Around the Sound: Sales down in King, Kitsap, Island, and Skagit

Get access to the full spreadsheets used to make the charts in this and other posts, and support the ongoing work on this site by becoming a member of Seattle Bubble.

It has been a few months since we looked at the housing stats for the broader Puget Sound area. Now that the first quarter of 2018 is over, let’s update our “Around the Sound” statistics for King, Snohomish, Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

First up, a summary table:

March 2018 King Snohomish Pierce Kitsap Thurston Island Skagit Whatcom
Median Price $689,950 $475,000 $349,950 $341,360 $301,000 $365,000 $348,500 $368,000
Price YOY +15.0% +11.8% +18.6% +18.5% +9.7% +14.4% +12.0% +9.1%
Active Listings 1,687 679 1,269 337 445 258 282 414
Listings YOY -0.9% -14.1% -11.7% -34.3% -19.4% -11.9% -6.6% -8.8%
Closed Sales 1,883 903 1,302 346 399 131 153 220
Sales YOY -9.4% -1.5% +2.7% -8.0% -1.5% -21.6% -12.1% -3.5%
Months of Supply 0.9 0.8 1.0 1.0 1.1 2.0 1.8 1.9

Prices are climbing and listings are down across the board. King County actually had the smallest listings decrease among the Puget Sound counties, and one of the largest drops in sales. Sales also dropped significantly in Kitsap, Island, and Skagit counties.

Here’s the chart of median prices compared to a year ago. Every county turned in a gain, with only Thurston and Whatcom turning in single-digit price gains.

Median Sale Price Single-Family Homes

Listings were down significantly from a year earlier everywhere… except King County. Every other county still saw fairly significant year-over-year decreases, with the largest coming in Kitsap.

Active Listings of Single-Family Homes

Seven of the eight Puget Sound counties saw sales fall compared to a year ago. This is the first time that sales fell year-over-year in many counties since April 2011.

Closed Sales of Single-Family Homes

Months of supply is low everywhere, but for the first time in a while, some counties actually did see a slight increase in this metric.

Months of Supply Single Family Homes

Finally, here’s a chart comparing the median price in March to the 2007 peak price in each county. Every Puget Sound has now exceeded the previous peak median price and is charting new territory.

Peak Median Sale Price Single-Family Homes

In summary: It’s still a better time than ever to sell a home in the Puget Sound, but there may finally be some tiny cracks beginning to form in the sellers’ market.

If there is certain data you would like to see or ways you would like to see the data presented differently, drop a comment below and let me know.

0.00 avg. rating (0% score) - 0 votes

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.

228 comments:

  1. 1
    ess says:

    I noticed that the YOY prices for Pierce and Kitsap are much higher than King and Snohomish. Is this because there is more new and bigger construction in that area that is skewing house prices, or are people priced out of King and Snohomish going further out to buy and those markets are more competitive? Or is it just a seasonal anomaly?

  2. 2
    Green-Horn says:

    “In summary: It’s still a better time than ever to sell a home in the Puget Sound, but there may finally be some tiny cracks beginning to form in the sellers’ market.”

    With the drought of available inventory, can any of you experienced market watchers say if demand is really in retreat or if they’re balking at the greedy sellers / representatives asking extraordinarily ambitious prices for the dregs they’ve managed to scrape out of the bottom of the barrel?

    In my south central Seattle neighborhood that I’ve been watching which encompasses almost the entire zipcode around the N Beacon Hill Light Rail Station, there was just 1 new listing in the past two weeks with the exception of a couple ramshackle looking old 5+ unit multi-family properties that they seem to be pitching at builders for teardown & redevelopment into townhomes. Meanwhile there are no homes available to buy except a couple new townhomes and two flips that have been languishing since almost 20 days. And I thought I had very little to choose from when I moved to the neighborhood a few years ago! Privately the prices on those two flips really make me gasp, but I sure am rooting for them….! The comps would be nice!

  3. 3
    Green-Horn says:

    RE: ess @ 1

    My bet: the bigger proportional increases are a statistical effect because Pierce & Kitsap are starting from a lower baseline than the already dear & expensive King.

  4. 4
    Jake says:

    @1 I think it is people being priced out, and other people cashing out on their equity and wanting bigger and better places down further south.

  5. 5
    Deerhawke says:

    In a so-called normal market, you have more listings than pendings and more pendings than actual sales. This makes sense, right? There is supposed to be a reservoir of houses for sale. Of them a certain number go pending. Some of the pending sales fall apart for a variety of reasons and the net result is completed sales.

    But the new normal for the spring market in the hot Seattle sub-market of King County is exactly the opposite. You had last month 463 houses for sale, 619 sold, and 769 went pending.

    Of course, there are lag effects to be accounted for. But after a short period like that, the base of inventory (including the crappy stuff or the overpriced stuff that tends to drag on the market) is exhausted and it becomes hard to make any sales because almost everything is sold or pending.

    When closed sales drop, it is usually a sign of slackening demand and means lower prices are on the way. But in the case of this market, there is real dearth of supply despite stable demand. We have fewer transactions and the result instead is higher prices.

  6. 6
    pfft says:

    I know this is off-topic but this is monumental news.

    F.B.I. Raids Office of Trump’s Longtime Lawyer Michael Cohen; Trump Calls It ‘Disgraceful’
    https://www.nytimes.com/2018/04/09/us/politics/fbi-raids-office-of-trumps-longtime-lawyer-michael-cohen.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

    Game on.

  7. 7
    Eastsider says:

    By Deerhawke @ 5:

    When closed sales drop, it is usually a sign of slackening demand and means lower prices are on the way. But in the case of this market, there is real dearth of supply despite stable demand. We have fewer transactions and the result instead is higher prices.

    This market has been tight for the past few years. This year is no different than last year or the year before, except that we are now experiencing a measurable drop in closed sales. I do not agree that the demand is ‘stable’ (at any price.) And it does not take more than a few people leaving the area to quadruple the supply in this market. We are likely at or near peak prices in the short term.

  8. 8
    David says:

    RE: Eastsider @ 7 – You think just a few people make that much difference?

  9. 9
    Jc says:

    I think buyers are giving up due to lack of inventory and quality of homes. The demand is still there, people are just waiting for the better homes to hit the market. When that happens, there will be another surge in prices.

  10. 10
    sleepless says:

    By Jc @ 9:

    The demand is still there, people are just waiting for the better homes to hit the market.

    I see some people don’t understand what demand actually means.

    Demand in economics is how many goods and services are bought at various prices during a certain period of time. Demand is the consumer’s need or desire to own the product or experience the service. It’s constrained by the willingness and ability of the consumer to pay for the good or service at the price offered.

    Demand is willingness to pay the asking price. A good analogy is Ferrari. Everyone wants a Ferrari, but how many people are willing to pay for a Ferrari. Does it mean Ferrari is in high demand? In contrast, how many Toyotas are sold? Toyotas have much higher demand because they cost cheaper. Just because you want something, but cannot afford it or not willing to pay for it, it doesn’t mean there is a demand for it.

  11. 11
    Deerhawke says:

    RE: pfft @ 6

    Pfft, yes this is off topic.. Really really off topic.

    This is a Seattle real estate blog. If you keep up this kind of thing, we will banish you to the same memory care unit as David, Software Engineer and Wreckingbull. We will get you medicated and have you sit in your wheelchair and drool on yourself right next to those old irrelevant dudes. Do you want that?

    Right. I didn’t think so.

    Now if you wanted to make appropriate comments on this matter and tie it to real estate, it might look like this:

    Did you notice today that the offices of Trump’s personal attorney got a no-knock early morning visit from the FBI? This normally would not be an issue related to Seattle real estate, but did you notice that Trump said the subpoena and raid on his personal lawyer’s office and residence were an “attack on our country in a true sense.”

    Clearly Trump is having a Louis XIV moment (L’etat? C’est moi. — Check wikipedia if these references went past you. )

    Since this “attack on our country” is in Trump’s mind an imminent national security threat, might Trump send heavily armed troops to the Justice Department, Attorney General’s Office or FBI deal with it?

    Yes, truly weird, but I am worried that this could be the kind of thing that could cause real estate nationwide to tank badly like it did after Nixon’s Saturday Night Massacre.

  12. 12
    Deerhawke says:

    RE: Eastsider @ 7

    “This market has been tight for the past few years. This year is no different than last year or the year before, except that we are now experiencing a measurable drop in closed sales. I do not agree that the demand is ‘stable’ (at any price.) And it does not take more than a few people leaving the area to quadruple the supply in this market. We are likely at or near peak prices in the short term.”
    _________________________________________

    Given that small changes tightening inventory are having an outsized effect on prices, why do you believe this year is no different than previous years?

    Put another way, if this year is no different than last year or the year before, why is it that we are now experiencing a measurable drop in closed sales?

    You say “it does not take more than a few people leaving the area to quadruple the supply in this market.” How would that work? How do you quantify this? Why did you choose to say quadruple, rather than triple, or double?

    Care to share your algorithms with us?

  13. 13
    pfft says:

    By Deerhawke @ 11:

    RE: pfft @ 6

    Pfft, yes this is off topic.. Really really off topic.

    This is a Seattle real estate blog. If you keep up this kind of thing, we will banish you to the same memory care unit as David, Software Engineer and Wreckingbull. We will get you medicated and have you sit in your wheelchair and drool on yourself right next to those old irrelevant dudes. Do you want that?

    Right. I didn’t think so.

    thanks for the advice grandpa.

  14. 14

    By Eastsider @ 7:

    By Deerhawke @ 5:

    When closed sales drop, it is usually a sign of slackening demand and means lower prices are on the way. But in the case of this market, there is real dearth of supply despite stable demand. We have fewer transactions and the result instead is higher prices.

    This market has been tight for the past few years. This year is no different than last year or the year before, except that we are now experiencing a measurable drop in closed sales

    The inventory has been creeping lower and lower each year. This month it was just barely lower, but remember the sales reported are largely from active listings from the month before and month before that. Those lower inventory levels have been impacting sales, IMHO, for the past 3-4 months. The level of new listings is also important when you’re dealing in such a low inventory environment. That’s actually been helping somewhat, but by a very tiny amount.

    Realize that most listings that goes pending within 7 days received multiple offers. There are a ton of buyers out there who want to buy a house but cannot because of various factors caused by the competition from other buyers.

  15. 15

    By sleepless @ 10:

    Demand is willingness to pay the asking price. A good analogy is Ferrari. Everyone wants a Ferrari, but how many people are willing to pay for a Ferrari. Does it mean Ferrari is in high demand? In contrast, how many Toyotas are sold? Toyotas have much higher demand because they cost cheaper. Just because you want something, but cannot afford it or not willing to pay for it, it doesn’t mean there is a demand for it.

    That’s not quite right. Demand is a curve, with different volumes desired at different prices. If you priced Ferraris under $30,000 the volume they could sell would be very high–probably higher than Toyota if they could actually produce that many. Ferrari makes money by designing for a lower volume and making more money on each car.

    A better example might be gasoline. If Gas Buddy is to be believed, a Chevron near the old Sam’s Club in Renton is selling gas about 25 cents below one on 169, about 5 miles away. The one in Renton is probably selling a lot more gas than the one on 169. Same product, different price, different volumes sold, but basically the same demand given their close proximity. One station tries to make money with volume (and car washes) and the other by charging more but selling less.

  16. 16
    sleepless says:

    RE: Kary L. Krismer @ 15 – no, it is not same demand. Demand for lower priced gasoline is higher. Demand is willingness or ability of the one to pay for goods and services, not the ones desire for good and services. You can build $10M all around king county, 1000s of them and you will hardly see any demand. Lower the price to $1M and the picture changes completely. I don’t need massage, but if I get one for $5, I will do massage every day. Same with lunch, I make my own lunch. But if I can buy lunch for a few bucks, I would rather buy it. The price is directly correlates with demand. Higher price means lower demand, lower price – higher demand. If the one could get a maid for $5 /hr, most people would have maids in their homes, it doesn’t mean the demand for maids is high. Make it affordable and the demand picks up. Example with Ferrari is excactly why demand for Ferrari is low – the high price of Ferraris. Make Ferrari $30K and you will increase the demand, Ferrari will outsells Toyota.

  17. 17
    David says:

    My personal feeling is that young people have a hard time buying houses because the system is now stacked against them. Somewhere about 20 years ago the higher education Gestapo figured out the perfect scam. They convinced everyone that a college education basically was your education and that your life’s value was dependent upon them teaching you. They then raised the price of that degree more and more and more – to reflect the value they were imparting to you. Then they convinced Congress to make a law that you could NEVER bankrupt out of that debt. Thereby creating a privileged class of product that had been only a minority option with limited value for most generations.

    They devalued a high school education – and stripped the university system of market controls.

  18. 18
    Eastsider says:

    By Kary L. Krismer @ 14:

    Realize that most listings that goes pending within 7 days received multiple offers. There are a ton of buyers out there who want to buy a house but cannot because of various factors caused by the competition from other buyers.

    I would caution reading too much into “multiple offers.” Miami condos had long lines and then the bottom fell out. How do you know there are still a ton of buyers out there? As prices rise relentlessly year after year, at some point, this “ton of buyers” will surely shrink and even disappear. No?

  19. 19
    Eastsider says:

    By Deerhawke @ 12:

    RE: Eastsider @ 7

    “This market has been tight for the past few years. This year is no different than last year or the year before, except that we are now experiencing a measurable drop in closed sales. I do not agree that the demand is ‘stable’ (at any price.) And it does not take more than a few people leaving the area to quadruple the supply in this market. We are likely at or near peak prices in the short term.”
    _________________________________________

    Given that small changes tightening inventory are having an outsized effect on prices, why do you believe this year is no different than previous years?

    Put another way, if this year is no different than last year or the year before, why is it that we are now experiencing a measurable drop in closed sales?

    You say “it does not take more than a few people leaving the area to quadruple the supply in this market.” How would that work? How do you quantify this? Why did you choose to say quadruple, rather than triple, or double?

    Care to share your algorithms with us?

    You have mostly answered your own question. We both agree that in a market as tight as this one, it does not take much change in inventory (or other variables eg AMZN stock price) to move prices. Unless you believe the outsized move in prices is only one way – UP, then we should expect it to move DOWN huge when market conditions change for the worse.

    I picked quadruple because that seemed to be a good number for a normal/functioning market. And I don’t see any algorithm in your new normal statement either.

  20. 20

    RE: sleepless @ 16 – What you’re referring to though is the quantity to be purchased when you say demand for lower priced gasoline is higher. What I’m referring to is the fact that the demand curve can stay exactly the same while the quantity sold changes with price. So with supply staying the same you can have quantity sold change for two reasons–the demand curve changing or the seller changing their price. I would not refer to the latter as being lower demand, because the demand curve stayed exactly the same, only the price changed.

    Turning back to our real estate market, the lower quantity sold is not due to lower demand by buyers. There are more buyers out there than properties on the market. The quantity sold and the higher prices are both reflections of the low number of listings. And that’s really why I raised the issue, and it’s probably more due to JC’s comment in post 9 than what you wrote (although your struggling with comparing demand for Ferarris with Toyotas did catch my attention). Sales have not been slack due to lower demand, they have been slack due to very tight supply.

  21. 21

    By Eastsider @ 18:

    By Kary L. Krismer @ 14:

    Realize that most listings that goes pending within 7 days received multiple offers. There are a ton of buyers out there who want to buy a house but cannot because of various factors caused by the competition from other buyers.

    I would caution reading too much into “multiple offers.” Miami condos had long lines and then the bottom fell out. How do you know there are still a ton of buyers out there? As prices rise relentlessly year after year, at some point, this “ton of buyers” will surely shrink and even disappear. No?

    True demand can disappear quickly. I doubt there were many new pending sales the week after 9/11. That change was short-lived, but an example of how outside events can affect demand.

    I’m not familiar with the Miami market you mentioned, but I’m assuming that was one of those speculative situations where people were buying never intending to move in, or in some cases intending to be able to sell their rights before closing. Ignoring grow houses I’m not sure we have much of that here in our market right now.

  22. 22

    RE: David @ 17 – I agree with most of what you say about college and student loan debt, but if those things had not happened our market would be even more unbalanced. The demand curve would be further to the right, and I’m not seeing how the supply curve would be impacted much at all. Maybe with less education more smaller contractors making money building houses???? Possible, but mainly your points don’t seem to address our market.

  23. 23
    Rupert D says:

    The Tim…..you asked for other data to include….perhaps ongoin affordability index information that would be easy to calculate and include would be helpful, if available. Also sales price per square foot may be something else to include. As a reference see: https://www.paragon-re.com/trend/san-francisco-home-prices-market-trends-news

    Also, can you ban pfft and his email from this site. He just wants to insert his off topic political posting and then when challenged about that he attacks. He should be posting at a political site not RE. Don’t ignore this request unless you want less visitors to your site.

  24. 24
    ess says:

    By David @ 17:

    My personal feeling is that young people have a hard time buying houses because the system is now stacked against them. Somewhere about 20 years ago the higher education Gestapo figured out the perfect scam. They convinced everyone that a college education basically was your education and that your life’s value was dependent upon them teaching you. They then raised the price of that degree more and more and more – to reflect the value they were imparting to you. Then they convinced Congress to make a law that you could NEVER bankrupt out of that debt. Thereby creating a privileged class of product that had been only a minority option with limited value for most generations.

    They devalued a high school education – and stripped the university system of market controls.

    David

    As far as I am concerned, it is a waste of time and money to obtain a liberal arts education these days, unless one is a trust fund kid. My greatest regret in retrospect was never taking a business class while obtaining my useless undergraduate degree. The only saving grace was at the time, I was able to finance my own education by working, thus avoiding student debt. And at the time I was also able continue on and obtain two professional degrees at a reasonable cost. These days the cost of an undergraduate education is so onerous that unless expense is no concern, and one will be supported in life, one is better have marketable skills after obtaining an undergraduate education. Only trust fund kids and lottery winners can afford to take English and poetry classes these days.

  25. 25

    By Rupert D @ 23:

    Also sales price per square foot may be something else to include.

    Price per square foot is really pretty meaningless, particularly when you’re dealing with widely varying properties and even more meaningless when dealing with properties of different sizes. All other things being equal a smaller house will sell for more per square foot than a larger house.

    Consumers focusing on price per square foot is probably why agents in some areas (e.g. West Seattle) tend to include unfinished area in their finished area stats. It makes their unreasonable list price look more reasonable and eventually some unknowing consumer will come along and jump based on a seemingly low price per square foot.

  26. 26
    sleepless says:

    By Kary L. Krismer @ 20:

    RE: sleepless @ 16 – What you’re referring to though is the quantity to be purchased when you say demand for lower priced gasoline is higher.

    Now you just start making things up. Can you answer my question? Why is demand is low for Ferraris or maids? What if Ferrari is not $30K instead of $300K? or what if you can hire a maid at $5/hr? How is that going to affect the demand for maids?

    You will have a line of people wanting to buy a Ferrari and maids will be the most demanding profession in US.

    What I’m referring to is the fact that the demand curve can stay exactly the same while the quantity sold changes with price.

    What you are referring to is made up definition.
    Kary, you are known on this blog for making up the facts and making fool of yourself. I guess I will have to school you again.

    Demand is an economic principle that describes a consumer’s desire and willingness to pay a price for a specific good or service. Holding all other factors constant, an increase in the price of a good or service will decrease demand, and vice versa.

    https://www.investopedia.com/terms/d/demand.asp

    True demand can disappear quickly. I doubt there were many new pending sales the week after 9/11.

    Can sentiment affect demand? Of course it can. High crime areas have lower demand. If you fund out your favorite yogurt contains deadly bacteria, will that affect your demand for that yogurt? Of course it will. Many factors affect demand, price is just one of them. Quantity, on the other hand, doesn’t affect demand. it doesn’t matter how many Ferraris you make a year if you sell them at $300K if you only have 1000 buyers willing to pay the asking price. If you make 20,000, you will still sell only 1000. On the other hand, if you only make 800 and 1000 buyers, now you can raise your prices to say $350 and reduce the number of buyers to 800 – aka lower your demand.

  27. 27

    RE: ess @ 24
    Have Any of You Bubbleheads Ever Studied the New Science of Akoshta?

    It dashes our normal haughty human nature and takes all the world’s technological advances’ credit away from man.

    It explains why our degreed professionals use old inventions and innovations….but didn’t really invent any of them. The knowledge came to him from somewhere outside….ask Tesla [who believed in Akoshta]. the telephone, jet engine, phonograph, even that neutrinos have mass, etc….all have exactly the same invention documented in two places on Earth and about the same day too…Akoshta.

    That’s why degrees don’t matter. We do need surgeons with steady hands and engineers to reverse engineer….but the invention technology is not man’s. Yes…a high school graduate uses Akoshta too. Its a mathematically provable science too…..albeit did the equations come from man???? LOL

    Akoshta acceptance could bring world peace too….we have nothing to fight and brag about anymore, we’re nothing but advanced dumb cave apes…LOL

  28. 28
    sleepless says:

    Kery, look, the demand curve: https://www.investopedia.com/terms/d/demand-curve.asp

    What is the ‘Demand Curve’

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. In a typical representation, the price will appear on the left vertical axis, the quantity demanded on the horizontal axis.

    What does affect it? You guessed it – price!

    For example, if the price of corn rises, consumers will have an incentive to buy less corn and substitute it for other foods, so the total quantity of corn consumers demand will fall.

  29. 29

    By sleepless @ 28:

    Kery, look, the demand curve: https://www.investopedia.com/terms/d/demand-curve.asp

    What is the ‘Demand Curve’

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. In a typical representation, the price will appear on the left vertical axis, the quantity demanded on the horizontal axis.

    What does affect it? You guessed it – price!

    That’s exactly what I’m saying! From post 20: “What I’m referring to is the fact that the demand curve can stay exactly the same while the quantity sold changes with price.”

    That you cannot understand simple English is not my problem. Rather than trying to understand a simple sentence you dismissed it as being made up, and then you quote something that said the exact same thing! LOL. Take a course in economics sometime. Your lack of understanding of simple economic concepts is annoying.

    You seem to be caught up with the simple fact that people will buy less the more something costs. I’ve never disputed that obvious idea.

  30. 30

    RE: sleepless @ 28 – Try to understand this simple concept.

    If you look at a chart of demand, where price is the verticle axis and quantity is the horizontal axis, an increase in demand is reflected by the line representing demand moving to the right. A reduction in demand is reflected by the line representing demand moving to the left. Moving along the same line is not a change in demand, it’s a change in price and quantity.

  31. 31
    Ross says:

    By Kary L. Krismer @ 30:

    RE: sleepless @ 28 – Try to understand this simple concept.

    If you look at a chart of demand, where price is the verticle axis and quantity is the horizontal axis, an increase in demand is reflected by the line representing demand moving to the right. A reduction in demand is reflected by the line representing demand moving to the left. Moving along the same line is not a change in demand, it’s a change in price and quantity.

    You have a slightly weird definition of demand. It’s called “demand curve”, because it is the graph of price vs. demand. The quantity demanded at a given price is the “demand” for an item. So of course, demand changes with price by definition.

  32. 32

    By Ross @ 31:

    By Kary L. Krismer @ 30:

    RE: sleepless @ 28 – Try to understand this simple concept.

    If you look at a chart of demand, where price is the verticle axis and quantity is the horizontal axis, an increase in demand is reflected by the line representing demand moving to the right. A reduction in demand is reflected by the line representing demand moving to the left. Moving along the same line is not a change in demand, it’s a change in price and quantity.

    You have a slightly weird definition of demand. It’s called “demand curve”, because it is the graph of price vs. demand. The quantity demanded at a given price is the “demand” for an item. So of course, demand changes with price by definition.

    No, I have a proper understanding of the term. Others here have a novice/consumer understanding of the term and tend to use “demand” and “quantity” interchangeably. FWIW in college I took 40 credits of microeconomic topics with a mean average GPA of over 3.8 and a mode average of 4.0.

    But try this. If there’s a refinery fire and gasoline prices skyrocket, that’s not due to a change in demand, but the price will increase and the quantity decrease. Based on other others here have said they would view that as a reduction in demand because the quantity decreased. It is not a reduction in demand, it is an effect of the reduction in supply.

  33. 33
  34. 34
    Deerhawke says:

    RE: pfft @ 13

    The news about Trump’s lawyer’s office getting raided is truly big news. And it is real estate news.

    If you have read anything about how hard it is to get warrants given attorney-client privilege (Kary could probably weigh in here) you would know that there is a strong presumption that a crime was committed and crucial evidence was being hidden or might be destroyed. A lot of very senior people had to sign off on those warrants.

    All of this certainly got a lot more ink than a couple of low-level guys getting arrested for breaking into the DNC headquarters at the Watergate in June of 1972.

    But the grand analogy for Seattle real estate– and real estate across the country– is Watergate. Economic risk factors right now pale in comparison to political risk factors.

    Watergate was one of several factors that drove the markets in the mid-1970s including the 1973 oil crisis. Stocks were down. The dollar was down. Gold shot up. Real estate in Seattle continued to get hammered (following the SST cancellation and the oil crisis) until 1975 when it did a U-turn and went completely crazy. It took quite a while to get back anything resembling stability.

    Some people think that political turbulence just sells newspapers. But it is a lot more than that. Turbulence creates uncertainty which leads to hesitation which leads to a real drop in demand.

    For those forced to sell during a time like that, it can be pure punishment. But those who are in a position to buy might find real bargains.

  35. 35
    uwp says:

    Is a Macro-Econ derail better than politics?

  36. 36
    Deerhawke says:

    A demand curve is largely a theoretical construct used for heuristic purposes. A lot of things go into determining what that curve looks like. And the curve can change in shape over time.

    In some cases, because of a variety of factors, the demand curve can be an asymptote. Look it up and think about it.

    The analogy is an old fashioned hose bib faucet. I haven’t gone back and checked the actual math on this since grad school (you are welcome to), but you will get the point.

    When it is wide open, you get full pressure. Close it one whole turn — almost no change. Give it another turn , it drops by a barely noticeable 3% . Give it another turn– down 7.5%. Another turn, down 15% more. At that point the valve is really starting to create resistance. The next turn it drops 30% and you are down a total of over half the running volume. At this point, you realize that if you want to get any water at all, you can’t turn it down a whole turn or it will be completely off. You start feathering it down a half, then a quarter, then an eighth and then just tiny bit more, and it is off.

    And in economics, like in old garden hose valves, you can get stickiness in demand. Once people start to realize that demand has dropped so much and that prices are going up so fast, they don’t sell even though they had planned to sell that house in Ballard to buy that place in Tucson. You get emulation factors. When neighbor #1 sold and then regretted it (because prices jumped) and neighbor #2 held off and it worked out well for him (because prices jumped again) then neighbor #3 down the street holds off on selling too. Why sell when it might be worth $100k more next spring?

    But the stickiness works in both directions. Once neighbor #2 thinks he might have missed the top and sells, then suddenly #3 decides to sell too. And pretty soon real estate yardarms are popping up like dandelions.

    That is how markets overshoot.

    Right now, after a lot of turns on the inventory valve, it seems to me that a bit less inventory can lead to a substantial change in prices. But a bit more inventory for one month is going to look more like an anomaly and won’t really change prices much. That is why I say that right now I think we have upward stickiness.

    But if we have big economic or political shocks to the system, that could turn around pretty darned quickly.

  37. 37
    bubble blower says:

    I work at MS. In the last year I’ve seen an unusual number of college hires leave the company after around 1 yr on the job. When I talk to these people about their decision to move, they mention the cost of living in Seattle as the major motivating factor. These folks leave for places like Austin, Boston, Atlanta and Chicago.

    The single largest factor in producing the bubble in Seattle has been tech job demand pushing housing demand. When the in-flow to Seattle becomes an out-flow or even a slower flow, it will not take much movement on the margin to significantly hurt our current housing prices.

    If I didn’t have family ties in the area, children in school etc, I would be looking to sell now. The world is changing rapidly.

  38. 38
    Eastsider says:

    RE: bubble blower @ 37 – Don’t forget the horrendous Seattle weather. All things being equal, most people would choose to live in another city with nicer weather. At least that was true until the recent (tech) bubble.

  39. 39
    Blake says:

    RE: bubble blower @ 37
    We’ve also had a hard time hiring analysts once they start to do some searching and realize the salary we are offering won’t cut it in this metro area. (I work for a Federal Gov agency so we can’t offer them more than HR tells us!)

    I also wonder about all the people who have moved out here for jobs dealing with our winters and weather. I’ve been here 12 years after living out east and in the upper midwest and each winter (I mean Nov, Dec, Jan, Feb, March, April, May…) seems worse. My wife and I are counting down the days before we can leave and just spend our summers here. I have to imagine that a good proportion of the new hires the last 5-10 years must also be feeling the same way. AMZ is a consumer goods business and a recession will hit them harder than most. And when any squeeze comes down at AMZ we may see many of their recent hires decide to cut and run to sunnier pastures!

  40. 40
    Deerhawke says:

    My goal in a few years is to be in Seattle only April – September. The winters here really are brutal.

    But I keep running into people in other parts of the country who clearly have not gotten the memo. “Oh you live in Seattle! You are so lucky! My friend/cousin/co-worker moved there and I hear it is so green and beautiful. And it never gets cold or snowy in the winter. And it is so totally hip. ”

    The city must be paying a really effective PR firm or something.

    But if you think Seattle is going to be less attractive over time, think again. They are scheduled to start taking down the viaduct in January. Right, this next January–nine months from now. That is right around the time Expedia moves in with 4500 employees. Three years after that, the city will be finishing a park between the city and the sound that rival– or exceed– San Francisco. The city will finally have a central park.

    Will the traffic get worse. Sure. Will it be more crowded? Sure. Will the winters still be dark. Sure. Will people still be complaining about the rapid rise in the price of real estate?

    Of course– because it will be.

  41. 41
    N says:

    Weather is subjective. If your from CA and like sun, it probably sucks here. If your from much of the rest of the country (especially the midwest or northeast) its actually much milder and not really anymore gray in the winter. Growing up here I remember many transplants saying how great the climate was here and enjoying being away from the heat. There is always that honeymoon period.

    Instead of getting 40+ inches of rain + 50+ inches of snow you just get the rain and warmer temps. BUT there clearly is something to it and it certainly wears on many based on how many comments you hear in the workplace and even those that do well in it are ready for change come February. But that isn’t much different than many other places.

    Then you have the group that loves winter sports and loves the combination of mild in the city with access to the mountains.

    BTW, I’ve learned that everyone loves to complain about weather, and its usually the natives that complain the most, I learned that living in other areas.

  42. 42
    Blake says:

    RE: N @ 41
    N: “If your from much of the rest of the country (especially the midwest or northeast) its actually much milder and not really anymore gray in the winter.”

    You’ve obviously never spent a winter in the midwest. It is cold, but it is MUCH sunnier. I don’t mind the cold much and I love xcountry skiing and just being outdoors. It was the very humid, HOT summers that drove me away.

    Seattle is also much farther north . Chicago is about 400 miles south of Seattle, so the darkness comes earlier and the nights last well into the morning. And 30-60 straight days of grey drizzle is much worse than an occasional snowstorm…. IMHO.

    Depression is much worse here than almost anywhere else in the US… except Alaska!

  43. 43
    Doug says:

    Yep, 50% correction coming as soon as these college grads making $75k/year realize it actually sucks here.

  44. 44
    S-Crow says:

    RE: Deerhawke @ 40 – Nothing more frustrating than leaving Spring training this year, particularly leaving Salt River Fields after the M’s game vs the Rockies. A depressing drive to the airport and flight home. However, nothing better than 72 outside at Safeco on late Spring/Summer day and sitting 5 rows up from 3rd base (and if Felix is pitching well.)

  45. 45
    sleepless says:

    By Kary L. Krismer @ 29:

    By sleepless @ 28:
    That’s exactly what I’m saying! From post 20: “What I’m referring to is the fact that the demand curve can stay exactly the same while the quantity sold changes with price.”
    That you cannot understand simple English is not my problem.

    It is you who cannot read plain English, let me write it for you again in bold:

    What is the ‘Demand Curve’
    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. In a typical representation, the price will appear on the left vertical axis, the quantity demanded on the horizontal axis.

    The quantity demanded is the demand by definition. With higher prices, the quantity demanded decreases and the opposite happens with the decreased price – demand increases. What you tell us is that the demand doesn’t depend on price meaning no matter what the prices is, the demand is always there. But same is true then for any product and service. How can you measure demand for Ferraris if the demand is there at all price points? That means we cannot measure the demand because people will always want more of everything. More house, more sex, more food, more cars and more massages. That simply means you don’t have any demand because demand is simply as desire. I desire a house in every country and state, so, what is my demand for houses? If i can get one at $1000, it is $50K for 50 houses in 50 states. Does it mean the demand is high for housing?

    I mentioned above, other factors affect demand, such as sentiments. For instance, the demand can increase in anticipation of the price increase – aka more demand now vs less demand later when the prices go higher. You can take demand from future by “scaring” people to buy now. But this means people are willing to pay higher prices now that they would not be able to afford in future – so the demand is increasing. But the future demand is decreasing by the same token.

    You seem to be caught up with the simple fact that people will buy less the more something costs. I’ve never disputed that obvious idea.

    If people buy less of something this is the definition of decreased demand. Whether the demand is decreased by sentiment of price is another question. But stating the demand is there simply because people desire something is naive at best. Trying to claim this as the economic definition is simply stupid. This is what you made up, you make up definitions that fit your agenda. You just keep making fool of yourself Kery. Keep trying…

  46. 46
    David says:

    RE: S-Crow @ 44 – My Houston Astros finally won a World Series last year. Houston has the worst flip-side of Seattle weather. Or that is how I remember it. And Houston had a real estate crash in the 80s that was straight-up epic. It did recover however as they usually seem to.

    It is the Winter weather here in Seattle that makes the place good for programmers. What else is there to do?

  47. 47
    sfrz says:

    RE: sleepless @ 45 – I am so tired of the “It’s different this time” crowd. Up up up, until it isn’t. Who couldn’t have seen this one coming? “The “lack of supply” argument is just wonderful – a bunch of “economists” finding a basic free market capitalism solution to a problem that has nothing to do with free market capitalism. Perhaps “economists” can also argue that building more, despite the lack of prime borrower demand, will also have the added benefit of puffing up GDP. From there, it’s only a couple more steps down the primrose path that leads to China’s ghost cities. ”
    https://www.zerohedge.com/news/2018-04-10/economists-who-push-inflation-stunned-rising-home-prices-put-buyers-deeper-debt

  48. 48
    sfrz says:

    RE: Doug @ 43 -The movement isn’t to Seattle. It’s the Rockies. “In the 2000’s was when we met, those who had grown up there and those who were moving were in the same age group. Only about 40% were college educated or in tech/programming oriented roles. Of those, a small amount has ridden the wave to prosperity. Most moved to Seattle (if looking for a career/home/etc), or Portland (if they pass the weird-test). There’s been a steady trickle out of the Bay for anyone not in tech for the past decade, and now I think only 10% of them still remain. Now they’re going to Colorado rather than Seattle, and a few more to Portland. Those that are currently missing the wave in Seattle are looking at moving to Colorado.” https://news.ycombinator.com/item?id=16797958

  49. 49
    David says:

    Redfin sent me another email that my property has moved up again the last 30 days. The only thing I can see squelching demand right now are Amazon employees holding their breath about HQ2. Uncertainty is bad.

  50. 50
    Deerhawke says:

    RE: sfrz @ 48

    Part of the next wave in Seattle may not just be young people getting tech jobs. Part of it will be wealthy boomers moving into the city from all over the Northwest.

    I have met some of them. The couple who sold the business in Spokane have a daughter at Seattle U for law school– why not relocate to First Hill? The couple whose apartment buildings in Tacoma are producing great cash flow, so now they can retire downtown near the son and grandkids in Magnolia. Lots of great stuff to do downtown and top-notch hospitals too as they get older.

    It has already started, but will really pick up steam after the waterfront park is completed.

    This same kind of thing started happening in NYC when I lived there. After the urban pioneers had done their work and the city started to feel safe again, all these wealthy people from Darien and Westchester who had gotten their kids off for college started moving into the city. Right behind them were wealthy retirees buying places near Lincoln Center. Right behind them were a whole group of foreign investors who wanted a pied-a-terre.

    We will see the same thing here, but perhaps some will only live here during the good months of the year. It is going to be a boon for the downtown high-rise condo developers (seen the prices of those units lately?) It will probably be good for the theatre, opera and orchestra as well as for downtown restaurants.

    But it will certainly widen the already substantial gulf between the haves mores and the have nots in this city.

  51. 51
    sfrz says:

    RE: Deerhawke @ 50 – Not so sure about that. NYC, unlike Seattle, is diversified, and a hop across the pond to Europe. We are a currently a one industry city. TECH. AMZ- and they are looking elsewhere.

  52. 52
    QA Observer says:

    HQ2 is going to be in Loudoun County Virginia!

    The traffic in NOVA is already horrendous and can’t imagine another 30% increase. I-66 and Dulles Toll Roads are parking lots most of the time.

    I hope AMZN moves everyone there and closes up shop here. It would be good riddance. All their faces glues to their phones with their hands in their pockets creates a pedestrian hazard. It would be hard to do both at the same time, but I think I have seen some try.

    Oh yea, and I think the Yield to Pedestrian law should be revoked. It would be carnage down by the Globes.

  53. 53
    sfrz says:

    RE: QA Observer @ 52 -CIA/WaPo/AMZ/Finance employees from NYC to VA.

  54. 54
    Nicole says:

    RE: sleepless @ 26
    Demand is a relationship of prices to quantities demanded at said prices. Holding other things constant, a change in price will result in a change in quantity demanded. You move along the same demand curve from first price to second price, giving you the new quantity demanded. Demand itself doesn’t change when prices changes; quantity demanded does. Changes in price result in changes in quantity demanded on the same demand curve.

    Demand shifts due to non-price changes, such as changes in income, expectations about the future, the costs of other goods, etc. The difference is that a movement along the curve is caused by change in price (example above) and shift in demand caused by something other than price change (of the good/service in question.

    I teach economics for a living :)

  55. 55
    S-Crow says:

    RE: sfrz @ 47 – A little down within that article reflects the Debt to income ratio’s of conventional loans. If that chart is correct it shows just an incredible rise which is what I’ve been preaching to deaf ears for some time.

    Erik mentions in earlier posts that this market will run until around 2022 and there are no loose lending or “sub prime loans.” Perhaps people should revisit FHA and FHA loans coupled with WSHFC (Washington State Housing Finance Commission loans)—with seller contributions or with WSHFC backed programs these buyers are nothing down borrowers. Essentially these loans are Gov’t backed defacto sub prime loans. They certianly assist people into home ownership but let’s not sugarcoat the potential risk. Fannie Mae expanded debt ratio’s to 50% (what the heck would people consider that? Prime? Alt-A? Stupid?). Remember that these ratio’s are based on gross income (not take home pay). Enter Carrington Mtg a week ago making no bones about serving sub prime borrowers or as they called them “under-served borrowers.”

    I mentioned to a client of mine who has flipped homes heavily over the last couple years or so if they were aware that all but one of their sales was financed 100%. People are stretching to enter into housing and I’m not talking about housing residing on 22nd Ave E & Prospect on Capitol Hill.

    The narrative of no loose lending is full of dry rot. And that’s without commenting on the leverage sloshing around the Puget Sound real estate market.

    Exibit A: https://twitter.com/seattlebubble

  56. 56
    sfrz says:

    RE: S-Crow @ 55 – Non QM (Non qualified mortgages) re-branded subprime. It’s baaaccckk…

  57. 57
    sleepless says:

    By Nicole @ 54:

    RE: sleepless @ 26
    Demand shifts due to non-price changes, such as changes in income, expectations about the future, the costs of other goods, etc. The difference is that a movement along the curve is caused by change in price (example above) and shift in demand caused by something other than price change (of the good/service in question.

    I teach economics for a living :)

    Did you even bother to read what i wrote. Let me re-quote this for your:

    I mentioned above, other factors affect demand, such as sentiments. For instance, the demand can increase in anticipation of the price increase – aka more demand now vs less demand later when the prices go higher. You can take demand from future by “scaring” people to buy now. But this means people are willing to pay higher prices now that they would not be able to afford in future – so the demand is increasing. But the future demand is decreasing by the same token.

    The argument was about the prices not affecting demand

    Holding other things constant

    because by Kery’s definition demand is merely the desire for the one to buy something. Following his logic the demand for Ferraris and massages should be thru the roof, shouldn’t it, after all, who cares about prices if people want more of something (more Ferraris and more massages).

    If the price of the product increased and, as the result, the sales of the product fell, it is by definition is change in the demand for the said product. Kery wants everyone to believe otherwise since he needs to push his agenda and give ill gotten financial advise to his customers.

  58. 58
    Brian says:

    By S-Crow @ 55:

    Exibit A: https://twitter.com/seattlebubble

    WHOA. I heard about that lending change but didn’t expect anywhere near that quick and drastic of an impact.

  59. 59
    sleepless says:

    By Kary L. Krismer @ 32:

    But try this. If there’s a refinery fire and gasoline prices skyrocket, that’s not due to a change in demand, but the price will increase and the quantity decrease. Based on other others here have said they would view that as a reduction in demand because the quantity decreased. It is not a reduction in demand, it is an effect of the reduction in supply.

    Kerry, you are falling on your own sward. Supply and demand in free market always try to find equilibrium. If the refinery burns down and the supply of gas decreases, the demand for gas will not go down if the price for gas doesn’t change. But if the price for the gas goes up, the demand will fall. It doesn’t matter if the prices for gas goes up due to the restrained supply or other factors (increased costs of production, market price change, etc). You can increase the price of gas without decreasing supply, this would affect the demand just the same way. Low supply doesn’t affect the demand. Low supply results in higher prices and higher prices lower the demand. If you have say 1000 people ready to by 10 gallons of gas each (10,000 gallons total), at $3/gal, you have a demand for 10,000 gallons of gas. If your raise your gas prices for whatever reason to say $4/gal, now only 900 people are ready to buy 8 gallons each. What happened to the rest? The rest will find other ways to get around. For example, if gas is too expensive, people can decide to ride a bus or a bike. Or maybe the one decides to buy more economical car because the gas is too expensive. But what will not happen is people will not continue to buy the same amount of gas at higher prices.

    Another example. You have 10,000 gals of gas at $3/gal and 1000 people willing to buy 13 gals each. You have a short supply. You have two choices – raise the price and decrease the demand or you can find a way to bring 3000 more gals of gas to the market. This is what most manufacturers do. When Toyotas demand is high, they don’t just raise prices because the result would be losing the market share to other manufacturers as the demand for Toyotas will fall and people will start buying Hondas, Chevys, Fords, etc. Instead they increase the supply of Toyotas so they keep the demand satisfied and the market share unchanged.

    If price of beef increases, the demand for beef falls. People start eating less beef and more chicken, pork, etc. Or just simply eat less. If prices of homes go up, less people choose to buy, more people choose to rent or cramp more people into smaller units, remodel instead of buying new, etc.

    Falling sales due to the increase in prices is by definition is falling demand. When prices fall on the other hand and products and services become more affordable, people demand more of the said goods and services. When movie ticket is $5/ticket, you have theaters full of people watching movies. When the price is $25/show, then you have very few people going to the theater. Claiming that demand doesn’t change is oxymoron. Then there is just simply no definition for demand – demand is simply the ones desire. But how much does the one desire? Then the demand is high always for everything – people always want more cars, more toys, better food, more entertainment, more vocations, etc.

  60. 60
    Nicole says:

    RE: sleepless @ 57RE: uwp @ 35
    You wrote: “On the other hand, if you only make 800 and 1000 buyers, now you can raise your prices to say $350 and reduce the number of buyers to 800 – aka lower your demand.” Which is wrong. Raising prices doesn’t lower your demand, it lowers the quantity demanded. Quantity demanded is relative to price while demand is the entirety of the price, quantity relationship.

  61. 61
    Eastsider says:

    RE: Nicole @ 60 – You are being nitpicky. Here is a similar paragraph from Investopedia.

    For example, suppose a luxury car company sets the price of its new car model at $200,000. While the demand of the luxury car may be high due to the company creating hype for the car, most consumers are not willing to spend $200,000 for a car. As a result, the sales of the new model quickly fall, creating an oversupply and driving down demand for the car. In response, the company reduces the price of the car to $150,000 to balance the supply and the demand for the car to ultimately reach an equilibrium price.

    https://www.investopedia.com/ask/answers/033115/how-does-law-supply-and-demand-affect-prices.asp

    P.s. Just to be clear, I don’t teach economic for a living. LOL.

  62. 62

    By sleepless @ 57:

    because by Kery’s definition demand is merely the desire for the one to buy something. Following his logic the demand for Ferraris and massages should be thru the roof, shouldn’t it, after all, who cares about prices if people want more of something (more Ferraris and more massages).

    If the price of the product increased and, as the result, the sales of the product fell, it is by definition is change in the demand for the said product. Kery wants everyone to believe otherwise since he needs to push his agenda and give ill gotten financial advise to his customers.

    Wow, the person who claims I make things up demonstrates an incredible ability to make things up together with an incredible level of misunderstanding.

    I suspect your problem is not only a lack of understanding of basic economics, but also reading comprehension. Hopefully in addition to someone who teaches economics we will get someone in here to teach you reading comprehension. But whatever. Debating economics with someone who doesn’t understand even the basics is pointless.

    The only point to be made here is that the slightly depressed sales recently have not likely been the result of lower demand, no matter what your misunderstanding of the term. And a point I made a few months ago, none of the statistics published by the NWMLS give us any idea of how strong the demand is. When the government gives us employment figures they let us know how many people have jobs and how many people are looking, the latter of which is information obtained by polling. The NWMLS doesn’t do any polling to figure out how many people are unsuccessfully looking for houses/condos. All we have are stories about how many offers come in on a few listings.

  63. 63

    By sleepless @ 59:

    By Kary L. Krismer @ 32:

    But try this. If there’s a refinery fire and gasoline prices skyrocket, that’s not due to a change in demand, but the price will increase and the quantity decrease. Based on other others here have said they would view that as a reduction in demand because the quantity decreased. It is not a reduction in demand, it is an effect of the reduction in supply.

    Kerry, you are falling on your own sward. Supply and demand in free market always try to find equilibrium. If the refinery burns down and the supply of gas decreases, the demand for gas will not go down if the price for gas doesn’t change. But if the price for the gas goes up, the demand will fall.

    I quit reading at this point because it’s clear from that much that you don’t have a clue about economics. You’re wasting my time and everyone else’s time.

    Yes the quantity sold will go down as prices increase. No one is denying that obvious point. Unfortunately you’re unable to see beyond the obvious.

  64. 64

    By Eastsider @ 61:

    RE: Nicole @ 60 – You are being nitpicky. Here is a similar paragraph from Investopedia.

    For example, suppose a luxury car company sets the price of its new car model at $200,000. While the demand of the luxury car may be high due to the company creating hype for the car, most consumers are not willing to spend $200,000 for a car. As a result, the sales of the new model quickly fall, creating an oversupply and driving down demand for the car. In response, the company reduces the price of the car to $150,000 to balance the supply and the demand for the car to ultimately reach an equilibrium price.

    https://www.investopedia.com/ask/answers/033115/how-does-law-supply-and-demand-affect-prices.asp

    P.s. Just to be clear, I don’t teach economic for a living. LOL.

    Actually what Nicole wrote wasn’t nitpicky, unless you want to describe being accurate as being nitpicky.

    But as to what you quoted, this sentence is wrong: “As a result, the sales of the new model quickly fall, creating an oversupply and driving down demand for the car.” Oversupply does not reduce demand, but it is a situation that is not in equilibrium. To rectify that the company will either have to stop producing cars for a period of time or reduce the price of the cars to sell more. That reduction in price doesn’t change the demand for the car, but it does change the quantity sold.

    To change the demand for the car you’d need some other change. If I recall correctly a lot more White Broncos sold after OJ’s slow speed chase. That event increased the demand, increasing both the price paid and quantity sold. [OMG, I can see Sleepless’ head exploding as he contemplates rising prices AND more sold.]

    Conversely, and roughly as long ago, Audi had a problem with unintended acceleration events. The publicity of those events greatly reduced the demand for Audi vehicles. As a result the price obtained for new and used Audi vehicles declined, without a corresponding increase in quantity sold.

    Those are the types of events that result in a change in demand, as do changes in employment, economic events, etc. A change in price by a seller does not result in a change in demand, but instead is merely the seller taking advantage of the demand curve.

  65. 65

    Several posts above I commented on the stupidity of your average reporter. This article is a great example of that.

    https://www.cnbc.com/2018/04/10/house-hunting-heres-how-to-win-a-bidding-war.html

    Their points?

    1. Bring cash. Duh!
    2. Don’t use a financing contingency. Okay, a bit extreme, but it would help. And given how poorly drawn the NWMLS’s financing contingency is, I can’t argue with that a great deal locally, but it’s still extreme.
    3. A personal letter to the seller! OMG, we’re heading off into the realm of amateur hour now! But it could work–I wouldn’t hang my hat on it, or fear losing out to someone else who wrote such a letter.
    4. Don’t be afraid to give up! Well if steps one to three are your only courses of action, perhaps giving up before you begin would be in order!

    This is just pathetic stuff. In contrast, Washington Realtors is starting a 10 part series on how to win bidding wars without losing the battle. I’ve only seen the first so far, and it’s probably not terribly interesting for consumers, but that will undoubtedly contain more useful information than this piece.

    Also making the news lately are stories about what a red iPhone looks like in real life. Can you imagine spending four years getting a journalism degree and writing about what a red phone looks like?

  66. 66
    Dustin says:

    By sfrz @ 51:

    RE: Deerhawke @ 50 – Not so sure about that. NYC, unlike Seattle, is diversified, and a hop across the pond to Europe. We are a currently a one industry city. TECH. AMZ- and they are looking elsewhere.

    While perhaps not as diversified as NYC, Seattle is more diversified than it was during the Boeing bust, and west coast cities benefit from their proximity to Asia although they are farther from Europe. I would agree that the tech correction will have significant economic implications in Seattle, as it will in SF and NYC.

    I like Deerhawke’s comments anticipating how the waterfront park will make downtown living more desirable – this is a great opportunity for those who live near the existing viaduct, and for developers who are building residential in that area. That said, seeing small 1-2 bedroom condos selling for 1-2 million in downtown Seattle makes me feel the area is overvalued, maybe due to too much optimism about a new wave of downtown living. Not that some condos shouldn’t sell for these prices, but we still live in a city where 1-2 million can afford large, beautiful home with a yard, even new construction, in a central neighborhood.

  67. 67

    It just occurred to me that Sleepless doesn’t understand that a demand curve is a snapshot in time.

    Assume a gas station with the following demand curve:

    Price 3.00, gallons per day 20,000.
    Price 3.05, gallons per day 19,000.
    Price 3.10, gallons per day 17,500.

    Now assume everything stays the same for 30 days, right down to the number of competitors and their pricing, and even the weather, and sunrise/sunset. For those 30 days the gas station owner would sell 17,500 gallons if they price at 3.10, and 20,000 if they price at 3.00. That is not a change in demand, that is merely a change in quantity sold. The demand has remained static for 30 days because nothing has changed to change it.

    Now assume a competitor opens across the street. Or assume road construction makes access to the station difficult. Or assume this station’s brand of oil had a large oil leak somewhere and protests over their practices start up. The demand for this particular gas station’s gas will fall dramatically. If they price at 3.00 they will no longer sell 20,000. Those types of things are changes in demand. Just changing price merely moves you to a different point on the demand curve.

  68. 68
    uwp says:

    Also missing from these explanations is the elasticity of Demand and Supply for housing

  69. 69
    N says:

    @ S Crow 55 – Right on. It seems like for years, a realtor talking point has been lending standards are so tough, but dry rot indeed. You don’t lend to buyers with a 600 credit score when banks are being conservative. It works as long as the economy is strong and values go up 10% a year.

    600 credit scores and little down has gotten people in homes for a few years now. It’s just getting easier and easier and the risk goes up and up.

  70. 70
    Blake says:

    By uwp @ 68:

    Also missing from these explanations is the elasticity of Demand and Supply for housing

    Yes… and also the fact that people are not rational actors! 30-some years ago I read Herb Simon’s paper about ‘bounded rationality’ yet economists and pundits still “assume” that people act rationally and have perfect information. They love models, but as George Box (one of my stat professors at Wisconsin) liked to point out: “All models are wrong, but some are useful.”

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

    Another example: Let’s say a recession hits and Seattle housing prices start to decline rapidly (again). Who here thinks there will be an increase in demand at that time due to lower prices?

  71. 71
    sleepless says:

    By Kary L. Krismer @ 67:

    Price 3.00, gallons per day 20,000.
    Price 3.05, gallons per day 19,000.
    Price 3.10, gallons per day 17,500.

    Now assume everything stays the same for 30 days, right down to the number of competitors and their pricing, and even the weather, and sunrise/sunset. For those 30 days the gas station owner would sell 17,500 gallons if they price at 3.10, and 20,000 if they price at 3.00. That is not a change in demand, that is merely a change in quantity sold. The demand has remained static for 30 days because nothing has changed to change it.

    Kerry, you are just making a fool of yourself again. The fact that the quantity demanded lower at $3.10 is the result of lower demand for gas at $3.10 then when the price is $3.00. The increased price of gas lowers the demand as many people choose not to buy gas and ride bus, bicycle or walk. Or people opt out to cars with smaller engines and save more. You are clearly have no idea what you are talking about.

    You can build $10M home all over the country, but guess how many people would by them? None! Or very few. How many people would buy same houses at $500K? You have a line of people willing to throw money at your.

    Hey Kerry, what is the demand for Ferraris and massages. I am pretty sure you can have a lot of demand for $30K Ferrai, wouldn’t you? I still haven’t gotten the answer Kerry, what’s going on?

    I feel sorry for people who take financial advice from ignorant people like you. I understand that realtor’s profession doesn’t require a college degree, but giving financial advice without knowing the basics? You can spit on your monitor all day long, as I can imagine it sucks to be schooled over and over again on basics. Keep trying…

  72. 72
    Blake says:

    Meanwhile in the real world: “The spread between 5- and 30-year Treasury yields, as well as the gap for 2- and 10-year maturities, tumbled Wednesday to the lowest levels since 2007, at 37.2 basis points and 45.7 basis points, respectively.”

    A few days ago:
    https://www.bloomberg.com/news/articles/2018-04-08/bad-omen-for-markets-from-first-signs-of-yield-curve-inversion

  73. 73
    sleepless says:

    By uwp @ 68:

    Also missing from these explanations is the elasticity of Demand and Supply for housing

    In ideal world supply would always match demand. What that means is if you have 1000 homes $500K, but 800 buys willing to pay that much, you have too many homes on the market – aka oversupply. You have two choice – either decrease the price which will increase your demand or decrease the supply and keep price the same. If you keep price the same and don’t decrease supply, you sell 800 homes and you have no buyers for the remaining 200 – no demand. Now, you can lower the prices of the remaining homes to say $450K and bring a new poll of the buyers to the market that are now willing to buy your home at lower price.

    It is a basic economic, you have higher demand for items at lower prices. This is why Ferrari doens’t sell as many cars as Toyota, this is why Gucci doesn’t sell as much clothing as Guess and this is why not as many home sold at $10M vs at $1M.

    But Kerry is too ignorant to understand that. He thinks that it doesn’t matter what the price is, if people want something – that is the definition of the demand. He thinks that demand for Ferrari just as high as for Toyotas. Following his logic the demand for $10M homes should be higher than $1M since more people want better homes. Why to “want” $1M home when you can “want” $10M home?

  74. 74

    RE: sleepless @ 71 – Okay, I tried to explain it to you in simple English. You are a hopeless case, completely unable to understand even the most simple of economic concepts. I take back my advise that you should take a course in economics. That would just be setting you up for failure.

    Oh, and do I need to mention again how well I did taking economic courses at the UW? Your claims I don’t understand economics are laughable. That I disagree with you should tell you something, but again you have a problem with reading comprehension. Probably median and mode went over your head.

  75. 75

    By Blake @ 70:

    Another example: Let’s say a recession hits and Seattle housing prices start to decline rapidly (again). Who here thinks there will be an increase in demand at that time due to lower prices?

    You mean besides Sleepy! ;-)

  76. 76
    S-Crow says:

    Speaking of Demand………Regarding Rental Units:

    “Looking just at large projects of at least 50 units, the region has added 40,000 new apartments since 2014. ”

    “That far outpaces the rate of population and job growth, but follows about 20 years of slow apartment construction. There are about 35,000 units across the region still in the pipeline that haven’t been built yet, roughly the same as a quarter ago.”

    https://www.seattletimes.com/business/real-estate/smallest-springtime-rent-increase-of-the-decade-for-seattle-area-as-new-apartments-flood-the-market/

  77. 77
    greg says:

    By uwp @ 68:

    Also missing from these explanations is the elasticity of Demand and Supply for housing

    agreed.

  78. 78

    RE: S-Crow @ 76 – That’s actually speaking of supply. ;-)

    RE: greg @ 77 – And after three posts we’re still missing any discussion of elasticity. ;-)

  79. 79
    QA Observer says:

    So, there is new development by Toll Brothers going in down the street from me. Plans indicated 57 townhomes. Advertisement reflects the THs “starting” at 1.1 million.
    https://www.mcgrawsquare.com

    Anyone want to wager if all will sell at or above ask?
    They have about another 18-months I’d suspect until CO.

  80. 80
    Deerhawke says:

    RE: QA Observer @ 79

    Wow. That is a pretty substantial townhouse project. This has clearly been in design review and permitting for at least 3 years. What was there before? And how do the neighbors feel about the project?

  81. 81
    Deerhawke says:

    RE: Nicole @ 60

    Welcome Nicole! Thanks for bringing up the level of economic literacy in our region and on this blog.

  82. 82

    By Deerhawke @ 80:

    RE: QA Observer @ 79

    Wow. That is a pretty substantial townhouse project. . . . What was there before?

    I’d suggest using Google Streetview and their historical images. Also, King County iMap has historical satellite/aerial going back a long way!

  83. 83
    uwp says:

    RE: QA Observer @ 79 – I used to live on 10th W a few blocks from there. It was formerly Seattle Children’s Home.

    That is a big project!
    Nice location with a good direct bus line downtown (at least it was when I lived there). 10th W is a cool street.

  84. 84
    greg says:

    By Kary L. Krismer @ 74:

    RE: sleepless @ 71 – Okay, I tried to explain it to you in simple English. You are a hopeless case, completely unable to understand even the most simple of economic concepts. I take back my advise that you should take a course in economics. That would just be setting you up for failure.

    Oh, and do I need to mention again how well I did taking economic courses at the UW? Your claims I don’t understand economics are laughable. That I disagree with you should tell you something, but again you have a problem with reading comprehension. Probably median and mode went over your head.

    classic appeal to authority and a little ad hominem thrown in for good measure…

  85. 85

    RE: greg @ 84 – Of course it’s ad hominem. Sleepy deserves nothing less. If this were ancient Egypt he’d be arguing that the 2D drawings were realistic representations. (Think about that–it actually relates to his understanding of demand.)

  86. 86
    sleepless says:

    By Kary L. Krismer @ 75:

    By Blake @ 70:

    Another example: Let’s say a recession hits and Seattle housing prices start to decline rapidly (again). Who here thinks there will be an increase in demand at that time due to lower prices?

    You mean besides Sleepy! ;-)

    You obviously cannot read Kerry. I told you already that price is one of the factors affecting demand. The other factor is sentiment and i explained it clearly above, including repeating for others who didn’t read.

    Can sentiment affect demand? Of course it can. High crime areas have lower demand. If you fund out your favorite yogurt contains deadly bacteria, will that affect your demand for that yogurt? Of course it will. Many factors affect demand, price is just one of them.

    The fact that you cannot read is not my problem. But yes, you pick one word and ignore the rest of what i said. So smart of you indeed. it just shows how clueless you are.

    To answer the recession question – yes, the demand will fall if the prices remain the same. If the prices fall enough to match the lower demand, the demand will increase.

  87. 87
    sleepless says:

    By Kary L. Krismer @ 74:

    RE: sleepless @ 71 – Okay, I tried to explain it to you in simple English…

    Keep trying Kerry, keep trying… making fool of yourself…

    Oh, and do I need to mention again how well I did taking economic courses at the UW? Your claims I don’t understand economics are laughable. That I disagree with you should tell you something, but again you have a problem with reading comprehension. Probably median and mode went over your head.

    I guess you didn’t do so well after all, did you? Or was it a bad teacher? But keep convincing yourself how smart you are and how well you did in school while the rest of us keep making fun oh you :).

  88. 88
    whatsmyname says:

    By S-Crow @ 76:
    Interesting article, but I am drawn to the same quotes as you regarding the region:

    “Looking just at large projects of at least 50 units, the region has added 40,000 new apartments since 2014. ”
    “That far outpaces the rate of population and job growth,”

    First part seems right, but what about the second? Is that true? Here’s a link to work by the PSRC from July 2017.
    https://www.psrc.org/sites/default/files/trend-population-201707.pdf

    According to them the central Puget Sound population grew 231,400 from 2014 to 2017.

    That seems a lot. I will boldly guess that the OFM is off by some number, but 40,000 apartments hasn’t far outpaced population growth – even if the OFM overshot by 100%.

  89. 89
    whatsmyname says:

    RE: sleepless @ 87
    Dude, as the economics teacher tried to explain to you, demand is a broad and nuanced concept. If you want to make a stand on demand “definition”, you might take ten minutes with google to see that there are many definitions. This is because it is difficult to reduce a nuanced concept to few words, and various definers will skew to the aspect that most fits their frame of reference – much like the blind men describing an elephant.

    Your definition can be sourced. So can Kary’s. Your definition is the introduction to concept version. It is too narrow to include latent demand, residual demand, and many other everyday economic demand business concerns. So don’t laugh too hard. Knowledgable people aren’t joining you.

  90. 90
    ess says:

    By whatsmyname @ 88:

    By S-Crow @ 76:
    Interesting article, but I am drawn to the same quotes as you regarding the region:

    “Looking just at large projects of at least 50 units, the region has added 40,000 new apartments since 2014. ”
    “That far outpaces the rate of population and job growth,”

    First part seems right, but what about the second? Is that true? Here’s a link to work by the PSRC from July 2017.
    https://www.psrc.org/sites/default/files/trend-population-201707.pdf

    According to them the central Puget Sound population grew 231,400 from 2014 to 2017.

    That seems a lot. I will boldly guess that the OFM is off by some number, but 40,000 apartments hasn’t far outpaced population growth – even if the OFM overshot by 100%.

    Not only as you suggest is true, but the outpacing statement does not include how many housing units were torn down to build the new housing stock. The housing units are usually marginal single family houses that are torn down to make way for the new construction. Thus there is a reduction of what most people desire the most – a single family house that they can afford.

  91. 91
    Voight-kampff says:

    RE: whatsmyname @ 89

    Cheers!

  92. 92
    Matt P says:

    By whatsmyname @ 88:

    By S-Crow @ 76:
    Interesting article, but I am drawn to the same quotes as you regarding the region:

    “Looking just at large projects of at least 50 units, the region has added 40,000 new apartments since 2014. ”
    “That far outpaces the rate of population and job growth,”

    First part seems right, but what about the second? Is that true? Here’s a link to work by the PSRC from July 2017.
    https://www.psrc.org/sites/default/files/trend-population-201707.pdf

    According to them the central Puget Sound population grew 231,400 from 2014 to 2017.

    That seems a lot. I will boldly guess that the OFM is off by some number, but 40,000 apartments hasn’t far outpaced population growth – even if the OFM overshot by 100%.

    Two things: 1. not everyone lives in apartments and the 40,000 is for King and Snohomish counties and only counts projects with 50+ units. 2. The 231k increase covers Kitsap and Pierce as well. Take those out and it’s 184k.

    If you assume double occupancy average for the 40k units, that’s 80k and that’s probably low. A quick google says 42% of Seattlites are renters, so 78k of that 231k increase would need to rent, but probably more since newcomers would need to rent more. If we assume it’s 60%, 110k, but we haven’t accounted for projects with less than 50 units and those that will rent houses or condos or older unoccupied space.

    I think it’s pretty safe to assume that 40k new units for 50+ unit projects outpaces the growth of the population and is thus contributing to the slow down of rent increases despite the large tax jump. And there are a lot more units coming online this year which will further depress rents.

  93. 93
    Erik says:

    RE: Deerhawke @ 12
    There are less closed sales because there are less homes to choose from. People give up and rent when they can’t find what they want.

  94. 94

    By Deerhawke @ 36:

    And in economics, like in old garden hose valves, you can get stickiness in demand. Once people start to realize that demand has dropped so much and that prices are going up so fast, they don’t sell even though they had planned to sell that house in Ballard to buy that place in Tucson. You get emulation factors. When neighbor #1 sold and then regretted it (because prices jumped) and neighbor #2 held off and it worked out well for him (because prices jumped again) then neighbor #3 down the street holds off on selling too. Why sell when it might be worth $100k more next spring?

    But the stickiness works in both directions. Once neighbor #2 thinks he might have missed the top and sells, then suddenly #3 decides to sell too. And pretty soon real estate yardarms are popping up like dandelions.

    I’m not real crazy about your terminology, but you do hit on an important topic for the supply side.

    For the past couple of years in King County there have been roughly 2,500 new SFR listings a month on average, tending to concentrate more during the spring/summer, but other than that their scheduling is rather random. They don’t all tend to pile up in one month even though there’s nothing coordinating their release date (other than perhaps the lack of agents to do 30,000+ listings in one month). They just seemingly happen randomly, no matter how closely you look.

    On the other side there has been just a slighly lower average for closed sales each month. And with our “months of supply” being under one month in many counties, that means that if there were no listings one month we’d for all practical purposes run out of listings. But the random flow of listings described in the prior paragraph has been keeping that from happening.

    Standard economic theory would tell us that at higher prices there would be more “supply,” but we have not been seeing rising inventory levels with the higher prices. That is not entirely due to increased demand removing those properties from the market. Some existing owners are merely not deciding to sell even with the higher prices. There are at least three reasons for that.

    The first is your seller #3 situation. They have been watching what prices are doing, and seeing prices rise they are consciously deciding not to go on the market. They want to ride it out. You see this same sort of thing in the stock market after a stock has clearly broken past a new high. In that scenario literally every owner of the stock is holding it at a profit, and virtually all of them know the stock has been doing well, so the “supply” of stock available on the market is low despite the record price. And non-owners of the stock, seeing how well it’s been doing want in, and their behavior drive the stock price up further. So basically the higher prices cause the supply curve to move left and the demand curve to move right, resulting in even higher record prices. That same sort of thing is happening locally in our real estate market.

    The second pertains mainly to SFR real estate and not stock–the likely need to buy something new. Someone selling stock doesn’t need to buy anything new, but if they do there are plenty of other options. For houses, unless an owner is looking to move out of the area, there currently are not a lot of other options to buy. And that will make them more reluctant to sell, further restricting inventory.

    And finally, there’s the move-up or even move-down buyer. Ordinarily they would not impact the inventory numbers significantly because they would both buy and sell. But some may opt to rent their old place out instead of selling, due to the type of thinking from the the “first” reason above. And there are also those people who erroneously think that they sell they will have to pay a tax, and prefer to rent.

    All of these things and more have been putting downward pressure on our active listing inventory. As I’ve said in the past the stats Tim is publishing today are a lot different than what they were in 2010, but despite being so different both then and today the markets could only be described as unhealthy.

  95. 95

    By Erik @ 93:

    RE: Deerhawke @ 12
    There are less closed sales because there are less homes to choose from. People give up and rent when they can’t find what they want.

    Correct–the sales numbers have clearly been impacted for at least 3-4 months. I was amazed prior to that how well they were holding up notwithstanding the lack of inventory.

    As to “giving up” that is basically “substitution.” We’ve talked a lot about that in the past. Someone who can’t afford what they want may buy something smaller, something further out, something different (condo), may live with someone else or may rent.

  96. 96
    N says:

    Less homes to choose from compared to when? Certainly not last year. Inventory appears to be running higher but that is a fairly new development and if you allow 30-60 days to close the lower sales your seeing would be homes that went under contract in Feb and March.

  97. 97

    RE: N @ 96 – I assume you’re responding to Eric’s post 93, which was responding to post 12. I made a similar comment to yours in post 14, but I was contemplating the sales just reported as being from contracts as early as January, because a sale closing in early March could have easily been written up in January. As you note, back then inventory levels were not doing as well, and thus likely impacted the recently reported sales number.

  98. 98
    Erik says:

    RE: N @ 96
    Say 2000 homes went up for sale in 2015. Of those new listings, 1700 were sold and 300 of the less wanted homes carry over to 2016. In 2016, 2000 more homes were put up for sale and only 1700 sold. Now we have 600 homes people don’t really want. In 2017 it happened again and now there are 900 homes people don’t want to buy.

    My guess is in 2018, there are a large amount of homes that are overpriced or just houses people don’t want to buy for whatever reason. All the garbage got carried I’ve from previous years and is still garbage in 2018.

    At normal inventory levels this wouldn’t matter as much, but with extremely low inventory, a larger percentage of homes are undesirable for whatever reason and the problem grows yearly. Now buyers just don’t want to buy the leftovers and new inventory is bid up and fought for. Seattle has a lot of potential buyers, but those buyers don’t want to buy something they don’t really want.

  99. 99
    Brian says:

    By Erik @ 98:

    My guess is in 2018, there are a large amount of homes that are overpriced or just houses people don’t want to buy for whatever reason. All the garbage got carried I’ve from previous years and is still garbage in 2018.

    Wow those are some rose-colored bullish glasses lol.

    I doubt many people are going to leave their houses on the market for over a year, much less three years. They’ll either take it off the market or lower the price to sell. Most are not going to deal with agents and tours for that long.

    Besides, your argument is completely ignoring the fact that prices have been increasing along with mortgage rates, impacting the amount of demand for the houses on the market.

  100. 100

    RE: Brian @ 99 – I’m not even sure I could describe Eric’s numbers as bullish or bearish. But he does have a point that the desireable inventory is less than the total number.

    Also keep in mind that for some areas/types of properties there may literally be zero properties on the market. My development (Fairwood Greens) is over 1,000 homes and several weeks ago there were no active listings. My guess would be that is probably a first in almost 50 years since they started selling houses there.

    FWIW, right now the mean average time on the market for Active SFR listings is roughly two months and the median time for Actives is about three weeks. The longest is apparently 1,500 days!

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

  101. 101
    Deerhawke says:

    Kary, I think you are referring to the term stickiness. Is that the term you don’t like?

    It is actually a real economics term used in the literature. It is often used to refer to prices (sticky prices, price stickiness, etc. ) but can be used for any economic variable that, all other things being equal, is in the short term resistant to change.

    Other economic terms that people think is made up are lumpiness and clumping, especially when referring to data sets.

    I remember a brown bag lunch in grad school where the presenter used these terms a lot. One of the professors got a laugh when he said he felt like he had walked into a talk on kitty litter.

  102. 102

    RE: Deerhawke @ 101 – It wasn’t stickiness, and I’m aware of stickiness of prices. But if I were to use the term in the examples you gave I’d call it stickiness of supply since you were discussing supply.

    Also I wasn’t really crazy about “asymptote” but I suppose a demand curve could be that way–I just didn’t want to think too hard about that one or why.

  103. 103

    RE: Erik @ 98
    Yes Erik

    These 1920 Seattle built homes have issues, actually all homes have maintenance issues, including SWE’s east Kent modular with lot. It was built in 1991 and the appliances and heating/plumbing system get wore out with time. My hot water tank broke, the plumber turned the water main valve off and it main water valve burst pouring water under my house and the sump pump was broke. About $5K and two days later it all got repaired and the plumber was able to get emergency pumps going and got the sump pump installed before the HOA turned the block’s water off……whewww!!!

    Then my dishwasher pump stopped working….LOL….home ownership is not cheap….the new dishwasher arrives April 8th.

    Take this into account when you buy.

  104. 104
    Erik says:

    RE: Brian @ 99
    Yeah, my example is crude with a lot of holes in it. Like kary said, a lot of inventory is undesirable right now. I think there is always gonna be crap in the mix and with very low inventory, that matters because it’s a larger percentage of what’s out there. That means less buyers buying.

  105. 105
    Erik says:

    RE: softwarengineer @ 103
    That’s why I like to buy top floor condos. That way if my hot water tank breaks, it just destroys the condos below and there is minimal discomfort to me.

  106. 106
    pedaltothemetal says:

    Go for broke!
    Pedal to the metal!
    Can’t stop Seattle!

  107. 107
    Green-Horn says:

    RE: Erik @ 104

    Don’t know how much longer this ball is going to last…
    The music is still playing, but there aren’t a whole lot of options to choose.
    I agree with Erik, in the case of the Seattle housing market, there is an unusually high proportion of dregs to princesses now. And the dregs that are left are now demanding princess prices and princess treatment. I completely understand the potential buyers who are balking. Even if they COULD afford these princess priced dumps, some sacrifices aren’t worth making. I can imagine many hoping that more and better options will present themselves later. But without actual increasing the supply significantly, when the inelastic supply is met by the rising demand of people relocating to Seattle or graduating and coming of home-buying age, then if this additional demand can’t be satisfied by the expansion of offerings in multifamily apartment housing, then there is no place for this pressure to go but into rising prices.

    If a couple years ago, nobody could have imagined that median home prices in San Mateo County would reach $1.3 million and $1.05 million in Santa Clara County, then in a couple of years we shouldn’t be surprised when our prices reach similarly unimaginable levels. For example if Seattle’s home prices continue to rise 12% annually, median prices breach seven figures in just two years.

    It’s certainly crazy, but crazy almost always overshoots for quite a while before enough realize they’ve lost their minds for gravity to reassert its control.

  108. 108

    By Green-Horn @ 107:

    And the dregs that are left are now demanding princess prices and princess treatment. I completely understand the potential buyers who are balking.

    Not all the buyers balk. The reason the “dregs” are demanding princess prices is that some buyer will likely be willing to give them that price. And this is hardly a new thing. I would have to look up another transaction to nail down the time frame a bit, but I was commenting maybe 4 years ago that people were buying houses with obviously and severely failing siding without adjusting the price for the condition of the siding! Now maybe the buyer doesn’t understand or recognize siding issues, and maybe their agent doesn’t either, but this was before the period of time that going without an inspection became common.

  109. 109

    By Erik @ 105:

    RE: softwarengineer @ 103
    That’s why I like to buy top floor condos. That way if my hot water tank breaks, it just destroys the condos below and there is minimal discomfort to me.

    Some (many?) buildings have policies requiring replacement of hot water tanks every X years to prevent leaks like that.

    But a better reason to go top floor (besides more likely view) is you’re much more likely to hear a neighbor walking above you than below you.

  110. 110
    Erik says:

    RE: Kary L. Krismer @ 109
    I never pass when my hoa suggests that I replace my water tank. It’s a small investment that could alleviate a major headache.

    Top floor condos with vaulted ceilings are my favorite. You get a view and you don’t have to hear your neighbors. One thing that most people don’t understand is that a condo can feel private if you buy the right one.

  111. 111
  112. 112
    pedaltothemetal says:

    Zillow shares plunge 9 percent on the company’s plan to start flipping homes

    https://www.cnbc.com/2018/04/13/zillow-shares-plunge-on-plan-to-start-flipping-homes-rival-opendoor.html

    Spencer Rascoff is such a joke.

  113. 113
    Jake says:

    @112 why is Rascoff a joke? I admit I don’t know much about him, but stock speculators get things wrong all the time. I don’t see why this is such a horrible move for Zillow, but I am interested in your take.

  114. 114
    pfft says:

    they are back.

    Subprime mortgage bonds are making a comeback
    https://www.curbed.com/2018/3/30/17179750/subprime-mortgage-bonds-comeback

    Before you get all crazy this can go a long time. I remember after the tech bubble laughing that Zuck didn’t sell Facebook for that billion dollar offer or that the IPO of google was surely signs of a bubble. Both companies basically rule today. Each company is worth much more.

  115. 115
    Green-Horn says:

    RE: Kary L. Krismer @ 108

    Apparently it’s not just buyers having to scrape the dregs from bottom of the barrel during the inventory drought, mortgage bankers are going to be getting desperate to find business in new segments of the market as refis dry up with rising interest rates. Will this mean they’re going to relax their underwriting criteria or get creative with new approaches and new products? An interesting thought… They’re going to have to adapt to market conditions that mean fewer deals… or more likely they’re going to have to chase deals in new places… Gotta feed the machine!

    We’ll see! Maybe someone with a view from that end of the business would like to share…

    Relevant:
    https://www.zerohedge.com/news/2018-04-13/wells-just-reported-worst-mortgage-number-financial-crisis

  116. 116
    pedaltothemetal says:

    @109@110 Spot on with the reduction in walking noise by being on the top floor. What about general moaning and groaning sounds? Best heard from above or below?

  117. 117
    sfrz says:

    I am not a fan of top floors. Big negatives. trash take out/groceries/dogs/little ones/ Even elevators have their drawbacks. Broken and the wait. More than a dozen stairs, is too much for many.

  118. 118
    Erik says:

    RE: sfrz @ 117
    You sound lazy.

  119. 119
    ess says:

    https://www.seattletimes.com/seattle-news/data/seattle-taxes-ranked-most-unfair-in-washington-a-state-among-the-harshest-on-the-poor-nationwide/

    Above article – how unfair the tax system is to poor folks that live in the more expensive cities of Washington State.

    Possible flip side – how advantageous Washington State is for rich folks.

    Question – does this information influence a variety of out of state individuals who consider this as a factor when moving to and buying residences in the expensive parts of Puget Sound? After all, the rich often become rich by paying attention to detail, and this certainly is one big detail. Not having a state income tax saves the wealthy a fair amount of money as compared to residing in most other states.

  120. 120

    RE: ess @ 119 – This is just a BS study by a group that wants to support income taxes.

    Landlords have not been adding up their bills and then deciding what to charge tenants. They have been setting their rates as high as they can and see if they can get away with it. If they can then they try to charge more, if they can’t they charge less. The amount of real property taxes that they pay does not separately factor into the equation. (Although admittedly a landlord who has been lagging behind on rents might be motivated to change their rents after a large tax increase.)

    I’d like to see the study re-run by only showing the taxes directly paid by the various income groups. With rent and food expenditures being completely exempt from direct taxation it’s probably likely that many of the low-income groups probably pay more in Social Security taxes than state taxes.

  121. 121
    wreckingbull says:

    By pfft @ 114:

    they are back.

    Subprime mortgage bonds are making a comeback
    https://www.curbed.com/2018/3/30/17179750/subprime-mortgage-bonds-comeback

    Before you get all crazy this can go a long time. I remember after the tech bubble laughing that Zuck didn’t sell Facebook for that billion dollar offer or that the IPO of google was surely signs of a bubble. Both companies basically rule today. Each company is worth much more.

    Those are companies in the business of selling advertising and people’s personal data. I don’t know why you use them as examples. Lehman Brothers, Merrill Lynch, Washington Mutual might be better examples, no?

  122. 122
    ess says:

    RE: Kary L. Krismer @ 120

    It may be a BS study – but then – there are many BS studies conducted by all groups whose goal is to extract tax dollars from the general public. On the other hand – I would imagine that more than one wealthy individual has looked upon Washington State as a possible relocation prospect as a result of a lack of state income taxes. I believe Jeff Bezos, when considering his Amazon model took that into consideration. And lousy winters? The super wealthy either buy a winter place in a warm climate, or jet off to Hawaii.

    The end result of having a equitable tax – everyone – including the poor get screwed with higher taxes. Just ask folks in California or back east if a state income tax has been limited to the wealthy. The
    walk never matches the talk.

    We know that social security taxes are a highly regressive tax, as almost 50% of all taxpayers don’t pay any federal income tax. On the other hand – the social security benefit skews to the lower income worker, so maybe it all comes out in the wash.

  123. 123

    I linked the CNBC article above as an example of stupid reporters giving bad questionable advice. That article was about how to win a bidding war.

    Here is the most recent Washington Realtor’s video on a very narrow, but very important topic–Form 17.

    https://www.youtube.com/watch?v=pKEZOxawU8E

    I’d advise starting at the 6:00 mark, but there are two important points. First, it’s very difficult for a seller to properly and completely fill out a Form 17. And that can theoretically give a buyer an out far into the transaction. In the past couple of years upped my game in this area, trying to make sure my sellers fully complete the form, but perfection in this area is nearly impossible. (Although I would possibly disagree with Annie that not checking “N/A” could lead to a problem since “N/A” isn’t part of the statutory form.)

    And that leads to the second point. A buyer can sign either acknowledge receipt of the form or waiving their right to revoke based on the form (or a third waiver not often applicable). A buyer wanting to make their offer more attractive can waive their right to revoke. The risk is giving up the right to rescind within 3 days, or longer if there are incomplete answers. But that action should make the offer more attractive to a seller.

    For buyer clients whether we recommend waiving depends on the situation, and we probably only waive about 25-40% of the time. And when we do our transmittal letter to the listing agent will specifically point out that we are doing that.

    For seller clients the decision is much easier. If we’re fortunate enough to have multiple offers our spreadsheet will always include indicating whether the buyer waived Form 17 or merely accepted receipt. If you’re talking about a significant difference in price then that term isn’t likely to sway the day. But if there are two offers which are close on the various terms, that could very well be part of a deciding factor.

    Now admittedly this is something based on state law and thus not something CNBC is likely to cover. But I doubt you’ll find that covered in any local news story ever. If you want advice on how to win a bidding war (or on how to avoid having a buyer back out well into the transaction), you don’t look to reporters who don’t have a clue what they are talking about. You look to informed agents (which admittedly is not the entire population of agents).

  124. 124

    RE: ess @ 122 – I would agree with almost all, if not all, of that.

    BTW, “The FYI Guy” is well aware of the type of arguments I made, but due to the Seattle Time’s own bias (or his), they completely fail to cover those. The closest they come is to call the entity doing the study a “liberal think tank.” So you basically have a liberal newspaper covering something done by a liberal think tank, without any attempt to cover opposing viewpoints, including the types of positions either of us have made.

  125. 125
    ess says:

    By Kary L. Krismer @ 124:

    RE: ess @ 122 – I would agree with almost all, if not all, of that.

    BTW, “The FYI Guy” is well aware of the type of arguments I made, but due to the Seattle Time’s own bias (or his), they completely fail to cover those. The closest they come is to call the entity doing the study a “liberal think tank.” So you basically have a liberal newspaper covering something done by a liberal think tank, without any attempt to cover opposing viewpoints, including the types of positions either of us have made.

    The above is nothing new. And one of the comments in the article absolutely nailed it. That individual reminded everyone that the study did not account for all the goodies and benefits many lower income families receive. Furthermore – there is so much tax evasion happening – but no one has accounted for income obtained “under the table”.

    Furthermore, there is no acknowledgement that government activities are much of the cause of expensive housing – which apparently is what is driving the entire article.

    And I agree with you about the statement regarding property taxes. A landlord doesn’t view and then segregate his property taxes and automatically passes any tax increase to the tenant in isolation. The price they charge is combination of all sorts of factors. Just like almost everyone in businesses and as well as most employees. Apparently these articles are produced to hype up individuals who have never been exposed to a basic economics course, or have had experience in running a business, including the business of renting residences.

  126. 126

    By ess @ 125:

    Apparently these articles are produced to hype up individuals who have never been exposed to a basic economics course, or have had experience in running a business, including the business of renting residences.

    The use of the word “apparently” was completely unnecessary. ;-)

  127. 127
    Deerhawke says:

    RE: Green-Horn @ 107
    _____
    If a couple years ago, nobody could have imagined that median home prices in San Mateo County would reach $1.3 million and $1.05 million in Santa Clara County, then in a couple of years we shouldn’t be surprised when our prices reach similarly unimaginable levels. For example if Seattle’s home prices continue to rise 12% annually, median prices breach seven figures in just two years.
    ______

    Yours was a good post. It got me thinking about the parallels between Seattle and the Bay Area. A quick Google search turned up this article, updated just this month.

    It has a long-term view and a lot of useful information including charts, graphs, links, etc.

    https://www.paragon-re.com/trend/3-recessions-2-bubbles-and-a-baby

  128. 128
    sfrz says:

    RE: Erik @ 118 – Lazy? You must not have/had toddlers with strollers, or small ones insisting on walking themselves. You must not have owned a dog that needs to pee at 2 in the morning, refusing the pee pad. You may never have had an elderly or disabled family member visit.

  129. 129
    Erik says:

    RE: sfrz @ 128
    Right, I have had none of those things.

    The biggest struggle I’ve had as an adult is when I did 6 years of hard time in North Everett.

  130. 130
    David says:

    YouTube has live webcams showing the siege of Everett by occupation forces. Why is Trump bombing Syria when Everett is there?

    Is it just me, or does it seem like sales activity has taken a big yawn recently outside of Seattle city limits? Shouldn’t activity be getting crazy now? Or is it May when things really buzz?

    By Erik @ 129:

    RE: sfrz @ 128
    Right, I have had none of those things.

    The biggest struggle I’ve had as an adult is when I did 6 years of hard time in North Everett.

  131. 131
    Eastsider says:

    RE: ess @ 119 – I’m not so sure about the WA tax system favoring the ‘rich’. WA has one of the highest estate taxes in the country. If you have a couple million worth of asset which includes your bubbly priced real estate, you are probably better off retired in CA than in WA!

  132. 132
    Eastsider says:

    RE: Kary L. Krismer @ 120 – It is ridiculous to believe that cost has not effect on rent. Landlords do take higher property taxes into account when setting rent. Otherwise, what is the point of cap rate on rental property?

  133. 133

    By Eastsider @ 132:

    RE: Kary L. Krismer @ 120 – It is ridiculous to believe that cost has not effect on rent. Landlords do take higher property taxes into account when setting rent. Otherwise, what is the point of cap rate on rental property?

    If the landlords could charge $200 a month more in rent, why in the world would they wait for costs to rise before doing so? Answer–they wouldn’t! Landlords are constantly adjusting their price to see what the market will bear, or at least those with professional management. They don’t add up all their costs and then add a precentage to that to determine the rent–they use their experience in what properties have rented for in the recent past and adjust from there.

    Let’s put it this way. Let’s assume you have a 1964 1/2 Mustang which you’ve owned since new. You want to sell it. Are you going to add the purchase price with the maintenance costs over the years, and then add a percentage to that? Or are you going to determine what 1964 1/2 Mustangs have been selling for in similar condition?

    As I said, rising costs may cause some non-professional landlords to consider raising their rents. But just the fact that costs rise that does not mean they can be passed on.

    Your understanding of how rentals work is based on having been told over and over and over again by members of the press, who don’t have a clue what they are talking about, that costs get passed on to consumers. If that were true no business would ever go out of business due to rising costs. It’s completely absurd to think that way.

  134. 134

    By Kary L. Krismer @ 123:

    (Although I would possibly disagree with Annie that not checking “N/A” could lead to a problem since “N/A” isn’t part of the statutory form.)

    Annie convinced me she was right, at least as to most the choices. It turns out the form’s instructions contemplate needing to write in “N/A” rather than providing for a checkmark for that choice. The drafters of the statewide forms added the “N/A” choice, but that is consistent with the statute.

  135. 135
    Eastsider says:

    RE: Kary L. Krismer @ 133 – I don’t see any point arguing with you. It’s like arguing that the price of a new car is determined by market forces regardless of costs. So if the Trump tariffs go into effect, automakers just have to eat the cost increase and lose money. There is one other person I can think of who may agree with you – Sawant. (Btw, she can legitimately claim to have more economic training than me. Haha!)

  136. 136
    Green-Horn says:

    RE: Eastsider @ 135

    Property taxes probably also constrain supply of rental housing, because when investors / landlords do their math, they’ll stop building / making additional rental housing available if they can’t pass the higher costs on with higher rents that profitably cover all these. In a simple example of single family housing, I can imagine that if I were renting out homes and rising property tax expenses meant I would have to take a loss every month, I might sell if I couldn’t get rents that cover these. Appreciation is nice, but landlords can’t take it for granted to be able to afford indefinitely subsidizing tenants every month with negative cash flow. So the consequence is a reduction of supply of rental housing units and ultimately resulting in a new equilibrium with likely higher rents but not necessarily equivalent to the amount by which property taxes were raised.

    Another way I suspect that higher property taxes impact the market, might be in home value. I was looking at some homes in markets back east. They weren’t bad homes, but were valued significantly less than the King County median. Interestingly they were assessed property taxes of $15K – $25K so the monthly payments those homeowners face are actually comparable or even higher than the much more expensive houses out here in Western Washington. Maybe somebody who actually knows more about this than I do with my superficial facile observations would care to comment about how relative differences in property taxes affect affordability and ultimately home prices?

  137. 137

    RE: Eastsider @ 135 – I never said regardless of costs. What I’ve clearly said is that in this market increased real estate taxes are not likely to be passed along. There are other markets where they might be, but not this one (or the rental market from a couple of years ago either).

    But let’s accept this liberal think tank at its word. What makes them think that income taxes wouldn’t be passed on by landlords? If you just randomly assume that every cost is passed on to the consumer, it doesn’t really matter what the tax is. If you start thinking like that then landlords are probably passing along Seattle’s sugar and ammunition taxes too! Why not?

    BTW, from what I read the tariff amount on steel/aluminum was relatively insignificant, even on a Boeing airplane, so it might just be eaten.

  138. 138

    RE: Green-Horn @ 136 – Buyers of houses clearly look at RE taxes when purchasing. Unless they are a cash buyer their lender will also factor taxes in because they have to determine the total monthly cost of ownership. The higher the taxes the smaller the loan the buyer qualifies for.

    Similarly, for condos the buyers and their lenders will look at the HOA dues for the same reason.

  139. 139
    Green-Horn says:

    RE: Deerhawke @ 127

    That data from Paragon is very interesting, to say the least!
    It’s an important reminder that it isn’t always boom or bust, but that doldrums over several years are also possible. Also it shows that the deflating bubble and crash in most recent memory is a pretty extraordinary episode and not necessarily the best basis for forward expectations. Also it’s eye-opening that Bay Area real estate values only retreated 10% during the dot.com crash! I bet the homeowners there wished their stock portfolios dipped only so modestly during that episode. In a couple turbulent weeks this year my own little stock portfolio is down more than that! Even the 30% decline in values during the Great Financial Crisis looks positively harmless compared to the hit that equities took during the same period.

    Recently many have been advising me to sell my Seattle real estate to take advantage of the hot market. While I’m not completely opposed to that idea, nobody ever suggests what I do with the proceeds. Especially with the expectation of rising interest rates, I don’t see any options that look any better. Buy bonds that will be worth less every time the Fed raises rates? Put it on Wall Street and hope that profits keep rising and multiples keep expanding? If real estate looks overpriced and values stretched, what would we call stocks?

    So for the time being, I’m letting it ride. Eventually it might be good to diversify my holdings outside of the Seattle market, where it looks quite likely the local activist government will continue try carve away property rights of home owners & real estate investors in the name of affordability or tenant rights. From what I’ve observed of how that works in other places elsewhere in the US and abroad., transferring privileges & rights away from homeowners tangibly reduces the value of their property. There are probably other risks to the Seattle market I’m overlooking… Perhaps industrial concentration of the employment base? Real estate markets in areas dependent the booming resource & energy industries show the risk of depending on the fate of a single sector.

    As a developer, perhaps you can answer a few questions that I’ve been curious about the market in creating / building new housing. In previous posts, you’ve mentioned how rising prices among contractors and in the trades is exerting significant upward pressure new home construction. Also I suspect that builders are competing for the scarce time of the skilled trades with homeowners who are choosing to remodel and renovate because they can’t trade up to a better house because available inventory is so low. However how is the availability of land for new construction projects affecting the demand for contractors? I can imagine that at some point, other constraints in the business besides the availability of competent & skilled labor become bottlenecks for construction, for example the low availability of parcels available for development or redevelopment or the ability of local authorities to review and approve plans and permits for construction. Can you envision situation that despite crazy hot demand, some other constraints lead to fewer actual projects in progress causing construction workers actually to be idled? How could you imagine that happening and what would you expect to be likely market responses?

    Finally maybe you or other developers would care to comment on the minimum housing affordability proposals in the city of Seattle. Without considering the political merits of the plan, how would it affect your business? The way I understand it the city is trying to tempt developers with a little additional floor area ratio density and height but then demanding they pay $20 -30+ per square foot into a fund to be dedicated to building “affordable” housing. To me this looks crazy. I don’t understand how making the construction of housing MORE EXPENSIVE by $20 – 30+ a square foot is going to make the market more affordable. In what proportion to the actual building costs is this? A couple years ago I heard that new construction costs start around $150+ per square foot, so that $20 – 30+ looks pretty significant to me.

    All things considered, how much more expensive do you think this will make the construction of a single town house or basic apartment unit? How much of a rise in market prices do you anticipate this fueling?

    How likely do you think it is that the proposal will pass? I’m thinking of going to upcoming hearings for my neighborhood. I’ve never been to that kind of thing before. I’m not sure what to expect, but I suspect that it’s pretty much a foregone conclusion that it WILL pass and this long “Seattle Process” of public “input” is just a charade to give the people an illusion of being listened to. Ultimately despite all the sound and fury, the proposed changes will probably turn out to be too modest and too long in coming to appreciably move the needle in opening the supply of developable parcels and increasing density to make it possible to build more units on the land that is available. For your business, this is probably good. An unlikely sudden glut of new product wouldn’t be good for your industry either. Nevertheless, in a couple years they’re invariably going to have to torture themselves with a rerun of all this gnashing of teeth because this expansion won’t have been enough.

    What specifically do developers want? I suspect that quick reviews & approvals and consistent fair application of clearly articulated standards are the usual things, but all the gripes I hear from people in the business makes me suspect that the authorities aren’t really listening. Anything else? What questions should we be asking as citizens? Here’s your opportunity to put some words in my mouth if I get a chance to have my voice heard at any of these meetings.

    Instead of taking the time to answer questions here, maybe I could invite you to lunch or something?
    If interested reach out to: chki (at) outlook (dot) com

  140. 140
    Saffy The Pook says:

    The whole point of this board is to share observations, experience, and (occasionally) wisdom. Deerhawke is near the top of my list of value-added posters and I would encourage you and he to keep the conversation public to the benefit of all.

  141. 141

    RE: Green-Horn @ 115
    Loan Qualification In My Cheaper Neighborhood is Grim

    The property tax and other escrow increases and add in the principle mortgage loan [if needed]…means one thing.

    Only one unit is listed open house out of 140…I assume no one qualifies for like $200-250K principle….yikes. They heard about the bad water valves in my HOA and fear the repair charges too…BTW, all neighborhoods have Achilles Heel maintenance costs, consider this when you buy….leave a $20-30K cushion for normal maintenance costs…..or you’ll not be prepared without 2nd mortgages [if ya qualify]…..then its fore closure up the road.

  142. 142
    pfft says:

    By Eastsider @ 135:

    RE: Kary L. Krismer @ 133 – I don’t see any point arguing with you. It’s like arguing that the price of a new car is determined by market forces regardless of costs. So if the Trump tariffs go into effect, automakers just have to eat the cost increase and lose money.

    I am late to this, but there is one other scenario(forgive me if I misunderstand you). Automakers don’t automatically lose money, they just make less money per car. Car companies have all sorts of costs and they go up and down all the time(just look at commodity prices). They may chose to eat them and they may raise prices. Cost increases are not always passed on. margins shrink.

    Your favorite pizza place doesn’t adjust the piece of a slice by the day or hour passed on the price of cheese. They may only raise prices ever few years if hardly ever. Car companies may car more about market share than a percentage point of two of profitability. A restaurant may not want to raise prices because they want to be the type of place where everyone can eat.

  143. 143
    Doug says:

    Most of the article is about blockchain so you can ignore if not applicable to you, but the key piece…

    “Everybody wants to leave California. Anybody in business wants to leave California. Because even though the weather’s awesome and their friends are probably here – all of the incentives are to leave.
    That’s why I want to flee California. I want a fresh start. And also to leave the US but that’s different set of incentives. The taxes are higher here, the services are worse, educations worse, the roads are poor. You go to Texas – they have no personal income tax, they have great roads, they have a free government encouraging innovation. You need that. New York, they have the problem that California does. They are over regulated, they’re on top of each other, they don’t let anybody do anything without filling out forms to do it.”

    As someone who fled Cali for tax purposes I can tell you it’s 100% true. I can work anywhere with a high speed internet connection so why would I ever live in a state with income tax? Particularly one where it’s north of 10%. Seattle and the broader PNW is an amazing place for many different reasons. I think some of the haters here have been here too long and can’t see the forest for the trees.

    https://www.zerohedge.com/news/2018-04-15/everybody-wants-leave-california

  144. 144
    pfft says:

    By Doug @ 143:

    Most of the article is about blockchain so you can ignore if not applicable to you, but the key piece…

    “Everybody wants to leave California. Anybody in business wants to leave California. Because even though the weather’s awesome and their friends are probably here – all of the incentives are to leave.
    That’s why I want to flee California. I want a fresh start. And also to leave the US but that’s different set of incentives. The taxes are higher here, the services are worse, educations worse, the roads are poor. You go to Texas – they have no personal income tax, they have great roads, they have a free government encouraging innovation. You need that. New York, they have the problem that California does. They are over regulated, they’re on top of each other, they don’t let anybody do anything without filling out forms to do it.”

    As someone who fled Cali for tax purposes I can tell you it’s 100% true. I can work anywhere with a high speed internet connection so why would I ever live in a state with income tax? Particularly one where it’s north of 10%. Seattle and the broader PNW is an amazing place for many different reasons. I think some of the haters here have been here too long and can’t see the forest for the trees.

    https://www.zerohedge.com/news/2018-04-15/everybody-wants-leave-california

    Nobody goes there anymore. It’s too crowded.

    -Yogi Berra.

    It’s just the same old republican BS they’ve said for years about blue states. Lots of people want to live in California that is why it’s so crowded and costs so much. There is plenty of land in california but people want to live as close to the beach as possible which further constrains things.

    “I can work anywhere with a high speed internet connection so why would I ever live in a state with income tax?”

    Why would you live in the US then? There are plenty of cheaper places you just need a reliable internet connection and possibly the same time zone.

    WHy would you live in a state with the 10th highest sales tax? That’s rhetorical by the way.

  145. 145
    pfft says:

    By Green-Horn @ 136:

    RE: Eastsider @ 135

    Property taxes probably also constrain supply of rental housing, because when investors / landlords do their math, they’ll stop building / making additional rental housing available if they can’t pass the higher costs on with higher rents that profitably cover all these.

    Right, because as we’ve seen business people make sound decisions with their money! Just like people would never buy overvalued homes or stocks.

  146. 146
    Green-Horn says:

    By Green-Horn @ 139:

    RE: Deerhawke @ 127

    As a developer, perhaps you can answer a few questions that I’ve been curious about the market in creating / building new housing. In previous posts, you’ve mentioned how rising prices among contractors and in the trades is exerting significant upward pressure new home construction. Also I suspect that builders are competing for the scarce time of the skilled trades with homeowners who are choosing to remodel and renovate because they can’t trade up to a better house because available inventory is so low. However how is the availability of land for new construction projects affecting the demand for contractors? I can imagine that at some point, other constraints in the business besides the availability of competent & skilled labor become bottlenecks for construction, for example the low availability of parcels available for development or redevelopment or the ability of local authorities to review and approve plans and permits for construction. Can you envision situation that despite crazy hot demand, some other constraints lead to fewer actual projects in progress causing construction workers actually to be idled? How could you imagine that happening and what would you expect to be likely market responses?

    Wanted to add these details from the Puget Sound Business Journal to the discussion…

    https://www.bizjournals.com/seattle/news/2018/03/29/value-of-construction-starts-dodge-data-analytic.html

    During the first two months of the year, construction starts fell dramatically with the value of office, warehouse and other nonresidential starts dropping 73 percent in the metro Puget Sound area, Dodge Data & Analytics reported Thursday.

    It’s the latest sign that the region’s hottest-ever building boom is cooling off.

    The report by New Jersey-based Dodge, which tracks North American construction activity, follows earlier news that the number of construction cranes in the city of Seattle fell by more than a fifth to 45 during the last six months of 2017. Seattle was still No. 1 in the country on the crane count list.

    While general contractors won’t like the news, for developers it’s a breath of fresh air as it comes amid rising construction costs. Costs jumped 26 percent from 2009 through 2017, according to Mortenson Construction’s Seattle-area office.

    Expect Dodge’s numbers to yo-yo in the coming months. The start of big projects, such as the impending Washington State Convention Center addition, can lift the numbers not just for the month but the year. The $1.7 billion cost of the project equals nearly a quarter of the nonresidential starts in 2017.

    Addition project team leader Matt Griffin of Pine Street Group on Thursday said he expects construction to start in late June, depending on the Seattle City Council granting final approval.

    During the first two months of 2018, the value of non-residential construction starts in the tri-county metro was nearly $358.6 million, down from nearly $1.4 billion during the same period in 2017. The value of single- and multifamily construction starts in January and February was $806.4 million, down 21 percent. The combined value of both categories was $1.16 billion, down 51 percent.

    These are significant declines!

    What do we suppose is happening here?
    My first guess would be multifamily developers are easing off new projects that would be bringing a lot of new product onto the market as the pipeline is already quite full. It already looks pretty late in the cycle; perhaps they’re concerned about getting caught with their pants down when the winds change and the tide goes back out.

    Another possibility that I’ll offer for your consideration… With the trauma of the most recent bubble, crash and Great Financial Crisis fresh in their minds, developers are dealing very conservatively and are avoiding risk of overleverage. However in a couple years hence, there may turn out to be no glut after all and those developers who were bold, leaned in and took on some prudent amount of risk for additional projects and deals, might end up being rewarded by a market starved for product.

    Or is it as simple as developers just plain running out of land to build on?
    What else could explain such a significant slowdown particularly in the production of single family housing that typically doesn’t entail the same complexity and long lead times as multifamily development does?

  147. 147

    By pfft @ 145:

    By Green-Horn @ 136:

    RE: Eastsider @ 135

    Property taxes probably also constrain supply of rental housing, because when investors / landlords do their math, they’ll stop building / making additional rental housing available if they can’t pass the higher costs on with higher rents that profitably cover all these.

    Right, because as we’ve seen business people make sound decisions with their money! Just like people would never buy overvalued homes or stocks.

    I think Eastsider’s point was more the the volume will be down. Undoubtedly some will be build no matter what the tax hit, but it will be fewer because many builders/developers/landlords will be put off.

    So over the long term I agree that high RE taxes will affect supply, but that still doesn’t get you to a situation where taxes are passed through. It gets you to a situation where rents go up regardless of costs.

  148. 148
    Erik says:

    RE: Saffy The Pook @ 140
    I can tell people how and where to buy condos, live in them, fix them up, and sell them for a profit. I also know how to buy them and rent them out. Other than that, my knowledge is limited.

    Deerhawk seems to know a lot.

  149. 149
    Eastsider says:

    RE: Green-Horn @ 146 – Developers/builders prefer price stability over volatility. Each project takes 9mo to 2 years from start to completion. At current prices, developers/builders would be more cautious. RE does not appreciate 20% annually indefinitely. The last bubble took care of many over leveraged developers/builders/banks. So I expect many to take a more cautious position after a few years of escalating prices/costs.

  150. 150
    Nicole says:

    RE: Eastsider @ 61 -You
    are right, but I can’t help myself. it’s the teacher in me!

  151. 151
    ess says:

    Regarding the issue of taxes and renting out of houses.

    When we rent one of our two houses, we go through a process that includes the following elements

    -review what else is available, including the size, location and condition of the housing that is currently on the market.
    -outside of restorative repairs – decide what if any improvements are to be made, and attempt to determine if those improvements will increase either the rent or possibly the quality of the tenant. Is that investment worth it, both in terms of immediate return and longer term if and when we sell the house, or will the improvements be degraded by the tenants over time. Included in that assessment – the quality of the investment (ex carpets vs wood floors).
    -in light of the fact that people in the area value having pets more than children, determine what kind of pet policy is best in terms of return vs possible destruction. We have been back and forth on this issue for years – currently we allow both dogs and cats although they have caused various problems in the past.
    -a big issue for us that has been debated with great enthusiasm over the years is yard maintenance. Do we include it as part of the rental package, or let the tenants take care of the yard for a reduced rate. Problem is that one’s definition of yard maintenance is different. For many tenants – yard maintenance is mowing the lawn once before they move out. While the condition of the yard does not affect the condition of the house – it does add to the total ambiance. So far we have not included yard maintenance, but we are leaning to including it as part of the rental package in the future.
    – Do we charge a very competitive rent with the hope that tenants will appreciate the deal they have and maintain the place in good condition. The theory being that tenants will appreciate a good deal and stay longer and keep the place up. While it may tend to keep tenants in place longer on occassion – we have not seen any co-relation between a “good deal” and maintenance. So we may raise rents upon vacancy to market levels in the future – competitive but not a good deal as we have given in the past
    -raise rents as a result of tax increase? So far we have not had to do so, and tenants don’t stay that long that we have only raised rents 2x in 30 years, both as a result of other factors. The expense of having a place empty and refurbished for a month does not justify the yearly increase in rents. ANd one never knows what new and exciting tenants one is truly going to get. In addition, we had a business to run, and places to visit all over the world – not interested in ringing every last dollar out with the disruption that might cause.
    -the cost of doing business as a landlord. We don’t view each part (ex -increased taxes) individually, but all expense and tax benefits vs income as a totality. And while increased taxes are an annoyance – the dramatic increase of the cost of repairs that we can’t do ourselves has dwarfed the increase in taxes as an issue.
    -Is this investment worth it? As landlords are hit on all sides – increase taxes, maintenance costs, local interference by do gooder governmental regulations on rental property that most homeowners would have trouble meeting, and the rate of return vs the risk, and possible decrease in the value of the property in the next housing downturn, we constantly ask ourselves and review – is this investment worth it?
    The upside of course is that the property will increase in value, and it is an asset that is purchased often with only 20% down and with borrowed money. There are the tax advantages to consider also.
    But alternatively, there are other issues mitigating against this type of investment. One must deal with people, other than just getting a statement in the mail regarding one’s investments every month. When refurbishing and renting – that takes evenings and weekends away from life. There are the emergencies when the plumbing backs up.
    Also to consider is the rate of return. My friend’s kid in Oklahoma owns a rental house he bought a few years ago that is worth one hundred thousand dollars and he is getting one thousand dollars a month rent. Not too many landlords in this area getting one percent a month rent as compared to the value of their house. Of course more expensive houses do have a larger increase of principal payments as compare to inexpensive hundred grand houses. With interest rates increasing – after all the expenses and time (which is worth something), does it make more sense to invest in some sort of financial instrument (short term bonds, bond funds, money market funds, long term stock market investments in passive index funds) and get a possibly higher return on investment without the hassles. The faster and more interest rates increase as compared to rents, the more attractive those types of investments appear, especially to those who are older and are interested in other activities in life other than making their financial mark. Another issue that would impact the investment – possible state tax on capital gains as the spending addicts in government look for other ways to pay for their financial addictions that never end.

    So lots of factors go into deciding what to do as a landlord, including some of the factors that have been discussed above.

  152. 152

    RE: Erik @ 105
    I Only Buy Homes On Top Of the Hill

    My Home is the highest land in Kent…I drain on the rest. Location, location location…LOL

    Your condos are all upstairs…good idea…same logic. You flippers are so smart and innovative :-)

    The appliances are still cheap new designs that break fast….refrigerators are poorly built now [about a 7 year life they say] and you can’t carry ’em out of a store. I’d put a backup portable fridge in the closet for when you’re waiting for a new replacement order [weeks from now]. We can thank the joke Toyota Deming method of no inventory [sound like Seattle real estate?] for the furnace part [takes weeks to get a part] and empty refrigerator inventory shortages for carry out. Horrifying but true.

    We are a 3rd world nation now.

  153. 153

    RE: Kary L. Krismer @ 147
    The High King County Property 2018 Tax Bill Also Hit My Check Account Today

    Along with the HUGE critical safety maintenance bill that hit me last week.

    Its not chump change either….its several hundred dollars/month more….you folks with mortgage escrow won’t see it until you get the increase to your escrow accounts. A horrifying wake up nightmare.

    I see fore closures impacted in a couple years over just this HUGE increase.

    I won’t tell you how I voted on the recent property tax increase elections….LOL

  154. 154

    RE: ess @ 151 – Thanks for that. You’re perhaps not the typical landlord, but you do raise a lot of good points–particularly about the cost of a vacancy. For professional investors wanting to possibly sell at any point the increased potential sale value outweighs that. But if you’re renting SFR houses, that wouldn’t really be a factor.

    But one more thing on the topic. If taxes could be passed along in any market, then presumably landlords with higher mortgage balances or higher interest rates would be able to charge higher rent. They would just add up their expenses, add some arbitrary percentage to that, and then charge more. People who think that is possible remind me of the sellers of houses who want to price them based on what they need to get out of the transaction–e.g. We need to put $100,000 down on our next house, so we want to list for $X. Buyers don’t care what sellers “need” in funds.

  155. 155
    Deerhawke says:

    RE: Green-Horn @ 139

    I appreciate the fact that you think I have something worth saying. I use this blog as a way not just to get information, but to work out my own thoughts on housing and the economy in writing. For me, there has always been a strong link between clear writing and clear thinking.

    It is a full week for me, even before having to finalize paperwork with my bookkeeper and CPA for tax day. I will respond to your post in bits here.

    First, I have had the same thoughts as you about diversifying out of Seattle real estate. Last year the tenants in one property were driving me crazy complaining, looking for things to get fixed, asking for upgrades, etc. There were lots of things that suddenly needed fixing after owning the property since 1997. Plus the rent seemed stuck in place by an excess of rental inventory last summer and fall. Also, I felt that the City of Seattle was being intrusive with its regulations regarding rentals.

    And on the other hand, I was getting agitated mailers from people who wanted to buy the property for cash, now, now, now.

    I was halfway resolved to selling it when I had a glass of wine and remembered my own version of the Hippocratic Oath. First do no stupid.

    Since there was no forcing event, I decided to hold off on selling until I did a full analysis. Put aside the fact that the house was a hassle. Was it still a good investment? Could I do better investing in something else?

    After a while it dawned on me that I had always viewed this property located on a super busy street as strictly a cash-flow property. But now, because everything else around it is going up in value, it is both a cash-flow property and an appreciation property.

    I decided that if I really believed this area is going to continue to appreciate in the way I think it will, then this house would appreciate too. I decided to look at places like Silicon Valley and see what they can teach me.

    I started looking at things online and then happened to meet a heads-up guy who lives and invests there. I took him out for lunch and then showed him the house. How much would it rent for in Silicon Valley? The answer was shocking. How much would it sell for there? Even more shocking. He said he had a similar property that had been a dog at the bottom of the market. He always had problems with it and with the tenants. But at a certain point, housing close to employment was so scarce that the quality of the tenants improved dramatically. People started fixing up bad houses on busy streets and making a lot of money on the flips. Other people started buying bad houses on busy streets and put in brand new luxury houses with sound insulation, triple pane windows and $2+ million price tags.

    Some things he said stuck with me.

    You have a fixed view of this house, but the market doesn’t. Just remember that if the median value of a house in this area goes up $100K, the value of this house probably also goes up $100K. And maybe because there is so much demand at the bottom, it goes up more.

    Long story short, I decided to invest in the property rather than ditching it. Do the entire tenant wish list. New deck surface. New lighting. New stainless appliances. And this summer, probably a new roof with new skylights for the upstairs rooms. I have started to notice that there is now suddenly a dearth of properties like it at anywhere close to the price. And this fact has not been lost on the tenants. They have gone from whining with a strong sense of entitlement to making nice as the end of their lease is on the horizon.

  156. 156
    Dave says:

    By Erik @ 110:

    RE: Kary L. Krismer @ 109
    I never pass when my hoa suggests that I replace my water tank. It’s a small investment that could alleviate a major headache.

    Top floor condos with vaulted ceilings are my favorite. You get a view and you don’t have to hear your neighbors. One thing that most people don’t understand is that a condo can feel private if you buy the right one.

    The next step above Top Floor Condos is SFH “Single Family Home” and I personally went that route at no small expense thanks to a memorable GFE “girlfriend experience.” I was the guy helping her recover from all the damage done to her condo after an upstairs neighbor had an “unauthorized” waterbed malfunction that destroyed her ceiling, floors, files, bedding, sofa, laptop, elliptical, practically everything. Even after the lawsuits she never fully recovered her losses. A sad, memorable, and cautionary true story.

  157. 157
    ronp says:

    RE: Deerhawke @ 155 – I remember getting a tour of San Bruno neighborhoods back in 1998 and being amazed at the $500,000 prices for the equivalent of a $140,000 Burien house. Jets screaming overhead from SFO every 10 minutes.

    What is a San Bruno house worth now? $1,000,061.

    Amazing.

  158. 158
    David says:

    RE: ronp @ 157 – $140k Burien house? Must have been back in the day OG!

  159. 159

    RE: ess @ 122
    Yes ess

    I’m on full FERS Pension with Social Security and make as much as I did working in take home pay….I’m not paying into all my retirements anymore waiting for Social Security to lower benefits that were paid for double in lifetime anyway. You figure….the government just stole the money out of its locked box…LOL…the ones not on Social Security [i.e., Bush] were for stealing it.

    More overpopulation immigration will fix Social Security fraud by the government? LOL…what a joke.

  160. 160

    RE: ronp @ 157
    The Air is Polluted Bad on a Jet Path Home

    Ask any safety engineer like SWE.

  161. 161

    RE: Dave @ 156
    Who Determines the Life of a Water Heater? The HOA plumber friends….LOL

    BTW….mine broke and did not leak a drop….the heater coil probably just failed after 30 years. Also, when my water heater broke in Bothell it leaked like a cup or two before it was replaced [so what]. Ohhhh….HOAs most all have sales contracts on water heater replacements they approve….you’re gonna need a $1500 minimum 5 year plumber HOA warranty installed part…garbage disposals go for $700….actually, IMO, the dishwasher and garbage disposal water leaks are more frequent and common in comparison. That HORRIFYING $4 toilet flap better be installed by a plumber too or no flood warranty for 5 years on a toilet paper”plugged” toilet with a stuck open flap gushing water out right after you wash your hands and close the bathroom door [its not if its when it happens to almost everyone]. There’s many scenarios that will flood and destroy you house. Use your home insurance? They’ll cancel you? LOL

    We all need “Critical Home Safety Fixes” or face horrifying consequences [even my cheap repo in Kansas]. They aren’t cheap at all either. Its called being a responsible home owner. 2nd mortgage for repairs? LOL….you haven’t paid off that student loan yet [?], the 2nd mortgage maintenance costs will likely follow you to the grave too. That’s why many just rent.

  162. 162

    RE: softwarengineer @ 161 – I really doubt a heating element lasted for 30 years, and that is extreme life for an electric water heater tank too (gas in my experience last longer from some reason). But the point is, the cost of replacing them is insignificant to the damage they can cause if they leak inside a house or in multi-family housing situations.

    Ideally, a water heater will be located in a garage where any leakage won’t cause much damage. If your home is set up that way you can get an entire life out of your water heater without much risk–other than maybe the inconvenience of having to scramble to replace it.

    Finally I’ve never seen HOAs have contracts for replacement, although some probably do have names of plumbers that have worked in the building before.

  163. 163

    RE: Eastsider @ 131
    Yes Eastsider

    My property tax increase grabbed about 1/2 my Trump federal tax decrease and I bought a cheap modular….pity the folks living on 2-3 times my property tax….

  164. 164

    RE: Kary L. Krismer @ 162
    Kary

    My hot water heater was installed in 1991….the plumber showed me the evidence on the tank. End of discussion.

  165. 165

    RE: Kary L. Krismer @ 162
    Older Washing Machines Leak All the Time

    The frames bend and the spin cycle wobbles….

  166. 166

    By softwarengineer @ 164:

    RE: Kary L. Krismer @ 162
    Kary

    My hot water heater was installed in 1991….the plumber showed me the evidence on the tank. End of discussion.

    I didn’t say the tank didn’t last 30 years, only that it would be extreme life for an electric water heater–the old water heaters I see all tend to be gas.

    What I doubted was that it was the original heating element. That would be virtually impossible. Those can be cheaply and easily changed and unless you owned the tank the entire 30 years you’d not know if it was original.

    As an aside, I wish more plumbers would write install dates on tanks, but seemingly well less than 10% of them do.

  167. 167

    By softwarengineer @ 165:

    RE: Kary L. Krismer @ 162
    Older Washing Machines Leak All the Time

    The frames bend and the spin cycle wobbles….

    That’s why in newer construction they are placed inside pans that drain away safely to somewhere outside, particularly if the washer is on an upper floor. It’s one situation where new construction tends to be better.

    Totally unrelated, but something I thought of earlier today, another area where new construction is better is not enclosing the soffit area. I think that was done for cosmetics back in the 60s and 70s, but it can hide or delay the discovery of bad things happening.

  168. 168
    uwp says:

    “King County had only about 2,000 homes (single-family and condo) for sale last month. During the average month of March over the last two decades, the region had more than 7,800 homes for sale — nearly four times as many.”

    https://www.seattletimes.com/business/real-estate/why-are-seattle-area-home-prices-so-high/

  169. 169
    N says:

    @ uwp 168 – Great stat but I would be curious to see the same stat for the top 10 cities in the country. I bet its similar in most cities. Both Denver and SF also have less than 1 month of inventory. And a huge number of cities I suspect are below 2.0 months (All the counties Tim reported on above in our area are, as is Spokane).

    What does it tell us that KC inventory is flat while all the other counties in the metro are down, double digits in many cases. Lack of affordability in KC?

  170. 170
    ess says:

    By ronp @ 157:

    RE: Deerhawke @ 155 – I remember getting a tour of San Bruno neighborhoods back in 1998 and being amazed at the $500,000 prices for the equivalent of a $140,000 Burien house. Jets screaming overhead from SFO every 10 minutes.

    What is a San Bruno house worth now? $1,000,061.

    Amazing.

    For many long term Puget Sound homeowners, the possibility that their house can be worth as much as a Bay Area house reminds me of a famous line from the movie “The Maltese Falcon”.

    This housing market is “the stuff that dreams are made of”

  171. 171
    N says:

    @ ESS 170 – But, while Seattle has rocketed 80%, SF is up 70% so the gap doesn’t appear to be closing.

  172. 172
    ess says:

    By N @ 171:

    @ ESS 170 – But, while Seattle has rocketed 80%, SF is up 70% so the gap doesn’t appear to be closing.

    Even more to dream about for Seattle and area homeowners. The fact that SF, with its totally insane prices can still have price increases indicates that there could be much more room for prices in Seattle and area to increase.

    What I find interesting is that South King County is experiencing the largest percentage increases in prices. I would imagine it is in part that people are priced out of the inner Puget Sound area and have decided to look in less pricey areas. And others have no chance to buy in the first place are looking in less expensive areas. But not to worry – there are Starbucks down there also.

    Hopefully there will be those who will also look north, as well as south. After all, I want to dream a bit also!!

  173. 173
    N says:

    https://www.npr.org/2018/04/17/601925433/a-decade-after-the-bubble-burst-house-flipping-is-on-the-rise

    A look at the market in Phoenix, considered a bellwether by industry experts, is a good way to see how things have changed or not. More than 8,500 homes — or 8.5 percent — sold in the Phoenix metropolitan area last year were flips, more homes than anywhere else in the country, according to Attom.

    New research and data suggest that the practices of house flippers fed the bubble of the early 2000s. Much of the blame for the housing crash has fallen on subprime borrowers and people who bought and lived in homes they couldn’t afford.

    But researchers are now coming to understand that a big part of the problem was people with better-than-average credit scores who owned multiple homes — not subprime buyers, but real estate investors, landlords and flippers.

    But as flip rates in cities like Virginia Beach, Va., Baltimore and Birmingham, Ala., near 10 percent, some wonder if there is cause for concern.

  174. 174
    N says:

    Who said credit wasn’t easy? 20% of conventional loans leave buyers with payments of more than 45% of their income.

    https://www.pymnts.com/loans/2018/mortgage-loans-monthly-income-consumer-debt-housing-market/

    New data shows that rising home prices are translating into mortgage loan debt not seen since the housing crisis.

    According to The Wall Street Journal, new research from mortgage data tracker CoreLogic found that about one in five conventional mortgage loans completed this winter went to borrowers who were paying more than 45 percent of their monthly incomes toward their mortgage and other debts.

    Fannie’s new policy closed 100,000 new mortgages that otherwise wouldn’t have been made in 2017 and early 2018, according to the Urban Institute, a non-partisan research organization.

    But economists are quick to remind lenders about the role that easy mortgages played in creating the last housing bubble. The share of new buyers with debt-to-income levels in the 46 to 50 percent range is well below the peak registered in 2007, but it is getting close to the levels of 2004 and 2005, the years leading up to the bubble.

  175. 175
    ronp says:

    RE: ess @ 170 – I wasn’t really implying that Puget Sound would soon match the Bay Area, just that over time values can change dramatically in surprising locations.

  176. 176
    ess says:

    By ronp @ 175:

    RE: ess @ 170 – I wasn’t really implying that Puget Sound would soon match the Bay Area, just that over time values can change dramatically in surprising locations.

    Understood. What I was implying is that when individuals indicate that prices are crazy and impossible here, one only has to look at locations such as the Bay Area to realize that prices are even crazier and more impossible elsewhere. Which doesn’t make them so crazy and impossible by comparison.

  177. 177
    uwp says:

    Not impossible, but yes crazy.

    https://www.redfin.com/WA/Seattle/9412-Fremont-Ave-N-98103/home/18657660

    Even if you had the $150,000 for 20% down (good job saving), this buyer is still looking at a $3,500/month (or more) payment to live in a 10 year old townhome a block and a half off Aurora in North Greenwood. Can this keep going like this?

  178. 178
    N says:

    @uwp 177 – The logical answer is no, but likely it can go for a while, but the longer we go the more likely we have a hard, ugly reversal down the road.

    Is it a sign that rents aren’t keeping up with the latest for sale price gains?

  179. 179

    RE: uwp @ 177 – I really wonder how quickly agents will learn to adjust when the market isn’t so crazy. On the listing side how will they deal with not receiving multiple offers, or not any the first two weeks! On the selling side how will they adjust the terms of their offers to benefit their clients? Some selling side agents still haven’t adjusted to this market.

  180. 180
    uwp says:

    By N @ 178:

    Is it a sign that rents aren’t keeping up with the latest for sale price gains?

    Probably.

    I’m not a bear waiting for the imminent crash, but a property like this has doubled in 4 years and you could probably rent it for ~$1,000 less than the mortgage payment. That is the type of stuff was happening in 2005-2006.

  181. 181
    ess says:

    RE: N @ 178

    But on the positive side, the residents of the house will save money on a gym membership -getting all the exercise going up and down those stairs all the time.

  182. 182

    On the topic of reporters not knowing what they are covering, this piece is classic reporter stupidity.

    http://komonews.com/news/consumer/what-every-hot-market-home-buyer-should-know-about-review-date-home-sales

    The ironic thing is, Connie Thompson considers herself a consumer’s reporter! Pathetic.

  183. 183
    kenmorem says:

    By uwp @ 177:

    Not impossible, but yes crazy.

    https://www.redfin.com/WA/Seattle/9412-Fremont-Ave-N-98103/home/18657660

    Even if you had the $150,000 for 20% down (good job saving), this buyer is still looking at a $3,500/month (or more) payment to live in a 10 year old townhome a block and a half off Aurora in North Greenwood. Can this keep going like this?

    thanks for this link. i am putting my townhouse on the opposite side of aurora on the market in a week. very similar to this fremont one (though probably less nice finishes and feel, but a slightly better area and much closer to future lightrail). fingers crossed for a similar outcome!

  184. 184

    Here’s a slightly different RE tax topic, one we’ve touched on before. How the amount of RE taxes affect not only value, but apparently appreciation. As a reminder, I’ve taken the position that part of the reason prices are high here is our taxes are relatively low. That when buying a house buyers take into account the total cost of ownership, and that includes not only P&I on a mortgage, but also taxes and insurance. Because our taxes are lower, they can afford more in P&I, and thus a higher price.

    Well Ken Harney has a piece showing a study that dealt with the issue slightly differently. It found that as a general rule places with lower RE taxes had higher appreciation! Subtle different, but important none the same.

    http://tucson.com/business/are-lower-tax-rates-linked-to-higher-home-appreciation/article_301572f0-a2f0-5662-b1a9-ed714edff70c.html

  185. 185
    Deerhawke says:

    RE: uwp @ 168

    UWP, thanks for the citation. I missed it in the paper. This whole piece by Mike Rosenberg bears reading. Evidently it is the first in a series on why real estate in this area has gotten so expensive.

    https://www.seattletimes.com/business/real-estate/why-are-seattle-area-home-prices-so-high/

    In addition to the quote about the supply of homes, which you noted, there is a good graph.

    “King County had only about 2,000 homes (single-family and condo) for sale last month. During the average month of March over the last two decades, the region had more than 7,800 homes for sale — nearly four times as many.”

    In some ways, the more impressive piece of information (with accompanying graph) brings together supply and demand elements.

    “In the typical year over the last two decades, the county had 1 home for sale for every 230 people. Now? There’s one home available for every 1,060 people.”

    Reminds me of Dr. Seuss.

    And NUH is the letter I use to spell Nutches Who live in small caves, known as Niches, for hutches.

    These Nutches have troubles, the biggest of which is The fact there are many more Nutches than Niches.

    Each Nutch in a Nich knows that some other Nutch would like to move into his Nich very much.

  186. 186
    Eastsider says:

    RE: Deerhawke @ 185 – Your question @12

    You say “it does not take more than a few people leaving the area to quadruple the supply in this market.” How would that work? How do you quantify this? Why did you choose to say quadruple, rather than triple, or double?

    My reply @19

    I picked quadruple because that seemed to be a good number for a normal/functioning market.

    And from Mike Rosenberg’s piece

    “King County had only about 2,000 homes (single-family and condo) for sale last month. During the average month of March over the last two decades, the region had more than 7,800 homes for sale — nearly four times as many.”

    LOL.

  187. 187
    N says:

    @ Deerhawke – Good info. Is this really only a Seattle thing. A quick glance at Denver for instance seems to paint the exact same picture. Denver would need to add 20,000 listings to get to a 6 month supply of inventory (5 TIMES CURRENT LEVELS). Ditto for many others. Just an interesting perspective looking outside our Seattle realm.

    https://blog.usajrealty.com/posts/a-look-at-the-denver-real-estate-market

    A balanced market in Denver would be a six month supply of homes for sale. That number would be 23,868 active units. In November of 2017, Denver metro had 3,987 (Land Title Guarantee Company). The last time Denver had over 23,000 listings was December 2011 (REColorado). See the chart below on trends:

  188. 188

    RE: N @ 187 – Six months is very arbitrary, and not everyone accepts that as a balanced market. I’ve heard others use 4 or even 3 as balanced, and that was back in 2007! Even having 2 months supply, what it was the last time I was dealing down in Olympia, was much more normal than what we have now. It wasn’t horrible for buyers but still pretty good for sellers. That small change would be a vast improvement for buyers.

  189. 189
    Eastsider says:

    RE: N @ 187 – It is all part of FED’s asset reflation plan. Note that the FED is the biggest holder of mortgage securities and they can’t allow those mortgages to fail. So we now have inventory shortages throughout the country. The reflation is likely over now because the FED has to deal with other pressing unintended consequences of QEs. Btw this is just a thought and no links or proofs to back it up LOL.

  190. 190

    RE: Kary L. Krismer @ 166
    My Installation Date Was a Sticker With Serial ID On It [Small Print]

    If the plumber hadn’t pointed it out to me I probably wouldn’t have found it either. Its a code like 91xxxxxxx for a 1991 installed part.

    Now I know.

  191. 191

    RE: Deerhawke @ 185
    Seattle Population Decreases

    Seem to have some evidence in my neighborhood…albeit, the listing shortage contradicts it.

  192. 192
    Deerhawke says:

    RE: Eastsider @ 186

    I think you need to understand the difference between addition and multiplication.

    If, as you say, a few more people were to leave the area, then that would be the current level of Inventory (represented by I) plus, say 4 inventory units.

    I + 4

    If as Rosenberg states, Inventory is about 2000, then Inventory + 4 units = 2004 inventory units.

    On the other hand, Rosenberg is talking about the fact that we would need to nearly quadruple total inventory to get back to the running average of the past 20 years which is 7800 inventory units. He is talking about

    I x 4 = approx. 20 year running average = 7800 inventory units

    There is no question in my mind that if we were to have 7800 inventory units available, it would lead to a dramatically more balanced market, maybe even a glut. But in order to get there, you wouldn’t need 4 more people leaving the area, you would need 5800 more people leaving the area.

    So adding 4 inventory units to 2000 inventory units will not get you there. Multiplying 2000 inventory units by 4 would.

    Clear your calculator and try again.

  193. 193

    RE: Deerhawke @ 185
    Yes Sales are Laggard

    Maybe its the first sign that “old money” from old pensions and such is drying up as pensions in general reduce drastically or just bankrupt by state completely. We are a 3rd world country now….the old heydays are gone, we’re entering the NWO.

    I wondered when the “old Baby Boomer household savings money” would eventually dry up and avg household savings rates have been dismal lately too. Perhaps its happening right now.

  194. 194
    Deerhawke says:

    RE: N @ 187

    I really don’t have good data on other cities, but I am sure someone in an economics or urban planning faculty has collected this data and begun to do serious research on it.

    We have had the emergence of a star system within our economy. More of the gains over time are going to a smaller and smaller subset of the people leading to increased income inequality.

    The same star system is developing on a regional basis. More of the gains over time are going to a smaller and smaller subset of cities/regions leading to increased regional disparities in pricing for real estate.

    Clearly there is a connection between these two phenomenon.

  195. 195
    greg says:

    RE: softwarengineer @ 193

    it might reflect institutional investment monies are no longer able to get a positive return or least not one that looks good on a Q . You can’t sell investors on a REIT that is not making a good return without asset inflation. Your typical buyer of REITs is not your typical condo flipper.
    I would guess they are moving on to lower tiers..

    Maybe someone who does the auctions would have a better idea?

  196. 196
    kenmorem says:

    based on my search for an investment property outside of WA, it seems that most cities are experiencing identical situations as seattle, but probably not for the duration or scale that we have. cities i’ve looked at include indy, KC, pittsburg, OKC, little rock, nashville, and some others. same story everywhere. shortage. bidding wars. on the market < 1 week.

  197. 197
    N says:

    @Kenmorem 196 – Exactly. Everyone has their Seattle is different glasses on but the story of 2018 real estate in any big city is the same – low low inventory and rising prices. Sure, instead of less than 1 month of inventory like Seattle, Denver and SF, its around 2 months in Spokane, Atlanta, Dallas, but still multiples off their average inventory levels.

    This is not simply a regional issue brought on by Amazon jobs.

    One difference here compared to some of these cities is the amount of new condos being built.

  198. 198
    Eastsider says:

    RE: Deerhawke @ 192 – If you think I meant 4 people leaving the area below, you are missing my point. It is like saying that the housing crash could never happen because the subprime market was too small to matter. Cheers.

    “This market has been tight for the past few years. This year is no different than last year or the year before, except that we are now experiencing a measurable drop in closed sales. I do not agree that the demand is ‘stable’ (at any price.) And it does not take more than a few people leaving the area to quadruple the supply in this market. We are likely at or near peak prices in the short term.”

  199. 199
    David says:

    I personally think lack of housing is due to 2 factors:

    1a) The Obama Depression killed off huge numbers of small-time builders
    1b) This killed a LOT of institutional knowledge and ensured it stayed dead by lasting for SOOO long.

    2) Onerous Government regulation was heaped on during the prior good times. Now that the bad times for builders is over – it reinforces the inability to draw in enough spec builders to overcome 1b.

  200. 200

    The hardest part of the current market is the “hidden” high prices. At what point do agents stop creating the insanity? It’s a week to week board game. This week…house goes on for under a million. I look at it and see the most recent true comp was last summer and it sold for $1,025,000. So why is it priced under a million almost a year later? So I take the comp plus 10% and call it minimum $1,127,500. It gets 9 offers and sells for over $1,125,000. So why price it under a million in the first place and get 9 offers?

    Week before that, similar but priced lower and gets 12 offers.

    Once in a blue moon we would see this happen a few years back, but it seems to be the norm now.

    We all can get into this when there are no high or recent comps. But when last year’s comp is down the street and over a million…why price under a million to cause a $150,000+ over asking bid up? $100,000 over asking wasn’t “good enough”?

    If everyone started pricing up where they think it will sell or even a bit above, as has been the historical norm, there would be more “balance”. I price it where I think it will fairly easily appraise and do get substantial bid ups. But I do use the comps.

    When I see asking prices lower than the comps, I don’t wonder why the market isn’t a bit more balanced.

  201. 201
    kenmorem says:

    @ardell: i assume you price low to generate a larger buying crowd to the open house. once they see what they like and it’s “close” to their price range, then sky’s the limit for their escalation clause. i’d much rather buy something for $99.95 than $100!

  202. 202
    Blake says:

    By kenmorem @ 196:

    based on my search for an investment property outside of WA, it seems that most cities are experiencing identical situations as seattle, but probably not for the duration or scale that we have. cities i’ve looked at include indy, KC, pittsburg, OKC, little rock, nashville, and some others. same story everywhere. shortage. bidding wars. on the market < 1 week.

    It is definitely nationwide and even worldwide…
    There are multiple factors, among them:
    1. Housing is an investment for many. REITs and such and also directly by smaller-time investors… like Ken.
    2. Airbnb and VRBO make it much easier for people to invest in rental properties. (Hotels have not been building as many rooms because of this.)
    3. Massive amounts of overseas money is flowing into US properties through LLCs and fake fronts to hide fortunes (some clearly illicit).
    4. Income inequality has been rising for decades and the top 10-20% have much more investible money: High demand for all investments (all asset classes are in nose bleed territory).
    5. People can’t afford to sell and move. Where can they go?

    But it really circles back to #1. Housing is really “investment” for more and more people and all investments tend to get bubbly from time-to-time. Sometimes irrational mania sets in… Huge pools of money like Blackrock are sinking billions into US RE. Yes, Seattle has a great economy and many things going for it, but it is not that different… and many people look at Seattle RE as a great investment, like Dallas, like Denver, like New York…

  203. 203
    kenmorem says:

    RE: Blake @ 202
    agreed. i always appreciate your reasoned comments. all of society is financially segregating further and further since the death blow to the unions.

    BTW blake, does your last name start with H?

  204. 204
    Blake says:

    RE: kenmorem @ 203
    Thx Ken… But no H in my name.

  205. 205
    pfft says:

    By Eastsider @ 189:

    RE: N @ 187The reflation is likely over now because the FED has to deal with other pressing unintended consequences of QEs. Btw this is just a thought and no links or proofs to back it up LOL.

    Like what? Rampant inflation? LOL.

    Are people here for or against a financial transactions tax?

  206. 206
    pfft says:

    By David @ 199:

    I personally think lack of housing is due to 2 factors:

    1a) The Obama Depression killed off huge numbers of small-time builders
    1b) This killed a LOT of institutional knowledge and ensured it stayed dead by lasting for SOOO long.

    2) Onerous Government regulation was heaped on during the prior good times. Now that the bad times for builders is over – it reinforces the inability to draw in enough spec builders to overcome 1b.

    you mean Bush Great Recession. You aren’t fooling anyone.

  207. 207
    pfft says:

    “3. Massive amounts of overseas money is flowing into US properties through LLCs and fake fronts to hide fortunes (some clearly illicit).”

    When the Mueller investigation is over I believe we will be shocked about how much money laundering in the US is in the real estate game. Shocked.

  208. 208
    Erik says:

    RE: David @ 130
    In the puget sound, areas are chosen to dump prison inmates when they get out of jail by offering them assistance. In the north sound it’s Everett.

  209. 209
    Deerhawke says:

    RE: pfft @ 206

    David clearly believes that Obama was in the White House from January 2001 until the Great Ascension of Trump in January 2016. Sixteen years in office.

    Therefore Obama is responsible for 9/11, the invasion of Iraq and Afghanistan, the sub-prime mortgage crisis, the Great Recession, TARP and all the money spent to reflate the economy. It is all Obama’s fault.

    Do you see the kind of havoc Alzheimer’s can wreak on the memory of old people like David?

  210. 210

    RE: kenmorem @ 196
    The Prices aren’t Going Up

    Property tax is going down in Kansas City KS….my repo unit there gets me continuous flipper mail begging me to sell. Landlords see dollar sign profits in KS I suppose.

  211. 211

    RE: Erik @ 208
    Hey Erik

    How’s my favorite Bubble Head engineer [besides the Tim….LOL] doing?

    Nice day to sell in Seattle….partly cloudy and sunny :-)

    Maintenance costs of homes in Seattle now has grown….perhaps I’m mistaken, but it most likely appears that appliance store installation of anything plumbed [water supply] is not possible, even if they charge you for it in advance and promise the work. The installers lie to the appliance stores on this topic. What does that mean to your home purchase planning?

    My new GE dishwasher installed yesterday by a plumber [about $1100 installation BTW, not $180] included installation of a new water valve to get the 5 year warranty against home floods. Since all new appliances do not last near as long as the old ones decades ago [refrigerators have a 7 year life now], a change in flipper cost planning is necessary?

    Parts on old furnaces take like 3 weeks to deliver [if they even exist]….ya need a backup generator and propane heat for emergencies until the winter part arrives?

    Refrigerators with ice makers will cost like $2-3K with approximate $1K plumber installation now. Stoves should go in cheap by a regular handy man….but it appears likely now general appliance installers won’t do water supply hookups. BTW, that dishwasher water supply hookup pipe needs replacing every 5 years….normal maintenance per appliance contract. My old dishwasher hookup tube lasted about 27 years and was not broken; so who determines replacement frequency?

    My advice is buy the cheapest dishwasher you can live with and spend the rest of the money on installation….LOL….HOAs will muck up your maintenance planning too.

    Lord only knows frequency policy virtues :-)

  212. 213
    The Tim says:

    RE: JustSomeDude @ 212 – This is good stuff. I’m highlighting this in its own post for broader visibility.

  213. 214

    By ARDELL DellaLoggia @ 200:

    The hardest part of the current market is the “hidden” high prices. At what point do agents stop creating the insanity? It’s a week to week board game. This week…house goes on for under a million. I look at it and see the most recent true comp was last summer and it sold for $1,025,000. So why is it priced under a million almost a year later? So I take the comp plus 10% and call it minimum $1,127,500. It gets 9 offers and sells for over $1,125,000. So why price it under a million in the first place and get 9 offers?.

    In this market I try to price to get between 4 and 6 offers. It’s actually very disappointing to only get one offer because it means you don’t have a choice at all as to agent or buyer, and you might end up with a situation where you have to hold your nose and just accept going into a transaction you really don’t want to get into. But I also don’t want to price too low for other reasons.

    Back when the market really sucked you didn’t have that luxury. I once had a client who really needed to sell–they couldn’t even keep the lights on. An offer came in that was so poorly drafted I actually had to rewrite the offer and send it over as an offer to sell! I’ve never done that before or since. Anyway, not surprisingly the agent did have troubles on his end, but we did get it closed with only a short delay. But the point is, those are the types of situations you want to avoid, and by having 4-6 offers you usually can!

  214. 215

    By kenmorem @ 201:

    @ardell: i assume you price low to generate a larger buying crowd to the open house. once they see what they like and it’s “close” to their price range, then sky’s the limit for their escalation clause. i’d much rather buy something for $99.95 than $100!

    The sky is not the limit. If you price too low you can actually limit the amount of the highest offer.

    I’ve mentioned this before, but several years ago I had a listing where we received 3 or 4 offers, if I recall correctly. A house about 3 blocks away priced lower, even though it was a nicer house. They reportedly ended up with over 20 offers. My final price was higher than theirs, even though their house was nicer/better,

    Also related, about the only time I will use an escalation clause for a buyer is where the house is priced extremely low. I do that realizing that others will likely only bid a certain amount over list (although that is getting to be less and less true in this market).

  215. 216

    By pfft @ 206:

    you mean Bush Great Recession. You aren’t fooling anyone.

    You mean the Republican and Democrat recession. It’s not like one party was out there calling out warnings about our financial situation, and the other party was saying: “No everything is great.” Both were saying everything is great, and the policies of both got us into this mess.

  216. 217
    greg says:

    RE: Kary L. Krismer @ 216

    No, Kary.

    Bush was in POWER for 8 straight years, he dragged us into wars without funding them . He spent like drunk sailor and he failed to rein in the banking industry.

    While of course those who preceded Bush had some role to play, BUSH was the one who created the majority of the mess and he is 100% the person who dragged us into wars which 17 years later we have still not managed to get out of. Many thousands of American lives lost, Trillions of dollars spent and millions of dead, maimed and displaced victims.
    It was Bush’s failure to restrain the banking /investment communities that led to the great recession .

    and let me be clear, the DEMS were NOT saying “things are great” when Bush was running the show, that is simply nonsense, even if they believed it, that is not what they do. Just like the Rs they would have been arguing that Bush’s admin is failing in some form or another, that is what they all do and what is more you know it.

  217. 218
    David says:

    The Fed also had a very heavy part in turning the housing market into a bomb. Maybe MOST of the blame. Still, Obama being elected would have tipped the scales and destroyed anything good.

    The Fed has been responsible for most major downturns it seems. Makes sense too. If professional stock market pickers so consistently underperform the broader market, how can a Fed Board be wiser than the market?

    Answer: The Fed cannot – but they have the power. And if you see another Obama-style Democrat getting close to winning the nomination perhaps get OUT of everything. Which points out the major flaw with real estate – ILLIQUIDity.

    RE: Kary L. Krismer @ 216

  218. 219

    By greg @ 217:

    RE: Kary L. Krismer @ 216

    No, Kary.

    Bush was in POWER for 8 straight years, he dragged us into wars without funding them . He spent like drunk sailor and he failed to rein in the banking industry.

    Well first, federal spending has been a problem for decades, regardless of which party was in power, but beyond that, the recession wasn’t caused by any military action or federal spending. So nice non-responsive answer that just repeats the partisan nonsense that’s been drilled into your head and accepted as gospel.

    Second, it’s not like the Democrats were completely absent during that period, and not trying to pressure Freddie and Fannie into loosening lending standards so that home ownership percentages could be increased. The Republicans went along with that because it benefitted banks–or so they thought. Those things do relate to what caused the recession–housing.

    Learn to think for yourself rather than just regurgitate partisan nonsense.

  219. 220
    pfft says:

    By Deerhawke @ 209:

    RE: pfft @ 206

    David clearly believes that Obama was in the White House from January 2001 until the Great Ascension of Trump in January 2016. Sixteen years in office.

    Therefore Obama is responsible for 9/11, the invasion of Iraq and Afghanistan, the sub-prime mortgage crisis, the Great Recession, TARP and all the money spent to reflate the economy. It is all Obama’s fault.

    Do you see the kind of havoc Alzheimer’s can wreak on the memory of old people like David?

    Some people(mostly republicans) think Obama was president during Katrina.

    https://www.snopes.com/fact-check/barack-obama-katrina/

  220. 221
    pfft says:

    By Kary L. Krismer @ 216:

    By pfft @ 206:

    you mean Bush Great Recession. You aren’t fooling anyone.

    You mean the Republican and Democrat recession. It’s not like one party was out there calling out warnings about our financial situation, and the other party was saying: “No everything is great.” Both were saying everything is great, and the policies of both got us into this mess.

    spare me. Kary you called out Obama for supposedly hurting the economy with his Las Vegas comments and the ACA(healthcare has added TONS of jobs). Nothing about Trump’s xenophobia/islamophobia/racism costing us tourism jobs or his tariffs costing us nearly 100,000 jobs? Crickets?

    https://www.bloomberg.com/view/articles/2018-01-24/don-t-blame-all-of-tourism-s-decline-on-trump-just-most

    https://nypost.com/2018/04/19/fed-says-trumps-steel-tariffs-will-kill-more-jobs-than-they-save/

  221. 222
    pfft says:

    By David @ 218:

    The Fed also had a very heavy part in turning the housing market into a bomb. Maybe MOST of the blame. Still, Obama being elected would have tipped the scales and destroyed anything good.

    The Fed has been responsible for most major downturns it seems. Makes sense too. If professional stock market pickers so consistently underperform the broader market, how can a Fed Board be wiser than the market?

    Answer: The Fed cannot – but they have the power. And if you see another Obama-style Democrat getting close to winning the nomination perhaps get OUT of everything. Which points out the major flaw with real estate – ILLIQUIDity.

    RE: Kary L. Krismer @ 216

    space me all the RW nonsense. bush collapsed the economy. obama created tens of millions of new jobs even though he was dealt a very bad hand and didn’t get any help cleaning up the REPUBLICAN mess.

  222. 223

    RE: pfft @ 221 – Cite. Find me some significant warnings by Democrats in 2008 that we were headed into a financial mess. I remember Obama tried to cite to some letter he wrote, but even if you agree that was somehow on target, oh boy! He wrote a letter!

    Both parties were at fault and the entire House of Representatives and 1/3rd of the Senate should have been replaced in 2008, but name recognition and partisan politics kept that from happening.

    You’ve just been eating up so much Democratic party feces for so long that you think they taste good.

  223. 224
    pfft says:

    Kary your post is so ridiculous it doesn’t merit more than a one sentence rebuttal.

    “spare me. Kary you called out Obama for supposedly hurting the economy with his Las Vegas comments and the ACA(healthcare has added TONS of jobs). Nothing about Trump’s xenophobia/islamophobia/racism costing us tourism jobs or his tariffs costing us nearly 100,000 jobs? Crickets?”

    stop dodging the question kary.

  224. 225

    RE: pfft @ 224 – Whatever, pfft. There is no question to answer, except ones I’ve asked of you. And in response, I only see deflection and denial by you. That’s a symptom of your disease–being extremely partisan. Unfortunately, that disease impacts about 80% of our population today because they pick news sources that reflect their own bias and fail to do any thinking on their own. You are a prime and extreme example of that.

  225. 226
    pfft says:

    By Kary L. Krismer @ 225:

    RE: pfft @ 224 – Whatever, pfft. There is no question to answer, except ones I’ve asked of you. And in response, I only see deflection and denial by you.

    What on God’s earth are you talking about? How come you never go on about Trump’s policies costing jobs? How many jobs to Obamacare supposedly cost or Obama’s Las Vegas remarks?

    “Cite. Find me some significant warnings by Democrats in 2008 that we were headed into a financial mess.”

    Hey genius, you must have a really bad memory. In the summer of 2007 we had big market turmoil and in March of 2008 Bear Stearns roiled the markets. Everyone knew by then 2008 would be bad.

    “I remember Obama tried to cite to some letter he wrote, but even if you agree that was somehow on target, oh boy! He wrote a letter!”

    so when provided evidence you declare it evidence of nothing? How convenient. your disinformation game is strong kary. don’t respond to this though…just say I have a terrible memory. It’s your playbook.

  226. 227

    RE: pfft @ 226 – Trump’s policies have not been costing jobs, but they also haven’t resulted in any significant increase either. We’re still plugging along with relatively pathectic job creation numbers.

    But at least unlike Obama, Trump hasn’t shamed business because they were generating economic activity. That was Obama with the Los Vegas nonsense he spouted. That cost low income people hours and hours of work, but you don’t understand that.

    And LOL that Obamacare has created jobs. That’s perhaps the biggest jobs killer in my lifetime. And if you backout those now getting Medicaid it’s done so without any significant increase in the number of insured, because it’s forced as many off of insurance as it allowed on. Not everyone can afford to have hundred dollar increases in insurance premiums each year. But no, except for perhaps the incredible buracracy it’s created, it hasn’t created any jobs. It’s only cost jobs and forced more people into part time work because the cost of medical insurance is no so high.

    Oh, and don’t bother saying that the policies before were cut rate, because they weren’t, at least not in Washington state. That’s just Democratic propaganda which you’ve fallen for hook, line and sinker, as you’ve done with all the other Democratic propaganda. The difference between you and me is you actually believe what politicians say. I don’t. Most of what politician say is simplistic nonsense designed to appeal to people with small minds–like you. You’ve posted a lot on this site, but you’ve not once posted a single unique idea. You can only repeat things, but you are totally incapable of independent thought.

  227. 228
    Wowza says:

    RE: Kary L. Krismer @ 227 – I’d be curious to see the numbers you base your beliefs on. It’s only fair, as that’s what you’re suggesting we do, beyond the words. (and please no more car/gas analogies)

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.