Real Estate Heat Index off the charts in 2017

After the final 2017 Seattle-area real estate sales data was released last week by the NWMLS, I updated my chart of the “Residential Real Estate Heat Index” for King County single-family homes and condos.

As a reminder, the “Residential Real Estate Heat Index” is an index that rolls changes in the median price, new listings, total inventory, pending sales and closed sales all into a single number to measure the relative “heat” of the market. Note that this index only looks at the real estate sales market. It does not factor in any other economic conditions such as wages, interest rates, rents, etc.

Below is the latest data for the heat index of King County single-family homes and condos. It has been quite a while since I last updated this chart, and… holy cow.

King County Residential Real Estate Heat Index

At 213.9, the latest King County heat index dwarfs the average level seen during the last bubble (42.6). Keeping with the trend we saw during the previous bubble, the condo heat index is even more out of control, coming in at 334.3 in the fourth quarter (more than five times the 61.4 average during the last bubble).

Based on this measure, we have been well into bubble territory since late 2015, and things have gotten seriously out of control since then.

However, as I mentioned earlier, this index doesn’t account for external economic factors at all. The current situation is definitely very different from last time, and we need to look at a more complete picture before we can definitely say this is a new bubble. I’ll be updating some of those broader charts later this month.

Still though… damn.


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.

538 comments:

  1. 1
    Doug says:

    Tim, what drives the increasing volatility that you start to see in mid-2015?

  2. 2
    Erik says:

    Dang, it would have been pretty smart to invest all your money in Seattle condos over the past few years.

  3. 3
    Dustin says:

    RE: Erik @ 2 – And cash out right now. ;)

  4. 4
    toad37 says:

    Just got back from the King County foreclosure auction… prices were basically just a smidgen below retail. The out of town hedge-fund guy (Blackrock) was bidding stuff up as usual. I may check out the Pierce county auction next week. Will report any findings.

  5. 5
    Liam O'Reilly says:

    These exploding prices will drive those who purchased homes over a decade ago to sell, and for new sub-divisions to be built even farther out from downtown Seattle, making the drive time even longer.

  6. 6

    RE: Liam O’Reilly @ 5RE: Erik @ 2 – Only part of this is price.

  7. 7
    The Tim says:

    RE: Doug @ 1 – I believe that the index has spiked so high in the fourth quarter in 2015, 2016, and 2018 is because of how crazy low the number of new listings and overall inventory has been falling at the end of the year. Closed sales and pending sales are at relatively normal levels, but new listings and total inventory keeps hitting new lows every December. This drives the index really high during those periods.

  8. 8

    RE: The Tim @ 7 – You need to make it seasonally adjusted! ;-)

  9. 9
    S-Crow says:

    RE: Liam O’Reilly @ 5 – It is an acute problem for the senior community. Property taxes are having a negative impact on that community in my opinion based upon conversations with our escrow clients and 2018 valuations are going to shock.

  10. 10
    redmondjp says:

    By S-Crow @ 9:

    RE: Liam O’Reilly @ 5 – It is an acute problem for the senior community. Property taxes are having a negative impact on that community in my opinion based upon conversations with our escrow clients and 2018 valuations are going to shock.

    Maybe we can pass our own version of California’s Proposition 13 to protect seniors and others on a fixed income.

    Nahhhhhhh! Sound Transit is going to need more money soon, so that would never work.

  11. 11
    GoHawks says:

    Thank you for all of the recent content Tim.

  12. 12
    Ross says:

    By S-Crow @ 9:

    RE: Liam O’Reilly @ 5 – It is an acute problem for the senior community. Property taxes are having a negative impact on that community in my opinion based upon conversations with our escrow clients and 2018 valuations are going to shock.

    I thought Seniors could defer property taxes. Anyways, only homes rising in value more than the median should have property tax increases.

  13. 13
    Anonymous Coward says:

    RE: Ross @ 12 – Haven’t most of the recent levies been on assessed value?

  14. 14
    Joe_Clave says:

    Today from Seattle Times:
    “Seattle-area rents drop significantly for first time this decade as new apartments sit empty”

  15. 15
    Joe_Clave says:

    RE: Joe_Clave @ 14
    From article:

    “Overall, there are 24,500 apartments under construction now across King and Snohomish counties. There are an additional 35,000 units in the pipeline, although not all of those will get built.

    The city of Seattle is getting more apartments this decade than in the prior 50 years combined. For the Puget Sound region as a whole, the current construction frenzy rivals the record apartment boom from the late 1980s, which was centered in the suburbs.”

  16. 16
    wreckingbull says:

    RE: Ross @ 12 – You have to be pretty low income by Seattle standards to qualify. Plenty of people in the middle get squeezed out.

    https://www.kingcounty.gov/depts/assessor/TaxpayerAssistance/TaxRelief.aspx

    In addition, even if a deferral keeps someone in a home, most plan to use the proceeds from the eventual sale to fund part or all of assisted living. It’s still ‘real money’.

  17. 17
    Joe_Clave says:

    RE: Joe_Clave @ 15

    One more quote:

    “The rental slowdown runs counter to the for-sale housing market, where home prices continue to shoot up unabated at the fastest rate in the country. A key difference is that there are very few new single-family homes being built in the region, in contrast to the frenzy of apartment construction.”

    My take: Common wisdom is prices are being driven up partially by millennials with software engineering jobs- but what happens when rental prices become more attractive?

    “The vacancy rate across the region grew 0.8 percentage points to 5.4 percent in December — the highest since 2010 — a sign that supply has outgained demand.

    In South Lake Union, where developers have been gung-ho about Amazon’s rapid growth, so many new apartments have opened up in recent years that the vacancy rate increased from 4.6 percent to 7.1 percent (the figure excludes brand-new buildings just starting to lease up). That’s a huge jump that gives the neighborhood the second-highest vacancy rate in the region, behind the Everett/Mukilteo area.”

    Last one ;-)

  18. 18

    By Anonymous Coward @ 13:

    RE: Ross @ 12 – Haven’t most of the recent levies been on assessed value?

    Levies and things like libraries and ports, yes. But a lot of the tax is as otherwise described, so if your house goes up less than average you could still get a tax cut even with an increased assessment. And it works the same way on the way down–you might not see a tax savings.

  19. 19
    David says:

    When things do cool off in the next recession – those condos are going to be an albatross around SO many people’s necks. After 2008 , some markets literally had ZERO condo sales/resales for the year. I owned a condo and it was emotionally traumatizing to realize you were stuck in limbo for years.

    Unless there is a shortage of appropriate housing, I see little need to own a condo trap.

  20. 20
    Erik says:

    RE: toad37 @ 4
    Told yah. It’s worth the money to buy in Seattle, trust me this time. The 3 most important things in real estate are location, location, location. You want something you can afford in a nice area, not a nice place in peirce county.

  21. 21
    toad37 says:

    RE: David @ 19 – You’d think, but who knows. Maybe foreign buyers continue to flood in, maybe San Fran gets gobbled up in a ‘quake and survivors swarm here for housing… just never know. The stock market melt-up is scary… and the fact they approved bitcoin trading on the CME spells trouble for the dollar I would think? .. we’re in such crazy times it’s almost impossible to make any reasonable forecast, imho. Trade the market in front of you, and for now it’s still bullish.

  22. 22
    toad37 says:

    RE: Erik @ 20 – You’re adorable.. and exactly right… But I’d just be flipping if I get something down there. I’ve always been interested in learning about this underbelly side of the market…. foreclosures, flipping, etc. I do feel dirty at the auctions… I better find a way to give back to the communities to balance any bad karma that may be picked up there…

  23. 23
    Erik says:

    RE: The Tim @ 7
    Right, supply and demand is in full effect.

    Kind sir, I would like to see a graph that compares prices to supply/demand somehow over the years. On the same axis, you could plot actual prices. I’m trying to grasp how closely prices correlate with supply/demand. Not sure how it would look, but there has gotta be a way.

  24. 24
    Erik says:

    RE: toad37 @ 22
    Haha! The auction is full of snakes. Just be honest and don’t try to cheat anyone.

    The goal is to hold as much cash as you can when the next collapse happens. When the market collapses and everyone is scared, the smart money buys at the auction because those auction prices overreact the most and you can get some screaming deals.

    If black rock is back at the auction, I tend to believe something big is going to happen in Seattle. Last time black rock was buying at the auction in 2012 and they nailed it. My guess is Seattle is in for a huge growth. Black rock has a great track record. I have a hard time believing they miscalculated the market this time.

  25. 25
    toad37 says:

    RE: Erik @ 24 – It’s just one guy, and he usually loses to Vestus… I wouldn’t read too much into it.

  26. 26
    David says:

    I own Blackrock stock. I made 70% is one year on their stock a few years ago and it has kept going. Blackrock has a HUGE reputation for managing risk well. If they are buying houses then I have to wonder 2 things:

    1) They are supporting local housing prices til they sell some assets; or
    2) They expect price appreciation on new assets – which would translate into higher Return on Equity.

    So which is it?

    FYI, I also bought Bitcoin 4 month s ago and sold all of it at 80% gain which I used to buy PG&E stock recently. Bitcoin has 2,000 competitors and 4,000,000 of the original Bitcoin have been permanently lost – BTC is useless long term.

    lBy Erik @ 24:

    RE: toad37 @ 22
    Haha! The auction is full of snakes. Just be honest and don’t try to cheat anyone.

    The goal is to hold as much cash as you can when the next collapse happens. When the market collapses and everyone is scared, the smart money buys at the auction because those auction prices overreact the most and you can get some screaming deals.

    If black rock is back at the auction, I tend to believe something big is going to happen in Seattle. Last time black rock was buying at the auction in 2012 and they nailed it. My guess is Seattle is in for a huge growth. Black rock has a great track record. I have a hard time believing they miscalculated the market this time.

  27. 27
    toad37 says:

    RE: David @ 26RE: David @ 26

    I haven’t seen him buy one to be honest… but he sure squeezes Vestus to pay up.

  28. 28
    Eastsider says:

    By David @ 19:

    When things do cool off in the next recession – those condos are going to be an albatross around SO many people’s necks. After 2008 , some markets literally had ZERO condo sales/resales for the year. I owned a condo and it was emotionally traumatizing to realize you were stuck in limbo for years.

    Unless there is a shortage of appropriate housing, I see little need to own a condo trap.

    Not only that, you may not be allowed to rent your unit and still have to pay monthly HOA fees even when it is vacant.

    Condos suffer the worst price drop in a correction compared to SFHs. But when they outperform SFHs, watch out below.

  29. 29
  30. 30
    Erik says:

    RE: Eastsider @ 28
    Yes, it’s emotionally taxing. Tough life owning condos and collecting sweaty renter cash while my value goes up and people pay down my mortgages. This lifestyle is not for the faint of heart.

  31. 31

    By toad37 @ 22:

    RE: Erik @ 20 – You’re adorable.. and exactly right… But I’d just be flipping if I get something down there. I’ve always been interested in learning about this underbelly side of the market…. foreclosures, flipping, etc. I do feel dirty at the auctions… I better find a way to give back to the communities to balance any bad karma that may be picked up there…

    BTW, just so that you know, if you plan on being a true flipper, you need a contractor’s license and bond. Consult an attorney about your specific situation.

  32. 32
    Eastsider says:

    RE: Erik @ 30 – Yep, and be ready to rip off banks and taxpayers when time is tough.

  33. 33
    GoHawks! says:

    Amazon expanding again in Seattle with 2 more leases, as growth continues unabated: Seattle Times

    But what about HQ2 worries?

  34. 34
    Erik says:

    RE: Eastsider @ 32
    Yep, it’s all part of the game I guess. Thanks to Tim and people on this site, I have an idea how to play the game now. Shout out to Seattle Bubble.

  35. 35

    RE: Ross @ 12
    If You’re Income is Under $40K/Yr

    Otherwise ya pay full property tax. Retired and trying to live on like a few thousand net pay per month and pay the full few thousand/mo property tax= bankruptcy. Get your lifetime McDonalds uniform on you lazy senior and limp to your job until ya die [you can’t afford a car in King County]….

    There’s HORRIFYING cheap smelly nursing homes that will take you in BTW….anyway. The state will take your wealth in that case and kick you out of your house…gladly :-)

    Ya see why ya need to start a buildable retirement savings when you’re young.

  36. 36
    Matt P says:

    RE: softwarengineer @ 35 – If you own a home and you’re retired, $40k per year is plenty to live on especially if you’re on medicare. If you’re not at that age yet, then you shouldn’t have retired anyway. That’s over $3k a month for food and … what other expenses can you have? The car should have been paid off or they should still be working. If you’re making more than $40k per year and can’t afford your property taxes, then it’s time to sell and move.

    The choice is not work at MacDonalds all your life or go to a horrible nursing home. That line of thinking is what keeps people poor. Social mobility is often tied to physical location. People would do a lot better if they would just take a chance and move. That our wages are stagnant are in no small part due to relocation rates being the lowest since the stat has been tracked when it should have been the highest due to the recession.

  37. 37
    ess says:

    By GoHawks! @ 33:

    Amazon expanding again in Seattle with 2 more leases, as growth continues unabated: Seattle Times

    But what about HQ2 worries?

    Amazon probably has no plans to abandon Seattle. But it probably dawned upon them that they needed much more space than the area in SLU could provide. Not only is there physical and political safety in spreading the wealth, but now there are two states that can be aggressively lobbied for tax breaks. And by calling it HQ2, the second location is an equal amongst equals (for tax goodies). HQ3 is probably being discussed right now

    While these latest leases are not huge by Amazon standards, they do give a certain comfort to those who worry that Amazon will leave and the sky will fall.

  38. 38
    ESS says:

    By Erik @ 34:

    RE: Eastsider @ 32
    Yep, it’s all part of the game I guess. Thanks to Tim and people on this site, I have an idea how to play the game now. Shout out to Seattle Bubble.

    Erik

    While you are having all this fun, and I hope for both our sakes that housing prices and rents escalate far into the future. You should also be developing a contingency plan in the event that real estate and rental prices drop 10-35 %, and vacancy rates increase to 10% or beyond.

    Hope for the best and plan for the worst usually keeps you out of most difficult situations.

  39. 39
    wreckingbull says:

    RE: Matt P @ 36 – Did it ever occur to you that sometimes people don’t always choose to retire, especially those who have used their physical body to make a living? Sometimes the body just wears out.

    Do you really think that food and property taxes are the only expense for a senior citizen? Medicare does not cover everything. Most also have to buy supplemental insurance which also does not cover everything. Cars still wear out when you are a senior citizen, houses still need repair, sometimes expensive repairs. Homes must still be insured. Senior citizens still need to buy other non-food items like everyone else.

    Based on your comments, it sounds like you think a taxation scheme should be designed around the perfect, financially secure household, everyone else be damned. I predict that when you have more life experiences and start having to care for your own elderly family members, your cold view will soften a bit.

  40. 40
    Matt P says:

    RE: wreckingbull @ 39 – So what do you think is a reasonable income level for a senior tax break so they can stay in their house? And why should that not apply to non-seniors?

  41. 41
    Saffy The Pook says:

    The Tim: please post the formula used to calculate the “heat index”. Without that, it’s impossible to ascertain what relevance it has, if any.

  42. 42
    S-Crow says:

    RE: wreckingbull @ 39 – I’m glad to see a conversation regarding the housing conundrum for Seniors and those on fixed income. Adding to that conversation I’d like to mention the drumbeat from the usuals advertising on the radio regarding seniors using their home equity for reverse mortgages. This is still a very debatable loan program with huge upfront and ongoing mortgage insurance fees.

    In fact two local Sno Co. homes that I identified very recently for a client that were bank owned had underlying reverse mortgages. HUD has admitted that the traditional FHA/VA insured mortgage insured loans were funding or being utilized to offset the huge spike in HUD insured reverse mortgage defaults/foreclosures over the last couple of years– in this market! Robbing Peter to pay Paul.

  43. 43
    wreckingbull says:

    RE: Matt P @ 40 – I think the nature of your question points out the exact problem. There is no arbitrary dollar amount. A cap, as a percentage of MAGI, would be a start. Also get rid of deferrals. Not many die in their home anymore. They die in an expensive assisted care facility, of which the home is often sold to pay for.

  44. 44
    Kmac says:

    By Kary L. Krismer @ 31:

    By toad37 @ 22:

    RE: Erik @ 20 – You’re adorable.. and exactly right… But I’d just be flipping if I get something down there. I’ve always been interested in learning about this underbelly side of the market…. foreclosures, flipping, etc. I do feel dirty at the auctions… I better find a way to give back to the communities to balance any bad karma that may be picked up there…

    BTW, just so that you know, if you plan on being a true flipper, you need a contractor’s license and bond. Consult an attorney about your specific situation.

    And to top that off, I’m amazed that so many flippers buy just below retail and think they are going to make any amount of money given that it usually costs about 8 to 9% to sell the property the very next day.
    I think many flippers must only have a $5,000 margin of error and heavily rely on a greater fool to come along. (or they perform labor for free and mistake that as their “profit”??? Why buy your job?)
    No thank you!

  45. 45

    RE: Kmac @ 44 – The biggest mistake I see is picking a house with a limited upside, like say a 1 or 1.5 bathroom house, or one next to another ratty house.

  46. 46
    toad37 says:

    RE: Kary L. Krismer @ 45 – Thanks for that.. I’ve been making a list of what to avoid if I were to bid something. So far…

    1- Don’t buy if it’s occupied, heard it can easily take 60 days to get them out
    2- No houses with basements… all of ’em eventually have water issues
    3- Nothing under 2 bathrooms

    What else?

  47. 47
    Alex says:

    RE: Kmac @ 44 – most flippers buy their homes at 20 to 30% below market value.

  48. 48
    Blurtman says:

    RE: toad37 @ 46

    Get them out, those vermin!

  49. 49
    Erik says:

    RE: Kmac @ 44
    I have never flipped. I buy, live somewhere 2 years, and sell it. I think on top of real estate agent fees and excise tax, you have to pay 35% capital gains tax on a flip. I’m not interested in paying Uncle Sam when I did all the work.

    My current home which I’ve had about 6 months, I bought about $150k under. It was in good shape when I bought it and someone was living in it. I painted, updated electrical switches, outlets, and thermostats, and put in new flooring. Next is countertops, sinks, and appliances. I got lucky at the auction that week is all and was able to get a real good deal. These days everyone at the auction seems to not be getting good deals except for homes in maple valley, but I’m not interested in pierce county.

  50. 50
    Erik says:

    RE: toad37 @ 46
    I have broken your 1st and 3rd rule and those were my best deals. My current place was occupied. Paid dimensions law $57 to evict. The more complicated the deal, the more risk. The more risk, the bigger upside. Get your hands dirty and buy what lazy investors don’t want to buy. That’s how you get good deals.

    My 1br 1ba condo was my best deal. Got it in march for $203k and Zillow says $380k, but I think it’s worth $360k. Right after I bought it, 1br condos went way up in that area. I’m losing money on that one every month, so I’ll have to raise my rent. Good equity and poor cash flow seems to be the story of my life.

  51. 51

    By toad37 @ 46:

    RE: Kary L. Krismer @ 45 – Thanks for that.. I’ve been making a list of what to avoid if I were to bid something. So far…

    1- Don’t buy if it’s occupied, heard it can easily take 60 days to get them out
    2- No houses with basements… all of ’em eventually have water issues
    3- Nothing under 2 bathrooms

    What else?

    I don’t know that basements are that problematic, but the problem is you wouldn’t know and those sorts of issues can be somewhat expensive to fix. But I don’t know that they are more expensive to fix than other nightmare scenarios, like mold in the attic or significant wood rot somewhere.

    If you’re talking about a house, I wouldn’t go under 3 bedrooms. I’ve seen one relatively modern large 2 bedroom house, but those are rather rare and I don’t know what the market is for them.

    I’d probably avoid anything with a shake roof, unless it’s fairly new because determining the condition can require going onto the roof, and replacing it can require new sheeting and be expensive. I’d also avoid anything with composite wood siding unless you can walk around the house.

  52. 52

    RE: Matt P @ 36
    I Don’t Support Property Tax Decreases For Seniors BTW

    It should be a debt owed the county and paid back after the senior’s death.

    Most of the old money loot is going to likely go to lucky X-Gens getting inheritance then blowing it on over priced real estate deals. Savvy investors?”?? LOL

  53. 53
    Justme says:

    By Saffy The Pook @ 41:

    The Tim: please post the formula used to calculate the “heat index”. Without that, it’s impossible to ascertain what relevance it has, if any.

    I also think it is essential to know the exact formula of the heat index.

  54. 54
    Matt P says:

    RE: softwarengineer @ 51 – With Boomers pension for profligacy and their extreme longevity, there won’t be much in he way of inheritances for gen Xers.

  55. 55
    Blurtman says:

    RE: Matt P @ 53 – Maybe genXers should make their own wealth.

  56. 56
    ARDELL DellaLoggia says:

    RE: Matt P @ 53

    I just showed a house bought new for about $15,000 the year I was born, 1954, which the original owners are now selling for the first time. It will sell for over a million in original condition except for ongoing maintenance items. No loans against equity over the 63 years they have owned it. So maybe the key is to stop “moving up” so much.

    The tax laws were changed so that people didn’t need to buy up to avoid capital gains, this some time ago and not the recent change. But when people preserve their “home as savings” plan we have less inventory. So someone will complain either way.

  57. 57
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 50

    I just saw one yesterday that was new Hardie plank on the front but part old wood and part “defective wood product” on the walk around.

    Kind of like the old “don’t judge a book by it’s cover” as the siding replacement may be partial with the best in the front. Though I have also seen the best on one side only.

  58. 58
    Jon says:

    RE: Matt P @ 53 – The real problem is that instead of dying at a young age from disease and starvation, third world people are coming here and out-bidding the locals for 64 year old houses.

  59. 59

    By Jon @ 57:

    The real problem is that instead of dying at a young age from disease and starvation, third world people are coming here and out-bidding the locals for 64 year old houses.

    There’s nothing wrong with 64 year old houses. They are generally in better locations with better construction methods than construction built this century. The exception is electrical, seismic and insulation, but those to some extent can be upgraded to close to what current construction would be (electrical to current standards).

  60. 60

    RE: ARDELL DellaLoggia @ 55RE: ARDELL DellaLoggia @ 56 – Your clients maybe carried the tax thing too far, because they probably won’t be totally protected given the limit of exclusion if $500,000. But they probably will do better selling this year compared to last year.

    As to the siding, often the damage is only on one side, and on houses built after about 1990 or so it is quite common to have something different on the front and cheap but easy to install sheet product on the sides and rear. That’s something I doubt you’d ever see original on a 64-year-old house!

  61. 61

    RE: Kary L. Krismer @ 59

    One I don’t get the “your clients” thing…I wasn’t talking about my clients.

    Two, the front is usually the least likely to have new on a two story, especially in the lower covered area by the door which should have the least damage.

  62. 62
    toad37 says:

    RE: Kary L. Krismer @ 50 – Thanks guys… updated
    For flips (rentals or primary residence has separate list)
    1- Don’t buy if it’s occupied
    2- No houses with basements
    3- Nothing under 3 bd, 2 ba
    4- No shake roofs unless verified newer
    5- No composite siding unless can walk around the house to verify condition

    keep ’em coming :-)

  63. 63
    ARDELL DellaLoggia says:

    RE: Ardell DellaLoggia @ 60

    Sorry, reading in pieces as I’m out showing property. The 64 year old house is not the same house as the one with the siding issue which is 40 vs 63 years old. The wood composite product is easier to spot when the home was built in the worst years for that, give or take 2 years from 1993. It’s harder when the house is older and fully or partially replaced in those problem years.

  64. 64
    Jon says:

    RE: Kary L. Krismer @ 58 – I didn’t mean to impune the quality of those houses. I just had in mind that their size is small in comparison to the amount being paid for them now. Those small houses were often used to raise large families of boomers. Still 15k was alot of money when gas was 20 cents a gallon.

  65. 65
    wreckingbull says:

    By Blurtman @ 54:

    RE: Matt P @ 53 – Maybe genXers should make their own wealth.

    Agreed. We will need it to service the country’s debt obligations!

  66. 66

    By Ardell DellaLoggia @ 60:

    RE: Kary L. Krismer @ 59

    One I don’t get the “your clients” thing…I wasn’t talking about my clients.

    Sorry, I thought that was the one you were getting ready to list–I didn’t read carefully enough or had not enough coffee.

  67. 67
    Kmac says:

    By Kary L. Krismer @ 31
    BTW, just so that you know, if you plan on being a true flipper, you need a contractor’s license and bond. Consult an attorney about your specific situation.

    This was enacted in 2008 and the rcw’s were revised. As far as I can tell, it was revisited in 2015 and was changed by SB 1749.
    http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Session%20Laws/House/1749-S.SL.pdf

    So it looks like you do not need to be a contractor to flip a house at <12 months, but ONLY IF you have CONTRACTED with a licensed contractor to do the work.

  68. 68
    ARDELL DellaLoggia says:

    RE: Jon @ 63

    The house costs almost nothing. The land it sits on costs a lot. 1/3rd the price a brand new (and larger) home would sell for on that lot equals the land price. Whether or not it’s a teardown depends on who buys it.

  69. 69
    ARDELL DellaLoggia says:

    RE: Kary L. Krismer @ 65

    The house I’m working on is older than me. :) 1946 in Wedgwood, Seattle.

    The two above are houses I was looking at for buyers. One is $110k overpriced, the other will bid up by that much. January’s always fun like that. Hope both don’t bid up when they look at offers next week. We’ll see how efficient the market is in 2018.

  70. 70
    Kmac says:

    By ARDELL DellaLoggia @ 67:

    RE: Jon @ 63

    The house costs almost nothing. The land it sits on costs a lot. 1/3rd the price a brand new (and larger) home would sell for on that lot equals the land price. Whether or not it’s a teardown depends on who buys it.

    Okay ARDELL, that is a “RULE OF THUMB”. And who determines how much bigger and how much nicer that supposed new home is that would put your formula to work?
    This is a formula that the real estate cartel has encouraged it members to use in the valuation process to MAXIMIZE their client SELLER’S properties and to promote maximum commissions for their members.
    You may get many people willing to do this 3x thing in markets like Seattle, Bellevue or Kirkland but I will tell you that as an occasional small builder of spec homes outside those areas, I (and many like me) would NEVER buy a property at that 3x rate. Not enough meat on the bone – so to speak- for the risk that ensues. And also, at that 3x rate, nothing more irritating than getting to closing table and finding that the supposed “profit” is practically split 3 ways – bank/ RE broker/builder – but yet the builder took most all the risk and 6 to 12 months of tying up resources only to have to share the bounty equally.

    I have found 4x lot to be much more reasonable as a “RULE OF THUMB in many areas aside from those mentioned above, but the rule of thumb ONLY comes in AFTER I have numbers for the proposed project and then it only serves as a general check to see if it is in line against what I already know.
    But then again, maybe I just don’t like giving all of MY efforts away to others and maybe I have a lower risk tolerance than may other builder types.
    I am pretty efficient, so I don’t think it is about the cost to build…….

    You use your rule as a starting point for the seller, but I use it as a buyer – ONLY on the back end – to check if I am within parameters against my cost estimates going in.

    I would NEVER pay 150k for a lot to put a 450k home on (3x)
    but
    I *might* pay 110k for a lot to put it on (4x)

    Perhaps in Seattle, Kirkland, Bellevue there are willing participants to do so?
    Perhaps in the more rural areas there are uniformed folks willing to do so also…. ?

  71. 71

    RE: Kmac @ 69

    Kmac: “I would NEVER pay 150k for a lot to put a 450k home on (3x)
    but I *might* pay 110k for a lot to put it on (4x)”

    Not following you there. If you are building a house for yourself you would want a 2x, not a 4x. 3x is the right price for a spec house on a tear down lot. Or more correctly, 1/3rd is what the old people should get for their old house that the builder is going to tear down. That establishes lot value. Find the closest newest house that sold as a NEW never lived in house recently to get the 1/3rd number.

    4x would be overpaying . You don’t want to build a 4X unless you are a builder trying to make a killing.

    An owner occupant will pay more than lot value for a teardown and a flipper will pay less than a builder for a teardown. Of course people make mistakes everyday, but if someone pays $800,000 for a new house on a $150,000 lot, well, then you know you did it wrong. But yes…you can still do it.

    If there are no new houses in the last 5 years anywhere near you, the lot value may be close to nil if the builders don’t want it at all. When the houses are really cheap but not bad houses, it usually means the land value isn’t appreciating.

  72. 72
    Kmac says:

    By Ardell DellaLoggia @ 70:

    RE: Kmac @ 69

    Kmac: “I would NEVER pay 150k for a lot to put a 450k home on (3x)
    but I *might* pay 110k for a lot to put it on (4x)”

    Not following you there. If you are building a house for yourself you would want a 2x, not a 4x. 3x is the right price for a spec house on a tear down lot. Or more correctly, 1/3rd is what the old people should get for their old house that the builder is going to tear down. That establishes lot value. Find the closest newest house that sold as a NEW never lived in house recently to get the 1/3rd number.

    4x would be overpaying . You don’t want to build a 4X unless you are a builder trying to make a killing.

    An owner occupant will pay more than lot value for a teardown and a flipper will pay less than a builder for a teardown. Of course people make mistakes everyday, but if someone pays $800,000 for a new house on a $150,000 lot, well, then you know you did it wrong. But yes…you can still do it.

    If there are no new houses in the last 5 years anywhere near you, the lot value may be close to nil if the builders don’t want it at all. When the houses are really cheap but not bad houses, it usually means the land value isn’t appreciating.

    Huh…?

    What I am saying is I(and many others) may look at a lot (or offer on) if it is roughly at about about a 25% value to the finish new construction sell price (I refer to this as 4x)

    You seem to be saying that the new construction sell price should be at 33% of the new construction sell price?

    I am talking vacant land and you seem to be talking land with a tear down on it.????
    A tear down would take an additional 10k to get rid of so I would deduct that from the vacant land value as a buyer.
    Yeah, I guess I’m not competitive on the race to nowhere.

  73. 73
    S-Crow says:

    RE: Kmac @ 71 – Your approach will provide dividends to you and I’m guessing it already has. I can’t tell you how may small builders and contractors did not stay disciplined during the last run up and I’m seeing cases of it today.

    By the way, maybe you should consider Coeur d’alene for building.

    “Bubble? What Bubble?” : http://www.cdapress.com/local_news/20180113/bubble_what_bubble

    Labor/Employment Info for Northern Idaho:
    https://labor.idaho.gov/publications/lmi/pubs/Northern.pdf

  74. 74
    ARDELL DellaLoggia says:

    RE: Kmac @ 71

    We were talking about old houses that cost a lot of money. That’s why we were talking lot value being 1/3rd the price a new house in its place would sell for. If a builder can put a house there and sell it for 2.1M, he will pay $700,000 and throw the old house away. An owner occupant buyer will outbid the builder. A flipper will pay less than both in most cases, when they can. Though as S-Crow pointed out, some are getting burned right now as the margins are too thin due to competition.

    When you see it run up toward the builder getting 3.5x lot, the price of the next teardown goes up to bring it back to 3x lot. When you see builders getting 4x lot, the bubble will burst in the next cycle.

  75. 75
    Kmac says:

    I guess what the problem is is that you are stating that the lot is the lot because” I say it is”….
    To me, the lot isn’t necessarily what YOU say it is.
    Seems RE folks try to dictate what things are by using some arbitrary formula on the front end.
    Guess it works in some areas.

    I do the math with givens and I know what the selling price is within reason before consulting any RE professional, and then do a reverse engineering on the numbers.

    Maybe it come down to most builders are willing to do anything just to stay busy.

    Although, I have noticed that some savvy small builders have a permit in hand within days of actual closing on the lot.
    Perhaps this technique mitigates some of the risk of the time value- ie: less holding costs.

    And please Ardell, don’t take this personally, as I really like the contributions you always seem to offer up…

    And as far as ID goes, I read a couple weeks ago that ID is the fastest growing state now.

  76. 76
    Eastsider says:

    RE: Kmac @ 74 – Some builders will do 3x or even less because they are not risking their own capital. If the market declines by 10%, it will easily wipe out profits and more. In a 20% down market, these builders will be gone.

  77. 77

    RE: Kmac @ 74

    It really isn’t because I say it is. I didn’t make it up and it is not an “exact” science. Unfortunately agents have a ton of sometimes stupid rules that make it harder for me to describe to you here than to a client. But I’m going to go out on a limb and break a rule before going to bed by using examples. Not really allowed in a public forum for me to do that, but this is an important point for people to know. I didn’t just make it up and I do test it often and I don’t repeat it just because I heard it somewhere.

    https://www.redfin.com/WA/Bellevue/12829-SE-2nd-St-98005/home/508379
    Lot on the above was $660,000. 3 x lot would be $1,980,000 sold for $2,098,000. Close enough.

    https://www.redfin.com/WA/Kirkland/10834-108th-Ave-NE-98033/home/461367
    Lot on the above was $625,000. 3 x lot would be $1,875,000 sold for $1,750,000. Close enough.

    https://www.redfin.com/WA/Kirkland/8643-NE-124th-St-98034/home/282428
    Lot was $412,500. 3 x lot would be $1,236,000. Sold for $1,328,000. Close enough.

    It’s after midnight and I pulled those in 5 minutes without Cherry picking. The first three I saw.

    This is an important Rule of Thumb, because if you see that the builder paid $300,000 for the lot and is asking $1,500,000 for the new house…you have to know that something is not right. Maybe you still buy it for $1,500,000…maybe you don’t. But at least you know you have to come to some rational reason why you would. Maybe it’s a personal reason. Maybe it’s because you have money to throw away and plan to die in the house so you don’t care. But you should still know the rule and why you are breaking the rule.

    Off to bed. :)

  78. 78
    Kmac says:

    After thinking about this 3x lot thing overnight, perhaps it is kinda like the home maintenance “rule of thumb” that was being chatted about on the last entry.

    A house is a house- very similar no matter the specific area. The land is what makes the difference.

    Expensive land= house is a lower percentage of the completed value.

    More rural area= house is a higher percentage of completed value.

    I’ve built houses east of the cascades that were 5x and 6x lots, meaning the land was cheap by Puget Sound region standards and the total dollars of projects was much, much lower.
    ($165,00 1200 sq ft house on $25,000 lot)

    Nonetheless, I think a blanket statement about 3x this- 3x that encourages unsophisticated land buyers, who go out to cheaper pastures, to pay too much (and take all reason away from the market).

  79. 79
    synthetik says:

    It looks like Erik is the new Meshugy.

  80. 80

    By Kmac @ 66:

    By Kary L. Krismer @ 31
    BTW, just so that you know, if you plan on being a true flipper, you need a contractor’s license and bond. Consult an attorney about your specific situation.

    This was enacted in 2008 and the rcw’s were revised. As far as I can tell, it was revisited in 2015 and was changed by SB 1749.
    http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bills/Session%20Laws/House/1749-S.SL.pdf

    So it looks like you do not need to be a contractor to flip a house at <12 months, but ONLY IF you have CONTRACTED with a licensed contractor to do the work.

    There’s still an issue if you’re overseeing the contractor, which could make you a contractor yourself, and drag you back in. That would probably be true of most flippers, and at least argued in litigation if there were a problem with the house. The consequences of being unlicensed are so severe I wouldn’t risk it, and instead opt to be licensed and bonded (preferably cash bond).

  81. 81

    As to the other two threads, both involving “rules of thumb,” perhaps the real message is that if you’re going to be involved in a real transaction (actually make an offer) you should work with some real numbers that pertain to the specific property.

  82. 82
    ess says:

    By Kary L. Krismer @ 78:

    As to the other two threads, both involving “rules of thumb,” perhaps the real message is that if you’re going to be involved in a real transaction (actually make an offer) you should work with some real numbers that pertain to the specific property.

    Or to paraphrase Tip O’Neil who popularized the phrase ” all politics are local”

    All real estate deals are local

  83. 83
    ARDELL DellaLoggia says:

    RE: Kmac @ 76

    For agents, the most important application of the 3x lot rule is when choosing a list price for an old house. Again, speaking in the context of why old and even dilapidated “houses” can sell for what appear to be ridiculous prices from a buyer’s perspective. AKA “Why should we pay almost a million dollars for this crap box?”. The answer to that is always about the land value.

    What happens in Wenatchee stays in Wenatchee and this is not “Wenatchee Bubble”. I assume where a building lot can be had for $25,000, people aren’t paying obscene prices for a crap box. :)

    When we see an agent list an old house for $200,000 under land value because they don’t know the 3x lot rule, it’s embarrassing to the profession. It is also very costly for the consumers in total. The last time I saw that happen there were about 50 offers and no, that is not great.

    My mind automatically calculates the 30 or more of that 50 who were relying on that list price having a rational basis when doing a pre-inspection. At $500 per pre-inspection, that’s $15,000 of money down the toilet due to agent error. A “house” shouldn’t list for less than the value of the dirt it sits on.

    So while people who build may not like the rule, it is an important concept in markets where land value is high and highest.

    Another application has to do with a buyer’s expectations as to the condition of the house. If you are paying lot value, then the house is free. A free house might have many defects and understandably so. In other markets I have worked in where we were selling a “crap box” for $1.5 Million lot value, we did so “as is; sight unseen” to drive that point home. It might have termites. It might have a recalled old electric panel. It might need a plumbing upgrade from galvanized pipes. But not the seller’s concern if it is being sold at lot value.

    So while there are limited applications and primarily where land values are exceptionally high, it is still an extremely important rule for people to know.

    It follows the same logic as the foreclosure discussion. Foreclosures are supposed to be so cheap that defects are a non-issue. When that is not the case, as others are pointing out due to overbidding at the auction, mistakes will be made.

    But if you buy a “house” at 1/3rd the value that a new house on the same lot would sell for, the house is free. If you choose to live in a free house you just paid a million dollars for because you like the pricey neighborhood and commute, go for it. But don’t whine that it’s a “crap box”.

    Lots of valuable applications to the 3x lot rule…where crap boxes sell for obscene prices.

  84. 84
    wreckingbull says:

    Ardell, why would someone use a rule of thumb for a transaction as large as RE purchase. If it were my money, I would put together a detailed analysis with global and transaction-specific variables. I would run a handful of different scenarios though the model. All easily done with a free afternoon and a spreadsheet.

  85. 85

    RE: Matt P @ 36
    Ya Gotta Move Out of Seattle if You’re Too Old to Afford It?

    LOL…..tell that to the West Seattle Scandinavians who have lived in Seattle all their lives with their families…

    $40K is lots of money? I’m rolling on the ground in laughter…..what planet do you live on? BTW, they make like $2K/YR in the 3rd world and live in ditches….what you really mean is we need to spread the wealth, after all the Rich Elite Progressives allege the world owns and controls America, not its voters?

  86. 86
    Eastsider says:

    RE: ARDELL DellaLoggia @ 80 – The “3x rule” applies only to a small number of mostly expensive neighborhoods. On the Eastside, there are neighborhoods of half-century old houses valued at $600k+ (mostly ‘land’ value!). No builder will build $2m new homes in a neighborhood of teardowns using the 3x rule. For example, when is the last $1m+ new house built and sold in Lake Hills?

  87. 87
    wreckingbull says:

    By ess @ 79:

    All real estate deals are local

    I think the experience of 2008-2009 pretty much disproved this old mantra. Oh, and also one of the hilariously timed books from our old friend David Lereah

    https://www.amazon.com/All-Real-Estate-Local-Sellers/dp/0385519222

  88. 88

    By wreckingbull @ 84:

    By ess @ 79:

    All real estate deals are local

    I think the experience of 2008-2009 pretty much disproved this old mantra. Oh, and also one of the hilariously timed books from our old friend David Lereah

    https://www.amazon.com/All-Real-Estate-Local-Sellers/dp/0385519222

    I’d disagree. Although that was a national event, some localities and property types did much better than others. In simple terms, some localities and property types are more volatile than others. As an example, for waterfront property that would have been a great time to buy and a poor time to sell. Surprisingly, to me at least, in contrast, Seattle condos held up fairly well.

  89. 89
    Kmac says:

    RE: ARDELL DellaLoggia @ 80

    Great explanation, but Wenatchee Bubble? LoL!
    Come on, you know the point I was hammering at.

    Get away from the CORE area and your formula has less reliability.

  90. 90
    Kmac says:

    By Ardell DellaLoggia @ 77:

    RE: Kmac @ 74

    It really isn’t because I say it is. I didn’t make it up and it is not an “exact” science. Unfortunately agents have a ton of sometimes stupid rules that make it harder for me to describe to you here than to a client. But I’m going to go out on a limb and break a rule before going to bed by using examples. Not really allowed in a public forum for me to do that, but this is an important point for people to know. I didn’t just make it up and I do test it often and I don’t repeat it just because I heard it somewhere.

    https://www.redfin.com/WA/Bellevue/12829-SE-2nd-St-98005/home/508379
    Lot on the above was $660,000. 3 x lot would be $1,980,000 sold for $2,098,000. Close enough.

    https://www.redfin.com/WA/Kirkland/10834-108th-Ave-NE-98033/home/461367
    Lot on the above was $625,000. 3 x lot would be $1,875,000 sold for $1,750,000. Close enough.

    https://www.redfin.com/WA/Kirkland/8643-NE-124th-St-98034/home/282428
    Lot was $412,500. 3 x lot would be $1,236,000. Sold for $1,328,000. Close enough.

    It’s after midnight and I pulled those in 5 minutes without Cherry picking. The first three I saw.

    This is an important Rule of Thumb, because if you see that the builder paid $300,000 for the lot and is asking $1,500,000 for the new house…you have to know that something is not right. Maybe you still buy it for $1,500,000…maybe you don’t. But at least you know you have to come to some rational reason why you would. Maybe it’s a personal reason. Maybe it’s because you have money to throw away and plan to die in the house so you don’t care. But you should still know the rule and why you are breaking the rule.

    Off to bed. :)

    Boy, that got lost somewhere in moderation land didn’t it.
    Now the post numberings are all screwed up.

    If I am able to get a killer deal on something (anything), does it make sense that a future buyer gets their panties in an uproar because they can see what I paid for it?
    Or does the real estate agent get upset that THEIR formula isn’t at play and they need to look like the smart one in the room?

    Please tell me why it matters what a seller paid for what they are selling if it is obvious that the new house appraises at the agreed price and everyone is good with it otherwise.

  91. 91
    Erik says:

    RE: synthetik @ 79
    People have said that on here for years. Sounds like this meshugy character is pretty smart.

  92. 92
    Matt P says:

    Read this about incremental improvements. It talks about the 3:1 rule. If goes much more in depth on the rest of the blog if you are interested:https: //www.strongtowns.org/journal/2017/6/12/the-little-house-a-story-of-incrementalism
    Full series on incremental growth: https://www.strongtowns.org/journal/2017/12/12/the-power-of-growing-incrementally-series

  93. 93
  94. 94
    ronp says:

    RE: wreckingbull @ 43 – According to http://nursinghomediaries.com/howmany/ of the 78 million baby boomers 3.9 million will end up in nursing homes or assisted living. So good odds of dying from a fall or other causes in your house or apartment!

  95. 95
    Kmac says:

    RE: Matt P @ 92
    The Little House That Could story seems to suggest that when a property has an
    improvement/land ratio of 3/1 that it should be re-developed back to a
    9/1 ratio.
    ,(or some other higher ratio number where the improvements far outweigh the land value)

    Doesn’t that fly in the face of the suggestion on here that the redevelopment must follow the formula of 3x lot and that a $600k lot must have a $1.2 million dollar improvement for a total value of $1.8 million – no ifs, ands or buts?
    This newly developed property would be a 2/1 (improvement/land ratio), which is even more under utilized than the example in the story.

    Maybe a $1.8 million dollar property should be a 200k lot (8/1 ratio-$1.6 improvements/200k lot)
    or perhaps
    a $600k lot should have a $4.8 million dollar improvement [YIKES!] placed upon it for a total value of 5.4 million (8/1 ratio).

  96. 96
    ARDELL DellaLoggia says:

    RE: Kmac @ 95

    Haha! I think you added the “no ifs, ands or buts” part. LOL! Busy work day. I’ll try to respond to questions late tonight. I gave you three valid examples. No comment? You just don’t want it to be so even though I sent you proofs?

  97. 97
    jon says:

    By ronp @ 94:

    RE: wreckingbull @ 43 – According to http://nursinghomediaries.com/howmany/ of the 78 million baby boomers 3.9 million will end up in nursing homes or assisted living. So good odds of dying from a fall or other causes in your house or apartment!

    That article makes so many internal contradictions that it doesn’t seem trustworthy enough to try to decipher. Here is a more reasonable and comprehensive set of statistics: http://news.morningstar.com/articlenet/article.aspx?id=564139

    eg. 40%: The expected percentage of deaths in the U.S. occurring in nursing homes by 2020.

  98. 98
    Matt P says:

    By Kmac @ 95:

    RE: Matt P @ 92
    The Little House That Could story seems to suggest that when a property has an
    improvement/land ratio of 3/1 that it should be re-developed back to a
    9/1 ratio.
    ,(or some other higher ratio number where the improvements far outweigh the land value)

    Doesn’t that fly in the face of the suggestion on here that the redevelopment must follow the formula of 3x lot and that a $600k lot must have a $1.2 million dollar improvement for a total value of $1.8 million – no ifs, ands or buts?
    This newly developed property would be a 2/1 (improvement/land ratio), which is even more under utilized than the example in the story.

    Maybe a $1.8 million dollar property should be a 200k lot (8/1 ratio-$1.6 improvements/200k lot)
    or perhaps
    a $600k lot should have a $4.8 million dollar improvement [YIKES!] placed upon it for a total value of 5.4 million (8/1 ratio).

    RE: Kmac @ 95 – Yes, that is right. Traffic problems in the US are caused by the lack of population density. Seattle, San Francisco and Los Angeles should look more like NYC with a much more concentrated core, which would then spur better public transportation, but instead we just get sprawl until traffic is untenable and people are commuting from 4 hours away as is the case of people coming from Sacramento into the Bay area every day. We’re too far along to simply scrap everything and start over, but continually building bigger houses and more and more expensive land is not going to make these places better, but maybe that will just crystalize Seattle’s size and stop growth. I doubt it, though.

  99. 99
    Kmac says:

    RE: ARDELL DellaLoggia @ 96
    I did say “outside of CORE areas”, and the examples you gave are inside those core areas.
    I never disputed that people are paying those prices, my argument is is it realistic or sustainable if we have some kind of hiccup in the local economy and is it your place to question how much the seller paid for something?

    Look, all I am saying, like what was mentioned earlier by others, is that what works in one area won’t necessarily work in others.
    People hear you go on and on about 3x lot and they think “gee let’s head north and we can buy this land and we will build a nice home and it falls into the 3x paradigm etc. etc”.
    Can you say UP SIDE DOWN?

    But, I want to hear more from Matt P about the Little House that Could.
    Even though the valuation process that was put forth seems to agree more with my method of valuing older properties, the presentation seems somewhat discomforting for some reason.

    At 3x lot you are in a different place than the piece’s author.

    Good day!

    Edit:
    I see Matt P chimed in while I was typing this out…

  100. 100
    Matt P says:

    By Kmac @ 99:

    RE: ARDELL DellaLoggia @ 96
    I did say “outside of CORE areas”, and the examples you gave are inside those core areas.
    I never disputed that people are paying those prices, my argument is is it realistic or sustainable if we have some kind of hiccup in the local economy and is it your place to question how much the seller paid for something?

    Look, all I am saying, like what was mentioned earlier by others, is that what works in one area won’t necessarily work in others.
    People hear you go on and on about 3x lot and they think “gee let’s head north and we can buy this land and we will build a nice home and it falls into the 3x paradigm etc. etc”.
    Can you say UP SIDE DOWN?

    But, I want to hear more from Matt P about the Little House that Could.
    Even though the valuation process that was put forth seems to agree more with my method of valuing older properties, the presentation seems somewhat discomforting for some reason.

    At 3x lot you are in a different place than the piece’s author.

    Good day!

    Edit:
    I see Matt P chimed in while I was typing this out…

    RE: Kmac @ 99

    Basically, land is overvalued out in the suburbs because there is not enough high density housing inside the core of the city. You’d be crazy to build 9x $500k land value in the suburbs because no one is going to want to live in apartments that far out and a house than expensive would never sell or fit on the property. That’s why they’re going so far in the first place. But with land so overpriced, ever larger and more expensive houses are being put on them to justify the land value, but there’s only so high that house can go.

    We’re finally seeing a construction boom bringing in more apartments which will turn into condos which will bring people back into the city and drive down land values outside the city – if it keeps going. If there’s a large correction again, the cycle will start over, apartments won’t get built, projects under construction and in the pipeline will be cancelled, and we’ll go back to land values outside the city going crazy again because we don’t have the high density housing we need. A lot of it is a NIMBY problem where people simply won’t admit that large apartment buildings are the answer.

  101. 101
  102. 102
    wreckingbull says:

    RE: Kary L. Krismer @ 88 – Kary, let’s be honest here. That daft old trope is stupid.

    How about “All real estate is a mix of local, macroeconomic and irrational psychological trends” Does that work for you?

  103. 103

    RE: Kary L. Krismer @ 59
    Old Versus New Houses???

    Ask a recent Bellevue home Owner about the rusty water from the 60 year old Bellevue infrastructure.
    Ask a New Home Owner in the Seattle area how big their lot is.
    Ask a Seattle home owner where guests can park.
    Ask an Amazon worker how they can pay rent in Seattle with their dinky pay.

    Old homes are not energy efficient and I’m sure old home owners would never admit they keep the heat off to save money and this causes mildew BTW…do you like a nice warm clean smelling house in the winter? Buy a small energy efficient one then….my heat is never turned down. I don’t like mildew.

  104. 104

    RE: softwarengineer @ 103
    Its Also a Great Selling Point Too

    I can sell the house and brag about my $354/mo Christmas Heating/Light electric bill on my 1460 SF rambler design….it was high and its a selling point [I don’t need incense covering up the mildew odor when listing the house….LOL]. Leave your heat on high if you like clean air in the winter…ask an allergy doctor if you want to disagree.

    Imagine a proportional utility bill on an old 2×4 frame insulation…mine is 2×6. 50% more insulation HAS to make a big difference to you folks that don’t understand math and science.

  105. 105

    RE: softwarengineer @ 104
    Educated Idiots

    Believe Open Border Asian engineers will make insulation unnecessary….after all, they are so much better than lower paid American ones….LOL

    Unrelated to post….did you hear t the Detroit Auto Show? Trucks are King now. FCA [American Engineered Dodge] stock is leading the Big Three. 31% dividend GROWTH. Not only did Americans design them; they’re highest quality and cheapest in price too. The Toyota Corolla is priced about the same as a Dodge Charger.

    What is American made anyway? It sure isn’t American engineered anymore….LOL.

  106. 106

    By wreckingbull @ 102:

    RE: Kary L. Krismer @ 88 – Kary, let’s be honest here. That daft old trope is stupid.

    How about “All real estate is a mix of local, macroeconomic and irrational psychological trends” Does that work for you?

    Stupid would be too strong of a word because “local” matters a lot all the time. Changes in macro conditions and trends are somewhat infrequent. But yes those other two factors do come into play.

    Just to put things in context, one of the stupidest things I ever heard an agent say was to price a house by taking its purchase price from years ago, and multiply that by the ratio of the current NWMLS median for the NWMLS area over the same number from the date the property was purchased. Ignoring the fact that different house types would have different rates of appreciation, even an NMWLS area is not sufficiently “local.” It’s not uncommon that being some direction from a certain road makes a considerable amount of difference in value.

  107. 107
    N says:

    An interesting read on what lengths some chinese apparently go to in order to buy canadian property. Wonder if this applies here?

    http://vancouversun.com/opinion/columnists/douglas-todd-explosive-b-c-court-case-details-seven-migration-scams

  108. 108

    By softwarengineer @ 104:

    Imagine a proportional utility bill on an old 2×4 frame insulation…mine is 2×6. 50% more insulation HAS to make a big difference to you folks that don’t understand math and science.

    That’s why I said insulation could be updated “to some extent.” The walls are typically the exception because of the use of 2x4s, although there are some enclosed ceiling areas that have issues too.

    For my house the two biggest energy savers were insulating the ductwork and getting rid of the Honeywell thermostat which did not allow an adjustment of swing.

    It’s amazing what they didn’t insulate back in the days of cheap energy. Most houses built before sometime prior to 1960 might not have any insulation in the walls.

  109. 109
    N says:

    https://wolfstreet.com/2018/01/16/sales-prices-of-manhattan-office-buildings-as-chinese-buyers-absent/

    While not residential and not Seattle, I wonder if anyone has any insight to what the current demand from Chinese buyers is like given its been most of a year since the tighter controls on outflows from the Chinese government.

    Of course if they are using the tactics from the above article I posted perhaps they are getting around it.

  110. 110

    RE: Kary L. Krismer @ 108
    True Kary

    They also have Seattle area leak detection specialists to assist energy efficiency patching on old structures….but I’ll be blunt Kary…anyone who understands the basics of thermodynamics knows insulation is the key, if not sole solution, to energy efficiency.

    Ask a good home inspector….they’ll tell ya the same thing….

  111. 111
    Kmac says:

    By Kary L. Krismer @ 108:

    By softwarengineer @ 104:

    Imagine a proportional utility bill on an old 2×4 frame insulation…mine is 2×6. 50% more insulation HAS to make a big difference to you folks that don’t understand math and science.

    That’s why I said insulation could be updated “to some extent.” The walls are typically the exception because of the use of 2x4s, although there are some enclosed ceiling areas that have issues too.

    For my house the two biggest energy savers were insulating the ductwork and getting rid of the Honeywell thermostat which did not allow an adjustment of swing.

    It’s amazing what they didn’t insulate back in the days of cheap energy. Most houses built before sometime prior to 1960 might not have any insulation in the walls.

    You could add foam and then new siding, but that is expensive and a negative return on dollar for many years…
    I think doing R-49 in the attic would probably have a reasonable payback period

    Limiting air flow is a key to efficiency as well as adding insulation.

    I have noticed that in my detached shop, that is finished on interior, that if I keep the heat at a steady upper 60’s – 24/7 – I am using way less electricity than if I turn the heat down at days end.

    The thermal mass of the concrete, drywall and everything else in the room absorbs heat and radiates it back. And much less moisture problems as SWE suggests.
    I also keep some Dri-Z-Air cannisters in 2 opposing corners and empty them every other week.

    No more cycling the heat up and down – just one consistent temperature.

  112. 112

    By Kmac @ 111:

    I think doing R-49 in the attic would probably have a reasonable payback period

    Limiting air flow is a key to efficiency as well as adding insulation.

    I should have mentioned that our ductwork was both sealed and insulated. That had an incredible impact on our heat bill–more than a 20% savings. We also did the crawlspace insulation at the same time, but I’m attributing most of the gain to the ducts.

    We did the attic later and quite frankly I didn’t notice a bill change at all, and I keep rather good track of energy use, noting also outside temperature. It did help slightly in the summer keeping the house cooler.

    What I always wonder is what’s the payback period on new window frames, particularly if the old ones were already two-pane. Of course there are other benefits over aluminum, like less condensation, but I can’t imagine the payback is less than 10 years.

  113. 113
    S-Crow says:

    Buying or Selling in Seattle? Just received Final Electrical Bill from City Light from a closing J-U-L-Y 2017. It’s January 16, 2018.

    Agents, please inform your sellers refund disbursements can take this long. We have others from closings last year that we are waiting on. It is nothing short of a mess and the Seattle Times article this past weekend sort of shed a light (no pun intended) on the billing issues.

    S-Crow

  114. 114
    uwp says:

    By Kary L. Krismer @ 106:

    Just to put things in context, one of the stupidest things I ever heard an agent say was to price a house by taking its purchase price from years ago, and multiply that by the ratio of the current NWMLS median for the NWMLS area over the same number from the date the property was purchased. Ignoring the fact that different house types would have different rates of appreciation, even an NMWLS area is not sufficiently “local.”

    I agree that “guidelines” are only guidelines, but I use a similar bit of math to estimate sales price with moderate success, probably +/- 5% with what the house eventually closes at. Then again, I’m not an agent :)

    Obviously, if I was seriously looking at a home or something I would dig deeper, but it’s handy for seeing something pop up in my neighborhood with a list price designed to get a bidding war and have a quick rough idea of where it will end up.

  115. 115

    By S-Crow @ 113:

    Buying or Selling in Seattle? Just received Final Electrical Bill from City Light from a closing J-U-L-Y 2017. It’s January 16, 2018.

    Agents, please inform your sellers refund disbursements can take this long. We have others from closings last year that we are waiting on. It is nothing short of a mess and the Seattle Times article this past weekend sort of shed a light (no pun intended) on the billing issues.

    S-Crow

    You should have seen my transaction for a client buying a HUD property in Seattle, back when HUD required you use their escrow–the worst escrow in the world! It was ridiculous because Seattle Utilities’ payoff was always padded in an amount that exceeded the escrow’s authority. After two extensions they finally found a solution, and it involved putting the utilities in my client’s name before closing, and without permission! I don’t remember why that helped, but it worked.

  116. 116

    By uwp @ 114:

    By Kary L. Krismer @ 106:

    Just to put things in context, one of the stupidest things I ever heard an agent say was to price a house by taking its purchase price from years ago, and multiply that by the ratio of the current NWMLS median for the NWMLS area over the same number from the date the property was purchased. Ignoring the fact that different house types would have different rates of appreciation, even an NMWLS area is not sufficiently “local.”

    I agree that “guidelines” are only guidelines, but I use a similar bit of math to estimate sales price with moderate success, probably +/- 5% with what the house eventually closes at. Then again, I’m not an agent :).

    On the topic of being an agent, I could see maybe doing that if you had a client who wanted a higher price than what you were suggesting, and the math worked out to support your number. And I could see it would have a bit more merit if the client’s house was priced near either the mean or the median when purchased and you used the calculations based off of whichever it was. If the price were far from the mean or median I’m not sure what it would really tell you. Ignoring that, if you narrowed it down to zip code it might work even better. I’ve never done that though and would prefer a more detailed analysis.

  117. 117
    Bitcoin Bubbles says:

    Was the local Bitcoin real estate sale the top of the Bitcoin bubble?

  118. 118

    RE: Kary L. Krismer @ 112
    Good Question Kary

    I got a rock chip in my living room window from gardeners on the road with riding mowers throwing rocks. I glued the chip with strong adhesive. Two paned glass is a positive; but pay back on investment of replacing 2 pane with new 2 pane is ZERO.

    No use throwing good money at bad maintenance.

  119. 119

    Apparently Apple is also going to have another corporate campus. Hopefully it’s not in Seattle proper! Maybe that Weyerhauser space in Federal Way! “Auburn” properties which are not really Auburn could use a boost. ;-)

    https://www.usatoday.com/story/tech/2018/01/17/apple-pays-38-billion-trump-tax-bill-open-second-hq/1041261001/

  120. 120
    Jon says:

    RE: Kary L. Krismer @ 119 – Since technical support jobs are a leading candidate for replacement with AI, it would make sense to put those jobs close to the engineers that are developing the code to do that.

  121. 121
    Blurtman says:

    10 year UST’s – to the moon!

    https://www.cnbc.com/quotes/?symbol=US10Y

    Run, you fools!

  122. 122
    Kmac says:

    Amazon HQ2 candidates:
    http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2327285

    – Atlanta, GA

    – Austin, TX

    – Boston, MA

    – Chicago, IL

    – Columbus, OH

    – Dallas, TX

    – Denver, CO

    – Indianapolis, IN

    – Los Angeles, CA

    – Miami, FL

    – Montgomery County, MD

    – Nashville, TN

    – Newark, NJ

    – New York City, NY

    – Northern Virginia, VA

    – Philadelphia, PA

    – Pittsburgh, PA

    – Raleigh, NC

    – Toronto, ON

    – Washington D.C.

  123. 123
    ARDELL DellaLoggia says:

    RE: wreckingbull @ 84

    Usually one would use three or four methods as checks and balances against one another. One or two of those on their own might appear to be “stupid” as Kary said, IF it were the ONLY method being used.

    Odd to me you listed “global” first. Something crossing my mind now and again is why is “global” so relevant and right thinking…until Russia comes along and has an opinion on who they want to be our next President :)

  124. 124
    ARDELL DellaLoggia says:

    RE: Eastsider @ 86

    Sorry it took me so long to reply. I haven’t been beating my head against the wall in Ardmore or Lake Hills since late 2016/early 2017 when things started getting whacky over there. Without the Lake Hills division that is aka Executive Lochmoor, the out of Country investors started mucking up the valuations by being overly mesmerized by the Bellevue/Swellvue tag. Jury’s still out as the resultant Million plus flips are still in play. I just checked this morning before heading to meet the carpet installers. We should have that answer by end of first quarter.

    You can’t be 1/3rd lot if the builders never want your lot. That might move it to flipper math, but usually not as flipper prices lag behind the owner occupant bidders by a wide margin.

    While it is true that 3x lot doesn’t apply in every neighborhood, it still establishes the upper limit via nearby neighborhoods. So they are interdependent valuation methods.

  125. 125
    Matt P says:

    By Kmac @ 122:

    Amazon HQ2 candidates:
    http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2327285

    – Atlanta, GA

    – Austin, TX

    – Boston, MA

    – Chicago, IL

    – Columbus, OH

    – Dallas, TX

    – Denver, CO

    – Indianapolis, IN

    – Los Angeles, CA

    – Miami, FL

    – Montgomery County, MD

    – Nashville, TN

    – Newark, NJ

    – New York City, NY

    – Northern Virginia, VA

    – Philadelphia, PA

    – Pittsburgh, PA

    – Raleigh, NC

    – Toronto, ON

    – Washington D.C.

    RE: Kmac @ 122
    That Miami made the final list of 20 tells me that this isn’t about what’s best for Amazon but where Bezos wants to go. Miami has hurricanes, constant flooding, and massive amounts of fraud. No major company would seriously consider putting a 2nd headquarters there for anything but personal reasons of the CEO.

  126. 126
    uwp says:

    They couldn’t get the “short” list down to 5? or at least 10?
    The amount of time and money the “loser” cities will spend on this is sad.

  127. 127
    S-Crow says:

    Buyers with financing alert: Obtaining seller paid contributions.

    it is incredibly important that you make certain your loan officer provides you an accurate closing cost picture almost immediately after you come to mutual acceptance. If seller contributions toward allowable closing costs are not completely used up HAVE A PLAN to prevent the loss of some or substantial portions of seller contributions. DO NOT LEAVE MONEY ON THE TABLE. Any unused portion of those funds will go back to the seller as proceeds.

    Contracts must have air tight language that provides for a scenario to use ALL the seller contributions as they were intended.

  128. 128

    RE: S-Crow @ 127 – That’s always been a potential problem, but seldom an actual problem, in my experience. I’m not sure though what an agent or buyer could do to change the language–there were issues in the past when they made a change to 22A, but they’ve since corrected them. I had language back then correcting it, but that was an entirely different market. Custom language is much more difficult/impossible to get sellers to accept in this market. Do you have a specific example of something that a lender would have allowed that the contract did not allow? Or was it just the case of a lender who wasn’t good at math?

    BTW, as to the “seldom” comment, we did have it pop up last year on a listing. The buyer ended up leaving about $800 on the table, but the amount requested was set by their lender!

  129. 129
    David B. says:

    Regarding the “3x rule”, I generally agree with it. I actually came up with that figure on my own several years ago while considering buying a lot and having a modest home built on it; based on estimated construction costs, spending more on the lot than the “3x rule” dictates would have resulted in a cost per interior square foot (figuring in both land and building costs) above market rate for acquiring existing properties. Then I did some research and found (not too surprisingly) that the “3x rule” was an established rule of thumb.

    In my case, lots inexpensive enough to result in a 3x ratio for the sort of home I wanted to live in just didn’t exist, so that was enough to make me drop the idea. It wasn’t my original plan anyhow, but I had decided to entertain the idea after discovering how scarce the sort of home I was seeking was. (Eventually, I managed to get one of those scarce existing homes.)

    Basically, unless you’re dead-set on a brand-new home, housing (controlling for location, size, neighborhood quality, etc.) is fungible, and it doesn’t make sense to spend *significantly* more per square foot than the going market rate.

  130. 130
    Kmac says:

    RE: David B. @ 129

    If you are referring to comments above ^^^, spending LESS than 3x (1/3 final improved value) on the lot, — NOT MORE than the 3x (1/3 final improved value) is the point I was making.

    I will concede that this(3x Lot) may be an established rule in a core metropolis area such as Seattle (with higher valuations attributable to the raw land), but less accurate out away from the big city.

    The last house I did about a year ago was a 450k home on a 90k lot in a UGA within SnoCo. = 5x (20% of final valuation) and well within existing neighborhood valuations

    When the final, not estimated numbers came in, 110k was the most I could have justified paying for the lot. Roughly a 4x (or 25% of finish valuation)

    But someone hears 3x and sees existing 450k- 500k homes and might think 150k is a good price for the lot to build a 450k property…….
    Knock yourself out, but I think you would have paid too much in those circumstances.

    I guess re agents need something to establish a baseline, but ultimately it is only worth what someone is willing to pay.
    and
    I guess some builders have the need to constantly be doing something too, price be damned- (& hoping a greater fool comes along..)

  131. 131
    Kmac says:

    “What is the market value of land, which currently does not have a well, in light of the Hirst Decision?” The answer is: “Whatever the market will pay for such land.”

    https://dor.wa.gov/sites/default/files/legacy/Docs/Pubs/SpecialNotices/2018/sn_18_HirstDecision.pdf

    I think buying raw land without a municipal/community water system is going to be very complicated going forwards in WA.
    Rely on an future “EXEMPT” well at your peril.
    This will be a statewide issue too, not just Puget Sound region.

  132. 132

    RE: Kmac @ 131 – I think it’s been an issue more for out of the Puget Sound area. Water rights are big east of the mountains. Hirst itself was Watcom County, but it affected all rural areas (without water systems).

  133. 133
    Marc says:

    RE: Kary L. Krismer @ 128RE: S-Crow @ 127

    We run into this all the time because we rebate a big chunk of the commission to buyers. It used to be a lot harder than it is today but we do occasionally get push back on our contract language that deals with it. Particularly on new construction with bigger builders.

    Back when we started in 2009 I don’t recall any lender that would allow 3rd party contributions in excess of buyer closing costs and prepaids despite that being perfectly permissible under Fannie/Freddie/VA/FHA guidelines so long as handled appropriately. Today many lenders still won’t do it but more and more will including long-time hold out Wells Fargo. However, I am still wary of Wells on this issue and worry that it might be a case by case thing, i.e., luck of the draw in getting an old school or progressive underwriter to handle your file.

    S-Crow is right though that if you negotiate for a big seller credit or rebate from your lender or broker, you need to have a good understanding of how your particular lender handles third party contributions so you don’t leave money on the table.

  134. 134
  135. 135
    Kmac says:

    Puget Sound outlying areas will probably have issues too.
    ie: I-90 between Issaquah and the Summit and the growth spurt along Hwy 2 to Stevens are potentially affected areas that could be problems depending on what the counties do.

    I know that a lot of these places in the hills, that you think should have water because of the location, do not (at a reasonable cost anyhow).

    A reduced water availability study by the county could potentially affect water purveyors too, especially in a rapidly growing area.

  136. 136
    Kmac says:

    RE: David @ 134
    Burien is like another planet to me…..

    How much to build the improvement required for final approval of the 2 addtnl lots?
    How much would that Burien home be valued at on a much smaller lot?

    I’ve noticed that many sellers of paper lots always price them as if they are actually constructed.
    Better get educated before buying an uncompleted project.
    **Not saying that is the case here**

  137. 137

    RE: Marc @ 133 – I assumed S-Crow was just talking about seller paid closing costs, per 22A. As you know, on the 22A issue, if the buyer cannot use all that the seller agreed the seller just gets to keep the money. Yours is more an issue of being able to get financing with the rebate–the lender allowing it. Sort of similar to part of a down payment being gift, where some lenders care, some don’t.

  138. 138
    Wile E. Millenial says:

    The legislature apparently just agreed on a “Hirst fix” today.

  139. 139
    jon says:

    There is an interesting map of the locations of headquarters of Fortune 500 companies at http://fortune.com/fortune500/visualizations/ . Denver doesn’t seem to be any more popular than Miami, and that has been a frequent prediction for HQ2. The exclusion of Seattle and San Francisco are for obvious reasons, and apart from the concentration around DC it is a pretty representative set of cities. It seems to me they could have come up with that same list in an afternoon with no publicity at all.

    By making it so public they probably hope to make as many of their customers as possible feel like they had a fair chance, and that means keeping if geographically representative right up until they select a location in the NY-DC corridor.

    (The other visualization on that map is fun to hover the mouse over various columns)

  140. 140
    Eastsider says:

    By Blurtman @ 121:

    10 year UST’s – to the moon!

    https://www.cnbc.com/quotes/?symbol=US10Y

    Run, you fools!

    I commented only last week that mortgage rate might hit 4.25% sometime this year. MND now shows it is at 4.22% lol (http://www.mortgagenewsdaily.com/)

    UST 10yr yield has continued its upward march unabated and is now at 2.63%. (It was 2.03% on Sept 7, 2017.) At this rate, it might even exceed 2.75% before midyear. I believe one Fed governor is now talking about potential 4 hikes this year. The Fed, as usual, is behind the curve and is now playing catch up. If you are a CD buyer, you saw the sea change in rates in the past month.

    I don’t see the yield curve inverting this year… well, perhaps after the midterm election if Dem wins both houses.

    Expect higher mortgage rate going forward. The low rates are probably history.

  141. 141
    wreckingbull says:

    By Kary L. Krismer @ 132:

    RE: Kmac @ 131 – I think it’s been an issue more for out of the Puget Sound area. Water rights are big east of the mountains. Hirst itself was Watcom County, but it affected all rural areas (without water systems).

    This is correct, except for the east/west comment. It is hitting western counties just as bad. The Hirst decision was made on the arguments of lobbyists, not scientists, and I hope there is some resolution to this mess.

  142. 142

    RE: wreckingbull @ 141 – I didn’t mean the west side wasn’t affected, but more that water rights were a big issue in the east even prior to Hirst.

    I believe this is the legislation passed by the legislature to “fix” Hirst. It’s rather long and I haven’t made my way all the way through it, but it seems to have temporary and long-term fixes.

    http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/Senate%20Bills/6091-S.E.pdf

  143. 143
    wreckingbull says:

    RE: Kary L. Krismer @ 142 – Ground-zero for the water rights battle is soggy Skagit County, and this pre-dates Hirst. 2001, in fact.

    http://kuow.org/post/court-case-latest-battle-water-wars-skagit-river

    It looks like the recent legislation asks for an additional $500/well, and metering of private, exempt wells. Although that is all I know so far. I have not had time to read much on it. So really, we are just where we were before, but with a money grab and more bureaucracy added. Nice.

  144. 144

    RE: Kary L. Krismer @ 142
    Science Makes Seattle Water Shortage Fake News

    In Kent city hall still falsely alleges there’s a water shortage….their posters are still up.

    I live above the East Hill Water Spring which pours constantly into the Ocean….99% of it is unused. It costs too much, but its not SCARCE at all…more Fake News to control TAX PAYERS through PROGRESSIVE Fascism.

    Ohhhh….other news from Sacramento today….middle class skilled workers fleeing [we’re talking a several percent of the state’s population] California’s HUGE Sanctuary State TAXES…just like New York and soon [I predict]….Seattle.

    I now the Mexican Standoff….the GOVERNMENT SHUTDOWN likely today over DACA, you know the minor children abandoned by “Hades Hole Central American” countries. Its legally called 3.6 million [includes Obama chain migration] HUMAN TRAFFICKING [or sex slaves] and they’re more important than national security? God help us legal Americans if this is how our country works for us.

  145. 145

    RE: softwarengineer @ 144 – We need water to pour into the ocean for fish.

    Also, water is relatively cheap, it’s sewer treatment that is expensive.

  146. 146

    RE: wreckingbull @ 143 – I won’t purport to know that much about Hirst, having only read it a handful of times over a long period of time, and never having applied for a water permit of any type. But with that disclaimer, my impression of the decision was that local governments had not been doing what they were required by statute to do, and instead were relying on outdated studies produced by the state. Assuming that’s correct, then I could see why they would provide a funding mechanism for doing future studies–but note I didn’t even get to the funding in the link I posted. I’m just guessing that’s what it’s for.

  147. 147
    uwp says:

    By Eastsider @ 140:

    Expect higher mortgage rate going forward. The low rates are probably history.

    (Said everyone for the last 10 years)

    Why, rates are rising almost as fast as 2013!
    Link to Chart

  148. 148
    Kmac says:

    If properties are devalued due to there being insufficient water availability, the property tax on everyone else will be rising to make up for the short fall.

    The rub east of the mntns is that they have always considered themselves not part of WA due to the left leaning western side mostly setting the rules.
    As far as water goes, they typically have thumbed their noses at Ecology requirements, otherwise they would have zero growth. There is no repercussions to them because govm’t has that built in mechanism of immunity , but it sure trickle on down to the little peon land owner – even after local gov’t approvals.

  149. 149
    Eastsider says:

    By uwp @ 147:

    (Said everyone for the last 10 years)

    So said everyone?!

    Fake news. LOL.

  150. 150

    By Kmac @ 148:

    If properties are devalued due to there being insufficient water availability, the property tax on everyone else will be rising to make up for the short fall.

    Yep, exactly. And property values are determined as of the first of the year! Ideally this legislation would have dealt with that to fix this year’s issue. Otherwise Assessors are going to get slammed with valuation appeals.

  151. 151
    uwp says:

    By Eastsider @ 149:

    Fake news. LOL.

    I have curated a small selection of posts, feel free to read through and see if the vast majority of folks think rates are headed higher.

    (I especially enjoy the polls from 2011 and 2013.)

    2016 – Low Rates Continue to Prop Up Affordability
    2015 – Affordability Will be Destroyed if Interest Rates Increase
    2014 – Another Bubble Affordability Only Sustained by Low Rates
    2013 – Poll: 30 Year Mortgage Interest Rates Will be Above ____ by 2014
    2012 – People Stink at Predicting Interest Rates
    2011 – When Will Interest Rates First Rise Back Above 6%?
    2010 – Do Rising Interest Rates Lead to Falling Home Prices
    2009 – The Consequences of a Market Full of Monthly Payment Buyers
    2008 – Interest Rates vs Home Prices

    Another highlight is a commenter alerting The Tim to the fact that the 30 year rate has gone above 4% (in August 2012). You’ll have to click this link to find out who that commenter is.

  152. 152

    RE: uwp @ 151
    The MAGA Agenda Will raise Interest Rates as Inflation Kicks up with Much Higher Wages

    So what….savings interest also goes up.

  153. 153
    Kmac says:

    RE: softwarengineer @ 152

    I don’t think you’re going to see Much Higher Wages for some time though….

    That’s the missing equation

  154. 154
    Eastsider says:

    RE: uwp @ 151 – LOL. So if someone writes “30 year mortgage rates dipping back under 4%,” does he think 30 year rate is heading lower? Or if he writes the DOW breaks through 26,000 a couple days ago, is he a bull?

    That said, I believe we are now past the sub-4% 30-yr mortgage loan rate. And if you disagree, say so!

  155. 155
    Kmac says:

    Not quite yet, but probably soon.
    Still as low as 3.875
    https://www.bankrate.com/mortgage.aspx

    I was just quoted 4% 30 yr fixed by a local bank yesterday.

  156. 156
    Eastsider says:

    RE: Kmac @ 155 – MDN’s Daily Mortgage Rate Survey currently has 30yr at 4.23%. http://www.mortgagenewsdaily.com/ That is a benchmark being quoted everywhere.

    Btw, trying to call the bottom is an impossible task. But I believe the mortgage rate is moving higher this year.

  157. 157
    S-Crow says:

    With the US Gov. shutdown appearing the case it is possible that FHA and VA transactions (purchases and refi’s) will be paused as happened last time. I’m sure the Mortgage industry will be sending out bulletins shortly.

    S-Crow

  158. 158
    redmondjp says:

    By S-Crow @ 157:

    With the US Gov. shutdown appearing the case it is possible that FHA and VA transactions (purchases and refi’s) will be paused as happened last time. I’m sure the Mortgage industry will be sending out bulletins shortly.

    S-Crow

    I’m one of the affected “non-essential” (I concur) federal employees, so I have been following this very closely. It’s still early and it looks like everybody including the president is staying in town over the weekend. So there is a small chance that they may hammer out a deal before Monday. I’m not holding my breath personally, but it is a possibility.

  159. 159
    Blurtman says:

    By Eastsider @ 156:

    RE: Kmac @ 155 – MDN’s Daily Mortgage Rate Survey currently has 30yr at 4.23%. http://www.mortgagenewsdaily.com/ That is a benchmark being quoted everywhere.

    Btw, trying to call the bottom is an impossible task. But I believe the mortgage rate is moving higher this year.

    Wolf Richter: What Will Rising Mortgage Rates Do to Housing Bubble 2?

    By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street

    Oops, they’re already rising

    The US government bond market has further soured this week, with Treasuries selling off across the spectrum. When bond prices fall, yields rise. For example, the two-year Treasury yield rose to 2.06% on Friday, the highest since September 2008.

    In the chart, note the determined spike of 79 basis points since September 8, 2017. That was the month when the Fed announced the highly telegraphed details of its QE Unwind.

    September as month of the QE-Unwind announcement keeps cropping up. All kinds of things began to happen, at first quietly, without drawing much attention. But then the trajectory just kept going.

    The three-year yield, which had gone nowhere for the first eight months of 2017, rose to 2.20% on Friday, the highest since October 1, 2008. It has spiked 82 basis points since September 8:

    The ten-year yield – the benchmark for financial markets that most influences US mortgage rates – jumped to 2.66% late Friday.

    This is particularly interesting because the 10-year yield had declined from March 2017 into August despite the Fed’s three rate hikes last year, and rising short-term yields.

    At 2.66%, the 10-year yield has reached its highest level since April 2014, when the “Taper Tantrum” was winding down. That Taper Tantrum was the bond market’s way of saying “we’re shocked and appalled,” when Chairman Bernanke dropped hints the Fed might eventually begin tapering what the market had called “QE Infinity.”

    The 10-year yield has now doubled since the historic intraday low on July 7, 2016 of 1.32% (it closed that day at 1.37%, a historic closing low):

    Friday capped four weeks of pain in the Treasury market. But it has not impacted yet the corporate bond market, and the spread in yields between Treasuries and corporate bonds, and particularly junk bonds, has further narrowed. And it has not yet impacted the stock market, and there has been no adjustment in the market’s risk pricing yet.

    But it has impacted the mortgage market. On Friday, the average 30-year fixed-rate mortgage with conforming loan balances ($417,000 or less) for top-tier borrowers, according to Mortgage News Daily, ended at 4.23%, the highest in nine months.

    But historically, 4.25% is still very low. And likely just the beginning of a long, uneven climb higher.

    And the impact on mortgage payments can be sizable. When rates rise for example from 3.5% to 4.5%, the payment for a $250,000 mortgage jumps by $144 to $1,267 a month. This can move the payment out of reach for households that have trouble making ends meet.

    A one-percentage-point increase takes on larger proportions in a place like San Francisco, where it might take a mortgage of $1.25 million to buy a median home. At 3.5%, the monthly payment is $5,613. At 4.5%, it jumps to 6,334, an increase of $721 a month and an increase of $8,652 a year.

    A mortgage rate of 4.5% is still very low! And it is likely headed higher.

    Since the Financial Crisis, the ultra-low mortgage rates were among the factors that have caused home prices to soar. But as rates are heading higher, the housing market is in for a big rethink. These higher rates are going to be applied to the now prevailing sky-high home prices.

    This will come in addition to the rethink triggered by what the new tax law will do to the housing market.

    There’s another aspect to this equation: Homebuyers who are willing and able to stretch to cough up those higher mortgage payments can’t spend this money on other things. Falling mortgage rates gave a huge boost to home prices and to the entire economy in numerous ways. But that process will go into reverse.

    So where will it go from here? The 10-year yield is still historically low and has a lot of catching up to do with regards to the trajectory of shorter-term yields. In addition, the Fed will continue to push its buttons – gradually hiking its target range for the federal funds rate and proceeding with its “balance sheet normalization.” And as the 10-year yield rises, mortgage rates will respond, and Housing Bubble 2 will get a lot more costly to deal with.

    Even the bond market’s inflation expectations now exceed the Fed’s target. Read… Bond Market Smells Inflation, Begins to React

    https://www.nakedcapitalism.com/2018/01/wolf-richter-what-will-rising-mortgage-rates-do-to-housing-bubble-2.html

  160. 160

    RE: Kmac @ 153
    You Sound Just Like the LOSER Paul Krugman

    The NYTs Fake News finalist predicting Trump would cause a 2017 stock market CRASH…..not.

    Or Hillary will easily win the 2016 election…LOL

  161. 161

    RE: S-Crow @ 157 – In the past getting information out of the IRS has also been an issue. Not sure about this time.

  162. 162

    RE: Kary L. Krismer @ 145
    Good Point Kary

    How much of the potable water from the Cascades is used to wash SEATTLE OVERPOPULATION sewage into the ocean to kill off the Orcas whales? Most of it as you inferred? God help us if that’s true….LOL

    We need another OVERPOPULATION control flood, but make sure to save all the animals? it definitely happened about 7000 years ago, so its possible. Scientists agree on this.

  163. 163
    whatsmyname says:

    By uwp @ 151:

    I have curated a small selection of posts, feel free to read through and see if the vast majority of folks think rates are headed higher.

    (I especially enjoy the polls from 2011 and 2013.)

    2016 – Low Rates Continue to Prop Up Affordability
    2015 – Affordability Will be Destroyed if Interest Rates Increase
    2014 – Another Bubble Affordability Only Sustained by Low Rates
    2013 – Poll: 30 Year Mortgage Interest Rates Will be Above ____ by 2014
    2012 – People Stink at Predicting Interest Rates
    2011 – When Will Interest Rates First Rise Back Above 6%?
    2010 – Do Rising Interest Rates Lead to Falling Home Prices
    2009 – The Consequences of a Market Full of Monthly Payment Buyers
    2008 – Interest Rates vs Home Prices

    Another highlight is a commenter alerting The Tim to the fact that the 30 year rate has gone above 4% (in August 2012). You’ll have to click this link to find out who that commenter is.

    Sir, that is an awesome collection, and makes a dandy new testament to complement the Great ARM Reset torah of 2005-2007.

  164. 164
    whatsmyname says:

    By uwp @ 151:

    I have curated a small selection of posts, feel free to read through and see if the vast majority of folks think rates are headed higher.

    ………….

    Sir, that is an awesome collection. It makes a dandy new testament to complement the Great ARM Reset torah of 2005-2007.

  165. 165
    uwp says:

    By whatsmyname @ 162:

    Sir, that is an awesome collection. It makes a dandy new testament to complement the Great ARM Reset torah of 2005-2007.

    We have many sacred texts here at SeattleBubble. Some of my favorites were from the Prophet Elizabeth Rhodes.

  166. 166
    Kmac says:

    By softwarengineer @ 159:

    RE: Kmac @ 153
    You Sound Just Like the LOSER Paul Krugman

    The NYTs Fake News finalist predicting Trump would cause a 2017 stock market CRASH…..not.

    Or Hillary will easily win the 2016 election…LOL

    By Kmac @ 153:

    RE: softwarengineer @ 152

    I don’t think you’re going to see Much Higher Wages for some time though….

    That’s the missing equation

    Wow! You got that from what I wrote?

    No Hillary or Bernie or Krugman fan here…

    But I will say that I think that anyone who thinks what is going on in the stock market has much to do with Trump is delusional.
    Remember he was saying how phony the entire economic rebound was right up until he got in office but now he wants credit for it all??

    I kind of feel like we are living in the Truman show nowadays. ;-)

    but I will give you this: your un-medicated rants are borderline entertaining sometimes – LOL!

  167. 167
    Justme says:

    RE: uwp @ 147
    RE: uwp @ 151

    As usual, the bubble cheerleaders on this site are out prognosticating that mortgage interest rates will NOT rise, because they know that if the rates continue to rise the bubble will be in deep trouble. Bubble cheerleaders rarely talk about any underlying mechanisms, but instead pretend they are holy crystal-ball gazers that are just smarter than everyone else.

    Also as usual, the same bubble-mongers avoid mentioning the Federal Reserve Bank (Fed, FRB) as much as possible, because (a) FRB is currently taking decisive action to increase interest rates and (b) This time FRB will not be swayed by a market reactions (the “taper tantrum” of rising interest rates and falling stock market in 2014).

    FRB is taking action through QE-unwind (raises longer term rates, including mortgages) and FFR (Federal funds rate) rate policy increases, which raises short term rates, and this time in unision with longer term rates. And the reason FRB will not be swayed this time is that WAGE inflation is rearing it’s ugly head. There is only one type of inflation that the top 0.1% cannot tolerate, and that is WAGE inflation. They love asset inflation. They even sometime love consumer price inflation, when it helps their profits, as long as wages do not go up. But WAGE inflation? No, we can’t have that.

    So there you have it. Stop pretending to be right or righteous. Mortgage interest rates will go up, and this time it is not likely that throwing market tantrums will do anything about it.

    I also refer everyone to:

    https://wolfstreet.com/2018/01/20/whatll-rising-mortgage-rates-do-to-housing-bubble-2/

  168. 168
    Crazy Horse says:

    By redmondjp @ 10:

    By S-Crow @ 9:

    RE: Liam O’Reilly @ 5 – It is an acute problem for the senior community. Property taxes are having a negative impact on that community in my opinion based upon conversations with our escrow clients and 2018 valuations are going to shock.

    Maybe we can pass our own version of California’s Proposition 13 to protect seniors and others on a fixed income.

    Nahhhhhhh! Sound Transit is going to need more money soon, so that would never work.

    CA has the highest state income tax in the USA to make up for Prop 13. No way WA could have a prop 13 AND no state income tax.

  169. 169

    RE: Kmac @ 166 – I think a lot of the stock market has to do with the expectation of lower taxes after his election and then the realization of lower taxes after passage of the tax bill. There’s more to it than that, but that is a significant part of it. Ditto on reducing regulations. I don’t it goes much beyond that though, and there are other things like mere momentum driving the market.

  170. 170

    RE: Justme @ 167 – I think that is incredibly simplistic, from top to bottom. No one knows what will happen to prices as interest rates rise, as was demonstrated locally in the late 70s early 80s. No one knows what will happen to interest rates now that corporations are being encouraged to bring money back into the country (and that is just starting, so historical charts are even more useless than usual in predicting the future).

    As to wage inflation, I don’t agree it’s something that a certain class cannot stand as much as increased automation and some forms of immigration affecting demand and supply respectively. The former is going to be a huge problem going forward in some professions. If there is a class thing going on it’s that a certain group convinced the working class that unions are not a good idea. They’ve been very successful at that, particularly in the economic backwater parts of the country. At this point though I think automation is going to be the biggest restraint on wages going forward, so I don’t expect much upward pressure even with increases in the minimum wage.

  171. 171
    whatsmyname says:

    RE: Justme @ 167
    I think you missed his point.
    Of course mortgage rates will go up at some point.
    Even I think they may go up a little, and soon.
    But will they go up significantly?
    And in real terms?
    And in a long term trend?
    How long to get rates up to mid-sixes, (as they were in 2006 and 2007)?
    Will starved European capital stay away?
    And repatriating American corporate capital?
    Will people ignore an inflation hedge in inflationary times?
    Will the creditworthy be willing to pay more for capital in deflationary times?

    Let’s ask that stopped clock on the wall.

  172. 172
    Crazy Horse says:

    It’s amazing to me how fast this market went from 2012 where it was all short sales and foreclosures, doom and gloom, “real estate is a terrible investment”, banks going under left and right. To 2 yrs later in 2014 when it was off to the races again, “real estate is the way to wealth”, “oh my God did you see what my friend made selling her condo?”, 15 offers first day on MLS. It is really amazing how the psychology can so radically change so fast. And this is not just Seattle….same deal in Denver, Austin, Cali, Boston….even to some degree ATL, Dallas, Boise, Charlotte, RTP, Florida, Phoenix….and any other places too.

  173. 173
    Crazy Horse says:

    By Eastsider @ 140:

    By Blurtman @ 121:

    10 year UST’s – to the moon!

    https://www.cnbc.com/quotes/?symbol=US10Y

    Run, you fools!

    I commented only last week that mortgage rate might hit 4.25% sometime this year. MND now shows it is at 4.22% lol (http://www.mortgagenewsdaily.com/)

    UST 10yr yield has continued its upward march unabated and is now at 2.63%. (It was 2.03% on Sept 7, 2017.) At this rate, it might even exceed 2.75% before midyear. I believe one Fed governor is now talking about potential 4 hikes this year. The Fed, as usual, is behind the curve and is now playing catch up. If you are a CD buyer, you saw the sea change in rates in the past month.

    I don’t see the yield curve inverting this year… well, perhaps after the midterm election if Dem wins both houses.

    Expect higher mortgage rate going forward. The low rates are probably history.

    I do not think mortgage rates will go that much higher. The yield curve will flatten for sure as the Fed raises short term rates. The most important one to watch is the 10 yr treasury yield. That is what dictates all the mortgage rates (both residential and commercial), credit card rates, etc… The Fed does not control the 10 yr T directly like it does the FF rate. I think the world has way too much debt for the 10 yr T yield to go much above 3%. A high 10 year T would start to crash everything, and if things start to crash the yield will fall right back down again. No way the high priced coastal RE markets in the USA could take a 6% 30 yr fixed mtg rate. I think we may see a continued low 10 yr T in a tight range for many, many years.

  174. 174
    Crazy Horse says:

    By Justme @ 167:

    RE: uwp @ 147
    RE: uwp @ 151

    As usual, the bubble cheerleaders on this site are out prognosticating that mortgage interest rates will NOT rise, because they know that if the rates continue to rise the bubble will be in deep trouble. Bubble cheerleaders rarely talk about any underlying mechanisms, but instead pretend they are holy crystal-ball gazers that are just smarter than everyone else.

    Also as usual, the same bubble-mongers avoid mentioning the Federal Reserve Bank (Fed, FRB) as much as possible, because (a) FRB is currently taking decisive action to increase interest rates and (b) This time FRB will not be swayed by a market reactions (the “taper tantrum” of rising interest rates and falling stock market in 2014).

    FRB is taking action through QE-unwind (raises longer term rates, including mortgages) and FFR (Federal funds rate) rate policy increases, which raises short term rates, and this time in unision with longer term rates. And the reason FRB will not be swayed this time is that WAGE inflation is rearing it’s ugly head. There is only one type of inflation that the top 0.1% cannot tolerate, and that is WAGE inflation. They love asset inflation. They even sometime love consumer price inflation, when it helps their profits, as long as wages do not go up. But WAGE inflation? No, we can’t have that.

    So there you have it. Stop pretending to be right or righteous. Mortgage interest rates will go up, and this time it is not likely that throwing market tantrums will do anything about it.

    I also refer everyone to:

    https://wolfstreet.com/2018/01/20/whatll-rising-mortgage-rates-do-to-housing-bubble-2/

    The wolfstreet guy is another broken clock chicken little perma bear blogger like Zero Hedge (Or gusy like Schiff, Rickards, Rogers, Harry Dent…any of these clowns) that has been saying the sky is falling pretty much every day for 9 straight years. These guys are bitter because they missed out on an entire up cycle waiting for their crash that has been “any day now” for 9 years. They said they same doom and gloom crap 5 yrs ago in 2013. Wheres the crash?? They all beat the same dead horses about Keynsians, central bank manipulation, student loan debt, pension under funding, etc… Yawn. A lot of times you’ll find out that these perma bear bloggers are selling ad’s for gold companies or have large positions in gold themselves or write about negative news to draw traffic, sell their newsletters, etc… So they are doom and gloom on purpose.

  175. 175
    Eastsider says:

    RE: Crazy Horse @ 173 – I generally agree with your view except that wages and inflation are starting to move in a direction that few expected only a few months ago. (See Blurtman@159 – “Even the bond market’s inflation expectations now exceed the Fed’s target.”) Higher wages and inflation may cause 10yr yield to rise much higher than 3%.

  176. 176
    Justme says:

    The nattering nabobs of non-sequiturs are out in force in this thread, waxing poetically albeit nonsensically about how (a) how higher interest rates don’t matter, and, (just in case rates do matter) (b) that FRB does not control them, and (just in case FRB does control them after all) (b) how rates won’t be allowed much higher.

    It’s all a fine stew of nonsense trying to pass as sensible discourse. Don’t be fooled by these amateur VSPs (Very Serious Persons).

  177. 177

    By Crazy Horse @ 172:

    It’s amazing to me how fast this market went from 2012 where it was all short sales and foreclosures, doom and gloom, “real estate is a terrible investment”, banks going under left and right. To 2 yrs later in 2014 when it was off to the races again, “real estate is the way to wealth”, “oh my God did you see what my friend made selling her condo?”, 15 offers first day on MLS.

    I think your timeline is off a bit. Early 2012 is when the market shifted. By that point in time selling was no longer problematic.

  178. 178

    By Justme @ 176:

    The nattering nabobs of non-sequiturs are out in force in this thread, waxing poetically albeit nonsensically about how (a) how higher interest rates don’t matter, and, (just in case rates do matter) (b) that FRB does not control them, and (just in case FRB does control them after all) (b) how rates won’t be allowed much higher..

    As opposed to those here who think they can predict future prices based on other predictions of one or two other things. That is multi-level nonsense.

  179. 179
    Blurtman says:

    RE: Eastsider @ 175 – There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.

  180. 180

    RE: Blurtman @ 179 – Or as I have often said here, you don’t know what you don’t know.

  181. 181
    Blurtman says:

    RE: Kary L. Krismer @ 180 – Hey, you didn’t launch Splenda.

  182. 182

    RE: Kmac @ 153
    We’d See It Continue on Its Present Course MASSIVELY in Just One Year

    Just BRING BACK AMERICAN MANUFACTURING ENGINEERING to Seattle

    The 737 Boeing fab jobs outsourced to Japan are 3 times AMAZON slave pay. Its that simple.

    MSFT should hire mostly NW Highschool Graduates for S/W development and PAY ‘EM full legal citizen American pay too. Its that simple.

    Both MSFT and AMAZON have corporate tax rates cut massively under Trump…these cheapskate anarchists can afford it and still RAKE IN MASSIVE STOCK PROFITS too.

  183. 183

    By Kary L. Krismer @ 170:

    As to wage inflation, I don’t agree it’s something that a certain class cannot stand as much as increased automation . . ..

    As an example: https://www.seattletimes.com/business/amazon/amazon-go-cashierless-convenience-store-opening-to-the-public/?utm_content=buffer18a5c&utm_medium=social&utm_source=facebook.com&utm_campaign=owned_buffer_f_m

    Also, Walmart has something simliar in the works, although it wouldn’t be for the entire store, just certain customers.

  184. 184
    Eastsider says:

    RE: Blurtman @ 179 – After years of QEs, many people now believe that rates will never rise (above 3%). They also don’t believe a recession will be allowed by the FED. It’s like believing that home prices never drop prior to the great crash of 2007 housing bubble. At some point, rates will rise (significantly above expectation) and we will have a recession. The FED may not have control even if it tries then.

  185. 185
    whatsmyname says:

    RE: Justme @ 176
    Ironic straw man,
    Self referencing pretzels,
    Don’t tell us, show us.

  186. 186
    wreckingbull says:

    By Kary L. Krismer @ 180:

    RE: Blurtman @ 179 – Or as I have often said here, you don’t know what you don’t know.

    I find myself breaking out this Rummyism with co-workers from time to time. It never gets old.

  187. 187
    David B. says:

    By softwarengineer @ 182:

    Both MSFT and AMAZON have corporate tax rates cut massively under Trump…these cheapskate anarchists can afford it and still RAKE IN MASSIVE STOCK PROFITS too.

    That’s hilariously naive about how corporate capitalism works. Wages in a market economy are set by market forces, not by capitalists somehow being mysteriously entitled to only a certain fraction of the profits that labor creates.

    AMZN, BA, and MSFT, like all publicly-traded capitalist corporations, have a fiduciary duty to maximize the profits they yield for their owners (i.e. stockholders). They exist to fulfill this duty. Paying workers wages out of revenues that could instead be directed to their owners is a breach of this duty. As such, it almost certainly won’t happen. If it does happen, expect the owners to punish management.

    The only way workers will get more is if a situation can be created so that the stockholders will most likely end up getting LESS if they skimp on wages (and in the relatively short-term, since overall, investors seldom think super-long-term). Say, if the workers are unionized and might plausibly impose a painfully costly strike on the owners unless they get a pay raise.

    It’s no coincidence that the share of the GDP going to the working class has gone steadily down as the share of the working class that is unionized has gone steadily down. One of the ways in which market forces can be influenced to increase wages has been mostly removed from the picture.

    That the pro-Trump crowd is almost totally silent on the death of organized labor is a sign of just what a pathetic fraud Trumpism is.

  188. 188
    Erik says:

    RE: wreckingbull @ 186
    Previously you said you were retired. How do you have coworkers?

  189. 189
    Crazy Horse says:

    ****AMZN, BA, and MSFT, like all publicly-traded capitalist corporations, have a fiduciary duty to maximize the profits they yield for their owners (i.e. stockholders)****

    Despite being a capitalist, this is one of the things that has destroyed the fabric and culture of much of the USA. #1 politicians do not get re-elected if there is a economic downturn when re-election comes up. So everything they do becomes very SHORT TERM thinking to boost the economy so they get re-elected, versus what is good for the economy. No politician ever wants to do things that may hurt in the short term, but be really good long term. That is one of the weaknesses of democracy.

    #2 so many decisions in the country are driven by two things and two things only. GDP growth and shareholder profits. So this has led to policies of mass immigration from the 3rd world for cheaper labor to boost GDP and shareholder value, and offshoring of jobs. So screw the culture and fabric of country as long as it is good for GDP growth and shareholder value and makes a few people at the top super rich. Yes we get things cheaper, but at what cost to the culture and historic make up of the country? The USA basically has sold out its country for years to the highest bidder, and that includes all its real estate assets to foreigners.

    A lot of this started with the change in immigration with the 1965 bill. I guarantee non of those senators that created that law, even uber Lib Ted Kennedy, fore saw the the demographic changes we’ve seen. If those senators could get in a time machine and see what the USA looks like today, guarantee that would have made changes to that law.

    Western Europe, Candada, Aus, NZ have done the same thing. Ruining its culture and historic make with 3rd world immigration up just to bring in more people to boost GDP, pay boomer pensions and prevent deflation. But at what cost? Where Japan, South Korea, Taiwan for example have stayed 99% their historic cultural and demographic make up, and take in very little immigration.

  190. 190
    ARDELL DellaLoggia says:

    RE: David B. @ 187

    3 of my 5 working children are in a Union. The other two are artists. Two are UCLA medical and one is a “grip”. Which Unions disappeared?

  191. 191

    By David B. @ 187:

    The only way workers will get more is if . . .
    . . .
    That the pro-Trump crowd is almost totally silent on the death of organized labor is a sign of just what a pathetic fraud Trumpism is.

    The only way they will get more is if they are in less supply relative to demand or increase their relative bargaining power.

    As to organized labor, I don’t think it’s just the pro-Trump camp. I’m actually surprised labor still supports the Democrats.

  192. 192

    By ARDELL DellaLoggia @ 190:

    RE: David B. @ 187

    3 of my 5 working children are in a Union. The other two are artists. Two are UCLA medical and one is a “grip”. Which Unions disappeared?

    It’s not so much unions disappearing as fewer and fewer workers being union members.

    The number of employed union members has declined by 2.9 million since 1983. During the same time, the number of all wage and salary workers grew from 88.3 million to 133.7 million. Consequently, the union membership rate was 20.1 percent in 1983 and declined to 11.1 percent in 2015.

    https://www.bls.gov/spotlight/2016/union-membership-in-the-united-states/pdf/union-membership-in-the-united-states.pdf

    Look at Boeing, where they moved half the 787 production to NC, a state where most people think that being in a union offers no benefits.

    When I was in high school in 1974-76 I think the retail clerks working at Safeway topped out at about $7.50 an hour (ignoring overtime). To keep up with inflation they would need to make about $34 an hour today.

    When I was in college in 1980 I was making $12.63 an hour at United Parcel. To make the same amount today those workers would need to make about $37.50.

    Offsetting all that is a lot of things are cheaper in real terms. But part of that is because a lot of things are made in other countries, and that’s part of the reason wages have not kept up.

  193. 193
    Hugh Dominic says:

    RE: David B. @ 187 – You’ve made a small mistake. Trump is probably the best president since Reagan. If not for his stupid tweets, he would certainly be.

    Obama’s loser policies:
    – Import cheap, illegal labor (and some criminals)
    – Apologize to the world and yield to everyone on foreign policy
    – Undermine our economy with taxes and regulations
    – Run up trillions in debt to compensate for economic stagnation via social programs, and (ironically) to pay off banks and creditors
    – Encourage divisive racism rhetoric that divides us and destroys social fabric

    Trump’s policies:
    – Instead of handouts, help working Americans by creating labor shortages that drive high employment and wage increases
    – Offset the impact to businesss with tax and regulatory reforms
    – Other good things

  194. 194
    jon says:

    RE: Kary L. Krismer @ 192 – These days about half of US union workers work for the government, so it is not surprising that union leadership would support the party of bigger government.

    https://www.cnsnews.com/news/article/489-union-members-worked-government-2016

    I agree that is it globalization that has kept wages and inflation down, where all the explicit and implicit QE of the last few decades has accumulated in the hands of the wealthy. But the QE was done to support social programs and keep the economy from tanking and thus avoided hurting the working class even more. But Wall St and other business leaders know that they are the ultimate beneficiaries of this process, so they are only too happy to keep the party going.

  195. 195
    Eastsider says:

    RE: David B. @ 187 – Last week’s Economist/YouGov survey shows 49% approval of Trump’s handling of the economy compared to 39% disapproval. The Harvard/Harris poll also shows Trump with 54% approval rating for stimulating jobs and handling the economy.

    Just wait when people start to receive bigger paychecks in coming months…

  196. 196
    redmondjp says:

    By Eastsider @ 195:

    RE: David B. @ 187 – Last week’s Economist/YouGov survey shows 49% approval of Trump’s handling of the economy compared to 39% disapproval. The Harvard/Harris poll also shows Trump with 54% approval rating for stimulating jobs and handling the economy.

    Just wait when people start to receive bigger paychecks in coming months…

    Not to mention how much simpler most folks’ federal income taxes will be to file next year.

    There is a whole lot of winning going on right now!

  197. 197
    Blake says:

    By uwp @ 126:

    They couldn’t get the “short” list down to 5? or at least 10?
    The amount of time and money the “loser” cities will spend on this is sad.

    Late capitalism…

  198. 198
    Blake says:

    https://gritpost.com/vacant-properties-homelessness/
    “76 percent of all vacant homes in America are owned by investors — amounting to approximately 1.1 million vacant residential investment properties.”

    There are abput 500,000 homeless in the US.

  199. 199
    Blake says:

    RE: jon @ 194
    re: “But the QE was done to support social programs and keep the economy from tanking and thus avoided hurting the working class even more.”

    Too funny!!! Yup the working class really benefited from the bailout and low interest rates. I bet their average credit card interest rates dropped from 19% to 17%. AND now they are all gonna get a raise!! Ha ha ha…

  200. 200
    Kmac says:

    RE: redmondjp @ 196

    I agree, but I am left wondering, what happened to “draining the swamp” and what happened to “repeal [not waive the penalty in 2019] ObamaCare” ???

    Definitely no kicking A** and taking numbers going on.

  201. 201
    Blake says:

    It’s all about POWER… always is.

    Workers have little to no power, while all the largest corporations must maximize profits for their shareholders (and senior managers).

    Even Henry Ford had the foresight in 1914 to double his employees wages (and cut the workday to 8 hours) so his workers could buy more cars. Today’s capitalists are too greedy and myopic to do that! And their stockholders would sue them anyways.

    Trump’s largess will be “efficiently” distributed to the transnational elites (the 0.1% … 0.01%) that own our country.
    Mark…
    my…
    words.

  202. 202

    As long as we’re getting political, Schumer’s hypothetical in 2013 was very forward looking! ;-) :-D

    https://www.youtube.com/watch?time_continue=8&v=VQdduxE7U9A

  203. 203
    Blake says:

    RE: Kmac @ 200
    “Drain the swamp”???
    Trump has Goldman Sachs top brass running his economic team!! How stupid can (former?) Trump voters be? The guy is a first class con man fer crissakes!!

  204. 204
    Jon says:

    By Blake @ 198:

    https://gritpost.com/vacant-properties-homelessness/
    “76 percent of all vacant homes in America are owned by investors — amounting to approximately 1.1 million vacant residential investment properties.”

    There are abput 500,000 homeless in the US.

    So what is stopping you from buying one of them and inviting a homeless person to live in it?

  205. 205
    Eastsider says:

    By Blake @ 203:

    RE: Kmac @ 200
    “Drain the swamp”???
    Trump has Goldman Sachs top brass running his economic team!! How stupid can (former?) Trump voters be? The guy is a first class con man fer crissakes!!

    So did Obama have someone else in his economic team? Are you advocating someone without economic/banking background to run the nation’s economy?! Or would you rather have Sawant running our economy? This is getting hilarious.

  206. 206
    Eastsider says:

    By Kmac @ 200:

    RE: redmondjp @ 196

    I agree, but I am left wondering, what happened to “draining the swamp” and what happened to “repeal [not waive the penalty in 2019] ObamaCare” ???

    Definitely no kicking A** and taking numbers going on.

    I hope you realize by now we can’t have a national budget unless we grant non-citizens who broke our laws voting rights. Given that, Trump managed to waive the Obama penalty is a big deal.

  207. 207
    Hugh Dominic says:

    RE: Blake @ 201 – Mark… my… words.

    LOL Blake. You want Trump to fail so badly. Your world does not make sense otherwise. But please take a breath and turn down the CNN.

    The economy is roaring. Unemployment among minorities and women is at a record low. Paychecks for workers are getting bigger, except for NY/CA elites. N. Korea is reconciling with S. Korea. ISIS is smashed. Any rational person knows that illegal immigration is not compatible with welfare, so he offers amnesty but only if the borders are secured and chain migration is ended. He’s doing AWESOME.

    Enjoy the ride.

  208. 208
    Blurtman says:

    RE: Eastsider @ 205 – Yes, but at least Obama jailed the bankers for crashing our financial system. Hoo boy, remember when Eric Holder frog marched those execs from HSBC for money laundering for terrorists and drug kingpins.? That was classic!

  209. 209
    Eastsider says:

    By Blurtman @ 208:

    RE: Eastsider @ 205 – Yes, but at least Obama jailed the bankers for crashing our financial system.

    This is definitely untrue.

  210. 210
    wreckingbull says:

    RE: Erik @ 188 – Dedicate 2018 to self-improvement in the area of reading comprehension. It’s a useful life skill. I’ll repeat myself for you though. I work part time, for myself, in order to maximize the allowable contributions to a solo 401K. This work does mean I have to interface with other humans – thus the term ‘co-worker’. Does that help you with your confusion?

  211. 211

    By Eastsider @ 209:

    By Blurtman @ 208:

    RE: Eastsider @ 205 – Yes, but at least Obama jailed the bankers for crashing our financial system.

    This is definitely untrue.

    Apparently your sarcasm detector is broken and you don’t know who Bluntman is. ;-)

  212. 212
    Rupert D says:

    Your comments about Henry Ford insinuating he was altruistic by doubling his workers pay compared to the then current standard are a little off base. According to the PBS documentary about him the reason he had to offer such high wages for the times is because he worked his employees to the bone on the newly created assembly line method of production. What is not often reported (except by PBS) is that he had an employee resignation rate of 10% – not every year but every month…because the work was so demanding. Can you imagined 10% of the workforce quitting EVERY month! Henry Ford was like every capitalist which is to maximize return to the owners (shareholders). Trump cares more about the blue collar workers than any democrat. The Democratic party is no longer about blue collar workers it is about supporting illegal aliens and the other fringe elements of the democratic party. That is why Trump won the election. Putting the rights of non citizen illegal aliens ABOVE the rights of US citizens is a long term losing proposition. Illegal aliens working in the US, causes increased supply of labor which lowers the amount paid to US citizens who have the least job skills and least education (simple economics that Democratic politicians will never mention). How is that helping the blue collar worker. The only reason the democratic party supports illegal aliens is because they want them to eventually become citizens and then vote democratic, thereby keeping democratic politicians in power. RE: Blake @ 201

  213. 213
    Eastsider says:

    By Kary L. Krismer @ 211:

    By Eastsider @ 209:

    By Blurtman @ 208:

    RE: Eastsider @ 205 – Yes, but at least Obama jailed the bankers for crashing our financial system.

    This is definitely untrue.

    Apparently your sarcasm detector is broken and you don’t know who Bluntman is. ;-)

    Well, I am sure a bunch of readers here actually believe that Obama did jail the bankers for crashing the financial system among other nonsense. This is what we have become as a nation, unfortunately.

  214. 214
  215. 215
  216. 216
    Erik says:

    RE: wreckingbull @ 210
    I’m trying to get better every day.

  217. 217
    uwp says:

    I’m not really a Bubble Cheerleader. I don’t want prices to go up. I would like to buy a nice big house in Phinney Ridge someday, which is surely out of reach if housing prices continue on the current path.

    I’m just looking at the market and saying, it looks like another year of insanity.

    And I believe rates can go up. I just know people have been calling for it for a looooonngggg time, so I’m skeptical.

    I mostly just feel like housing isn’t the best purchase to try to time. If you’re going to live there for 7+ years, and can afford the payment, it probably makes sense to buy. If that makes me a “nattering nabob waxing poetically albeit nonsensically,” then, oh well.

  218. 218

    RE: S-Crow @ 157
    Yes S-Crow

    All new applications to government agencies [includes Social Security retirement too] are stalled and await the CR or final budget authorization. Federal Workers are furloughed today and although they may get paid, in 2013 Obama reduced pay by 20% for 4 months….

    You are not delinquent if you miss a house payment due to the unpaid furlough, but unpaid furlough can happen too. It did in 2013….news omits it BTW.

  219. 219

    RE: Eastsider @ 213
    Yes….We’ve Become a Psychotic Nation Over Nonsense

    My gosh….anyone with a brain votes their own pocketbook or tax refund….BTW, have you heard what the PSYCHOTIC Sanctuary State California [Seattle next?] just legislated?

    You must give half your Trump Tax Refund to the State so illegal aliens can share in your “windfall” with higher state taxation from legal citizens.

    The Dems are TOAST in 2018.

  220. 220

    By softwarengineer @ 219:

    RE: Eastsider @ 213
    Yes….We’ve Become a Psychotic Nation Over Nonsense

    Probably the best thing you’ve ever said here! It amazes me sometimes what the press and social media focus on.

  221. 221
    wreckingbull says:

    By uwp @ 217:

    I’m not really a Bubble Cheerleader. I don’t want prices to go up. I would like to buy a nice big house in Phinney Ridge someday, which is surely out of reach if housing prices continue on the current path.

    I’m just looking at the market and saying, it looks like another year of insanity.

    And I believe rates can go up. I just know people have been calling for it for a looooonngggg time, so I’m skeptical.

    I mostly just feel like housing isn’t the best purchase to try to time. If you’re going to live there for 7+ years, and can afford the payment, it probably makes sense to buy. If that makes me a “nattering nabob waxing poetically albeit nonsensically,” then, oh well.

    This is good advice. I’d add one footnote to this. Before purchase, ask yourself if you could service the debt, insurance, taxes, and maintenance on a home in a recession. Do you have a few years of emergency funds? Could you take on a much lower-paying job for a few years and survive?

    I think this is my biggest criticism of the new highly-paid younger home buyers today. What they don’t always understand is happy days don’t always last forever, there is a cycle, and this cycle seems to whipsaw harder and harder as the decades progress.

  222. 222

    RE: Blake @ 199
    And Without the QE Obama’s Horrifying GDP Economy

    Wouldn’t have been the actual 1% per QTR during his economic open border test laboratory…try 0%.

    Trump’s is a 3% GDP WITHOUT QE….the Dems are TOAST in2018.

  223. 223

    RE: uwp @ 217
    SWE Opinion on a FUTURE MORTGAGE Rate Hike

    In my opinion, at this point its hard to guess. Here’s my whack at it.

    I’ve structured my personal retirement on the assumption of lousy interest on savings, like 0-2% long-term CD on your 401K…if they raise long-term savings interest to 3-4% I’m dancing with a much bigger total net retirement check. Its win/win for me either way, but higher rates is what I want.

    Everyone votes their own pocketbook and if they don’t they’re a dimwit.

  224. 224

    RE: Kary L. Krismer @ 220
    God Bless You Kary

    I went to church yesterday and prayed that our nation would learn to follow laws on the books according to God’s laws. Its that simple and we’ve forgotten this Golden Rule in America.

    BTW Kary…..I also prayed “specifically” for a billionaire politician [3 years ago] who loved America to fight the Open Border dimwits, IOWs one that COULD NOT BE BOUGHT OFF…

    Then came Trump….LOL

    For all you Progressive atheists, prayer does work for unknown reasons. Ask a radiologist monitoring a cancer tumor that mysteriously/suddenly disappeared….or a scientist that measures an EMF spike every-time large prayer circles get going [any religion BTW]. Just like the Jesus image on the shroud, we don’t have a clue what technology made the image…..

  225. 225
    wreckingbull says:

    (Grabs popcorn….)

  226. 226
    David B. says:

    RE: ARDELL DellaLoggia @ 190 – THIS is what I am referring to. And most of those remaining unions are in the public sector. Private sector unionization is even more pathetic. Unions still exist but really aren’t a big part of the overall picture anymore, sadly.

    http://files.abovetopsecret.com/files/img/tt56c27730.png

  227. 227
    David B. says:

    RE: David B. @ 226 – I’m just so impressed that your imaginary friend is a big Trump fan.

  228. 228
    David B. says:

    RE: jon @ 194 – So what? That random poll result (limited to “handling the economy” and not “overall popularity” which is much lower for Trump) does nothing to logically refute any point I made.

  229. 229
    David B. says:

    RE: Crazy Horse @ 189
    RE: Hugh Dominic @ 193
    RE: Rupert D @ 212

    Only the dupes of the rich 1% that rule tend to take this race/culture/nation garbage seriously. The 1%ers are and always have been extremely class conscious and completely willing to sell out their “fellow” citizens in the name of cutting mutually profitable (for the rich) deals with 1%ers in foreign lands.

    Until the non-elite majority start playing the game like winners do, we will continue to be losers.

  230. 230
    David B. says:

    RE: softwarengineer @ 224 – So your imaginary friend is a big Trump fan, eh? I’m just so… impressed.

  231. 231
    eil says:

    My friend can’t even sell the Condor that he bought 3 years ago for break even. Don’t forgot the HOA.

  232. 232
    Kmac says:

    By softwarengineer @ 224:

    RE: Kary L. Krismer @ 220
    I went to church yesterday and prayed that our nation would learn to follow laws on the books according to God’s laws. Its that simple and we’ve forgotten this Golden Rule in America.

    Love it when church going folks carry on with population control shticks.
    You’re such a hoot!
    Did you get a flu shot this year?

  233. 233
    uwp says:

    By eil @ 231:

    My friend can’t even sell the Condor that he bought 3 years ago for break even. Don’t forgot the HOA.

    California Condors are a critically endangered species, and it’s probably illegal to buy/sell them. That might be the problem.

    Not sure on the HOA dues.

  234. 234

    By eil @ 231:

    My friend can’t even sell the Condo [typo fixed] that he bought 3 years ago for break even. Don’t forgot the HOA.

    Locally? That sounds rather odd unless maybe the condo got itself into a deferred maintenance/catch-up situation.

  235. 235
    Justme says:

    RE: uwp @ 217

    >>I’m not really a Bubble Cheerleader. I don’t want prices to go up

    LOL times infinity. You are not a bubble cheerleader? Bahhahahahahahaha (gasping for air). You were always a bubble cheerleader. and by denying it, you are also a concern troll and a shill.

    >>I would like to buy a nice big house in Phinney Ridge someday, which is surely out of reach if housing prices continue on the current path.

    LOL, then you should buy NOW, by your own logic.

  236. 236
    Eastsider says:

    By David B. @ 228:

    RE: jon @ 194 – So what? That random poll result (limited to “handling the economy” and not “overall popularity” which is much lower for Trump) does nothing to logically refute any point I made.

    Paul Krugman, a Nobel Prize Laureate no less, was predicting a global recession, with no end in sight, under Trump. And now that has become a “random poll result.” I see.

    https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout

    Btw, Trump has never been popular in the polls. Yet he won a electoral college landslide. Well, that was history anyway.

  237. 237
    wreckingbull says:

    By Eastsider @ 236:

    By David B. @ 228:

    RE: jon @ 194 – So what? That random poll result (limited to “handling the economy” and not “overall popularity” which is much lower for Trump) does nothing to logically refute any point I made.

    Paul Krugman, a Nobel Prize Laureate no less, was predicting a global recession, with no end in sight, under Trump. And now that has become a “random poll result.” I see.

    https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout

    Btw, Trump has never been popular in the polls. Yet he won a electoral college landslide. Well, that was history anyway.

    I learned about this last week:

    http://contrakrugman.com/

    Never listened to it, but they don’t exactly have a difficult job. It’s also interesting we don’t see pfft! in the comment section anymore. Most likely related to Krugman finally putting his foot in his mouth one too many times.

  238. 238
    uwp says:

    RE: Eastsider @ 236

    Krugman retracted that call two days later, and said bigger budget deficits (something the Pre-Trump GOP used to pretend to be against) might actually strengthen the economy. It would be pretty incredible if some folks in this thread could admit they were wrong within 2 days, but I realize that’s asking a lot.
    https://krugman.blogs.nytimes.com/2016/11/11/the-long-haul/
    “The true awfulness of Trump will become apparent over time. Bad things will happen, and he will be clueless about how to respond.”

    And Trump won 57% of the electoral votes, good enough for 46th best out of 58 presidential elections, and worse than both of Obama’s victories. A total electoral landslide!!! Added bonus, his -2.1% loss in the popular vote comes in 47th out of 49 elections in popular vote (Popular vote totals were not officially reported pre-1824).

    What is the weather like on your planet?

  239. 239
    Eastsider says:

    A couple weeks ago I mentioned that mortgage rate would hit 4.25% sometime this year. Well, that didn’t take long. MND now shows 30-yr mortgage rate at 4.27% (http://www.mortgagenewsdaily.com/).

    https://seattlebubble.com/blog/2018/01/05/nwmls-listings-drought-intensifies-months-supply-hits-new-record-low-december/#comment-267308 (“Again, my 2 cents -10y will hit 2.75% and 30y mortgage 4.25% sometime this year.“)

  240. 240
    ronp says:

    Hey people, what say you about these outsourced home appraisals? http://www.motherjones.com/kevin-drum/2018/01/a-decade-after-the-great-recession-were-outsourcing-home-appraisals-to-india/

    My guess is they are not a big deal, there is so much data now available to make decent remote appraisals. Worry is more about credit worthiness of borrowers.

    Also draft dodging Cadet Bone Spur Trump is an lying moron – https://www.nytimes.com/interactive/2017/06/23/opinion/trumps-lies.html

  241. 241
    Blurtman says:

    RE: Kary L. Krismer @ 211 – Whether the water is salt or fresh….

  242. 242
    Eastsider says:

    RE: uwp @ 238 – I’m sure you realize that the stock market went up over 20% and GDP growth trending higher even before the tax bills. Okay, de-regulation might have something to do with it. Krugman regretted his mistake because the biggest stock markets in the world called his bluff, Nobel Prize Laureate notwithstanding.

    As to your statement – “The true awfulness of Trump will become apparent over time. Bad things will happen, and he will be clueless about how to respond” – I am pretty sure it can be used on every US President.

  243. 243
    uwp says:

    By Eastsider @ 242:

    RE: uwp @ 238 – I’m sure you realize that the stock market went up over 20% and GDP growth trending higher even before the tax bills. Okay, de-regulation might have something to do with it. Krugman regretted his mistake because the biggest stock markets in the world called his bluff, Nobel Prize Laureate notwithstanding.

    And I’m sure you realize that he reversed his call after the market had gone up less than 1.5%.

  244. 244
    Eastsider says:

    By uwp @ 243:

    By Eastsider @ 242:

    RE: uwp @ 238 – I’m sure you realize that the stock market went up over 20% and GDP growth trending higher even before the tax bills. Okay, de-regulation might have something to do with it. Krugman regretted his mistake because the biggest stock markets in the world called his bluff, Nobel Prize Laureate notwithstanding.

    And I’m sure you realize that he reversed his call after the market had gone up less than 1.5%.

    Maybe you didn’t pay attention to the futures market when Trump first crossed 270 votes. Those fools who bought into the Trump recession nonsense lost their shirts.

    Enough of the political discussion. Here is another housing bear story. Just to be clear, I am not a housing bear, yet, although I think prices are hugely bubbly. Haha!

    This Rare Bear Who Called the Crash Warns Housing Is Too Hot Again
    https://www.bloomberg.com/news/articles/2018-01-22/housing-bears-hibernate-as-u-s-homebuilders-swagger-into-2018

  245. 245

    Does it seem like there was much less hype over the shutdown this time? If that’s correct, and not just my impression, I wonder if that’s what lead to the quick settlement?

  246. 246
    Blake says:

    By Hugh Dominic @ 207:

    RE: Blake @ 201 – Mark… my… words.

    Yup… mark my words. This is what I wrote: “Trump’s largess will be “efficiently” distributed to the transnational elites (the 0.1% … 0.01%) that own our country.”
    … Stock buybacks , dividend increases and buying out their competitors.
    How do I know? The people running this country and the big corporations are pigs at a trough!

  247. 247
    David says:

    RE: wreckingbull @ 237 – Paul Krugman – given half a chance – would have mouth pleased Obama. He was Obama’s fluffer.

  248. 248
    Blake says:

    By Eastsider @ 205:

    By Blake @ 203:

    RE: Kmac @ 200
    “Drain the swamp”???
    Trump has Goldman Sachs top brass running his economic team!! How stupid can (former?) Trump voters be? The guy is a first class con man fer crissakes!!

    So did Obama have someone else in his economic team? Are you advocating someone without economic/banking background to run the nation’s economy?!

    So you think that every administration has to hire Goldman Sachs bankers to run our country’s economic policy? Are they the only ones with “economic/banking background?”
    Trump ran against Goldman Sachs and his last ditch ad the week of the election was a condemnation of “global bankers” with images of Goldman Sachs CEO Lloyd Blankfein (and several other Jewish bankers and ominous music…), so for him to hire three high level Goldman Sachs managers to run his economic team is *just slightly* hypocritical.

    And now you are pointing out to me that Obama had Goldman Sachs guys running his economic team after you’ve been telling us for YEARS that Obama was a commie/pinko! I’m confused… is Goldman Sachs a socialist conspiracy? How can Obama and Trump draw thier economic teams from the same source?
    …??
    Perhaps you are learning? Obama was not a socialist, but actually backed by Wall Street! In 2006, the unknown young Senator was selected by the elite bankers to give their opening address for their Hamilton Project and in 2008 Obama received twice as much money from Wall St as McCain!
    Hmmm… but Rush and Bill O’Reilly said he was a pinko!?? (Fake news!)

    It’s not news… 30 years ago Bill Clinton’s corporate Democratic Leadership Council took over the Democratic Party, yet the right-wing nut jobs keep acting like the party is run by Berniecrats!?! Just look what Hillary and the Dem establishment did to the leftist uprising in 2016! They’d rather burn down the whole party than let true leftists take over.

    Fact: Big business and Wall Street control our country and BOTH parties. It is that simple…
    Trump expropriated a lot of Bernie’s populist campaign rhetoric (and he was lucky that he ran against Hillary – the consummate elite DC insider). The success of the insurgent campaigns of both Trump and Bernie Sanders in 2016 showed that most people were very unhappy about the direction this country was going and both political parties and wanted change. But then Trump brings in the SAME cast of Goldman Sachs banksters and it is business as usual! If you think he is going to help most people in this country (especially the poor and middle class) rather than helping himself and his rich friends then you are delusional.

    THAT was my point about Trump hiring Goldman Sachs and the reason I am pessimistic about this country’s future. If we cannot “throw the rascals out” and “clean the swamp” they will continue to loot the economy, “help themselves” and leave us with their deficits and bills. That is what they do…

    Consumers represent 70% of our economy, yet the labor share of income keeps plummeting:
    https://fred.stlouisfed.org/graph/fredgraph.png?width=880&height=440&id=PRS85006173
    Unless this changes our economy will not prosper in spite of all the crazy asset bubbles that keep recurring. Do you really think these crazy stock and real estate bubbles are a GOOD thing?
    Think about it…

  249. 249
    Blurtman says:

    RE: Blake @ 248 – Arise comrades and seize the White House! The revolution WILL be televised.

    https://goo.gl/images/E2ZjW2

  250. 250

    By Blake @ 246:

    Yup… mark my words. This is what I wrote: “Trump’s largess will be “efficiently” distributed to the transnational elites (the 0.1% … 0.01%) that own our country.”
    … Stock buybacks , dividend increases and buying out their competitors.
    How do I know? The people running this country and the big corporations are pigs at a trough!

    It would probably help if rather than focus on how well some other group is doing, to instead focus on things that would actually make the situation better for the lower groups. What the lower groups earn is dependent on supply/demand and bargaining position, and not just hoping that they make somehow more, and certainly not promoting policies which actually make some of those things worse.

    The current political climate is similar to standing outside in a hurricane, complaining about the wind, instead of going inside and taking shelter.

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