to the increase in standard deductions, as long as their rates weren’t going up too. Note some of this article only pertains to high income (>$200,000) taxpayers.

    https://www.nytimes.com/interactive/2017/12/05/us/politics/tax-bill-salt.html

    Also there’s a nice graph in there which shows how this benefits Republican states and harms Democratic stats, which is probably what you would expect from partisan legislation. At the same time though, there really isn’t a good policy reason to have any SALTs deductible. Why should one person making $100,000 a year pay less in taxes than another person only because they live in a jurisdiction which imposes higher taxes on its citizens?

  104. 354
    uwp says:

    By Kary L. Krismer @ 353:

    At the same time though, there really isn’t a good policy reason to have any SALTs deductible. Why should one person making $100,000 a year pay less in taxes than another person only because they live in a jurisdiction which imposes higher taxes on its citizens?

    Because the GOP has a strange obsession (or at least used to) with money being “taxed twice.”

  105. 355

    By uwp @ 354:

    By Kary L. Krismer @ 353:

    At the same time though, there really isn’t a good policy reason to have any SALTs deductible. Why should one person making $100,000 a year pay less in taxes than another person only because they live in a jurisdiction which imposes higher taxes on its citizens?

    Because the GOP has a strange obsession (or at least used to) with money being “taxed twice.”

    I think there’s a difference between being taxed at the state and federal level and being taxed twice at the federal (or state) level. And I’m not sure it’s Republicans that have that issue as much as it’s economists. It puts more of a burden on the economy.

    But if you don’t like that example, why should someone making $100,000 a year pay more in taxes than someone else because that someone else pays $20,000 a year in property taxes?

  106. 356
    wreckingbull says:

    By jon @ 338:

    “Chicago wants to give over $1 billion in taxes from workers at Amazon’s new headquarters back to Amazon”

    This is a great real-world example of the sickness and corruption that exists in Chicago. Chicago taxes all the Amazon employees, but rather than spend that tax money on services that would serve those residents and others, they instead pay that money directly to Amazon.

    Chiraq, indeed.

  107. 357
    uwp says:

    RE: Kary L. Krismer @ 355 – It’s true Kary, there is no defense of this bill. It’s stupid. They played around trying to get the most corporate tax cut they could, while trying to minimize (somewhat) the PR damage of what they are doing on the income tax side, rather than stopping to think about what good reform would look like. The idea that this is going to simplify things is hilarious. I’m already schedule C, so it isn’t going to be too tough for me to get something out of this, but I’m sure the accountants and lawyers are pretty excited about the rush of new business coming up. There aren’t really any conservatives who like this bill.

    The GOP is squandering their big chance at tax “reform” for this. Is there any good reason they feel the need to rush it? Just to get the “win?”

  108. 358

    RE: uwp @ 357 – This is an interesting article about how the tax plan is front loaded and could cause issues here and abroad. The concern here is that it might cause too much growth too quickly (assuming I guess that things don’t slow down before it goes into effect). The concern abroad is that it might disrupt things as money flows back into this country (and in a rush to be able to do so before currency rates are impacted).

    http://www.telegraph.co.uk/business/2017/12/04/us-tax-shake-up-risks-dollar-shortage-global-funding-shock/

    Note you will have to register to read the entire thing, but by doing so you can read one of the “premium” articles per week.

  109. 359
    Green-Horn says:

    RE: Kary L. Krismer @ 358

    Thank you so much for sharing this.

    I was recently thinking of reallocating some of investments over to Europe because Wall Street and the $USD are both looking so toppy.

    European shares will probably do well because of the USD appreciation makes their exports more competitive…

    Perhaps worth considering a hedged Europe fund that protects the appreciation of the stock holdings in USD terms?

  110. 360
    Green-Horn says:

    By Kary L. Krismer @ 353:

    By Kary L. Krismer @ 333:

    This letter from Gov Inslee was mentioned on the news tonight. In it he claims that only 30% of Washington tax filers deduct state and local taxes. . . .

    I wonder how low that number would go if the tax bill passes with a doubling of the standard deduction (assuming also no change in the mortgage interest deduction).

    Apparently the 30% is also a national figure (or Inslee maybe was using a national figure but not realizing that). This NYT’s article indicates some expect the number itemizing to drop to 10%. That in effect would mean that 90% of tax payers would be better off under the new tax bill (whichever one they’re discussing) due to the increase in standard deductions, as long as their rates weren’t going up too. Note some of this article only pertains to high income (>$200,000) taxpayers.

    Also there’s a nice graph in there which shows how this benefits Republican states and harms Democratic stats, which is probably what you would expect from partisan legislation. At the same time though, there really isn’t a good policy reason to have any SALTs deductible. Why should one person making $100,000 a year pay less in taxes than another person only because they live in a jurisdiction which imposes higher taxes on its citizens?

    I was going to share that article too; you beat me to it!

    Really an excellent interactive infographic!

    Worth checking out!

    Can’t help smiling because if you look at the big chubby blue blob on the lower right hand corner of the first graphic, it’s quite clear that King County makes out like a bandit from the elimination of the State and Local Tax Deduction. We’ve been spared the consequences by far more than any major county.

    Analysis.

    The effect of the plan, should it become law, puts more money into the pockets of area earners without any serious deleterious countervailing consequences from the lost deductions. Furthermore it makes the gross income area employers pay their people MUCH more effective for what ends up as net income that could be spent on housing compared to the situation other leading competing regions. Shocking to see that the AVERAGE SALT deductions alone claimed in the Bay Area range from >$45K in Alameda County, $54K in Contra Costa Country, $71K in Santa Clara Country, $89K in San Francisco County & $96K in San Mateo County.

    Ouch! Living in the Bay Area and Silicon Valley just got a whole lot more expensive!

    Predictions?

    An accelerating exodus from California to Texas and Washington as more high earners flee taxes?
    This may actually unfold more rapidly than any can imagine as many homeowners try to sell quickly to beat the rush before they’re caught in a spiraling downdraft of home prices.
    If they take the proceeds from sales and then use them to bid up prices in hot markets like Seattle’s with already stretched inventory, the consequences could be quite dramatic. Increasing the holding period for the personal residence capital gains tax exclusion could make this effect even more acute as some local homeowners are encouraged to hold on for another year or two before selling in order to qualify… further restricting new supply coming on to the market.

    A long term effect could also be expected as employers recognize the increased attractiveness of Texas and Washington in selection for business operation locations in order to compete for talent because the gross income they pay will go much further without the state and local tax burden in competing states.

    It also looks like the GOP might just give places Dallas & Austin, and perhaps Florida, a nice boost in the race for Amazon’s HQ2.

  111. 361
    Green-Horn says:

    RE: Kary L. Krismer @ 353

    I was going to share that NYT tax-bill-salt article too; you beat me to it!

    Really an excellent interactive infographic!

    Worth checking out!

    Can’t help smiling because if you look at the big chubby blue blob on the lower right hand corner of the first graphic, it’s quite clear that King County makes out like a bandit from the elimination of the State and Local Tax Deduction. We’ve been spared the consequences by far more than any major county.

    Analysis.

    The effect of the plan, should it become law, puts more money into the pockets of area earners without any serious deleterious countervailing consequences from the lost deductions. Furthermore it makes the gross income area employers pay their people MUCH more effective for what ends up as net income that could be spent on housing compared to the situation other leading competing regions. Shocking to see that the AVERAGE State and Local Tax Deductions alone claimed in the Bay Area range from $45K in Alameda County, $54K in Contra Costa Country, $71K in Santa Clara Country, $89K in San Francisco County & $96K in San Mateo County.

    Ouch! Living in the Bay Area and Silicon Valley just got a whole lot more expensive!

    Predictions?

    An accelerating exodus from California to Texas and Washington as more high earners flee taxes?
    This may actually unfold more rapidly than any can imagine as many homeowners try to sell quickly to beat the rush before they’re caught in a spiraling downdraft of home prices.
    If they take the proceeds from sales and then use them to bid up prices in hot markets like Seattle’s with already stretched inventory, the consequences could be quite dramatic. Increasing the holding period for the personal residence capital gains tax exclusion could make this effect even more acute as some local homeowners are encouraged to hold on for another year or two before selling in order to qualify… further restricting new supply coming on to the market.

    A long term effect could also be expected as employers recognize the increased attractiveness of Texas and Washington in selection for business operation locations in order to compete for talent because the gross income they pay will go much further without the state and local tax burden in competing states.

    It also looks like the GOP might just give places Dallas & Austin, and perhaps Florida, a nice boost in the race for Amazon’s HQ2.

  112. 362
    Kmac says:

    Not sure if this had been mentioned already, but Moody’s is seeing supply/demand imbalances in US office space.
    https://www.moodys.com/research/Moodys-Supply-demand-imbalances-in-US-office-markets-credit-negative–PR_376304

    Among the six largest US CBD office markets, San Francisco and Seattle have the biggest supply-and-demand imbalances, and their vacancy rates are likely to double to more than 12% in the next three years. Vacancy rates in New York, Chicago, Boston and Washington, D.C. will rise between 1% and 2% during the same period. Additionally, cap rates have recently risen in all six markets, signaling a turning point in both the CRE capital markets and the market for CRE space. “

  113. 363
    jon says:

    RE: Green-Horn @ 360RE: Green-Horn @ 360 – Those average deductions are eye-popping. Those governments have been able to spend that much because the federal government has been picking a large part of the tab for the taxpayers. That will come to an end as those taxpayers start paying the full bill.

    The rationale for not taxing SALT payments is of course the government shouldn’t tax money that the taxpayer doesn’t have. But in some cases, the taxpayers are voting for their local government to spend money on their behalf so that taxpayers can deduct it. High-end public schools instead of non-deductible private schools, for example. There will be a lot of pressure to rein in state and local spending. There will also be a lot of high-income people moving out of those areas, which puts even more pressure on fixed government costs such as existing debt and pension plans. Those costs will make it hard to lower taxes.

    The famous argument that the blue states get less net federal benefits than red states is flawed because it is really caused by retirees moving out and collecting federal benefits in low tax states. This dramatic infographic also shows that another reason to doubt arguments is the large amount of deductions being claimed by taxpayers in the blue states.

  114. 364
    Rupert D says:

    Illinois – 4.9% state income tax rate; second highest property taxes in nation behind New Jersey; eg., $500k house = $1,000 a month in property taxes/$800k house = $1,400 a month in property taxes. Cook County (Chicago) sales tax >10%. IL worst state bond rating of all 50. California same or worse than Illinois on all accounts except bond rating. Easy to see why people would move from California to Seattle. IL also leading or near top of all states in out migration. Not sure where CA stands.

  115. 365
    Erik says:

    At this pace inventory for houses will be under 1000!

  116. 366

    By Erik @ 362:

    At this pace inventory for houses will be under 1000!

    With a median CDOM of over 120.

  117. 367

    By Green-Horn @ 360:

    Can’t help smiling because if you look at the big chubby blue blob on the lower right hand corner of the first graphic, it’s quite clear that King County makes out like a bandit from the elimination of the State and Local Tax Deduction. We’ve been spared the consequences by far more than any major county.

    Thanks for locating that blob! Average SALT deduction in King County just over $17,000. The analysis for single and married bifurcates and unfortunately this data doesn’t break that out, But ignoring that, for married couples filing jointly the increase in standard deduction to $24,000 could help over 70 percent (80-90 percent?) of the married couples in the county, and also make filing their taxes easier. Singles will not do nearly as well, and might be harmed. But that’s the nature of tax reform vs. tax reductions. Reforms help some and hurt others.

    Of course that won’t keep NAR and the Democrats from releasing their propaganda about how bad the elimination or reduction of SALT and MID will be.

  118. 368
    uwp says:

    That $17,000 average SALT deduction for King County is for “Tax returns for filers earning $200,000 or more,” so not representative of everyone taking the deduction. Also an average rather than a median, so even more skewed by the upper end.

    If they are going to cap the deduction at $10,000, I would prefer to see it capped at 10k for all SALT, rather than the current proposal of capping property tax deduction at 10k and removing income/sales tax deduction completely. Is there a reason why we should give preference to property taxes over the others? (Also, I prefer it for selfish reasons, having property taxes under the 10k limit, but losing the sales tax deduction.)

  119. 369

    RE: uwp @ 365 – Thanks–I’d noted that $200,000 part yesterday, but had forgotten about that when posting today. The 70% number was based on Inslee’s letter referenced in post 334.

    I’d prefer they just do away with SALT because it gives local politicians a misleading argument about their taxes (“It’s this amount, but you can deduct it from your income tax.”) Also I don’t see why low tax states should effectively subsidize high tax states. But I would agree with you there’s little reason to allow one type of tax and not another if you’re going to allow some.

  120. 370
    Erik says:

    RE: Kary L. Krismer @ 363
    In Somolia, people eat garbage off of garbage trucks to survive. In Seattle, people buy garbage homes to survive.

  121. 371
    uwp says:

    By Erik @ 367:

    RE: Kary L. Krismer @ 363
    In Somolia, people eat garbage off of garbage trucks to survive. In Seattle, people buy garbage homes to survive.

    In Everett, people are garbage and rarely survive.

    Heyoooo!

    (I only did that for Erik, these statements do not represent the views of this commenter)

  122. 372
    Matt P says:

    RE: Kary L. Krismer @ 366
    But this isn’t true. The high tax states of NY and CA actually subsidize most of the other states. This may actually change some states from red to purple if democrats flee high tax states for lower tax ones now that the salt deduction is being removed.

  123. 373

    RE: Matt P @ 369 – I’m not talking about who pays the most tax. I’m talking about states which get the most benefit from the deductions.

    Another two person example–why should one person making $100,000 in State A pay more federal income tax than a person making $100,000 in State B, if the only difference between them is State B has higher taxes? Or stated differently, why should the federal government collect less from the person in State B? It’s not nearly as bad as the subsidy of foreign income taxes, where it’s a credit rather than a deduction, but it’s still a subsidy.

  124. 374
    Jon says:

    By Matt P @ 369:

    RE: Kary L. Krismer @ 366
    But this isn’t true. The high tax states of NY and CA actually subsidize most of the other states.

    A comment I made early but did not show up mentioned that. It only appears like high taxes states subsidize the others but if you look at it in a little more detail it is because of lower retirement payments. When people are working, they pay into social security. When they retire, they often move to a low tax state to receive their benefits. The high tax deductions actually show that the federal government has been picking up part of the tab for high spending localities.

  125. 375

    The NWMLS King County numbers are out. Active listings at 1,879, and the YTD new listings are down about 700.

    Closed sales were 2,224, and the YTD is up about 200 (YOY about even). The median is $630,750, which is up about $80,000 YOY.

    So basically higher prices but that is not resulting in more listings.

    One thing interesting, the pendings are almost exactly equal to last year, but the YTD is down about 1,200. So seemingly more transactions were failing in 2016 than 2017.

    Numbers from NWMLS sources, but not guaranteed, and I might have mis-typed or mis-read a number. Numbers all King County SFR.

  126. 376
    Erik says:

    RE: uwp @ 368
    Live in North Everett for 5 years and then talk to me. You will change your tune. I did 6 years of hard time there. I will live on the streets before I go back.

  127. 377
    David says:

    Are homes selling at this time? What about in markets like White Center and Burien?

    RE: Kary L. Krismer @ 372

  128. 378
    Deerhawke says:

    Until Tim does the posting for this month, you can get some good information from the breakouts published every month by the MLS. Page 2 gives the information on residential, non-condo sales.

    http://www.northwestmls.com/library/content/statistics/KCBreakouts.pdf

  129. 379
    Erik says:

    RE: Deerhawke @ 374
    Big shout out to the 140 and the 720.

  130. 380

    RE: uwp @ 365RE: Cap”n @ 352
    The Votes Against Tax Deduction Elimination is a Moot Point Anyway

    Only about 20% of the legal American voters use tax write-offs….the standard deduction exceeds the deductions…IOWs this minority of ‘Seattle Home Owner” rich elite better get used to eating more delicious federal tax cake…..LOL

  131. 381
    GoHawks! says:

    Has this real estate market killed Seattle Bubble? Miss new posts…..

  132. 382
    boater says:

    RE: GoHawks! @ 377
    I’m torn. On one hand posting new threads in the absence of real news or data is just chatter. On the other hand without new threads the site seems like it’s dying appealing to only a few had core readers/posters. It feels like the site has moved from Tim’s passion to his obligation and on maintenance mode.

  133. 383

    RE: boater @ 378 – If you think about it, not much has really changed in the market in the past three years. The numbers have just become more extreme under these conditions, but there’s been nothing disruptive to the market. Even the banks, the legislature and the courts have pretty much maintained the status quo (with the possible exception of clarifying the benefits of inspections). So all we have are numbers which keep trending either higher or lower.

    I was always amazed at Tim’s ability to post a new topic virtually every day. I suspect that caused a bit of burn out. Personally I had been keeping a database of NWMLS monthly numbers over the years, but I quit doing that at the end of 2014, but not because of burn out. I just realized the limited use of long-term stats to reflect market health.

  134. 384
    esskar says:

    Kary, you stated below:

    RE: boater @ 378 – If you think about it, not much has really changed in the market in the past three years. The numbers have just become more extreme under these conditions, but there’s been nothing disruptive to the market.

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

    When the Democratic legislative majority introduces a bill to overturn rent control in Washington state, there will be lots to discuss!! Now, that would be disruptive!!

    https://www.seattletimes.com/business/real-estate/rent-control-in-seattle-bill-to-repeal-statewide-ban-in-the-works/

  135. 385
    Ron Swanson says:

    RE: boater @ 378 – maybe Tim is rich now with all his Redfin IPO money he doesn’t need to post as frequently. :p

  136. 386
    Green-Horn says:

    RE: boater @ 378

    In my opinion moving discussions to the forum would be much more useful.
    Tim could even encourage this by putting links inside each of his articles to the relevant sections of the forum, where various specific issues are already being discussed.

    That way various threads dedicated to specific topics could stay alive rather than comments getting lost in the scrum of discussion in the comments attached to old archived posts.

    Buried in all these comments are many interesting insights that can’t be found by new and returning readers because they aren’t sorted by any logical theme. So unless one is following the latest discussion, one might miss it.

    Another benefit of moving things to the forum, is that it could offload some of the responsibility for making in depth contributions from the site’s initiator and host. There’s a lot of deep experience and knowledge here and it would certainly be interesting for the participants to have a chance to post longer in depth features exploring various issues from their expertise. So even if Tim gets busy, others in the community could step in and report about the market news and their own analysis.

  137. 387
    boater says:

    RE: Ron Swanson @ 381 – I hope so. He certainly built something good here.

  138. 388
    wreckingbull says:

    RE: esskar @ 380 – Seattle real estate has become pretty boring, but one other subject which I find interesting is what, if anything, city leaders will do to reintroduce entry-level housing into the mix. The problem lies squarely with poor legislation, both state and local.

    The answer to this could very well be ‘nothing’, as they prefer a renting population, but I don’t see that as a good long-term strategy.

  139. 389

    RE: wreckingbull @ 384 -First, I don’t understand your rental comment. Clearly both rentals and property designed more for sale need to increase. Prices are high in both markets.

    I “attended” a WSBA CLE on real estate issues last week, and they covered a lot of the issues surrounding growth. Beyond a lack of proper planning for growth (which apparently the GMA requires), they consistently blamed also the lack of building for several years after the peak. Not only did that directly lead to a shortage (it’s not like population growth changed in a corresponding fashion during those years), but also they claimed that much of the labor force in that industry found other ways to make a living.

    It’s sort of like the situation with cars, where car manufacturers know that eventually buyers will return (because their cars will wear out), but the difference being that car manufacturers don’t cut back on their production to the same extent as what happened in housing.

    Oh, and I almost forgot. A representative of the City of Seattle was there, and she explained how she thought it was “fair” that sellers of property would pay a higher REET tax to fund low income housing. At least she didn’t use the language of City Council members to the effect that it would be a good opportunity for them to do so. But yes, Seattle has its eyes in increasing the REET (.25%), but this time seems to understand that they need the legislature to approve that.

  140. 390
    ess says:

    By wreckingbull @ 384:

    RE: esskar @ 380 – Seattle real estate has become pretty boring, but one other subject which I find interesting is what, if anything, city leaders will do to reintroduce entry-level housing into the mix. The problem lies squarely with poor legislation, both state and local.

    The answer to this could very well be ‘nothing’, as they prefer a renting population, but I don’t see that as a good long-term strategy.

    There was once a famous comic strip called Pogo drawn by Walt Kelly, whose protagonist once stated:

    “We have met the enemy and he is us.”

    Government bureaucrats and political activists groups, at all levels of political activity can assuredly look in the mirror and say to themselves:

    “We have met the cause of both expense and a shortage of housing, and that cause is us”

    But they never will – always easier to blame the issue on greedy developers and landlords.

  141. 391
  142. 392

    RE: ess @ 387 – Seattle better hope that state politicians don’t start thinking like they do. State politicians might think it would be “fair” if the legislature passed legislation which reduced a city’s share of the REET tax by 75%, but only for cities over 300,000. That money could go to the state to help balance the budget. They might be able to find other large city local taxes which it would be “fair” for the state to dip into which would be an excellent “opportunity” for Seattle to help with the state’s budget issues. About the only Seattle-like argument that state politicians couldn’t make is that if Seattle doesn’t like it, they can move.

  143. 393

    I’m reading somewhere that the “must own 5 of the last 8 years” vs 2 of the least 5 years to be exempt as to capital gains on the sale of your prinicipal residence is effective for any sale after Jan 1, 2018. Is this true. Is it a fait accompli already? No future effective date?

  144. 394

    RE: Ardell DellaLoggia @ 389 – At this point nothing has passed, so nothing is in effect. I’m not even sure if there’s a difference in that between the House or Senate, or if that even matters. Both the House and Senate agreed to a 20% corporate tax rate, and the greatest negotiator suggested that they might compromise on 22%.

  145. 395
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 390

    Thanks Kary. That’s what I was thinking before I saw someone tell a seller they had to sell by year end. My next listing is in Jan by Feb 1 and I told them to stay on top of it. We have that new 30 day rule but I’ll likely have the Listing signed end of Dec. just in case it helps somewhere down the line even if it doesn’t meet that 30 day rule by a few days. There’s not much we can do if it passes and becomes retroactive to Jan 1 somehow. But I’m hoping not.

  146. 396
    district says:

    Is the sky falling yet?

    https://www.seattletimes.com/business/amazon/amazons-seattle-hiring-frenzy-slows-sharply-whats-going-on/

    Just shaking things up! It’s boring when the bears have nothing to talk about.

  147. 397

    RE: ARDELL DellaLoggia @ 391 – I’ve looked at this a bit more this morning, but before going into what I found I would remind you that this is an area where you’re required to refer the clients to another expert. Even under the current law not all sales are tax free if the time period is met. So it’s not like a real estate agent should ever say: “Since you’ve lived in your house X years you can sell it tax free.”

    As to what I found, here is a link to the text of the Senate Bill (I believe). https://www.finance.senate.gov/imo/media/doc/12.2.17%20HR%201.PDF

    If you search for “Residence” you’ll quickly get to the applicable section, and that indicates sales after 1/1/18 are subject to the new rules, but it creates an exception for sales subject to a binding contract prior to that date. I don’t know if the House bill has similar provisions, but it wouldn’t surprise me. And again, since this hasn’t passed we don’t know what will really happen until it does (or until it fails entirely).

    Also, in searching for this I noted that one of the bills also includes some sort of an income limitation for this exception. That is yet another reason to refer clients to tax professionals.

  148. 398

    RE: Kary L. Krismer @ 393 – Here’s the operative language in the Senate Bill:

    Paragraph (1) shall not apply to any sale or exchange with respect to which there was a written binding contract in effect before January 1, 2018, and at all times thereafter before the sale or exchange. (Emphasis mine.)

    I was having a hard time understanding what they were getting at in the emphasized portion, but now I think it is this (and maybe more). Any amendments extending the time to close would need to be executed before the contract expired. That could be a trap for the unwary, particularly in a situation where a necessary delay in closing was not known about until the last minute.

    BTW, Ardell, this is an excellent issue you raised.

  149. 399
    Justme says:

    By district @ 392:

    Is the sky falling yet?

    https://www.seattletimes.com/business/amazon/amazons-seattle-hiring-frenzy-slows-sharply-whats-going-on/

    Just shaking things up! It’s boring when the bears have nothing to talk about.

    Well, well, well. Hugh Dominic seems to have known about the redundandcies (layoffs) mentioned in the ST article already on Nov 20! Beary Christmas, everyone.

    By Hugh Dominic @ 235:

    2018 is going to be interesting due to the upcoming cuts at Amazon.

  150. 400
    Kmac says:

    RE: Justme @ 395

    Not sure if this had been mentioned already, but Moody’s is seeing supply/demand imbalances in US office space.
    https://www.moodys.com/research/Moodys-Supply-demand-imbalances-in-US-office-markets-credit-negative–PR_376304

    “Among the six largest US CBD office markets, San Francisco and Seattle have the biggest supply-and-demand imbalances, and their vacancy rates are likely to double to more than 12% in the next three years. Vacancy rates in New York, Chicago, Boston and Washington, D.C. will rise between 1% and 2% during the same period. Additionally, cap rates have recently risen in all six markets, signaling a turning point in both the CRE capital markets and the market for CRE space. “

  151. 401
    Justme says:

    RE: Kmac @ 396

    I had not seen that. Some bloggers like Calculated RIsk are taking the opposite tack, highlighting “momentum” and “leading indicators” for construction activity in the Commercial RE domain. No mention of vacancy rates and price pressure over there. And CR also shut down his comment section so that no alternate voice can be heard.

    http://www.calculatedriskblog.com/2017/12/leading-index-for-commercial-real.html

    I think CR has completely lost his marbles since the last bubble burst. Either that or he has loaded up on real-estate and is now just “talking his book”, as they say. Or maybe he is invested in construction now, I think his family used to be.

  152. 402
    uwp says:

    By Justme @ 397:

    I think CR has completely lost his marbles since the last bubble burst. Either that or he has loaded up on real-estate and is now just “talking his book”, as they say. Or maybe he is invested in construction now, I think his family used to be.

    LOL! CR basically just presents updates on figures with some light commentary. Clearly the facts are biased!

    McBride did a good job calling a bottom for housing: http://www.calculatedriskblog.com/2012/02/housing-bottom-is-here.html
    (As well as not calling a bottom early: http://www.calculatedriskblog.com/2009/07/housing-remember-two-bottoms.html)
    And has been correct in his “recession-watch” pieces for the last several years: http://www.calculatedriskblog.com/2017/04/update-predicting-next-recession.html (2013 through to now).

    The comment section there had been trash long before he shut it down. The folks there never gave up waiting for the next huge collapse that was coming (because 08/09 was just a precursor), I’m sure they have happily transitioned to Zerohedge.

  153. 403
    Erik says:

    RE: Ardell DellaLoggia @ 389
    Sucks! This will slow people down on making money with the 2 year buy and sell, which has gotten a lot of us poor folk a better life.

  154. 404

    By Ron Swanson @ 381:

    RE: boater @ 378 – maybe Tim is rich now with all his Redfin IPO money he doesn’t need to post as frequently. :p

    Maybe he’s started a new blog on Bitcoin. This is courtesy Jillayne.

    https://www.cnbc.com/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html?__source=twitter%7Cmain

  155. 405
    Blake says:

    US economy faces a painful comedown from its ‘sugar high’
    https://www.ft.com/content/41f4a510-dc4e-11e7-9504-59efdb70e12f

    Growth in the fourth quarter looks likely to hit 2.3 per cent, marginally higher than the consensus just before the 2016 election. Expectations for next year are only marginally greater today than they were before Mr Trump’s victory. So there has been no substantial lift in the economy. In fact, the US has trailed the global economy as other countries, notably in Europe, have seen greater upward forecast revisions.


    The suggestion that US fundamentals have improved is also called into question by the decline of the dollar, which has fallen by 8 per cent against the yen and 7 per cent against the euro since the Trump win. If something fundamental had happened to improve the business environment, we would have seen capital inflows and an appreciating dollar.


    The US stock market has risen by close to 25 per cent, largely due to increases in corporate profits this year…
    Despite record low capital costs and abundant corporate cash — both inducements to investment — productivity growth has been very slow. Even innovative companies such as Apple and Google cannot find enough high-return investments and so choose to engage in large-scale share repurchases.”

    The main problem…

    Inequality has increased and much of the growth has been captured by a small share of the population.

    There will be no meaningful and sustained growth in workers take-home pay without successful measures both to raise productivity and to achieve greater equality.”

    so…
    If the rich spent more of their money they could stimulate the economy, but they don’t. They put most of it into savings. And it’s just plain stupid to put through a massive tax cut when the economy is in the 8th year of expansion and unemployment rate is 4.1%!

    But the Repugs don’t think about that… they’re just taking and giving away billions to their friends and benefactors and leaving us with the bills!!! Boom and bust…

  156. 406

    RE: Kary L. Krismer @ 394

    Probably the most important issue for agents rights now, so silly for you to act like agents shouldn’t be on top of this and mentioning it to clients. Sure, as always, tell them as much as you can and then tell them to check with a professional. But we need to know as much as poosible.

    In my case as to my next listing, they can’t consider listing before Jan 6 or so and we are thinking Feb 1. But they couldn’t back it up to meet the new tax law even if they wanted to. So they know it will be what it will be, but I did bring this up ages ago when I first met them in case they could re-arrange the timing.

    IMPORTANT – There may yet be an exception for someone transferring or taking a new job across the Country, which is the case on mine. So even if they are prepared to pay a tax I still tell them to find the best tax person at time of filing as hopefully by then someone will be on top of this. Unfortunately I have had many situations over the last 27 years where I was more right than the lawyer and the tax person. Many. I had to go and explain it to them. So your advice falls on deaf ears because there are too many “professionals” out there giving bad advice.

    I once had a client I had to tell to take her house off the market the day after I listed it. I was newer in the biz. I asked if she had checked with a lawyer and tax person given her husband was dying in the living room and she was a bit old but not real old. She said yes she had.

    I learned she was SIX MONTHS from the age she needed to be to get a tax free gain under the old law and of course knew all along that she needed that stepped up basis on her dying husband’s portion. They had ZERO cost basis. his grandfather had build the house from sticks and stones or something. She double checked with the lawyer and the tax person and told them what I suggested and they were like “Oh yeah…she’s right.” This has happened to me enough times for me to proceed by telling them everything I think I know…and then telling them to check that with the lawyer and tax person and get back to me if the professionals disagree.

    You of all people know we need to do that. Lots of bad professionals out there in all fields. So I don’t know why we have had this 10 year argument about my not telling people anything outside of sign here and where does the for sale sign go. Ten years Kary. Give it up. LOL!

  157. 407
    whatsmyname says:

    Tim, are you still alive? Blink once for yes; twice for no.

  158. 408

    By Ardell DellaLoggia @ 401:

    RE: Kary L. Krismer @ 394

    Probably the most important issue for agents rights now, so silly for you to act like agents shouldn’t be on top of this and mentioning it to clients. Sure, as always, tell them as much as you can and then tell them to check with a professional. But we need to know as much as poosible.

    I’m not saying that agents shouldn’t mention it, I’m saying that they shouldn’t be giving advice (unless they also happen to be a tax attorney, CPA, etc.). Agents should absolutely mention it, and in fact I’ve been getting the word out to those who can get the word out.

    If you think a client is getting bad advice from a tax professional, you should not try to correct that advice, you should consult another tax professional and then have your client contact that professional. This issue can turn on more than how many years someone has lived in the house.

    Over half the agents in King County can’t even figure out the simple task of how to transmit documents by email, and you think that they should be giving tax advice?

    As to your example, if someone is clearly mentioning the old rule on sale of residence (which happens even today from time to time even though the law changed a very long time ago), then by all means yes let them know the law has changed. But don’t give them the result because there are exceptions to the general rule. Also if you throw poor health into the mix, how the property is held can affect the result on death.

    Oh, and finally it isn’t just me taking this position. It is Washington statutory law and the DOL.

  159. 409

    RE: Kary L. Krismer @ 403

    I give advice and tell them to double check that with an attorney and/or tax person and get back to me if they disagree so that I can follow up and find a different professional. I don’t want to choose their professionals unless necessary. So we are saying the same thing except yes…I do give advice…on most anything and everything. I don’t believe we get paid to be stupid or act stupid. This is really an argument I have with you, as I said for 10 years, and mostly about East Coast vs West Coast and Fiduciary vs Statutory duties. I believe, due to my many years as a fiduciary and on the East coast, that we are held to provide the highest standard of which we are capable. I understand that WA State views that differently, but given I already had the higher standard from working in other States and fields over the past 45 years, my highest standard is different. I’m sure you don’t pretend to know nothing about Bankruptcy legal issues even though you are answering as an agent and not a lawyer. Same for me. I can’t pretend to not know what I know. This comes up most often with accountants being wrong about what a buyer can deduct as to seller paid closing costs. In this market a non-issue, but rarely does an accountant get that right and yes I do correct them and they thank me. Teaching a professional something is like that “teach a man to fish…” quote. It helps many of his future clients. So people should not ever hold back with knowledge. Knowledge should be spread as much as possible. That’s why God made the internet. :)

    If an agent knows how to fix something in the house that is broken they should not pretend they don’t even though by your logic they should. It may be the law, but it’s not a neighborly thing to do. Every client is my “friend” and sometimes I give friendly advice with my agent hat off. Often, very often. I used to use an actual hat for that that I put on and removed. :)

  160. 410

    RE: Ardell DellaLoggia @ 404 – The only problem with your policy is that you are almost always wrong on legal matters! You have a horrible track record.

    Even though I’m an attorney, have a degree in accounting and sometimes help a tax professional on his technical articles, I still do less than you! I’ll state the general rule, but then note that there are exceptions and tell them to consult someone else.

  161. 411
    QA Guy says:

    I +1 on the comment about Amazon hiring slowdown in Seattle. It’s real. I go to amazon.com/jobs website once in a while and search for “sde” in Seattle area. A year ago and this summer the number of positions in search results was over 3000. It’s currently under 700. I don’t believe it’s necessarily related to reducing workforce or HQ2 announcement, but more of thinking along the lines “Hold on. Do we _really_ need 3 more engineers to keep this backend system up and running?”

    By district @ 392:

    Is the sky falling yet?

    https://www.seattletimes.com/business/amazon/amazons-seattle-hiring-frenzy-slows-sharply-whats-going-on/

    Just shaking things up! It’s boring when the bears have nothing to talk about.

  162. 412

    RE: QA Guy @ 406 – Could there also be some seasonality to it? Or maybe something related to opening the new building(s) in the Regrade area? Without historical charts or data I wouldn’t read too much into any one stat. Or if the data also includes fulfillment centers, something to do with both the season and that Kent center being open for over a year.

  163. 413
    QA Guy says:

    RE: Kary L. Krismer @ 407

    I was particularly looking for “SDE” jobs in the search area. This filters out fulfillment jobs or any other business area leaving only “software development” related jobs. It was “Seattle area”

    I definitely didn’t track historical trends on my searches. Kary, you have a good point here. All I remember is 3000+ SDE jobs in summer, 3000+ last winter and ~1500 jobs about 3 years ago.

    Amazon typically didn’t experience much seasonality in SDE job openings. At least, I never personally observed it. Fulfillment jobs on another hand are extremely seasonal, especially for holidays. Fall and winter usually had an uptick for SDE intern positions for next summer, but most of them would come directly through career fairs and never appear on jobs website. Source: I worked at Amazon.

  164. 414
  165. 415

    RE: Kary L. Krismer @ 405

    Haha…only in your opinion. LOL! Lawyers do not agree with you…at least the ones I have known personally for the last 45 years. You just choose to want to see “wrong” in pretty much everything. Just your rosy outlook on life. It seems to work for you, but your right vs wrong is a bit lopsided.

  166. 416

    Loan limit changes for King and Snohomish County. “King, Snoho and Pierce Counties, and Vancouver, WA, how have a “High-Balance” loan limit of $667,000.00 for SFRs, $853,900.00 for duplexes, $1,032,150.00 for triplexes, and $1,282,700.00 for fourplexes.”

    Pretty hefty numbers there. Over those amounts are the Jumbo Loans. Though Jumbo often has a better interest rate than non-jumbo, so sometimes better to put less down and go with the jumbo if the difference is small as to downpayment adjustment. But you need a lot more in reserves to go the lower jumbo rate route.

  167. 417
    N says:

    I’ve noticed some rental houses staying on the market a long time, one lowered from $2,800 to $1,850. Could this be part of the reason?

    Amazon’s Seattle hiring frenzy slows sharply; what’s going on?
    https://www.seattletimes.com/business/amazon/amazons-seattle-hiring-frenzy-slows-sharply-whats-going-on/

  168. 418
    Blake says:

    Seattle is a company town… once again. But now it’s Amazon.
    Hold on…

  169. 419
    mountainfamily says:

    RE: N @ 411 – I moved out of my rental and the landlords raised the rent. It didn’t rent. Dropped the rent back to what I had been paying. Still not rented. I think it’s just a slow time of year and there are a lot of new luxury apartments to choose from.

  170. 420

    By mountainfamily @ 413:

    RE: N @ 411 -there are a lot of new luxury apartments to choose from.

    I don’t follow the rental market, but is it safe to assume those new complexes offer some move-in incentives? Those could make it difficult for existing units if there are enough of them.

  171. 421
    GoHawks! says:

    It does appear the rental market is slowing. Been a lot of homes that have sold and immediately come up for rent the past year.

    Will Seattle Bubble no longer adding new content mark the peak of this real estate cycle!

  172. 422

    By GoHawks! @ 415:

    It does appear the rental market is slowing. Been a lot of homes that have sold and immediately come up for rent the past year.

    I’ve also noticed a lot of houses going the other direction–rented but put up for sale when the tenant moves. Some of these seemingly have been motivated by having messy tenants.

  173. 423
    N says:

    @413 mountainfamily, @415 GoHawks –

    My guess is the rental market is shifting BUT until we get into next summer its hard to say for sure. It makes sense given the 10k new units hitting the market in 2017 but time will tell. If Amazon all of a sudden has 100-200 LESS new hires PER WEEK that would explain a ton as well, but as the article states hiring may pick up again.

    Based on Zumper data Seattle 2 bedroom apartments are already down 9% from the April 2016 peak.

    https://wolfstreet.com/2017/12/01/rents-plunge-in-the-most-expensive-us-cities/

  174. 424

    RE: whatsmyname @ 315
    What Percent Of Your Progressive Slanted NWO “Dinky” Pay Check

    Is used for your mortgage noose house in Seattle? 60%? Even 40%?

    BTW….I’d have to see it in writing to believe it.

  175. 425
    Erik says:

    RE: whatsmyname @ 402
    I purchased this site from Tim for $42.17. First order of business is to block wreckingbull. Second order of business is to bring back the thumbs up and thumbs down feature.

    Oh and I was thinking of setting the maximum comment cap to 20 per user. What do you think?

  176. 426
    whatsmyname says:

    RE: custodialengineer @ 418 – Your post is not even tangentially connected to the post you claim to be answering. You know, of course, that while a mop and cleaning rag may be soft wares, they are not software per se.

  177. 427
    whatsmyname says:

    RE: Erik @ 419 – $42.17? This confirms my suspicion that we are in a bubble for bubble blogs. Still, if you sit tight, you will get it all back eventually.

    I really like the idea of bringing back the thumbs up and thumbs down. I’ll have to be more judicious in posting around that 20 comment cap, but I think I can do it.

  178. 428
    QA Observer says:

    By QA Guy @ 406:

    I +1 on the comment about Amazon hiring slowdown in Seattle. It’s real. I go to amazon.com/jobs website once in a while and search for “sde” in Seattle area. A year ago and this summer the number of positions in search results was over 3000. It’s currently under 700. I don’t believe it’s necessarily related to reducing workforce or HQ2 announcement, but more of thinking along the lines “Hold on. Do we _really_ need 3 more engineers to keep this backend system up and running?”

    By district @ 392:

    Is the sky falling yet?

    https://www.seattletimes.com/business/amazon/amazons-seattle-hiring-frenzy-slows-sharply-whats-going-on/

    Just shaking things up! It’s boring when the bears have nothing to talk about.

    Yep, it is real. I posed the freeze question to my Amazonian sister-in-law yesterday and she said that Amazon does this every year, but they really put on the brakes this year pending the HQ2 decision. She also confirmed that HQ2 decision is largely based on the company’s ability to pay staff lower salaries in a lower cost area.

  179. 429
    Toad37 says:

    QA- does she have an educated guess on hq2 location?

  180. 430
    Erik says:

    RE: QA Observer @ 422
    I never know the direction of my company or why they do what they do. It’s nice of Amazon to share high level secrets with their employees.

  181. 431
    Erik says:

    Good thing I went on a condo buying spree .

    http://nexusseattle.com/2017/12/13/king-5-news-says-seattles-condo-conundrum-worse-ever/

    I will only sell my condos for 2X the purchase price. I’d like to cut you a deal, but I have to make something here. Pay me 2X my purchase price now or pay me 3X my purchase price later. Keep complaining about low inventory and I’ll make it 4X.

    You computer geeks complained about low inventory since 2012. I pleaded with you to buy and you told me I was wrong. I bought all I could afford. Now I’m here to collect.

  182. 432

    By Erik @ 424:

    It’s nice of Amazon to share high level secrets with their employees.

    One of your best points ever. It’s amazing what people will believe when they want to believe.

  183. 433
    QA Observer says:

    By Kary L. Krismer @ 426:

    By Erik @ 424:

    It’s nice of Amazon to share high level secrets with their employees.

    One of your best points ever. It’s amazing what people will believe when they want to believe.

    It sure is. That is how and why religious faith is perpetuated.

  184. 434
    Kmac says:

    By QA Observer @ 427:

    By Kary L. Krismer @ 426:

    By Erik @ 424:

    It’s nice of Amazon to share high level secrets with their employees.

    One of your best points ever. It’s amazing what people will believe when they want to believe.

    It sure is. That is how and why religious faith is perpetuated.

    Or how about “it is different this time”?

  185. 435
    QA Observer says:

    By Erik @ 424:

    RE: QA Observer @ 422
    I never know the direction of my company or why they do what they do. It’s nice of Amazon to share high level secrets with their employees.

    “Leakers”, as is so commonly used these days, speak on condition of anonymity. It is ignorant to be a secret in the first place if that is what management intended it to be. Hint: *AWS sales staff, project and team managers*. And so it begins…

  186. 436

    RE: Kary L. Krismer @ 337
    True Kary

    But its Bill Gates’ types [top 0.1%] that control over half of America’s income….

    Percentage drops are the only comparison way to go, forget dollar tax drops…

  187. 437
    N says:

    @Erik 425 –

    Ha. I bet your stocking up on Bitcoin too right? double, triple your cost and you probably just bought these in 2017 right? What makes you think its logical to double and triple within a few years or for that matter that it goes straight up. Why are rents down 9% here, 12% in SF, 16% in NYC, 18% in Chicago and 29% in Honolulu. Not saying your wrong in the short run but its short sighted to think you can time it or to think those type of gains are nothing but filled with greed and risk.

  188. 438

    RE: whatsmyname @ 420
    Wannabe Engineer High School Level Microsoft Programmers

    Explain this chronic S/W problem with random failures caused by numerous causes with no science to track it….sound familiar to your laptop running with H-1B S/W….

    This is not engineering or inventive science…its witchcraft. Where do you think the term “corrupted S/W” came from? A college book? LOL

    Who hired the illegal hackers BTW requiring weekly patches and virus S/W? Bill Gates? LOL

    Ya haveta error on the side of caution with illegal Microsoft Hackers because ya can’t prove they didn’t hire ’em…

    Sounds like organized devil crime, not engineering. I could make a great Hacker BTW with my skill at second guessing human nature, but I won’t tell ya any of my personal secrets, I don’t use them and I won’t tell anyone. My engineering training is moot and useless for on-the-job training jobs like S/W development.

  189. 439

    By N @ 431:

    @Erik 425 –

    Ha. I bet your stocking up on Bitcoin too right? double, triple your cost and you probably just bought these in 2017 right? What makes you think its logical to double and triple within a few years or for that matter that it goes straight up. Why are rents down 9% here, 12% in SF, 16% in NYC, 18% in Chicago and 29% in Honolulu. Not saying your wrong in the short run but its short sighted to think you can time it or to think those type of gains are nothing but filled with greed and risk.

    The difference is real estate has some intrinsic value. No one has any need to ever buy Bitcoin any more than they need to buy a Pet Rock. The demand for Bitcoin could drop to zero in a millisecond. And yes there’s a limited supply to Bitcoin, but even that has issues. I distinguish between Bitcoin and futures in Bitcoin, where the latter have some value because there is likely some economic substance behind the futures contract. But I will note that even some things with economic substance can drop significantly in value–what happened to Auction Rate Securities in 2008 would be a good example.

    As to Bitcoin I’ll repeat what I said about the stock market before. To be successful in the stock market you don’t really need to understand the fundamentals of a particular company, you just need to be able to understand how other investors are going to view the company. That is even more true with Bitcoin, because there are no fundamentals.

  190. 440

    RE: QA Observer @ 422

    “She also confirmed that HQ2 decision is largely based on the company’s ability to pay staff lower salaries in a lower cost area.”

    Makes perfect sense. Pretty much anywhere except the West Coast.

  191. 441

    RE: Ardell DellaLoggia @ 434 – But you want a place that would be appealing to new recruits. So that rules out a lot of areas, the best example probably being El Paso.

  192. 442
    QA Observer says:

    By Kary L. Krismer @ 435:

    RE: Ardell DellaLoggia @ 434 – But you want a place that would be appealing to new recruits. So that rules out a lot of areas, the best example probably being El Paso.

    Interestingly, HQ2 may not be just for recruits. There are a number of internal surveys currently being circulated w/in Amazon asking personnel what other areas of the world you would like to live and work besides Seattle, and then asking them for top 5 priorites. Each survey they send out asks differ things to weed out biased tendencies. I’m sure there is some internal data aggregate formula that has been developed and the decision will have sort of weight relative to conglomerate.

  193. 443
    Erik says:

    RE: N @ 431
    Inventory is at an all time low and major credit expansion hasn’t occurred. We have a ways to go before we have another dump.

  194. 444

    By QA Observer @ 436:

    By Kary L. Krismer @ 435:

    RE: Ardell DellaLoggia @ 434 – But you want a place that would be appealing to new recruits. So that rules out a lot of areas, the best example probably being El Paso.

    Interestingly, HQ2 may not be just for recruits. There are a number of internal surveys currently being circulated w/in Amazon asking personnel what other areas of the world you would like to live and work besides Seattle, and then asking them for top 5 priorites. Each survey they send out asks differ things to weed out biased tendencies. I’m sure there is some internal data aggregate formula that has been developed and the decision will have sort of weight relative to conglomerate.

    Interesting, but that perhaps just reinforces my point. Location matters–it can’t just be anywhere where the cost of living is cheaper. I wonder how many of them said El Paso. ;-)

  195. 445
    N says:

    By Erik @ 437:

    RE: N @ 431
    Inventory is at an all time low and major credit expansion hasn’t occurred. We have a ways to go before we have another dump.

    Major credit expansion hasn’t occurred… you repeat over and over…but personal debt is at an all time high, yes greater than 2008. Mortgages are plentiful regardless of credit scores (Sure you need verifiable income but..). % of income spent on housing keeps going up up up. What do you attribute the drop in rental rates in major cities to? Greater supply?

    As I said I think your right in the short term but to think that double or triple your asset in a couple years and you think that’s normal is not a sign that things are sustainable. Never has been.

  196. 446
    Jens says:

    Given the NYT Article last year I think on AMZN – how the founding culture breeds a tattle tail culture where everyone is running around tattle tailing via text on anything from I don’t like the way they said what they said, or I didn’t like the look oh his/her face when they said that, or they used a word I didn’t understand that was too big, or they were not at their desk when I walked by, they did not return my text after 1 second, and so on – this is all a huge indication that you have way too many people that do not have enough of the right things to do. They need to take a step back and recalibrate what those armies of people are focused on that is productive and constructive instead of having so many people that they digress into 6 year old school yard tactics in order to compete.

  197. 447
    Blake says:

    By N @ 439:

    By Erik @ 437:

    RE: N @ 431
    Inventory is at an all time low and major credit expansion hasn’t occurred. We have a ways to go before we have another dump.

    Major credit expansion hasn’t occurred… you repeat over and over…but personal debt is at an all time high, yes greater than 2008. Mortgages are plentiful regardless of credit scores (Sure you need verifiable income but..). % of income spent on housing keeps going up up up. What do you attribute the drop in rental rates in major cities to? Greater supply?

    As I said I think your right in the short term but to think that double or triple your asset in a couple years and you think that’s normal is not a sign that things are sustainable. Never has been.

    It’s all about debt and expansion of credit – which is cyclical. Record levels now, surpassing previous records in 1999 and 2007. Remember then?

    And – as noted in the article below – the US market is being inflated by unprecedented inflows from overseas: Rest of World (ROW). Sustainable?

    http://creditbubblebulletin.blogspot.com/2017/12/weekly-commentary-q3-2017-flow-of-funds.html
    “Household Sector Assets inflated $1.920 TN during Q3 to a record $112.360 TN. And with Household Liabilities little changed at $15.241 TN, Household Net Worth expanded $1.922 TN during the quarter to a record $97.119 TN. Household Net Worth ended September at a record 498% of GDP. This is up from the 378% Q1 2009 trough level. It also surpasses the cycle peaks of 478% back in Q1 2007 and 435% in Q4 1999.

    Inflating a Bubble creates vulnerability to any slowdown in underlying Credit and attendant financial flows. And it’s the final parabolic speculative blow-off that seals a Bubble’s fate. It ensures market dependency to unusually large and inevitably unsustainable flows. The Fed’s latest Z.1 report does a nice job of illuminating the historic scope of the U.S. securities Bubble. U.S. securities markets have been on the receiving end of extraordinary international flows, while inflating securities and asset prices have spurred rapid financial sector expansion. ” (end quote)

    **Note that in the two “% of GDP” charts today’s numbers are compared to the previous two bubble peaks when things had gotten so far out of hand that the following year saw massive financial crises. So the fact that we’ve blown through those two previous records portends interesting times ahead.

  198. 448
    Blake says:

    By N @ 439:

    By Erik @ 437:

    RE: N @ 431
    Inventory is at an all time low and major credit expansion hasn’t occurred. We have a ways to go before we have another dump.

    Major credit expansion hasn’t occurred… you repeat over and over…but personal debt is at an all time high, yes greater than 2008. Mortgages are plentiful regardless of credit scores (Sure you need verifiable income but..). % of income spent on housing keeps going up up up. What do you attribute the drop in rental rates in major cities to? Greater supply?

    As I said I think your right in the short term but to think that double or triple your asset in a couple years and you think that’s normal is not a sign that things are sustainable. Never has been.

    By N @ 439:

    By Erik @ 437:

    RE: N @ 431
    Inventory is at an all time low and major credit expansion hasn’t occurred. We have a ways to go before we have another dump.

    Major credit expansion hasn’t occurred… you repeat over and over…but personal debt is at an all time high, yes greater than 2008. Mortgages are plentiful regardless of credit scores (Sure you need verifiable income but..). % of income spent on housing keeps going up up up. What do you attribute the drop in rental rates in major cities to? Greater supply?

    As I said I think your right in the short term but to think that double or triple your asset in a couple years and you think that’s normal is not a sign that things are sustainable. Never has been.

    It’s all about debt and expansion of credit – which is cyclical. Record levels now, surpassing previous records in 1999 and 2007. Remember then?

    And – as noted in the article below – US assets are being inflated by unprecedented inflows from overseas: Rest of World (ROW). Sustainable?

    http://creditbubblebulletin.blogspot.com/2017/12/weekly-commentary-q3-2017-flow-of-funds.html
    There’s no doubt that financial sector leveraging and foreign flows (especially through the purchase of U.S. securities) continue to play an integral role in the U.S. Bubble. Inflating asset prices and resulting bubbling U.S. Household Net Worth are instrumental in fueling the overall U.S. Bubble Economy.

    Inflating a Bubble creates vulnerability to any slowdown in underlying Credit and attendant financial flows. And it’s the final parabolic speculative blow-off that seals a Bubble’s fate. It ensures market dependency to unusually large and inevitably unsustainable flows. The Fed’s latest Z.1 report does a nice job of illuminating the historic scope of the U.S. securities Bubble. U.S. securities markets have been on the receiving end of extraordinary international flows, while inflating securities and asset prices have spurred rapid financial sector expansion.

    **Note that in the two “% of GDP” charts today’s numbers are compared to the previous two bubble peaks when things had gotten so far out of hand that the following year saw massive financial crises. So the fact that we’ve blown through those two previous records portends interesting times ahead.

    And… the Fed is raising rates.

  199. 449
    Doug says:

    Just look at the Y-o-Y flattening taking place: https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx

    And then you have Yellen claiming, EXACTLY as Bernanke did in 2006, that an inverted yield curve is no longer necessarily indicative of a recession because this time it’s different.

  200. 450
    Deerhawke says:

    I wonder if the Tinkerbell Effect could be demonstrated on this site.

    As you may recall, in Peter Pan, the only way Tinkerbell could be brought back from near death is by the audience showing they believe in her.

    Ok, everyone, all together now.

    WE BELIEVE IN THE TIM!
    Clap, clap, clap, clap, clap clap.

    (Please cut and paste below. )

  201. 451
    Weasel says:

    By softwarengineer @ 269:

    RE: Weasel @ 251
    Seattle Hates Cars?

    Hey Weasel….I’m proud of you….you walk the talk.

    I hate these open border progressives demanding “I trade in my Dodge Charger for an electric vehicle”….LOL, I ask them what they drive and they point at a gasoline truck engine. If ya don’t walk the talk, I don’t respect your word, its that simple.

    IMO Weasel, almost all folks would move out of Seattle rather than spend hours each day waiting at bus stops in the rain [getting work done?], and electric cars are a joke too. Sorry Tim, but if we started buying more of them the ELECTRICAL GRID in the Seattle area would black out….electric cars already blacked out the grids in the SW states [during peak electric air conditioning].

    We’ll need like a MULTITUDE of Trillions of dollars in electric POWER PLANTS [smelly COAL] before electric cars are even remotely possible. Ignore SWE, he’s just speaking science truth, Progressives call that Racist Fascist *!%#& now…LOL

    Believe the lies.

    I spend at most 5 minutes actually waiting for a bus, and 10 minutes for the train, PM between 0 and 10 minutes max for a bus – the bus and train timetabling is pretty tight, the downside is little room for delays on my PM commute, maybe twice a month I have to get wife to pick me up, or take a 2 mile walk, or wait 15/20 for the next bus. As for getting work done, I was referring to the train :-) I mostly use that time to respond to emails using my phone, so when I get to work the ball is already rolling. Some people sit at the seats with tables and have laptops out

    As for waiting around in the rain and the cold, yeah its a down side – you just have to dress for the occasion, and but still better than sitting in traffic 10 times a week.

  202. 452
    wreckingbull says:

    RE: Kary L. Krismer @ 433 – The thing about Bitcoin is that in theory it does have intrinsic value – the ability to perform anonymous, remote transactions in some scenarios.

    The problem is that no one uses it as such, because its speculative value keeps going up. No one wants to be the one who spent $174 million on a pizza.

    https://twitter.com/bitcoin_pizza?lang=en

  203. 453

    RE: wreckingbull @ 443 – Yes, I would imagine it’s just the opposite of what occurs during hyperinflation, where everyone spends their money as quickly as they can.

    But as to the pizza, by not cashing out in time Bitcoin owners could also end up with having something that was worth six or seven figures only being worth enough to buy a pizza.

  204. 454
    uwp says:

    RE: wreckingbull @ 443 – But they needed that first transaction. Where would we be without the Bitcoin Pizza?

  205. 455
    ARDELL DellaLoggia says:

    RE: N @ 439

    He thinks that because he more than doubled the one I listed for him with a two year, almost to the day, hold period. Youngish people tend to want to meet or beat their successes. Hard to say it can’t be done or is too optimistic when he’s speaking from actual experience. Not saying he will do it again, but I can at least see where he’s coming from.

  206. 456
    Blake says:

    RED ALERT! This short article covers the deep-set problems in our economy… inherent to laissez-faire capitalism. I.e. the insatiable greed of the wealthy. Too much is never enough!

    This is NOT sustainable and will not end well.

    https://www.bloomberg.com/news/articles/2017-12-15/how-america-s-inequality-machine-is-firing-the-dow-into-orbit
    “Japan, which is also preparing corporate tax cuts, plans to make them available ONLY TO BUSINESSES THAT INCREASE SPENDING ON WAGES AND INVESTMENT. In the U.S., companies are flush with cash but they’re using it to buy more customers via mergers, or reward capital through dividends.

    Bank of America’s most recent buyback program totals $18 billion. Chairman Brian Moynihan championed the tax proposal this month. “It’s good for corporate America, and it’s good for us,” he said.

    This isn’t a case of “what’s good for General Motors is good for the U.S.,” said Minow, who’s dedicated her career to pushing corporations toward long-term investments in people and businesses. “In my list of the top 100 things companies should do for sustainable wealth creation, buybacks would be number 100.”

    Companies in the S&P 500 Index bought $3.5 trillion of their own stock between 2010 and 2016, almost 50 PERCENT MORE THAN IN THE PREVIOUS EXPANSION.

    If the tax changes end up helping markets most, they’ll be widening a gap noted last month by JPMorgan Chase’s chief investment strategist, Jan Loeys. There’s not much sign of “economic overheating,” which happens when companies start spending more on wages and other inputs, Loeys argued. “Financial overheating, in contrast, is well advanced,” he wrote. “It merits monitoring a lot more closely for signs of bubble-trouble.”

    Even Trump’s Treasury has flagged the danger. Last week, the Office of Financial Research made its annual report to Congress on the vulnerabilities of the financial system. It was sanguine about most of them, from inflation and bank solvency to debt levels.

    But the agency, which color-codes its assessments, did see one major threat — from market risk. That gauge is at RED ALERT.”

  207. 457
    Erik says:

    RE: N @ 439
    Not sustainable, but my results speak for themselves. If you want to listen, the indicators say the Seattle market will continue with rapid appreciation.

  208. 458
    Ross says:

    By wreckingbull @ 443:

    RE: Kary L. Krismer @ 433 – The thing about Bitcoin is that in theory it does have intrinsic value – the ability to perform anonymous, remote transactions in some scenarios.

    The problem is that no one uses it as such, because its speculative value keeps going up. No one wants to be the one who spent $174 million on a pizza.

    https://twitter.com/bitcoin_pizza?lang=en

    That’s an intrinsic value of the system, or digital currencies with certain properties. It is not an intrinsic value of bitcoin. Bitcoin is essentially a special number that other people have somehow been convinced is worth something. At least gold has utility in industrial, fashion, science and so on.

  209. 459
    Eastsider says:

    The latest on MID in the final bill per WSJ –

    “The tax bill approved by the conference committee allows taxpayers with existing mortgages to continue to deduct interest on a total of $1 million of mortgage debt for a first and second home.

    For new buyers, the $1 million limit drops to $750,000. There’s no chance of qualifying for the $1 million limit by getting a loan in the next two weeks, because the bill’s explanation clearly states that existing debt “had to be incurred before Dec. 15, 2017.”

    The agreement also suspends the deduction for interest on home-equity loans through 2025.”

    https://www.wsj.com/livecoverage/tax-bill-2017

  210. 460

    RE: Eastsider @ 449 – I’ll be really disappointed if it doesn’t pass early next week. Not because I like it, but because I’m tired of getting at the NAR and other real estate industry propaganda about how bad it is! Only passage will stop that.

  211. 461
    Eastsider says:

    RE: Kary L. Krismer @ 450 – Yeah the propaganda has been lopsided. They claim most people are against the new tax bill. But I bet most people are equally against the existing tax code if subject to propaganda. Sadly this is the society we are living in.

  212. 462

    RE: Eastsider @ 451 – Well most people probably are against it because of the lopsided incomplete reporting. Taxes are not an issue most people understand, so if they’re told something is bad that is what they’ll believe. For me the tax bill has some things I like and some things I don’t. If it passes or not I’m not going to care much either way.

    I particularly like (read hate) the slippery slope argument that passing this will lead to gutting social security. What is gutting social security is the inertia which has gripped Congress for probably the past 16 years plus. Every year with no fix merely means the fix will be more extreme.

  213. 463

    RE: Weasel @ 442
    Yes Weasel

    Ya walk [or wait for bus/train] the talk….excellent attitude.

    Most all of the rest of us drive cars in the traffic jam, we have no choice. Even the train station requires MASSIVE “parking/ticket costs” each weekday in the city….work commutes are gobbling 20-25% of our pay/time????

    Time is money too.

    This is a lousy sell point to get them to move to Seattle.

  214. 464

    RE: softwarengineer @ 453 – I’m not sure where parking for a train (or other transit) requires a payment. The bigger problem is that there typically are not enough spots. And that is a huge problem because that can make the existence of the alternative transit system irrelevant.

  215. 465
    kenmorem says:

    kary: do you not think the tax bill is a $1.5T transfer of wealth to the upper 1%? it looks pretty obvious, but then again, you’re a T supporter, somehow.

    BTW: days after the senate passed their version, paul ryan came out to say that medicare and SS needed to be looked at to maintain a balanced budget. ha.

  216. 466
    Blake says:

    By kenmorem @ 455:

    kary: do you not think the tax bill is a $1.5T transfer of wealth to the upper 1%? it looks pretty obvious, but then again, you’re a T supporter, somehow.

    BTW: days after the senate passed their version, paul ryan came out to say that medicare and SS needed to be looked at to maintain a balanced budget. ha.

    They are so f$cking cynical… lining their pocket$$$$$$$

  217. 467

    By kenmorem @ 455:

    kary: do you not think the tax bill is a $1.5T transfer of wealth to the upper 1%? it looks pretty obvious, but then again, you’re a T supporter, somehow.

    BTW: days after the senate passed their version, paul ryan came out to say that medicare and SS needed to be looked at to maintain a balanced budget. ha.

    First and foremost, I’m not a Trump supporter. I thought our choice in 2016 was the worst choice ever. Before 2016 I thought people watched The Apprentice to laugh at his stupidity, and one of my favorite jokes ever was Seth Meyer’s at the Washington Press Dinner in 2012 showing amazement that Trump was running as a Republican, because he thought Trump “was running as a joke.” (Cut away to picture of Trump in the audience looking very uncomfortable.) 2016 was a choice between stupid or corrupt and incompetent. We went with stupid.

    As to the bill, no not all of the $1+ trillion is going to the 1%. Why do you want to make up facts? Sure there are some things that work to their benefit, and yes there are probably some deductions which should have disappeared with the tax rate cuts. But a lot of it does benefit lower-income people–don’t believe everything you read with your Huffington Post subscription or everything Rachel Maddow says.

    As to the timing of why Ryan said, mere happenstance. Social security will not be running a deficit until 2020. But that has nothing to do with income taxes or even other government spending. It doesn’t even have anything to do with anything that’s happened recently. It has to do with nearly two decades of inaction in Congress. And FWIW, one of my solutions to the social security issue would be to not only raise the amount subject to tax, but also the type of earnings. I would make the first X thousands of dollars of rental, investment and interest income subject to social security tax.

    And finally, as to being “only” two years away from SS running a deficit, I’m appalled at both the Ds and the Rs for letting us get that close. This is like saving for retirement, where the longer you take to act the more you have to do and/or the more likely the result will be a catastrophy.

  218. 468
    ess says:

    The fallacy that the “rich” don’t pay their “fair” share of taxes is just demagoguery at its finest. The wealthy in the US pay a majority of the federal income taxes that are collected. Thus any tax reduction is going to appear to favor the “rich”. Not only do they pay the lion’s share of federal income taxes, but a percentage of lower income Americans not only don’t pay income taxes, but they receive income transfers from the Federal government (IE – handouts from those evil “rich people”). In some states with state income taxes, the “rich” fork over 50% of their income to various governmental entities. And with Obamacare, income transfers have been dramatically increased to moderate income self insured Americans.

    This information is easily obtainable, but cynical politicians keep on repeating it, and gullible voters keep on believing it. It is always easier to blame other individuals for one’s misfortunes rather than having an introspective moment or two that might result in a different financial direction resulting in a more positive outcome

    https://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24

  219. 469
    Eastsider says:

    RE: ess @ 458 – The statistic is telling. The number of people over 16 not in labor force increased by 23% in a decade. There are now over 95m not working. We definitely need to get many of them back into the labor force.

    https://data.bls.gov/timeseries/LNS15000000

  220. 470
    Kmac says:

    RE: Eastsider @ 459
    RE: ess @ 458

    You are not allowed to think for yourself. Off to the FEMA re-education camps you go!

  221. 471

    By ess @ 458:

    The fallacy that the “rich” don’t pay their “fair” share of taxes is just demagoguery at its finest. The wealthy in the US pay a majority of the federal income taxes that are collected. Thus any tax reduction is going to appear to favor the “rich”. Not only do they pay the lion’s share of federal income taxes, but a percentage of lower income Americans not only don’t pay income taxes, but they receive income transfers from the Federal government (IE – handouts from those evil “rich people”). In some states with state income taxes, the “rich” fork over 50% of their income to various governmental entities. And with Obamacare, income transfers have been dramatically increased to moderate income self insured Americans.

    Thank you for including Obamacare as a tax. If it had been proposed as such it never would have passed even though paying for it as a tax would have been far more equitable.

    As to the rest of this post though, again I’ll argue that certain deductions should go away. The government should get out of the business of trying to affect how both companies and people spend their money. I’m a bit more familiar with the personal deductions, so I’ll give those as examples. Someone should not be encouraged to spend $40,000 on home mortgage interest to save on their taxes. They shouldn’t have to spend over $30,000 on an electric vehicle to save $7,500 on their taxes. I don’t think those programs would be nearly as popular if they were restructured to be what they really are–contributions to banks and corporations. So for example, if the government gave $10,000 to Bank of America for every $40,000 they collected in home mortgage interest, I think people would be incensed.

    Conversely, though, I don’t have a problem with allowing a deduction for medical expenses, because those are not typically voluntary sorts of expenses (and maybe such voluntary ones cannot be deducted). That would be more of a hardship deduction.

  222. 472

    Two more issues on tax reform. I know we’ve discussed the change on the sale of residence going from two of five to five of eight years. But I’m not sure we’ve mentioned the impact that will have on supply. Right now we are in a period where people who bought two or three years ago have significant gains. They may hold off selling until they’ve lived in their house for five years.

    Also, the lower corporate tax rates might impact the development of low-income housing. Much of the investment in low-income housing is done due to various tax credits (another example of government using the tax code to affect how money is spent). Whether or not you agree with those programs with the corporate rates being slashed, and if the savings for the ultra-rich are anywhere near advertised by the press, then those tax credits will be much less attractive. I know there were some plans to counter that in the legislation, but I don’t know if they worked their way in. If not, that could be a secondary hit on the supply of housing, but in the rental market instead, and also not as immediate as the sale of residence provision.

  223. 473
    whatsmyname says:

    By Kary L. Krismer @ 461:

    Someone should not be encouraged to spend $40,000 on home mortgage interest to save on their taxes.

    No different than saving taxes on interest used to run a business or finance an investment. It is a capital expense which brings down the cost to equity. It is simply more intuitive on a business statement.

    I believe that coupling this rhetoric (and trend) with the increased standard deduction will be impactful, though. Renters will have a less immediate incentive to buy, and more money available for things (like higher rent). As a result, investors will have more incentive to buy, and have a structural financial advantage regarding the price they can pay. Where housing is tight, it will become more expensive to rent or buy than under the existing structure.

  224. 474

    By whatsmyname @ 463:

    By Kary L. Krismer @ 461:

    Someone should not be encouraged to spend $40,000 on home mortgage interest to save on their taxes.

    No different than saving taxes on interest used to run a business or finance an investment. It is a capital expense which brings down the cost to equity. It is simply more intuitive on a business statement.

    The difference is that one is a personal expense and one a business expense. Almost every business expense is allowed as a deduction to get to taxable income. Very few personal expenses are. You could argue that’s not fair, but I think it is. Someone who nets $50,000 in W-2 income is basically in the same position as someone who has a business which grosses $100,000 and has $50,000 of business expenses. They both have $50,000 to spend on their living expenses.

  225. 475

    Apparently, there is a connection between the tax bill and Medicare in that the deficit might trigger reductions. Surprisingly, Nancy Pelosi is saying that Democrats will not help fix that down the road if it happens.

    STEPHANOPOULOS: I don’t think they proposed that provision. But meanwhile, the Democrats are also warning this is going to trigger a mandatory cut in many government programs, including a $25 billion cut in Medicare. Leader Pelosi has written a letter to the Senate and House leaders in the Republican Party saying “given the lack of bipartisanship to date in your effort to provide massive tax cuts to the wealthy at the expense of the middle class, while adding $1.5 trillion to the deficit, it will be your responsibility to deal with the consequences.”

    She’s essentially saying, you won’t get any Democratic votes to waive those cuts, so $25 billion in Medicare cuts are coming. Can you prevent that on your own?

    http://abcnews.go.com/Politics/week-transcript-12-17-17-sen-john-cornyn/story?id=51834652

  226. 476

    By Kary L. Krismer @ 464:

    They both have $50,000 to spend on their living expenses.

    I should have finished this off by saying that the tax reform bill will apparently only tax the business owner on $40,000 of income if they qualify under the new pass-through provisions, which apparently also apply to sole proprietors. But the other difference is the sole proprietor business owner will pay more social security tax–not sure if there are any changes to that in the tax reform bill.

  227. 477
    Kmac says:

    By Kary L. Krismer @ 461:

    Conversely, though, I don’t have a problem with allowing a deduction for medical expenses, because those are not typically voluntary sorts of expenses (and maybe such voluntary ones cannot be deducted). That would be more of a hardship deduction.

    Qualified medical expense deductions are currently only allowed in excess of 10 % of AJI.
    Very few people hit that threshold. I might even argue that it would be the lower income bracket that may benefit from it, but then they would need to go with the long form.
    Was this designed this way purposefully….?

    By Kary L. Krismer @ 462:

    I know we’ve discussed the change on the sale of residence going from two of five to five of eight years. But I’m not sure we’ve mentioned the impact that will have on supply. Right now we are in a period where people who bought two or three years ago have significant gains. They may hold off selling until they’ve lived in their house for five years. .

    The change from 2 of 5 to five of eight is in the new tax bill or did that change somewhere else at some time?

  228. 478
    Joe says:

    My take is the RE market is much more precarious than last year:
    -Commercial real estate is dropping right now
    -Median stock prices are at lofty valuations – higher than Great Depression and 2000 bubble.
    -RE rose over 10% per year last few years
    -Home affordability is near its low
    -Rents are showing signs of topping
    -Amazon has greatly slowed hiring
    -The Fed is raising interest rates and plans 3 more increases in 2018
    -The Fed is now selling its treasuries and MBS in the market, which will likely increase LT rates
    -The yield curve has flattened tremendously, which dampens lending. Banks can’t lend when the interest rate on deposits equals the interest rates on loans.
    -New federal tax policy discouraging home ownership. $24k standard deduction, $10k cap on property tax deduction, $750K cap on mortgage interest deductability.
    -RE Inventory is at all-time lows (i.e., little change for inventory to drop from here for any meaningful period of time)

    All things considered, this appears to be a perfect time to sell. My prediction is this Spring we’ll see a trend reversal as inventory starts to rise and sellers try to beat the rush.

  229. 479
    whatsmyname says:

    By Kary L. Krismer @ 464:

    By whatsmyname @ 463:

    By Kary L. Krismer @ 461:

    Someone should not be encouraged to spend $40,000 on home mortgage interest to save on their taxes.

    No different than saving taxes on interest used to run a business or finance an investment. It is a capital expense which brings down the cost to equity. It is simply more intuitive on a business statement.

    The difference is that one is a personal expense and one a business expense. Almost every business expense is allowed as a deduction to get to taxable income. Very few personal expenses are. You could argue that’s not fair, but I think it is. Someone who nets $50,000 in W-2 income is basically in the same position as someone who has a business which grosses $100,000 and has $50,000 of business expenses. They both have $50,000 to spend on their living expenses.

    This is why I used the word “intuitive”. The purchase of a long term financial asset is not a personal expense just because you seek to get some of your return on an in-kind basis. For evidence you need only look at the people crowing that they can rent cheaper than buy. If you wish to harm the smallest of small time investors by giving disparate treatment on their one experience with full control over an investment asset, fine by me. Most of my interest is paid on rental properties.

  230. 480
    Eastsider says:

    RE: whatsmyname @ 469 – Note that housing is heavily subsidized in many ways. QE is clearly a subsidy on mortgage loans. Mortgage guarantee via agencies and/or purchase of MBS is another subsidy. Both subsidies affect housing affordability far more than MID.

  231. 481

    RE: Kmac @ 467 – I don’t know why the threshold to deduct medical was set so high, but it’s been a high number as long as I can remember. Given that I also don’t understand why it was a deduction that they were trying to take away.

    As to the year change for the sale of a residence, yes that’s part of the new law. Check out post 393 above for a link to the Senate bill. AFAIK, the same language is in the compromise.

  232. 482
    whatsmyname says:

    By Eastsider @ 470:

    RE: whatsmyname @ 469 – Note that housing is heavily subsidized in many ways. QE is clearly a subsidy on mortgage loans. Mortgage guarantee via agencies and/or purchase of MBS is another subsidy. Both subsidies affect housing affordability far more than MID.

    Government “subsidies” have made residential real estate too cheap? It needs to be made a little more expensive? Except for landlords? I like your style.

  233. 483
    Eastsider says:

    By whatsmyname @ 472:

    By Eastsider @ 470:

    RE: whatsmyname @ 469 – Note that housing is heavily subsidized in many ways. QE is clearly a subsidy on mortgage loans. Mortgage guarantee via agencies and/or purchase of MBS is another subsidy. Both subsidies affect housing affordability far more than MID.

    Government “subsidies” have made residential real estate too cheap? It needs to be made a little more expensive? Except for landlords? I like your style.

    Government subsidies make things more expensive over time. Housing, healthcare, and student loans are some examples. By getting rid of MID, it makes million dollar homes less affordable and slowdown future price increases. Subsidies may ‘help’ affordability in the short term but in the long run it only makes things worse.

    Hope this helps… lol

  234. 484
    whatsmyname says:

    By Eastsider @ 473:

    Government subsidies make things more expensive over time. Housing, healthcare, and student loans are some examples.

    Does this also hold true for farming, tech, transportation, oil, military goods, and passing on family wealth?

    By getting rid of MID, it makes million dollar homes less affordable and slowdown future price increases. Subsidies may ‘help’ affordability in the short term but in the long run it only makes things worse.

    So by making ownership more expensive, you hope to get a real benefit in purchasing price because as the purchaser you will not wind up paying the costs of ownership?

    Hope this helps… lol

    More than you know.. lol

  235. 485
    Eastsider says:

    RE: whatsmyname @ 474 – Passing on family wealth?! LOL

  236. 486

    By Eastsider @ 473:

    By getting rid of MID, it makes million dollar homes less affordable and slowdown future price increases.

    Except we’re not getting rid of the MID–although that may be the take away of people who just read headlines. The average person’s understanding of the changes in the Bankruptcy Act in about 2006 (or so) was extremely inaccurate, to the point where some people thought that you could no longer discharge credit card bills! So many people probably do think the MID is going away.

    The change to MID is only for $250,000 of debt or about $12,500 of interest at 5%. At a 40% tax rate, you’d lose about $5,000 in tax savings under the new bill (assuming your use of the deduction wasn’t otherwise curtailed).

    The bigger change is probably the limitation on SALT. Absent other items, I believe a person making $100,000 can deduct about $1,500 for sales tax, leaving only $8,500 for real estate taxes. That would only require about a $1M house in King County, and some states have higher RE taxes than us. Locally a $50,000 tax bill for a $6M house is not unheard of, and the owner of such a house probably earns more than $100,000 and thus can deduct more sales tax. There the lost tax savings due to changes in SALT would be about 3x the change due to the MID change. And that is not an item you can avoid by deciding not to borrow as much money–you’d need to buy a much less expensive house.

  237. 487

    The Apocalypse South I-5 Freeway Heading Into McChord/Lewis Tacoma

    Just had a massive heart attack…..a train collapsed upon the freeway parking lot this morning…thank God I’m retired and don’t drive in the Seattle area much.

    I imagine its stalled all the way to the Seattle City Limits this morning…..use an emergency jar in your car if you need a bathroom bad?

    http://komonews.com/news/local/derailed-train-falls-off-bridge-onto-i-5-lanes-south-of-tacoma

  238. 488

    RE: softwarengineer @ 477
    Hey Weasel?

    Do trains and buses have bathrooms for endless traffic delays? Maybe wear depends adult diapers on the stranded buses? LOL

  239. 489
    Doug says:

    Hope Tim is ok. Weird he hasn’t posted something for this long.

  240. 490
    David B. says:

    RE: softwarengineer @ 478 – Intercity trains and buses generally do (intracity, generally not). Though not for unexpected traffic delays, just for expected travel times (which commonly stretch into multiple hours). I’m surprised you don’t know that; it’s common knowledge.

    Living in Kitsap County as I do, it’s standard procedure if making a car trip to Portland to completely avoid I-5 north of Olympia (I take 3 and 101 instead). The 3/101 route is slower if 5 isn’t backed up, but I find a slightly longer predictable drive in sane traffic preferable to an unpredictable one in heavy traffic.

    For a while, I’d check traffic conditions online just before I reached Olympia and make a decision based on that information. Then came the time a crash happened just after I checked and I got screwed by I-5 anyhow. After that, never again.

  241. 491
    whatsmyname says:

    By Eastsider @ 475:

    RE: whatsmyname @ 474 – Passing on family wealth?! LOL

    Just testing your theory that government subsidies (specifically through tax policy) make things more expensive.

    Also still wondering if you hope rising ownership costs will provide you a real economic benefit via potentially lower purchasing price – because after the purchase you will somehow not wind up paying the increased costs of ownership?

  242. 492
    Eastsider says:

    By whatsmyname @ 481:

    Also still wondering if you hope rising ownership costs will provide you a real economic benefit via potentially lower purchasing price – because after the purchase you will somehow not wind up paying the increased costs of ownership?

    Using your argument, the FED should keep the QE program in place because it reduces ownership costs by lowering interest rate. That said, Seattle homes would probably cost half as much if the FED had not intervened.

  243. 493
    ARDELL DellaLoggia says:

    RE: Doug @ 479

    I think he’s ok. He posted on his Facebook recently..

  244. 494
    whatsmyname says:

    By Eastsider @ 482:

    By whatsmyname @ 481:

    Also still wondering if you hope rising ownership costs will provide you a real economic benefit via potentially lower purchasing price – because after the purchase you will somehow not wind up paying the increased costs of ownership?

    Using your argument, the FED should keep the QE program in place because it reduces ownership costs by lowering interest rate. That said, Seattle homes would probably cost half as much if the FED had not intervened.

    The FED’s purpose, the introduction and elimination of QE are all about protecting the banking system. Home ownership costs are not the FED’s concern. They are a concern to people who want to own. Had the FED not intervened, Seattle homes would be much cheaper because we would be in another (or worse) great depression. That would be a bug, not a feature.

    Going back to the quote from my post, you sure seem to have trouble with a simple yes or no question. That might be something to think about.

  245. 495
    Justme says:

    For better information about the Amtrak derailment in DuPont,WA, I recommend the wikipedia page.

    https://en.wikipedia.org/wiki/2017_Washington_train_derailment

    At total if 7 vehicles (2 trucks, 5 cars) on the freeway were damaged, so the southbound traffic on I-5 seems to have been fairly light at the time of the crash. estimated as 07:32.

  246. 496

    RE: Justme @ 485 – That’s the second I-5 event involving a non-automotive situation where we’ve been lucky. This summer a large cottonwood fell across I-5 in the north Fife area. There it was good that traffic was backed up because if it had been moving it would have been much worse.

  247. 497
    Eastsider says:

    By whatsmyname @ 484:

    Going back to the quote from my post, you sure seem to have trouble with a simple yes or no question. That might be something to think about.

    So you think every question has a simple yes or no answer? That might be something for you to think about. Bye!

  248. 498

    Here’s a Bloomberg opinion piece on four good things about the tax bill, and surprisingly they list the reduction of the limit on mortgage debt to be one of the four. The other is something I had not heard of–limiting corporate interest deductions to 30% of income.

    https://www.bloomberg.com/view/articles/2017-12-19/4-good-things-in-a-bad-tax-bill

  249. 499
    Blake says:

    RE: Kary L. Krismer @ 462
    Kary @462: “Two more issues on tax reform.”

    Bruce Bartlett (Former domestic policy adviser to Ronald Reagan and Treasury official under George H. W. Bush)
    “Anyone who refers to the POS Republican tax giveaway to the ultra-wealthy as “tax reform” is either clueless or lying. It is not reform in any meaningful sense of the term.”

    Norman Ornstein (Resident scholar at the conservative American Enterprise Institute)
    “There has never been a more outrageous, revolting, unfair process to pass a corrupted bill in the history of Congress. That Susan Collins, Lisa Murkowski, Jeff Flake, John McCain, Lindsey Graham have endorsed this makes anything positive they have done get erased. Unconscionable.”

    Blake sez: There is no reason for a tax cut and debt driven fiscal stimulus at this time. We are at the tail end of an expansion and unemployment is at 4%! They are just looting the treasury on behalf of the rich and blowing a hole in the budget so they can then agitate for cuts to Social Security, Medicare and other programs that benefit the bottom 60% – – who have been watching their real incomes decline for 30+ years! Shameful!

    “As of Friday December 15th, the bill had still not been released publicly, but the text was viewable by negotiators from both chambers at 10am, in a room closed off to reporters and even the lawmakers own staff!”
    (Secrecy is always a sign that something “excellent” is being cooked up, eh?)

    So… who are the winners and losers?
    http://www.taxpolicycenter.org/publications/distributional-analysis-conference-agreement-tax-cuts-and-jobs-act/full
    Top 1% gest an average $51,000 tax cut in 2016
    Top 0.1% gets an average $193,000 tax cut
    … Bottom 60% gets about 400 bucks on average. .. most less.
    Boy that $400 sure gonna win the Repugs a lot of votes, ya think? “Honey let’s buy 1/2 a TV or send junior to college!”
    You think the poor and middle class don’t know that this “tax reform” is another giveaway to the rich? They do… Ho ho ho!

    Kary @452: “For me the tax bill has some things I like and some things I don’t. If it passes or not I’m not going to care much either way.”

    The Republicans in control of the country today are not conservatives in any sense of the word. They are simply nihilistic anarchists who want to destroy the government and don’t give a damn about MOST AMERICANS, facts or the future. Smash and grab. They lie without any hesitation, but they are so stupid and brainwashed that I think they actually believe what they say! They just say stuff and their idiot followers say “yup yup!” (A recent poll showed that 85% of Trump supporters think he is “honest!” Luckily only about 30% of the country supports Trump.)
    Trump and the far right have NO SHAME! And they call themselves followers of Jesus of Nazareth… My Dad, who was a true Christian who supported the GOP til W Bush took power, is rolling in his grave. But he liked Mencken…

    “As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron.”
    ― H.L. Mencken

    … as is the House and Senate!

  250. 500

    By Blake @ 489:

    RE: Kary L. Krismer @ 462
    Kary @462: “Two more issues on tax reform.”

    Bruce Bartlett (Former domestic policy adviser to Ronald Reagan and Treasury official under George H. W. Bush)
    “Anyone who refers to the POS Republican tax giveaway to the ultra-wealthy as “tax reform” is either clueless or lying. It is not reform in any meaningful sense of the term.”

    I’m not sure why you quote me either time, but since that Bartlett quote refers to something I said I’ll refer to common English usage. “Tax cuts” would be simply changing rate tables by reducing rates. “Tax reform” is something more, although obviously, opinions can vary on whether the something more is good or bad. But I think few people would argue that reducing the people who need to itemize down to less than 10% is something good, thus at least that part is “reform.”

    I tend to discount the opinions of those who think that the entire bill is either good or bad. Anyone who thinks that way is simply not thinking because there are far too many changes to not like some and hate others. See the link I just posted, where the author overall doesn’t like the bill, but found four things to like.

    Blake sez: There is no reason for a tax cut and debt driven fiscal stimulus at this time. We are at the tail end of an expansion . . ..

    Illogical. You say there is no reason and then you give a reason! ;-)

    Seriously, if you believe in cycles to the extent of Erik, the economy is doomed pretty soon no matter what we do. Most expansion periods do not last terribly long and lead to downturns.

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