Real Estate Heat Index plummets in 2018—now at lowest level in over six years

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We haven’t taken a look at my “Residential Real Estate Heat Index” for King County single-family homes and condos since the fourth quarter 2017 data, so let’s see how it has moved through 2018 so far.

King County Residential Real Estate Heat Index

Wow, that’s quite the reversal this year from the recent trend. After hitting a massive all-time high in the fourth quarter of 2017, just three quarters later the index has fallen to its lowest point since the first quarter of 2012. Coincidentally, the first quarter of 2012 was when home prices in the Seattle area hit their lowest post-bubble point.

This measure is typically highly seasonal, peaking in the fourth quarter most years due to the low number of listings. However, after dropping down to earth in the first quarter, the heat index usually stays fairly stable through the first three quarters of the year. Not so this year. The first quarter was down slightly year-over-year, then the second quarter hit a three-year low, and the third quarter was the lowest level in over six years.

I still don’t think this decline portends another big bursting bubble anything like what we saw 2008 through 2012, since the foundation of the market is much stronger than it was ten years ago. That said, it is definitely becoming very difficult to ignore the dramatic signs of the slowing market here in the Seattle area.

Next year is going to be very interesting.

Methodology: The “Residential Real Estate Heat Index” is an index that rolls changes in the median price, new listings, total inventory, pending sales and closed sales all into a single number to measure the relative “heat” of the market. The formula is [100 × (median price ÷ median price last year) × (number of closed sales ÷ end-of-month inventory) × (number of pending sales ÷ number of new listings)]. Individual monthly index values are averaged to arrive at a value for each quarter. Note that this index only looks at the real estate sales market as reported by publicly-available data shared by the NWMLS. It does not factor in any other economic conditions such as wages, interest rates, rents, etc. You can download the full data set by becoming a member of Seattle Bubble.
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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

567 comments:

  1. 251
    Blurtman says:

    It’s the interest rate, stoopid. Gotta raise to be ready to lower.

  2. 252
    Eastsider says:

    RE: pfft @ 250 – Seattle definitely has the money to address the homeless problem without the stupid head tax. They demanded the developers of Washington State Convention Center expansion plan to pay $80m in ‘public benefits’ as part of permit approval. A significant sum went to address housing affordability. I am sure they demand the same from Amazon, Google and other developers in the city. Now, where is the accounting for the money?

    With expansion, Washington State Convention Center agrees to provide more than $80 million in public benefits
    https://www.seattletimes.com/seattle-news/politics/with-expansion-washington-state-convention-center-agrees-to-provide-more-than-80-million-in-public-benefits/

  3. 253

    RE: Eastsider @ 252
    Professionals in Today’s World are Gifted at Using “Stone Walling”

    To replace solving the problems…IOWs look in the mirror for the root cause?

  4. 254
    David says:

    RE: S-Crow @ 244 – Have any suggested firms to use for closing?

  5. 255

    By pfft @ 250:

    Here’s a breakdown of precisely how the city plans to spend the money it raises with the new head tax. The gist? About 61 percent will go toward building low-income housing; 34 percent will go toward emergency shelter and other needs for people experiencing homelessness in Seattle; and about 5 percent will go toward administrating the plan.

    There is even a link to the plan.

    https://3y7tq440s8xk37pci616zkly-wpengine.netdna-ssl.com/wp-content/uploads/sites/3/2017/08/Resolution-31810-Spending-Plan-V6.pdf

    That was part of a non-binding resolution, and the Mayor did not agree to its provisions in any case.

    http://seattle.legistar.com/View.ashx?M=F&ID=6260893&GUID=393BDADE-1101-478F-BB71-3D6D9C5D1D0C

    So yes, they had thought about how the head tax money might possibly be spent, they did not have an approved plan as to how to spend the money. They basically had some ideas as to how to spend the money. I wasn’t suggesting that Seattle politicians could not come up with ideas of how to spend money. That would be absurd.

  6. 256

    Also, this from the Times after the passage of the head tax.

    The new spending on shelter capacity comes as Durkan and the Seattle City Council are still considering how to spend $45 million generated by a controversial new tax on large businesses.

    https://www.seattletimes.com/seattle-news/homeless/durkan-plans-to-boost-homeless-shelter-beds/

  7. 257

    And then there is this from the Times.

    The Seattle City Council passed a spending plan with the tax, but it is nonbinding, setting up conflicting approaches between Seattle Mayor Jenny Durkan and some allied council members versus a voting bloc of at least four members on the other side.
    The approach backed by Durkan, Councilmember Sally Bagshaw and council President Bruce Harrell focuses on an immediate, visible response, including more spending on cleanups of the city’s hundreds of unauthorized homeless encampments and a surge in emergency shelter beds.

    On the other hand, a spending plan backed by M. Lorena González, Lisa Herbold, Teresa Mosqueda and Mike O’Brien focuses on a long-term strategy of building affordable housing while shifting away from the city’s focus on more emergency solutions.

    Each strategy has allies and detractors, and pros and cons.

    https://www.seattletimes.com/seattle-news/homeless/seattles-head-tax-fight-goes-to-the-next-round-how-best-to-solve-homelessness/

    So once again pfft doesn’t remember something that happened fairly recently. Serious memory problem have pfft.

  8. 258

    By David @ 254:

    RE: S-Crow @ 244 – Have any suggested firms to use for closing?

    You realize that S-crow is an escrow, right? :-) I would bet he recommends his firm.

  9. 259

    And finally, if this isn’t beating a dead horse:

    Final decisions on how to spend the revenue in 2019 will be made when the mayor and council put together a city budget this fall.

    https://www.seattletimes.com/seattle-news/politics/heres-what-happens-next-with-seattles-275-per-employee-head-tax/

    This isn’t that difficult. All you have to do is follow the news on a topic and remember what happened. That there was no plan to spend the money was widely reported.

  10. 260
    David says:

    Just back from North Florida after driving through the hurricane effected areas around Tallahassee. Lesson #1: Don’t let large trees grow close to your house. In some places, every single tree had been topped (mostly the softwoods). Surprisingly, most homes seemed to be relatively ok other than some shingle damage – except where trees fell on them. Also, I traveled 80 miles seeing hurricane damage. Did not get very close to the ocean though, so I am sure the damage escalated.

    Has me looking at the trees here in Seattle more suspiciously.

  11. 261

    RE: David @ 260 – You might find this interesting. Comparing the 1962 Columbus Day Storm to a hurricane.

    https://komonews.com/weather/scotts-weather-blog/how-does-the-columbus-day-storm-compare-to-hurricane-michael

    As to Hurricanes, I was down on the gulf coast a year after Camille. It looked like a war zone still.

  12. 262
    David says:

    RE: Kary L. Krismer @ 261 – Wow, that would be really scary up here in WA. Obviously the homes here are not built to handle hurricane-like winds.

    Two days ago I came upon a green field atop a low rolling hill amongst all those down trees (big ones) and thought what an amazing sound storm it would have been to stand there and hear all those trees snapping with the wind roaring. It must have been staggering wall of angry sound.

  13. 263
    redmondjp says:

    RE: David @ 260 – Our forefathers that settled this area originally knew full well the danger of tall trees. When they cleared the land, they built their houses away from big trees. They would be shocked to see all of the Eastside developments in which they built houses right in a mature evergreen forest with 150 foot tall fir trees just a few feet away from the houses. But hey, my new iWhatever has 247 jigabytes of memory, so it’s all good, right?

  14. 264
    wreckingbull says:

    Well, that ended quickly. Another lesson on speculation vs. investing:

    https://www.seattletimes.com/business/pioneer-of-eastern-washington-cryptocurrency-boom-falls-on-hard-times/

    FTA:

    “In Grant County alone, miners requested approximately 1,500 megawatts of power — or nearly three times as much as the county’s residents and businesses were using”

    Wow.

  15. 265

    RE: wreckingbull @ 264 – Really makes you wonder how much energy is being wasted on blockchain.

  16. 266

    The prior discussion of when low inventory is no longer a sellers’ market, and when it’s no longer balanced made me wonder what auto manufacturers thought were good and bad numbers for new inventory. And thinking about it further I thought the Ford F-150/F-250/Super Duty would be good to look at because it’s high volume and there are so many different possible model combinations (not fungible like houses). Well, I still haven’t bothered to look, but I stumbled across this. Apparently the Raptor’s only stay on the lot about 20 days on average, and that’s considered good. That’s not quite DOM, but it does give some idea.

    https://www.autoevolution.com/news/2019-ford-ranger-raptor-isnt-coming-to-the-united-states-129473.html

    BTW, good luck finding a Raptor at only $53,000. I suspect most are pretty well loaded up. The list can easily go over $75,000.

  17. 267
    wreckingbull says:

    By Kary L. Krismer @ 265:

    RE: wreckingbull @ 264 – Really makes you wonder how much energy is being wasted on blockchain.

    Here’s the kicker. Conservation has allowed us to hasten the shutdown of dirtier generation methods such as coal. Electricity demand has been flat to downward depending on how and where you measure. Enter this stupidity, and we have to fire those dirty methods back up to keep the lights on.

  18. 268

    RE: wreckingbull @ 267
    Coal Is Used in America With Underground Cleansers [Clean Coal]

    China burns it way dirtier/cheaper [through open smoke stacks], but they get away with murder when it comes to the environment, but do not compare American Safety Engineering clean coal processes to China’s pathetic coal smoked cities….apples and oranges…

    The Open Border Party are hypocrites on coal use, its OK for China to pollute like crazy? Last I heard was about half LA’s air pollution comes from where? China….LOL

  19. 269
    uwp says:

    I know there has been some discussion of agents listing high then following the market down. Here is one I’ve been watching that seems fine, but got way out over their skis with an 800k initial price in June:
    https://www.redfin.com/WA/Kenmore/16020-76th-Pl-NE-98028/home/275552

    Down to 645k now. As the prez would say: “Sad!”

  20. 270
    David says:

    RE: Kary L. Krismer @ 266 – High end luxury trucks are actually a lot nicer than a Mercedes; are a far better investment due to resale value; will ALWAYS be in demand.

    So question: What is the ‘truck’ of the housing world?

  21. 271
    wreckingbull says:

    RE: softwarengineer @ 268 – Interesting! Oh wait, it’s all a bunch of B.S, but it’s your kind of B.S. so at least it has that going for it.

    https://www.technologyreview.com/s/608191/clean-coals-flagship-project-has-failed/

  22. 272
    David says:

    RE: wreckingbull @ 271 – We will ALWAYS use coal or nuclear; or there will be mass poverty like in California. Virtue signaling does not keep granny warm. Though I bet you’ve kept a few grannies warm you little blue-haired cougar trawler.

  23. 273

    RE: David @ 262
    The Giant 60-80 Year Old Douglas Firs in Alderwood Manor in 1962 Hurricane

    Bent about 90 degrees, but never broke…branches were all over though. The younger trees in the Seattle Area now aren’t as strong as older growth….either is their lumber…LOL

  24. 274

    RE: wreckingbull @ 271
    Your Article Was Cherry Picked?

    Maybe mine was too?

    https://www.wsj.com/articles/does-clean-coal-technology-have-a-future-1416779351

    The bottom line: if you want to support more OVERPOPULATION we have no choice or starve. Your cherry picked MSM article indicates Kentucky switched to Natural Gas, smart alternative, we export gas. Canada built their “viable” clean coal [90% carbon removed] without Obama destroying coal development with layoffs and over regulation? Trump has changed the “clean coal” equation viability now, we can proceed the Canadian method now?

    Great discussion wrecking bull…send me more science reports from MIT….I loved that engineering school in the 70s….but let’s face it, its likely Open Border Party bent now, all the east coast universities are now. In 1970 the tuition at MIT was $2500/qtr, compared to $168/qtr at U of W…both universities were top ten engineering colleges that year. LOL, I went to U of W instead…

    Its sad that politics likely affects so called neutral universities now…both our articles proves this anomaly now…

  25. 275
    wreckingbull says:

    RE: David @ 272 – Nice weasel words and playground insult! Anyone who can read knows that coal usage has been dropping drastically for a decade. Please let’s do a little better next time.

  26. 276
    uwp says:

    Amazon announced HQ2:
    https://bit.ly/2Ajq02L

    A little surprising, but I guess we should have seen it coming.

  27. 277
    Matt P says:

    National house sales dropped to lowest level since 2015.

    There is no such thing as clean coal. It can be cleaner, yes, but clean is just marketing bs because it is still by far the dirtiest power source.

  28. 278
    David says:

    RE: wreckingbull @ 275 – Wrong. China is building massive coal power plants AND nuclear power plants. Their coal plants are clean coal tech.

    Read more. Cheap power is a key metric to prosperity.

    And remember, there are countries that adhere to leftist policies that one can move to. You will, however, need to walk because no one flys to Venezuela – therefore you are saving that carbon footprint as a bonus!

  29. 279

    RE: wreckingbull @ 275
    It Had Too Wreckingbull

    Obama laid them all off. Now the laid off American coal workers are proud Trump supporters wearing their safety helmets. Did you hear that Montana [coal producing state?] Populist Rally had people waiting in line all day….10,000 in line…..

    The Open Border Party claims the opposite, they need to get a life and a real agenda too. We the People are the deplorables to them.

    Let’s get on the trump Train for clean coal….put China’s dirty/crummy coal plants out of business, spewing coal Mercury all over the world [Seattle too].

  30. 280
    wreckingbull says:

    RE: David @ 278 – Funny, I never mentioned China nor nuclear. Slow down, guy, and go back to my original statement. I will clarify for to you make it easy, as I can see you are having some trouble understanding. When I say ‘we’ I mean the US. I am not a Chinese citizen. I also don’t have to walk around the city with a mask on, which I appreciate every day.

  31. 281

    By David @ 270:

    RE: Kary L. Krismer @ 266 – High end luxury trucks are actually a lot nicer than a Mercedes; are a far better investment due to resale value; will ALWAYS be in demand.

    So question: What is the ‘truck’ of the housing world?

    I don’t know that they are a lot nicer than a Mercedes (or Lexus), but they are pretty damn nice. And their construction is more heavy duty, so they should last longer.

    I was using the F-150/F-250/Super Duty as the truck of the housing world because they not only lead in sales, but they deserve to do so. The 3.5 Ecoboost is a great option, but they also have a truck that will tow over 30,000 pounds. Ram is moving up and GM down.

  32. 282
    uwp says:

    Coal jobs nationwide had been dropping pretty steadily from the mid-80s to the mid-2000s. They basically held steady with some ups and downs from 2006-2013, then dropped from 2014 until early 2016 when it flattened out again.

    The fact is, Coal Mining isn’t a big employer anymore (roughly 50,000 total jobs nationwide). It didn’t start with Obama. It’s been a long term trend.

    Here is a chart of Mining and Logging jobs in Montana (up 100 total under Trump) compared to Healthcare jobs in the state: https://fred.stlouisfed.org/graph/fredgraph.png?g=lFbG

    Which do you think matters more?

  33. 283

    RE: wreckingbull @ 280
    Spoken Like a True Open Border Party Hypocrite

    I appreciate your honesty. But making China spew its ugly toxins “worldwide” is affecting us too….its called worldwide Mercury contamination. I don’t eat seafood anymore….mercury poisoning is in almost all our seafood now, additive in a lifetime….its similar to nuclear radiation exposure. Environment protection is not just America’s duty, its equally China’s duty too…or ya become a NWO rich elite Open Border Party environmental HYPOCRITE.

  34. 284
    David says:

    RE: wreckingbull @ 280 – If China, with their cheap energy, ultimately creates a better economy than the USA, you will be looking for a job in China.

  35. 285

    RE: uwp @ 282
    Good Point UWP

    Bush and Obama were the same Open Border Party Hypocrites On Coal

    Send it to China, with all our Manufacturing Engineering jobs from America [Boeing 737 included].

    How about a real solution for once? Control OVERPOPULATION, it will take generations to cut gradually and cut billions of hungry mouths desperately needing coal….think about it.

    A stat to remember: If all the world ate [just ate] like we do in North America [includes Central America]…it would take every drop of oil currently produced worldwide….none for plastics, automobiles, manufacturing, etc, etc….

    Martin Luther King Jr and I totally agree on OVERPOPULATION, so did Nixon…LOL

  36. 286
    David says:

    RE: softwarengineer @ 285RE: softwarengineer @ 285

    I disagree with you on this. We could double the world population and still have plenty of everything. The entire world’s population could fit with room to move in a mile-wide cubic building.

  37. 287
    wreckingbull says:

    RE: David @ 284 – You should call your buddy Xi Jinping and tell him to rewrite his 2018-2020 economic plan.

    He must not have gotten your coal memo.

  38. 288
    David says:

    RE: wreckingbull @ 287 – That memo is BS – what they are doing is what counts.

  39. 289
    Justme says:

    RE: Kary L. Krismer @ 237
    RE: Kary L. Krismer @ 266

    >> not all the inventory is good inventory, even ignoring price.

    Karys says inventory is not all good, even if we ignore that the price is too high? Does that not mean that significant inventory is DOUBLY overpriced? Wow, I’m trying to decide whether Kary put a lot of thought into creating the quoted masterful sentence of Orwellian confusion and doublespeak, or no thought at all.

    But let’s leave that aside. Here’s the truth: PRICE *is* the only thing that makes any property bad. Price cures any shortcoming. Set the price low enough, and someone will find a use for a property. It may not be for everyone to buy, but it will find a use, some kind of use.

    >> What you’re completely missing is that houses are not fungible.

    Of course houses are not all fungible (interchangable in desirability). That is the whole point of prices being differentiated. Price cures any shortcoming.

    >>There are a lot of houses out there I wouldn’t recommend that anyone buy, absent special abilities, like the ability to do major renovations.

    Jeebus. There EXISTS buyers that will or should not consider houses that require a major renovation or rehab. And there EXISTS buyers that will, at the right price, overlook and optionally in time rectify the shortcomings. Maybe such buyers will even make a profit in the process. Price cures any shortcoming.

    Taking a step back again, the idea that 6-7 months of inventory is “needed” for a “balanced” market is just propaganda designed to create urgency, drive up prices, and for agents to pander to owners, who are after all their employers. The problem is that agents have been inhaling and blowing this smoke all over the media, and the severely self-entitled speculator and owner classes started believing the propaganda, and too many buyers became (initially reluctant?) believers as well. The sooner the REIC stops perpetrating this pandering pestilence, the sooner we can get normal market prices. People must stop thinking this harmful way.

    There is no such thing as “bad inventory” There is only OVERPRICED inventory.

    In the meanwhile, Just say no. The buyer’s strike is working.

  40. 290
    pfft says:

    By David @ 278:

    RE: wreckingbull @ 275 – Wrong. China is building massive coal power plants AND nuclear power plants. Their coal plants are clean coal tech.

    Read more. Cheap power is a key metric to prosperity.

    And remember, there are countries that adhere to leftist policies that one can move to. You will, however, need to walk because no one flys to Venezuela – therefore you are saving that carbon footprint as a bonus!

    Whatever the right-wingers here tell you just believe the opposite.

    China is so polluted they are going solar with a gusto.

    https://www.pv-tech.org/news/china-installed-24.3gw-of-solar-power-in-the-first-half-of-2018

  41. 291
    pfft says:

    By uwp @ 282:

    Coal jobs nationwide had been dropping pretty steadily from the mid-80s to the mid-2000s. They basically held steady with some ups and downs from 2006-2013, then dropped from 2014 until early 2016 when it flattened out again.

    The fact is, Coal Mining isn’t a big employer anymore (roughly 50,000 total jobs nationwide). It didn’t start with Obama. It’s been a long term trend.

    Here is a chart of Mining and Logging jobs in Montana (up 100 total under Trump) compared to Healthcare jobs in the state: https://fred.stlouisfed.org/graph/fredgraph.png?g=lFbG

    Which do you think matters more?

    We don’t need a lot of coal workers anymore because instead of working underground we use big buckets to scrape coal off the earth.

  42. 292

    RE: Justme @ 289 – I’d try to explain it further to you, but I have a feeling you don’t want to understand. So I won’t waste my time. But let me be clear, what I said made sense. That you cannot understand it is either your problem or your desire.

  43. 293

    By pfft @ 291:

    Which do you think matters more?

    We don’t need a lot of coal workers anymore because instead of working underground we use big buckets to scrape coal off the earth.

    Or probably use more equipment/machinery, and/or less efficient mines are closing down. In either case I’d be interested in seeing the amount of coal produced alongside the number of coal miners.

  44. 294
    Eastsider says:

    Here is my take on inventory and pricing –

    If it takes days to sell a property, it is underpriced (unless it is sold in an auction.)
    If it takes 6 months to sell a property, it is overpriced. At the very least, the excess carrying cost should be deducted from the sales price.

    So more properties are overpriced when there is 6 months inventory. IMO, 3 months inventory is balanced and DOM should be under 2 months if priced right.

  45. 295
    wreckingbull says:

    RE: pfft @ 290 – Geez, it got so ridiculous here, I have to agree with pfft. Strange times.

    Here’s the thing. China’s #1 goal is to balance their communist society with a content ‘happy-enough’ population. They don’t want any social unrest like they have experienced in flare-ups in the past. This is China Economics 101, first week.

    Up to recently, this was accomplished by a market-based economy which caused amazing growth and moved millions out of rural near-poverty conditions. Up to now, this has been good enough. Crushing pollution in its urban centers is now becoming its own new problem, and it needs to addressed. They see the writing on the wall:

    https://www.rfa.org/english/news/china/smog-protest-12092016121841.html

    This is why you see a promise to reduce coal use and start to fix this problem, much to Davids ire.

    Sorry this is not RE related, but perhaps it is a bit more interesting than David’s analysis of ‘what they are doing is what counts’.

  46. 296
    Notme says:

    A sellers market!
    now give me listing contract
    (co)mmission accomplished

    -a bubble haiku

  47. 297
    pfft says:

    By Kary L. Krismer @ 293:

    By pfft @ 291:

    Which do you think matters more?

    We don’t need a lot of coal workers anymore because instead of working underground we use big buckets to scrape coal off the earth.

    Or probably use more equipment/machinery, and/or less efficient mines are closing down. In either case I’d be interested in seeing the amount of coal produced alongside the number of coal miners.

    “Coal mining productivity in the United States increased 26% over the past five years, reaching 6.8 tons per miner hour in 2017, up from 5.4 tons per miner hour in 2012”

    Powder river basin has insane productivity.

    https://www.eia.gov/todayinenergy/detail.php?id=35232

  48. 298
    Matt P says:

    Rick Palacios says we are officially in a buyer’s market at 4.3 months of inventory in August nationwide. He argues that technology has cut 2 months off of selling times so it’s no longer 6 months that’s a buyer’s market. 4 months is buyers, 3 months balanced and 2 months and fewer is sellers’.

    https://www.realestateconsulting.com/two-housing-rules-of-thumb-that-can-get-you-into-trouble/

  49. 299
    Notme says:

    How much coal can dance
    on the head of a match stick
    who cares(,) coal is bad

    -an off-topic haiku

  50. 300
    Justme says:

    RE: Matt P @ 298

    Yep, technology definitely has something to do with changing selling times. Anything more than 1 month without a pending, and 2 months without a completed sale, is stale and overpriced.

    Here’s another good article on the same topic, based on the same source. Technology changes how much inventory is needed for having a “balance”. It’s just that the REIC decided it was convenient and profitable to hang on to outdated metrics.

    https://wolfstreet.com/2018/10/19/us-housing-turns-into-buyers-market

  51. 301
    S-Crow says:

    Good evening all. Here’s my Friday night in the trenches escrow report and commentary:

    The last three Fridays have resulted in crazies coming out. Something in the air with these screechers. Life in the Escrow biz I guess. Stress is really starting to show. I usually give people a long runway to run their mouths but today I hit my limit and had to educate a loan officer.

    Closings at end of the day for Snohomish Co look to be about 12-% lower for October YOY to date (Oct. 2017 to date vs Oct 2018 to date) with about 8 recording days to go this month. We’ll see how it ends up on Oct 31st. The rate of change to our local markets was a lot quicker than many expected.

    Refi’s…..crickets. Nada. Down substantially. Lenders are laying off staff due to low volumes. I expect to see head counts start to change in Title Insurance Co’s — but we’ll see. Our pipeline of refi to purchase ratio is ridiculous and I presume other escrow departments are similar (some do more or less volume but the ratio would be very similar). Completely inverted and that’s never happened since we opened. It’s a new world with rising rates and record prices to the moon. Since we opened our office, interest rates have only gone down in aggregate so we’ll see how the markets continue to react to a rising rate environment.

    Maybe there will be a resurgence of ARM’s to get the pipeline churn going? Either that or everyone is going to have to receive substantial raises. Something is going to have to change with the mortgage and housing industry: either it’s new products to get the market moving, deeper incentives or we have price deflation. Most people are not making $200K total household income. I’m also continuing to see refi’s with debt “consolidation” by shifting debt onto the home. Not a good recipe to increase your CLTV. Also, reading that the Auto market is showing cracks.

    Off topic for the trail hounds (hikers):

    Just completed the Beckler Peak trail hike last weekend just outside of Skykomish via Hwy 2. Wide trail with good long grade increases and the last 20 minutes was a bit steeper until you get to the summit at the Peak. Spectacular views. Put it on your list. I’m heading to a hike outside of Leavenworth this weekend followed by my reward of good Bratwurst and Brew. If people go on hikes via Hwy 2 corridor: go on Saturdays. Forget about it on Sundays with the traffic particularly coming back in the evening. It’s why several of my clients MOVED AWAY from Sultan & Goldbar area.

  52. 302
    wreckingbull says:

    RE: Justme @ 300 – I agree, but only to a certain extent. Sure there is no more driving around in your agent’s leased 3-series BMW looking at possible houses which fit your criteria, but I don’t think this compresses the sales cycle that much.

    The last two years has bent us in a way which will take a bit to recover from. It’s hard to remember what normal feels like. I’d say a home which goes pending in under two months is properly priced.

  53. 303

    By Matt P @ 298:

    Rick Palacios says we are officially in a buyer’s market at 4.3 months of inventory in August nationwide. He argues that technology has cut 2 months off of selling times so it’s no longer 6 months that’s a buyer’s market. 4 months is buyers, 3 months balanced and 2 months and fewer is sellers’.

    https://www.realestateconsulting.com/two-housing-rules-of-thumb-that-can-get-you-into-trouble/

    That article, which isn’t very compelling, links another article, which also isn’t terribly compelling, touting Zillow and Trulia as being something new that makes it possible to hold an open house in less than 30 days, because that’s how long it took back in the days of newspaper advertising. Newspaper advertising was pretty well dead when I became an agent, but I don’t believe for a second it took 30 days to get an ad printed. But the Internet does allow properties to stand on their own and not be placed in a queue at the brokerage level, which probably did happen in the days of newspaper advertising.

    There’s also some weird comment about how property can enter escrow faster now. Not sure what that’s about.

  54. 304
    whatsmyname says:

    How long on the market before a “buyer” is considered stale?

  55. 305
    wreckingbull says:

    RE: whatsmyname @ 304 – Three price reductions seems about right. I have noticed after that an unreasonable seller typically get the memo that their buyers at their initial price point have gone stale.

  56. 306
    whatsmyname says:

    RE: wreckingbull @ 305
    Very good; 3 failed attempts at a strike price might seem a good indication that someone is not price reasonable in the market. That seems a good measure for people who are busy taking action, although it might seem harsh for someone who lost 3 bidding wars.

    But what about people who don’t really do anything? If a “seller” with one house and no price reductions is price unreasonable after 4 months, what do you say about a “buyer” with thousands of potential houses and no transaction in 4 years?

  57. 307

    By whatsmyname @ 304:

    How long on the market before a “buyer” is considered stale?

    LOL. There could be many reasons for that.

    1. Some buyers are rather picky–I’m somewhat in that group in that we looked at over 80 houses (in addition to all the houses we were looking for on the behalf of clients) over probably 3-4 months before we found two houses we were willing to make offers on (and only made offers on one).

    2. Some buyers are indecisive, and simply can’t pull the trigger.

    3. Some buyers have the wrong lender. That’s probably less of a problem now, but if you had a problematic lender a year ago you were not going to win any bidding wars.

    4. As with sellers, some buyers have the wrong agent. As with sellers this has many different possibilities. Simply put, there’s an endless list of things agents can do wrong that make it more difficult for a seller to sell or a buyer to buy. The best example of that was back when the market was horrible and an agent wrote an offer so poorly I had to draft a completely new offer and have my seller sign it. There were too many mistakes and omissions to make a counteroffer practical. Thus we basically ended up with an offer to sell rather than an offer to buy. That wouldn’t happen in any other market. But it can be more subtle than that.

    5. Some buyers think they know things they don’t know, and thus make bad decisions. You see thinking they know things they don’t know all the time on this website.

  58. 308

    Is It Cheaper to Rent or Buy in Seattle Now???

    https://www.yahoo.com/finance/news/most-renters-think-cheaper-buying-183926553.html

    The URL above is a great nonpartisan neutral both sides of the issue breakdown of the important issues relevant to each case plan. The blogs to the article a the best part….the answer depends on where you rent and where you eventually buy too….common sense IOWs.

    I’d vote in Seattle right now, in general for all tier prices [and limited feedback I get from landlords/tenants alike]…its cheaper to rent. Its a gut feel vote, so not iron clad.

  59. 309

    RE: S-Crow @ 301
    Hey S-Crow

    If I ever need to close a home loan or such; you are the first one I’d attempt contact ;-)

    Excellent blog.

  60. 310

    RE: Kary L. Krismer @ 307

    Its Like That $1.79/Gal Chocolate Milk on Sale at Safeway

    Read the expiration date before ya buy it, it may be stale….LOL

  61. 311
    whatsmyname says:

    RE: softwarengineer @ 308 – Never say never, but in the short term, for the short term, and in a location that does not appear to be dying; it is virtually always cheaper to rent.

    Ten years later, assuming you can hold on, quite the reverse.

  62. 312

    RE: David @ 286
    You’re No Demographic Scientist

    But I appreciate your honesty….most Evangelical Churches agree with you and don’t like my “Noah’s Ark” take on OVERPOPULATION either. He killed off man with a flood it was so evil, but made sure to save the soon extinct Seattle Orcas whale and its other animal friends.

    Its gonna take time to straighten this brainwashing out IMO. It will also take generations to get world income per worker up to $40K/yr….depopulate gradually and say good-bye to carbon footprint too. Christians are to blame too.

  63. 313
    StupidLifeDecisions says:

    By Kary L. Krismer @ 307:

    By whatsmyname @ 304:

    How long on the market before a “buyer” is considered stale?

    5. Some buyers think they know things they don’t know, and thus make bad decisions. You see thinking they know things they don’t know all the time on this website.

    Hi Kary,

    What in particular have you observed buyers thinking they know that they don’t know? Just asking to see if any of this is behavior I should avoid once/if I ever buy.

  64. 314

    RE: whatsmyname @ 311
    Good Point

    IMO, buying generally does not trump renting if you’re moving in 5 years anyway….but I bet our Flipper King Erik would disagree on his cases…he blogs flipping every couple years after white washing the condo [makes huge profits along the way]. I met Erik, but never met his soul mate….I bet she’s the viable type and open to moving a lot for CASH$$….a keeper in my book for any Flipper. Rare for either males or females IMO.

    I was married for 15 years [from 78-94] and my other half would never have put up with a gypsie life style…even after our divorce, I was so busy working as a Bio-engineer Medical Hospital volunteer and Autistic Advocate and a full time engineering job….it made me understandably a bad transient Flipper choice too ;-)

    My daughter was lucky, the one Flipper repo I bought became her “college money replacement”gift. BTW, that Kansas house and 1/2 acre gift gets constant letters in the mail begging me to sell….LOL…I don’t want a “basement dweller” [Hillary name for working Milenials] adult child living [she’s 30 now] with me, so this plan was much better [her male significant other is somewhat cemented in place too, the free rent hole…LOL] . No. I’m not selling! LOL ;-)

  65. 315

    By StupidLifeDecisions @ 313:

    What in particular have you observed buyers thinking they know that they don’t know? Just asking to see if any of this is behavior I should avoid once/if I ever buy.

    It can be all sorts of things, but the best example might be pricing/valuation. I’ve mentioned the thinking of sellers when they over-price, but buyers also make mistakes. The one that will probably make a comeback is not recognizing when something is underpriced and wanting to make an offer under list just so they can feel like they are getting a bargain, when it’s already a bargain. Then when they lose out on that one they might end up getting another property that wasn’t nearly such a bargain.

    Also underestimating the seriousness of an adverse condition of the house, or how much effort it would take to fix the condition. I see that more though with friends/family who are advising a buyer and want a buyer to buy.

    And finally, thinking that the company/lender they used for their refinance (or recommended by friends/family) is a good company/lender for a purchase transaction.

  66. 316
    Deerhawke says:

    RE: Matt P @ 298

    From my perspective, this makes perfect sense. All the different elements of a transaction are much faster now. Listing, search, notification of client, visit, open house, etc. etc.

    Even with a buyer who is not all cash and needs financing, there is no reason nowadays not to close the loan in 30 days. So if you have 30 days on the market and 30 days to close, a well priced house should close 60 days after listing.

    If DOM goes above that, it is because sellers need to be convinced by the market that their price is too high or buyers need to be convinced by the market that they should move ahead and buy.

  67. 317

    By Deerhawke @ 316:

    <
    If DOM goes above that, it is because sellers need to be convinced by the market that their price is too high or buyers need to be convinced by the market that they should move ahead and buy.

    DOM doesn’t include the time the listing is pending. Also, some loans can take longer than 30 days, in part due to the time it takes to get an appraisal done. That was particularly bad about two years ago, but has probably lightened up due to fewer refinances. I’m pretty sure there hasn’t been a rush in people becoming appraisers.

  68. 318

    RE: Deerhawke @ 316 – One more thing. Average DOM and inventory levels are not even that well correlated.

    For September, King County SFR, the average days on market for the active listings was only three days longer in 2018 than 2017, even though the inventory was significantly higher (both in nominal terms and months of inventory). And the YTD average was actually five days shorter in 2018!

    For sold listings the average was 2 days longer in 2018, and the YTD was 2 days shorter. The average times for the sold listings were roughly 50% of that for the actives.

    None of these numbers was over 60 days.

    Data from NWMLS sources, but not calculated or guaranteed by the NWMLS.

  69. 319
    pfft says:

    By Justme @ 300:

    RE: Matt P @ 298

    Yep, technology definitely has something to do with changing selling times. Anything more than 1 month without a pending, and 2 months without a completed sale, is stale and overpriced.

    Here’s another good article on the same topic, based on the same source. Technology changes how much inventory is needed for having a “balance”. It’s just that the REIC decided it was convenient and profitable to hang on to outdated metrics.

    https://wolfstreet.com/2018/10/19/us-housing-turns-into-buyers-market

    interesting.

  70. 320
    Matt P says:

    Where’s the weekly Friday inventory update?

  71. 321
    Justme says:

    RE: Matt P @ 320

    It is time for the weekend update on for-sale inventory for KC/SFH. Six weeks have passed since the week of labor day. The King County SFH for-sale listings declined by 29 units from last week to 4829, a number last exceeded (same week) in 2012. As usual, inventory peaked on Friday evening.

    10.19.2018 22:00 4829 (-29)
    10.12.2018 17:00 4858 (-12)
    10.05.2018 17:00 4870 (-21)
    09.28.2018 20:00 4891 (+54)
    09.21.2018 17:00 4837 (+2)
    09.14.2018 18:00 4835 (+235)
    09.07.2018 19:00 4600 (+230) friday after labor day
    08.31.2018 19:00 4370 (-103) friday before labor day
    08.24.2018 17:00 4473 (+112)
    08.17.2018 18:00 4361 (+88)

    Compare with same week(s) in 2017:

    10.20.2017 18:00 2780 (-73)
    10.13.2017 19:00 2853 (-48)
    10.06.2017 19:00 2901 (-70)
    09.29.2017 22:00 2971 (-21)
    09.22.2017 20:00 2992 (-20)
    09.15.2017 18:00 3012 (+80)
    09.08.2017 19:00 2932 (+234) friday after labor day
    09.01.2017 17:00 2698 (-258) friday before labor day
    08.25.2017 20:00 2954 (+14)
    08.18.2017 20:00 2940 ()

    The seasonal droop in inventory is very small so far this year. The droop count is less than half of what it was in 2017 for the same week of the year, even though the absolute inventory level in 2018 is over 1.7x what it was in 2017. There continues to be an elevated crowd of sellers at the exits of the King County SFH market. It appears buyers are on strike.

  72. 322
    Eastsider says:

    RE: Justme @ 321 – One thing to note – Even with seasonal drop in inventory, it is still higher than the peak spring/summer selling months. Months of inventory must be skyrocketing… lol

  73. 323
    Matt P says:

    RE: Justme @ 321 – Thanks! Condos still heading up?

  74. 324

    RE: Eastsider @ 322RE: Kary L. Krismer @ 318

    Great Opinions and Hopes

    https://www.cnsnews.com/news/article/terence-p-jeffrey/florida-and-texas-post-record-sept-sept-job-gains

    The biggest national economic gains though are in Texas and Florida….Hurricanes bring rebuilding cash out and oil jobs sky-rocketing due to $80/bbl oil? But Seattle has the new X-Box Game Versions from MSFT….LOL….and who defines Artificial Intelligence as real? Bill Gates determines? LOL

    AI is a well used acronym to justify no manufacturing or energy production needed? How do we eat then?

  75. 325

    RE: pfft @ 290
    Solar?

    LOL…the Lithium Battery Production Process reminds me of a nuclear meltdown spewing toxins and destroying huge Chinese land sectors…but its China destruction, that’s OK?

  76. 326

    E-Statements on BECU Still Don’t Work

    I got mine in the mail in paper very late [BTW, my account pretty much balanced ;-)], but that likely “Adobe S/W virus thing” or Malware Trojan Horse Kary was referencing must be a doozy to reprogram and fix on the bank’s computer, assuming its the root cause…its been three weeks bubbleheads and the bank’s computer is still broke.

    I have a distinct feeling the ITs are useless when its a new and unique concern…understandable too. Don’t blame the STEM engineers either, we don’t do S/W development, its not taught in colleges.

  77. 327
    s says:

    Its Not Just Innocuous Recreational Pot That is Booming in Sanctuary Cities Now

    Its horrifying booze addiction and drunks increasing in Sanctuary Cities now, due to high cost of living and stresses? Bottoms up Seattle Bubbleheads, time for clinks of the glass and another real Toastmasters meeting in Seattle? LOL

    http://www.sandiegouniontribune.com/business/tourism/sd-fi-sandiego-booziest-cities-20181020-story.html

  78. 328
    Justme says:

    Weekend update, graphical version. As always, click on link, then click once more for enlarged view.

    King County SFH inventory 2017-versus-2018 on 2018-10-20.
    https://imgur.com/a/5enP2E3

    King County Condo inventory 2017-versus-2018 on 2018-10-20.
    https://imgur.com/a/aANhymr

    RE: Matt P @ 323

    Matt, as you can see , the KC/condo listed-for-sale inventory is still increasing. No seasonal drooping at all in the condo listings. In fact, it looks like the 2nd derivative is slightly positive. There are strong signs of a big buyers strike in the condo market. And with the aspirational (read: crazy high) list prices so far this year, perhaps no one should be surprised.

  79. 329

    The MASS Chinese Money Still Pouring into Vancouver, Canada is Finally Identified With Root Causes

    https://www.bloombergquint.com/pursuits/vancouver-is-drowning-in-chinese-money#gs.IWSfm0Q

    No wonder Canada is closing a blind eye to environmental destruction by Chinese OVERPOPULATION, mustn’t hurt the Godfather’s feelings…LOL

    I had no idea that Canada’s organized crime was this bad until I read this Bloomberg article today…it was covered up by the MSM until now? Canada is the Open Border Party’s prize poster child?

  80. 330

    RE: s @ 327
    Add in MASSIVE Opioid Addiction Gone Exponential

    And you have the perfect storm for drug dependency in these economically stressful times…

    https://nypost.com/2018/10/20/employees-and-execs-are-failing-drug-tests-at-shocking-rates/

    The old Soviet Union [Russia now too] had their vodka addiction due to economic hardships, we have our doctor/Medicaid/Mafia supplied opioids? LOL

  81. 331
    Eastsider says:

    RE: Justme @ 328 – IMO, condos are the canary in the coal mine. They suffer big declines (relative to SFHs) in a down market and are the last to surge in a rising market. Very similar to vacation homes. If I were Erik, holding on to the few condo units might not be a smart idea. Just my 2 cents…

  82. 332
    redmondjp says:

    RE: Eastsider @ 331 – Erik has been conspicuously absent from these comment threads lately, I’ve noticed!

    Much like Meshugy (for those of us old-timers who have been here since the beginning) back during the deflation of HB1.0.

  83. 333
    Brian says:

    Wow, condo inventory just keeps creeping up.

    The redfin condo search I created two years ago has more results than I have ever seen before

  84. 334

    RE: wreckingbull @ 295
    Why Doen’t China Sign the Open Border Party European Climate Change Treaty Now?

    LOL…cat got your tongue? IMO, based on the WTO’s tolerance of OVERPOPULATION polluters, China never will…and Europe never complains about their Godfather China [it may hurt their feelings], just their piggy bank, America…

  85. 335
    Deerhawke says:

    My view on the market in Seattle.

    Last year, everything was selling. Even garbage was selling and at high prices. Not now.

    The market in my area (705 and thereabouts) is highly differentiated.

    True single family homes are continuing to sell pretty well. Quality sells at or near full price. Occasionally over full price. Shoddy new construction and shoddy remodels are having to first nip, then cut, then chop their prices. Also buyers seem to have finally gotten tired of the Lego Modern Box so those lazy builders who built them are getting hurt.

    Townhouses are getting hammered– just as a lot of inventory was finally coming to market. A lot of bigger projects that got teed up in 2013 and 2014 were delayed and delayed by design review, appeals and longer permitting times. They finally got their permits during late 2016 and 2017. They are coming on the market now and instead of the roar of buyers pounding on the doors, the developers hear… crickets. After denial, anger, bargaining and depression (the last 6 months) their response has been to seriously cut prices and add features. , Many are even going with a 4% selling office commission. I haven’t seen it yet, but my guess is that next up will be interest rate buy-downs.

    Suddenly neighborhood matters again. Greenlake, Wallingford, Fremont, Capitol Hill, close-in Queen Anne, the central parts of the Central District and the Lake Washington neighborhoods are selling. Ballard is getting crushed. Magnolia is not doing well, unless there is a killer view. North and west Queen Anne are sitting.

    And suddenly people are paying a lot more attention to neighborhood amenities, walk-score, bike score, and door-to-door commute times.

    For all of you hoping for another 2008, sorry– I don’t think so. In my view, this year shows all the normal signs of the pause that refreshes, a pullback, a correction if you wish– not a historic twice in a century meltdown.

    For buyers, this represents (finally) an opportunity. My guess is that this downturn will last longer than builders and developers believe it will. The fact that the received wisdom among builders and developers that this will be done by Christmas, tells me it absolutely will not. This pullback will certainly last into the first quarter of 2019 and maybe extend through the spring.

    But the fact that most builders stopped buying any land in June of this year tells me there will be an inventory shortage again at the end of 2019. If we don’t have a big recession in the spring of 2020, there will be a big spring bump in prices.

    If I were a buyer now, I would realize that this is a good opportunity, but not one that will last forever. Bargain hard, but keep your eye on the clock– and on interest rates.

  86. 336
  87. 337

    By Eastsider @ 331:

    RE: Justme @ 328 – IMO, condos are the canary in the coal mine. They suffer big declines (relative to SFHs) in a down market and are the last to surge in a rising market. Very similar to vacation homes. If I were Erik, holding on to the few condo units might not be a smart idea. Just my 2 cents…

    I was expecting that to be the case in 2009-2012, but condos actually held up better than houses. In the late 70s, early 80s they did as you described.

  88. 338

    RE: Deerhawke @ 335 – Interesting observation on townhouses. I’ve not noticed that myself, but there’s no reason I would at this time because I don’t have a client with interest in such things. I could see this would be highly location dependent.

    WUCOIA (the common ownership interest act) will impact the larger new projects of this type, so it will be interesting to see how the developers react. If subject to the act, they’ll now have to create a public offering statement, just as they would have had to do before if they’d gone the condo route. Personally I think the condo format makes more sense for projects over 10 units, so it if pushes them to go condo that’s probably a good thing.

  89. 339

    Here’s an interesting article on how several large companies are moving their HQs out of the Bay Area. Seattle has many of the same issues. Will it be next?

    https://www.bizjournals.com/sanfrancisco/news/2018/10/09/bay-area-exodus-headquarters-move.html

  90. 340

    And here’s an update on the UW study. If you ignore the spin of the article, it basically breaks out which groups benefited from the minimum wage, which basically broke even (same earnings but fewer hours worked), and which suffered. And keep in mind this was all during a period of time when the economy was doing well, so you’d expect wages to be rising.

    https://www.nytimes.com/2018/10/22/business/economy/seattle-minimum-wage-study.html

    But OMG, still not peer-reviewed!

  91. 341
    Market Psychologist says:

    RE: Deerhawke @ 335 – The tide is going out and, while Seattle may not be left naked, I am betting it’s going to be a speedo. Seattle is just not that special, nor is tech. I wonder how long those big bonuses will keep flowing in a high interest rate environment, when setting cash on fire is no longer so easy.

  92. 342
    Matt P says:

    By Deerhawke @ 335:

    My view on the market in Seattle.

    Last year, everything was selling. Even garbage was selling and at high prices. Not now.

    The market in my area (705 and thereabouts) is highly differentiated.

    True single family homes are continuing to sell pretty well. Quality sells at or near full price. Occasionally over full price. Shoddy new construction and shoddy remodels are having to first nip, then cut, then chop their prices. Also buyers seem to have finally gotten tired of the Lego Modern Box so those lazy builders who built them are getting hurt.

    Townhouses are getting hammered– just as a lot of inventory was finally coming to market. A lot of bigger projects that got teed up in 2013 and 2014 were delayed and delayed by design review, appeals and longer permitting times. They finally got their permits during late 2016 and 2017. They are coming on the market now and instead of the roar of buyers pounding on the doors, the developers hear… crickets. After denial, anger, bargaining and depression (the last 6 months) their response has been to seriously cut prices and add features. , Many are even going with a 4% selling office commission. I haven’t seen it yet, but my guess is that next up will be interest rate buy-downs.

    Suddenly neighborhood matters again. Greenlake, Wallingford, Fremont, Capitol Hill, close-in Queen Anne, the central parts of the Central District and the Lake Washington neighborhoods are selling. Ballard is getting crushed. Magnolia is not doing well, unless there is a killer view. North and west Queen Anne are sitting.

    And suddenly people are paying a lot more attention to neighborhood amenities, walk-score, bike score, and door-to-door commute times.

    For all of you hoping for another 2008, sorry– I don’t think so. In my view, this year shows all the normal signs of the pause that refreshes, a pullback, a correction if you wish– not a historic twice in a century meltdown.

    For buyers, this represents (finally) an opportunity. My guess is that this downturn will last longer than builders and developers believe it will. The fact that the received wisdom among builders and developers that this will be done by Christmas, tells me it absolutely will not. This pullback will certainly last into the first quarter of 2019 and maybe extend through the spring.

    But the fact that most builders stopped buying any land in June of this year tells me there will be an inventory shortage again at the end of 2019. If we don’t have a big recession in the spring of 2020, there will be a big spring bump in prices.

    If I were a buyer now, I would realize that this is a good opportunity, but not one that will last forever. Bargain hard, but keep your eye on the clock– and on interest rates.

    I don’t think you’re factoring in rising interest rates and reverse QE enough. The two things that inflated the bubble are now going in the opposite direction.

  93. 343
    Notme says:

    Deerhawk diatribe
    self-serving wisdom galore
    seems so sensible

    -a bubblemonger propaganda haiku

  94. 344
    Eastsider says:

    By Matt P @ 342:

    I don’t think you’re factoring in rising interest rates and reverse QE enough. The two things that inflated the bubble are now going in the opposite direction.

    Yes, QEs have ‘inflated’ just about everything. You would think that trillions of dollars flooding the market will cause stock, housing and other hard assets to inflate. In any case, buying at inflated prices when interest rates are rising is not a good advice, unless you are expecting high inflation.

  95. 345
    Eastsider says:

    By Kary L. Krismer @ 337:

    I was expecting that to be the case in 2009-2012, but condos actually held up better than houses. In the late 70s, early 80s they did as you described.

    Where is your data? I found one bedroom (proxy for condo) sales price history on Trulia. Condo prices dropped more precipitously than SFHs. One bedroom median sales price went from $335k in 2008 to $195k in 2012.

    https://www.trulia.com/real_estate/Seattle-Washington/market-trends/

  96. 346
    steven says:

    RE: Matt P @ 342RE: Eastsider @ 344

    not to mention that current buyer freeze is not even from inventory excess, If the sales were happening at “normal”. Deerhawke’s statements are based on the fact that the current situation is a result of a inventory excess when in fact there is no definite economical reason for the sudden freeze. With the current drops in prices, there will be additional sellers, less buyers that will reinforce the upcoming downtrend in price. Needless to say, market never settles at d/s equilibrium. it always overshoots just like in the 2012s. I think seeing shortage by 2020 spring again is highly optimstic

  97. 347
    David B. says:

    RE: softwarengineer @ 336

    Tax and spend.

    As opposed to borrow and spend.

    Let me guess: all the stories about Trump’s deficits are fake news. Or maybe the deficits are all Obama’s fault. Or something. Because Orange Julius Caesar and his sycophants by definition can do no wrong.

  98. 348
    Eastsider says:

    RE: steven @ 346 – We have not had a normal market in the last 10 years. Sales volume has never recovered. If you adjust for population and households, the market has been in depression since the crash.

  99. 349
    Notme says:

    Deerhawke knew market
    was turning 6 months ago
    did he warn anyone?

    -a hell-no(-)bubble haiku

  100. 350

    By Eastsider @ 345:

    By Kary L. Krismer @ 337:

    I was expecting that to be the case in 2009-2012, but condos actually held up better than houses. In the late 70s, early 80s they did as you described.

    Where is your data? I found one bedroom (proxy for condo) sales price history on Trulia. Condo prices dropped more precipitously than SFHs. One bedroom median sales price went from $335k in 2008 to $195k in 2012.

    https://www.trulia.com/real_estate/Seattle-Washington/market-trends/

    I’m going by value, not median for all properties, which is impacted by short sales and REOs. If you strip those out for the 2008 and 2012 selling seasons (4/1-9/30) the median dropped from $279k to $230k, although the average and median size was up slightly. Surprisingly the sales volume was only down by less than 10%.

    BTW, I can’t do the same calculation on SFR easily because the volumes are over 5,000, which is the limit for the report I run.

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

  101. 351
    Notme says:

    no short sale, no REO
    market value only counts
    when Kary says so

    -an unclear-on-the-market-concept bubble haiku

  102. 352

    By steven @ 346:

    If the sales were happening at “normal”. Deerhawke’s statements are based on the fact that the current situation is a result of a inventory excess when in fact there is no definite economical reason for the sudden freeze.

    The buyer freeze is likely just a figment of Justme’s biased imagination. Sure sales were down somewhat significantly in September, about 27%, but that could have easily been due to too many over priced listings and other factors. A listing that is overpriced is not likely to turn into a sold listing, and there are plenty of price reductions to indicate over-priced listings.

    As to this month’s sales, that’s hard to determine since sales tend to be backloaded toward the end of the month. But they look a bit better than last month as far as YOY comparisons are concerned.

    I will say though, that this is far different from say two years ago, where you used to have lines outside listings with agents/buyers waiting to get in. That though was very unusual. I think in the last 8 days I’ve probably been in about 20 houses and the only person who showed up outside any of the listings while I was there was a buyer who erroneously thought there was an open house.

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

  103. 353

    By Notme @ 351:

    no short sale, no REO
    market value only counts
    when Kary says so

    -an unclear-on-the-market-concept bubble haiku

    Well if you ever have a property you want to sell, and want to sell it as if it’s priced as a short sale or REO, I’ll list it for you at a discount. That way you’ll only lose about 19%. ;-) (BTW, I’m not serious, because I don’t want to risk having to sort through too many offers.)

    And in any case, that the median was impacted by distressed properties has already been well documented. That’s why there was so much seasonal fluctuation in price during those years, because short sale approvals and bank sales remained relatively non-seasonal (particularly short sale approvals).

  104. 354
    Notme says:

    t’was no bubble burst
    only pile of sales that don’t count
    presto, no bubble!

    -a convenient-historical-revisionism bubble haiku

  105. 355

    By David B. @ 347:

    RE: softwarengineer @ 336

    Tax and spend.

    As opposed to borrow and spend.

    Both the parties are borrow and spend, or at least deficit spend, and the only thing that will change that is a very hot economy–as happened during one or more of the Clinton years.

  106. 356
    Eastsider says:

    By Kary L. Krismer @ 350:

    If you strip those out for the 2008 and 2012 selling seasons (4/1-9/30) the median dropped from $279k to $230k, although the average and median size was up slightly.

    Do you really believe condo prices dropped from a high of $279k to a low of $230k, or 17.6%? That is funny.

  107. 357
    N says:

    By Deerhawke @ 335:

    For buyers, this represents (finally) an opportunity. My guess is that this downturn will last longer than builders and developers believe it will. The fact that the received wisdom among builders and developers that this will be done by Christmas, tells me it absolutely will not. This pullback will certainly last into the first quarter of 2019 and maybe extend through the spring.

    But the fact that most builders stopped buying any land in June of this year tells me there will be an inventory shortage again at the end of 2019. If we don’t have a big recession in the spring of 2020, there will be a big spring bump in prices.

    If I were a buyer now, I would realize that this is a good opportunity, but not one that will last forever. Bargain hard, but keep your eye on the clock– and on interest rates.

    Do developers really believe this will turn again by January?

    We are potential buyers who have wanted to buy and each year want to buy a little more but experienced 2008 and being underwater. Honestly, at this point for us, until a monthly mortgage payments gets somewhat in line with rents it’s not worth it to us. Would probably pay 20% more a month but no more and right now it’s more like 40-50% more than rents on comparable properties. Interest rates are definitely a factor here.

    Interesting to note the trend with home builder stocks being down 20%+ this year…

  108. 358
    Rentin’ says:

    RE: Deerhawke @ 335
    I can only speak for myself as a potential buyer, but my feeling is that this downturn won’t be short lived. I am planning to watch and wait and see what happens in spring, and hope if prices retreat enough to start a more serious search next fall.
    One thing I have noticed is that builders are listing property for sale with plans. It looks to me like they don’t want to start building specs anymore because they’re afraid of big price drops by the time the house hits the market or they are having trouble getting financing. That seems like a positive sign for me as a buyer since I am fairly certain the profit margins on the recent builds have been astronomical.
    I went to two open houses this past weekend to check out a couple of newer construction homes and was the only one there both places. I wouldn’t consider buying either one, even if prices tanked. I think the developers were obviously taking advantage of a hot market to build these crappy houses on tiny lots that were listed for 1.2M. They were poorly designed, poorly constructed and even made all of the ugly 70s houses that I hate on the Eastside look like a much better option. I will keep waiting.

  109. 359
    Rentin’ says:

    RE: N @ 357 – I completely agree. Prices would need to retreat to at least 2015/2016 levels for it to make sense for me.

    If I were a developer I would definitely be pulling out of the market now to avoid losing my shirt. So many builders/developers lost everything last time. And from what I’m seeing it looks like some are trying to get out now.

  110. 360
    Notme says:

    RE: Rentin’ @ 358

    Deerhawke does god’s work
    tripling the cost of housing
    one teardown at a time

    -a bubble haiku

  111. 361
    Rentin’ says:

    RE: Notme @ 360
    I love your haikus Notme!

    A builder acquaintance of mine mentioned that the property for his projects has been the most expensive part. One of his projects sold this year for 2.5M. He paid 700k for the property. That margin makes those tech salaries with stock options look cute.

  112. 362
    steven says:

    RE: Kary L. Krismer @ 352RE: Eastsider @ 348

    i don’t know what you mean buy normal. We haven’t had a normal market even 10 years ago. great recession was followed by the bubble after dot com crash. If you look at pending/closed sales for the last 18 years we’re not too far from the middle of the pack.

    as for justme’s “imagination” I assure you it’s not an imagination. As much as i disbelieve that guy as he’s just a chronic bear, at this point market has turned. Market RARELY EVER turns toward equilibrium but towards the other extreme. at this pace, most of you are following the market. Market turned 4-5 months ago from the peak and most of realized this a month ago. 4-5 months from now, we’ll have realized that september was already deep in the dive. sales are not down just 27% from last year; if you do sales/inventory the contrast is far heavier. Downtown seattle condo market is diving deep as we speak.

    also the condo vs SFH contrast is i believe partially correct for both of you. Condo has harder time retaining its value in a recession and appreciates later, but not necessarily for downtown area where condos are the only source of housing, and downtown area are usually the quickest to react and the appreciates the most with biggest buffer for depreciation generally.

  113. 363
    steven says:

    also, in these downturning markets, people wait and have lots of room for waiting especially when the rental market is large. You argue there is big potential for millenials. After waiting 5 years, they can wait a little more , and millenials are not necessarily all that hyped up about SFR 30 miles away from their work place anyway. Over flowing apartment supply in the downtown area will suffice their small/starting family just fine. The rent vs mortgage is way too off balance and with appreciating mortgages, they have NO reason to buy at this point. Nobody wants to catch a falling knife; rather, they would rather pay more from the trough and see how the market play out when they have nothing to lose. Interest rates you may argue is the reason they should buy right now, but it’s already at 5.0 and most people have to pay more than 40% on their mortgage/HOA/taxes to get similar rental value especially with the number of apartments getting mass produced.

  114. 364

    By Eastsider @ 356:

    By Kary L. Krismer @ 350:

    If you strip those out for the 2008 and 2012 selling seasons (4/1-9/30) the median dropped from $279k to $230k, although the average and median size was up slightly.

    Do you really believe condo prices dropped from a high of $279k to a low of $230k, or 17.6%? That is funny.

    What’s funny about it? Those are the numbers in the non-distressed market (actually the 2008 possibly includes some distressed because there wasn’t a field for that back then).

    Also, keep in mind there were a lot of distressed condos due to the conversions (and a few new units) in 2005-2007. So they really drug down the total averages.

  115. 365

    By steven @ 362:

    as for justme’s “imagination” I assure you it’s not an imagination. As much as i disbelieve that guy as he’s just a chronic bear, at this point market has turned.

    I’m not saying that the market hasn’t turned, or at a minimum changed. I’m just saying Justme doesn’t have a clue. I’ve listed out multiple factors that could be in play for the changes, but it’s clearly not sellers rushing to the exits, as he’s repeatedly claimed. The stats don’t bear that out. As to buyers, that’s a bit harder to judge because there are not good statistics on number of buyers. But there is no buyer freeze–that’s just complete nonsense. Are there fewer buyers, particularly relative to the increased inventory? Sure. And one reason there are fewer buyers is buyers have been buying. One of the possibilities I mentioned before was that 5 buyers per listing turns to four the next week, turns to 3 the next, etc. But the problem is we really don’t know that number that started at–there are no statsistics.

  116. 366
    steven says:

    RE: Kary L. Krismer @ 365

    i guess u need to define buyer freeze first. we already have more than 3 dormant readers who openly came out to say that they are potential buyers who are going to wait a bit. i dont think i’ve seen that ever in the last couple years

    there is no statistics to show potential buyers on their willingness purchase right now but we can guess from the market atmosphere. that’s from experience. by the time statistics becomes obvious, it’s already too late. Plus, we are already seeing an increase in inventory, increased number of days in market, and mediocre pending/closed sales. you keep focusing on absolute numbers saying that it’s still good for buyers/sellers when in fact you should focus on the momentum of the current market flow. that’s how hilary lost; people underestimated the momentum of the popularity of the candidates.

  117. 367
    steven says:

    RE: Kary L. Krismer @ 365

    and it doesn’t matter if he doesn’t have a clue. he’s right this time on some aspects. even broken clock is right twice a day so why try to argue that he’s wrong again when in fact many of the things are turning in his favor. for the record, he’s already wrong by the timing.

  118. 368
    Market Psychologist says:

    My friend’s dad is advising him to borrow equity in his home to buy an investment property. Is this ever a good idea?

  119. 369
    Matt P says:

    By Kary L. Krismer @ 364:

    By Eastsider @ 356:

    By Kary L. Krismer @ 350:

    If you strip those out for the 2008 and 2012 selling seasons (4/1-9/30) the median dropped from $279k to $230k, although the average and median size was up slightly.

    Do you really believe condo prices dropped from a high of $279k to a low of $230k, or 17.6%? That is funny.

    What’s funny about it? Those are the numbers in the non-distressed market (actually the 2008 possibly includes some distressed because there wasn’t a field for that back then).

    Also, keep in mind there were a lot of distressed condos due to the conversions (and a few new units) in 2005-2007. So they really drug down the total averages.

    Why completely ignore the distressed market? The market is the market. If you cut out the distressed properties, you distort the overall picture – but that’s what you’re aiming for I’m guessing.

  120. 370

    By steven @ 366:

    RE: Kary L. Krismer @ 365

    i guess u need to define buyer freeze first. we already have more than 3 dormant readers who openly came out to say that they are potential buyers who are going to wait a bit. i dont think i’ve seen that ever in the last couple years.

    I would disagree. There have been at least three permabears on the site at any given time, claiming they couldn’t buy at the then existing prices, and mocking the small old houses in Ballard, etc. But again, I’m not saying there are not fewer buyers out there today than a year ago. And I have said that higher interest rates are a factor for buyers, as are higher prices. But that’s a long way from there being a buyer freeze, or anything like say late 2009.

  121. 371
    Eastsider says:

    By Matt P @ 369:

    Why completely ignore the distressed market? The market is the market. If you cut out the distressed properties, you distort the overall picture – but that’s what you’re aiming for I’m guessing.

    Kary is entitled to his opinion. Trouble is, during the crash, many condo HOAs had only distressed sales. I supposed if there had been no ‘normal’ sales during those years, the condo units must have held onto their pre-crash valuations. LOL!

  122. 372

    By steven @ 367:

    RE: Kary L. Krismer @ 365

    and it doesn’t matter if he doesn’t have a clue. he’s right this time on some aspects. even broken clock is right twice a day so why try to argue that he’s wrong again when in fact many of the things are turning in his favor. for the record, he’s already wrong by the timing.

    Because he’s not right. Clearly sellers are not rushing to the exists. He’s just has a story he’s made up and wants to repeat and then tries to claim the statistics support his position. I have my pet theory too, which is that sellers/listing agents overpricing is a large part of what has driven the higher inventory, but I’m not claiming that’s the only factor. Lots of things are at play, and one of the two things Justme is claiming is clearly not right.

  123. 373

    By Eastsider @ 371:

    By Matt P @ 369:

    Why completely ignore the distressed market? The market is the market. If you cut out the distressed properties, you distort the overall picture – but that’s what you’re aiming for I’m guessing.

    Kary is entitled to his opinion. Trouble is, during the crash, many condo HOAs had only distressed sales. I supposed if there had been no ‘normal’ sales during those years, the condo units must have held onto their pre-crash valuations. LOL!

    Yes there were some projects that were recent conversions or new construction that had mainly distressed sales. I mentioned that above when I said:

    Also, keep in mind there were a lot of distressed condos due to the conversions (and a few new units) in 2005-2007. So they really drug down the total averages.

    But as to the overall market the distressed sales in 2012 for King County condos was only about 20% of the market–1163 distressed to 4,619 non-distressed.

    But if you want to look at the entire King County condo market, the median for 2008 was $280,000 (with December being slightly higher!) and 2012 was $199,950 and 2011 being $204,000. That includes all the distressed. Those numbers are higher than the Trulia numbers stated above (shocking that Trulia/Zillow gets something wrong). But it shows even when including the distressed properties the condos held up fairly well.

    What you need to realize is that if you’re selling the value of your property is dependent on whether it is distressed or not, although if you’re in a condo and their are 10 distressed properties for sale, and you’re the only non-distressed, you’re pretty close to distressed too. So for those sellers who were not distressed and their complex was not distressed, the $279k down to $230k is rather accurate.

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

  124. 374
    pfft says:

    By David B. @ 347:

    RE: softwarengineer @ 336

    Tax and spend.

    As opposed to borrow and spend.

    Let me guess: all the stories about Trump’s deficits are fake news. Or maybe the deficits are all Obama’s fault. Or something. Because Orange Julius Caesar and his sycophants by definition can do no wrong.

    I prefer to call him the Big Orange Baby.

  125. 375
    pfft says:

    By Kary L. Krismer @ 372:

    By steven @ 367:

    RE: Kary L. Krismer @ 365

    and it doesn’t matter if he doesn’t have a clue. he’s right this time on some aspects. even broken clock is right twice a day so why try to argue that he’s wrong again when in fact many of the things are turning in his favor. for the record, he’s already wrong by the timing.

    Because he’s not right. Clearly sellers are not rushing to the exists. He’s just has a story he’s made up and wants to repeat and then tries to claim the statistics support his position. I have my pet theory too, which is that sellers/listing agents overpricing is a large part of what has driven the higher inventory, but I’m not claiming that’s the only factor. Lots of things are at play, and one of the two things Justme is claiming is clearly not right.

    They are overpricing only because in a rising market you try to get a little ahead of the market in your pricing. Works in a rising market. Now it isn’t. You aren’t skating anymore to where the puck is going. Sellers missed their mark. The market is turning.

    Your are basically using the not true scotsman argument and applying it to RE.

  126. 376
    pfft says:

    During up markets we have panic buying and during down markets we have distressed sales. It evens out.

  127. 377
    pfft says:

    By Kary L. Krismer @ 340:

    And here’s an update on the UW study. If you ignore the spin of the article, it basically breaks out which groups benefited from the minimum wage, which basically broke even (same earnings but fewer hours worked), and which suffered. And keep in mind this was all during a period of time when the economy was doing well, so you’d expect wages to be rising.

    https://www.nytimes.com/2018/10/22/business/economy/seattle-minimum-wage-study.html

    But OMG, still not peer-reviewed!

    You act like peer-review is nothing. Don’t forget a new method that produced outlier results and also used data not released to the public. I am sure everything is fine though.

    You would get laughed out of a baseball conference like that.

    “And keep in mind this was all during a period of time when the economy was doing well, so you’d expect wages to be rising.”

    Even with the city council running things? So now your new position is this? LOL? Moving them goalposts. I thought the min wage kary was supposed to lower wages?

    The study is trash. Berkeley showed that.

  128. 378
    David B. says:

    By Kary L. Krismer @ 355:

    By David B. @ 347:

    RE: softwarengineer @ 336

    Tax and spend.

    As opposed to borrow and spend.

    Both the parties are borrow and spend, or at least deficit spend, and the only thing that will change that is a very hot economy–as happened during one or more of the Clinton years.

    The Trumpist GOP, however, is particularly bad, running huge deficits during a recovery when the rest of the world is paying its public debts down.

    https://www.cato.org/blog/us-only-country-projected-rising-government-debt-gdp-ratio-through-2023

  129. 379
    Deerhawke says:

    RE: Matt P @ 342

    I don’t think you’re factoring in rising interest rates and reverse QE enough. The two things that inflated the bubble are now going in the opposite direction.
    ____________________

    Reverse QE is a substantial factor but the US continues to be a safe harbor and we continue to have strong capital inflows. I don’t think overall liquidity is a problem. In fact, interest rate increases are making the US all the more of a draw.

    Interest rates are a more immediate factor. People are still comparing current rates to rates in 2017 and there is a bit of natural sticker shock. But by any normal historical standard, interest rates are still really quite low. These are the rates my parents borrowed at in 1958.

    Anyone who lived through the Volcker years in the late 1970’s saw those 1950’s fixed interest rates as the great golden age of postwar housing. People now take them for granted.

    It will take a while for people to get it, but at some point they will tumble to the realization that a 1/4 or 1/2 point rise in interest rates is far more important to them over the long term than a $20,000 drop in the asset price.

    Remember that beyond a certain point, asset prices are really, really sticky in a downward direction.

    Some sellers won’t sell at a loss, but many more simply can’t sell at a loss.

    Sellers have a range of options, just as buyers do. They look at the current prices and selling environment and decide that they might as well not sell. Maybe they will remodel, especially given the rise in interest rates on that new property they were hoping to buy. Maybe they will rent their place out.

    There is a guy in my area who was looking to sell his rental houses. He got the tenants out of two of them last fall and remodeled. They sold in February and March for much more than he expected. He was elated and had two more that he planned to remodel this fall and sell in the spring. But those plans are now on hold. He had given the tenants advance warning, but then let them stay on at the current rent. He is not sure what he is going to do and has a range of maybes in mind. Maybe I will just hold them longer term. Maybe I will get a property management company so I can spend more time traveling and at the place in Scottsdale. Maybe I will see if this new HALA thing happens so I can turn them into triplexes. Maybe I will just wait out the downturn and sell later.

    By spring we will start to see who wants to sell and who needs to sell. A lot of people letting their listings expire now will have to reassess which group they fall into.

  130. 380

    By Eastsider @ 348:

    RE: steven @ 346 – We have not had a normal market in the last 10 years. Sales volume has never recovered. If you adjust for population and households, the market has been in depression since the crash.

    I would agree with this as to the raw numbers, but that can have some causes that are totally benign. One would be that older people are purposefully holding onto their homes longer and not downsizing, perhaps because they’re working longer or just because they like their neighborhood and house. Or maybe rather than relocating after retirement they are more likely to become snowbirds and hold onto their home here. Also one change I’ve noticed that probably resulted from the downturn, few buyers are buying with the stated intention that the house they buy will be a stepping stone to a later purchase only a 3-4 years down the road. Basically there was a lot of “churn” in the market prior to 2007.

    Of course there are non-benign causes of that too. Most recently that there wasn’t enough inventory to make buying easy if someone did want to downsize. What it hasn’t been is financing related, unless you want to consider student loan debt financing related.

  131. 381
  132. 382
    Deerhawke says:

    By N @ 357:

    By Deerhawke @ 335:

    We are potential buyers who have wanted to buy and each year want to buy a little more but experienced 2008 and being underwater. Honestly, at this point for us, until a monthly mortgage payments gets somewhat in line with rents it’s not worth it to us. Would probably pay 20% more a month but no more and right now it’s more like 40-50% more than rents on comparable properties. Interest rates are definitely a factor here.

    I would caution you to remember that both sides of the equation adjust. Prices and rents.

    Prices may be coming down a bit, but rents are stable and basically flat– for the near term.

    But the banks are already reining in the guys who want to keep on building all these apartments. And those guys are all acting as a herd turning them into condos anyway. (Which is such a good idea– for the lawyers that is.)

    So at some point in a year or two (maybe three), rents in the area will go up again. And instead of being an extra $25 or $50 per month, it will suddenly be an additional $300. The increases will be fairly substantial because they have a few years of additional taxes (yes, which renters also voted for) and lost time to make up for.

    Of course it will be on the front page in the papers and the landlords will be made to look like complete monsters.

    But really this is all very cyclical and if you have been through the cycles, you will know to look for the signs.

    I am sure you have read it, but take another look at the Seattle Times article.
    https://www.seattletimes.com/business/real-estate/hoping-for-seattle-area-rents-to-get-cheap-dont-hold-your-breath/

    The biggest problem with this article is that it looks at average rents. But during this time the average apartment was getting smaller and smaller.

    In 1997, the average apartment was probably a small 2-bedroom or at least a spacious 1 bedroom with a study area or nook. Over time, two bedroom units practically disappeared. One bedroom units went from 650-750 sf down to 550 sf and a lot more studios were being built. And then we had Apodments of about 120 sf and their replacement SEDUs (Small Efficiency Dwelling Units) of about 240 sf. This is not a small part of the mix since about 1000 to 1200 of these units were permitted each year for the last 3 years.

    So to put it in a nutshell, Seattle renters have been paying more over time but getting a lot less. If you redrew the Seattle Times chart of rental rates on the basis of square footage rented, the curve would be twice as steep.

  133. 383

    RE: Eastsider @ 331
    Yes Eastsider

    The Bubbleheads came up with a good reason why too and I totally agree too, from experiencing my own inept HOA. The condo HOAs spend too much fixing unimportant cost items and way too little on the really important stuff…like sealing and rotting. Then it becomes a rundown apartment house, next a homeless abandoned shelter?

  134. 384

    If You Have a Mortgage Payment Your Escrow Just Paid the Second Half of Your King County Property Tax for 2018

    I have the deed so mailed my 2nd half a few days ago….lordy, the check was bigger than two payments a few years ago.

    And prices are going down too?

  135. 385

    RE: David B. @ 347
    Trump’s Deficits Went Into the Underfunded Military and Obama’s Health Care Mess

    No Equitable Adjustments welfare to the banks like Obama….no comparison. Obama’s rally yesterday would fill a gas station ….Trump’s was 100,00 in Texas….Superbowl sized.

    You can’t give Obama credit for today’s economic growth without equitable adjustments welfare to the banks, Trumps’ lower taxes alone did it.

  136. 386

    More S/W Tech Junk News to Worry About…LOL

    Hey, this morning my McAfee told me don’t enter that website, I didn’t, then [McAfee sent???] a bogus box appeared telling me my Windows Security was dead unless I paid the crime lords their protection money….LOL…I hard booted it with the power off button after my computer froze…good as new. McAfee reports clean computer too…more phony BS from our crime lord ITs?

    Now its the new Chinese computer watches’ S/W won’t run….LOL, the fun goes on and on ;-)

    https://www.androidpolice.com/2018/10/23/latest-messages-3-7-update-crashing-constantly-wear-os-watches/?bt_alias=eyJ1c2VySWQiOiAiMDI1M2VmOWItMWEwZC00OWI1LWEyOTAtMWM1NWQwM2Y5NjM0In0%3D

  137. 387

    RE: Deerhawke @ 379
    Yes Deerhawke

    The Equitable Adjustment elimination cannot be ignored when comparing Trump’s deficit to Obama’s….Apples and oranges….

  138. 388

    Auto Sales Declines Were Worse Than 2018

    But still they’re down to like October 2018 production levels of 17,000,000 units. It was worse during the Obama economy, 16,000,000 units/yr. I see Toyota is declining at sales at like 25% in Kansas City….top of the list of declining companies in America. Its called obsolete Obama CAFE standards causing “unsafe” pea sized cars for ridiculous prices that no one likes….ask Ford/GM about their sedans being eliminated to replace ’em with those ugly “15 year old Dodge Caliber slugs designs” [with no locking trunk or worse yet, a hybrid trunk full of batteries]…compact utility vehicles with no trunk for twice or three times the price of a Caliber too…LOL…we drink like fish in Seattle now, where do we lock the empties so we can drive home? Where do we lock Christmas Presents out of sight with no trunk in mall parking lots where window smash/break thefts continuously occur now? How can we bring our pipes and legal 21 open bags home with no locking trunk. I see DUIs rising, at a theater near you. Don’t get stopped by a cop in your new wonderful CRV transporting the evidence…LOL

    Do automobile CEOs think were all brainless sheep? No one brags about their new ugly slugs anymore, have you noticed?

    https://www.cnbc.com/2018/10/23/auto-dealerships-see-sharp-decline-in-sales-in-october.html

  139. 389
    N says:

    @Deerhawke 382 – Certainly that’s the bull scenario.

    I’ve said this long before the market change the last few months, and that is unless wages march up from here it’s hard to see much sustained price growth. I would bet a top 3 reason for this current market change is affordability.

    And projecting going back to $300/yr rent increases in 2-3 years (equates to double digit increases on an average rental) seems bullish. Especially considering the record breaking inventory coming on line. But the more the job mix changes from blue collar to six figure tech jobs the more it could become a reality, and if the market holds and goes up from here that’s another plus.

    Plenty of question marks, but then again there always are.

  140. 390
    Matt P says:

    Some people are still delusional: bid up from $480k to $600k in 2016, now listed for $900k but only with approved plans for the new home and no pictures of what’s currently there.

    https://www.redfin.com/WA/Bellevue/3722-146th-Ave-SE-98006/home/234521

  141. 391
    Eastsider says:

    RE: Deerhawke @ 382RE: N @ 389

    I doubt the 6-7% annual rent growth can continue much longer. About half of Seattle renters spend over 30% of income on rents, which is considered rent burdened. Perhaps rents have more room to grow until we are as expensive as New York city and San Francisco. By then Seattle will be more of a transient city than a hometown for its residents. Here is a sobering report for those believing rent will only go higher –

    Seattle ‘out of reach’ for many as new report details the big salary needed to afford a small apartment
    https://www.geekwire.com/2018/seattle-reach-many-new-report-details-big-salary-needed-afford-small-apartment/

  142. 392

    By Matt P @ 390:

    Some people are still delusional: bid up from $480k to $600k in 2016, now listed for $900k but only with approved plans for the new home and no pictures of what’s currently there.

    https://www.redfin.com/WA/Bellevue/3722-146th-Ave-SE-98006/home/234521

    A lot of people are delusional. There are a lot of them living in the local area I follow. It’s part of the reason I focus so much on pricing too high, because I see so much of it!

  143. 393
    N says:

    Some interesting tidbits, some of which like the idea a shorter time period needed to sell a home has been discussed on this forum recently.

    https://wolfstreet.com/2018/10/19/us-housing-turns-into-buyers-market/

    “Technology has permanently taken two months off the time required to sell a home,” Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting, wrote last year

    Hence, according to Palacios, “roughly 4 months of supply is the new buyer/seller equilibrium.”

    Under this scenario, the unsold inventory of 4.4 months’ supply in September is now a buyers’ market.

    Palacios explains:
    If we’re right, nationally we’ve already entered the early stages of a buyer’s market. Should supply levels cross above five months we’ll be watching for flat, possibly declining resale prices in some markets, especially where affordability is already very stretched.

    But whatever there is, there is no shortage of supply, though there is, after years of rampant home-price inflation, a shortage of affordable supply. But that mismatch can be fixed by a drawn-out housing downturn.

  144. 394

    RE: N @ 393 – Isn’t that just reporting the same news as before? It’s largely BS, unless maybe they’re talking about sometime before 2007. Loans are not necessarily that much faster, and automated anything is complete BS. Some person is going to look at it at some point and make a final decision.

    Before I commented on the claim that things get to escrow faster, asking WTF they were talking about. No one responded with any ideas. Anyone now?

  145. 395
    randomseattledummie says:

    RE: Market Psychologist @ 368

    To answer your question of is this “ever” a good idea? 2012 called, the answer is yes.

    A better question would be if it is a good time to do it now. Being that I lack a crystal ball the best answer I could give is ¯\_(ツ)_/¯

  146. 396

    RE: N @ 393

    You don’t need a drawn out housing downturn. Just a drawn out negotiation on each house. A buyer’s market is not merely about a number of months of inventory. A buyer can still pay a seller’s market price in a buyer’s market and a buyer can at this time work a buyer’s market kind of deal on any given house. As long as there is only one buyer in the room…and a seller who wants to sell…anything is possible. It isn’t possible if there is a second buyer waiting in the wings to replace the first buyer…which is where we have been for about three years prior to June 2018. So we are already in a buyer’s market, depending on the buyer, the seller, and the house.

    No reason to argue about how many months of inventory. If there is more than one buyer then the seller has more control. If not…then not.

  147. 397
    S-Crow says:

    RE: Kary L. Krismer @ 394 – Things are not faster. Even cash transactions take time. With the major regulatory changes enacted after the housing collapse such as the new Closing Disclosures along with the idea of lenders being required to provide the CD three days prior to borrowers signing their closing and loans docs, it led many to believe it would save so much time and escrow would get loan docs at that time. Nope. We still get loan docs the day of or day before we are to close and record. For refi’s it’s a great day if we get loan docs well before the last possible day a borrower can sign due to rescission dates. But that’s normal. It’s always been that way. So, “Streamlining “the “process”whatever the hell that is supposed to mean has been the rhetoric we’ve been hearing ever since I’ve been in the housing space.

    On closing in a few days:

    When I hear the big companies or lenders talk about closing in just a few days I just roll my eyes because they have a very narrow view of what takes place to close a transaction. There are so many moving parts to a transaction. I’d love to take the executive staff at some of these Seattle based real estate or real estate “media” companies and put them through the paces transactionally. We are a long way off. You would need to have the adoption of regulations across multiple industries from Gov’t GSE’s, to lending under the umbrella of CFPB, FHA/VA/ HUD in general down to EVERY single municipality/County in America adopting and enacting AND having the technology infratructure to handle the ability to accept eRecordings and digital signatures (which has it’s own problems). Do people even know what classic Abstracting even is? Most agents have never even heard of that word. People think doing Title work is just hitting a green button and all the information is available like magic. And it’s all accurate and mistakes are not made. It’s not. Outside of all the accounting, much of escrow’s job is tracking down information and in many cases using years of experience to find people that are central to a required document and that means being almost like a personal investigator. Transactions can be routine which take time to incredibly complex with numerous hurdles to jump.

    In fact most agents and LO’s (unless they are former recovering LPO’s or seasoned escrow officers and there are a few out there!) still have a foggy view of what eRecord means. Most believe it’s just an automatic scan of docs over to Title and they sent it through their eRecording software they use to sent it onward to the County. Totally false. Genuine blue ink signed original Deeds and recording orders are handed over to Title in person (or the TDS service escrow uses to deliver them) which are subsequently reviewed by humans before being scanned into the eRecord software. From there most think it’s a done deal– which always cracks me up when I get a call asking if it’s closed yet within 10 minutes of release to record. Wrong. The eRecord doc’s are reviewed by humans again (with some files being rejected for a variety of issues) at the County level and excise dept staff.

    If I know it’s a busy day at end of month or there is some urgent reason to do so…..guess what I do when we have a “must close” purchase or a Simultaneous close. I walk it on personally at the County because IT’S FASTER! I’m not getting in line behind 150 eRecord purchases. Only an insider would know what to do but the end result is the client’s transaction is closed but they have no idea what we did behind the scenes to get it done. Oh, and if eRecord goes down? And it has. Ouch.

  148. 398
    pfft says:

    By David B. @ 378:

    By Kary L. Krismer @ 355:

    By David B. @ 347:

    RE: softwarengineer @ 336

    Tax and spend.

    As opposed to borrow and spend.

    Both the parties are borrow and spend, or at least deficit spend, and the only thing that will change that is a very hot economy–as happened during one or more of the Clinton years.

    The Trumpist GOP, however, is particularly bad, running huge deficits during a recovery when the rest of the world is paying its public debts down.

    https://www.cato.org/blog/us-only-country-projected-rising-government-debt-gdp-ratio-through-2023

    fake news from a liberal source.

  149. 399

    RE: S-Crow @ 397 – Thank you for that report. I’ve certainly not noticed anything speed up in the 12 years I’ve been an agent. Sometimes things go fast and sometimes not, but there’s a lot of moving pieces. As I mentioned before, a couple of years ago the weak link was getting the appraisal timely.

    But shock of all shock! Not everything you read is accurate! What will happen though is more and more news reports will pick up this “story” and more and more people will believe the nonsense. The press in general sucks when it comes to accuracy or even understanding what they are reporting. My favorite two examples of that are:

    1. Consumer reports having a chef write their report on generators. He doesn’t understand even the basics and for example thinks you need to have a 5,000 watt 220 volt generator to use a transfer switch. He also doesn’t seem to understand the advantages of an inverter generator, beyond noise and fuel consumption, only the latter of which is really a benefit of inverter generators.

    2. About a year ago someone posted something on YouTube or a similar site, claiming to have found a security flaw in the Amazon Exclusive phones. What they actually discovered was an optional feature of Motorola phones where you can set it to not immediately lock when the screen goes blank. I recognized that within about 30 seconds of hearing of the issue, but about 12 tech sites picked it up as news. Only one or two retracted the story.

  150. 400

    RE: Ardell DellaLoggia @ 396 – I would put that slightly differently, although the number of buyers interested is a factor. The way I would put it though is that all these averages we deal in (price, days on market, number of offers, etc.) are just that, averages. On any given transaction the actual outcome can vary widely, with buyers sometimes doing well in a seller’s market and visa versa.

    One of the examples I’ve given in another context was a listing near one of mine where a superior house sold for less than mine because the listing agent priced too low. He/she reportedly got something like 40-50 offers, where I got 4 or 5, but the buyer of the other listing ended up with a lower price on a better property.

    (The “other context” of that was looking at it from the seller’s side and pointing out that there are dangers to pricing either too high or too low.)

  151. 401

    RE: Kary L. Krismer @ 399
    Generators are a Good Example

    All Homes need emergency power sources….but price ’em first….the Honda Model is 10 times the price of a Heartland America generic with the same watts. Is the Honda much quieter? Are parts hard to get [albeit why fix a $200 cheap HA generator anyway, just buy another one?]. No one has a handle on these questions at all.

    Brainless sheep burning money for no reason?…LOL

  152. 402
    Market Psychologist says:

    RE: randomseattledummie @ 395 – Yea, that’s what I was thinking. He bought in 2012, so he has beaucoup “equity” right now. But to borrow against it now?!

  153. 403

    Chinese Teach Math and Science Better Than Seattle Public Schools?

    There is a silver lining to Seattle though, at least we aren’t including in the school supply necessities “military weapons”…what are these devils teaching the kids anyway?

    https://www.afp.com/en/news/717/inside-chinas-internment-camps-tear-gas-tasers-and-textbooks-doc-1a73p63

  154. 404
    Market Psychologist says:

    RE: Kary L. Krismer @ 370 – And that fact that this is happening nationally (and internationally)? Just a bunch of random SBB “permabears” skewing the numbers? You love the trees, but are lost in the forest.

  155. 405

    My Gosh, the News Today is a Mess Today

    Invading hoards, box bomb probes and lowering home prices…

    We need to cheer up a bit. Bubbleheads, here’s a somewhat funny Halloween story from Michigan. Now its Racism against CLOWNS too? LOL

    https://www.ksat.com/news/no-clowns-allowed-michigan-city-bans-clowns-on-halloween

  156. 406

    By Market Psychologist @ 404:

    RE: Kary L. Krismer @ 370 – And that fact that this is happening nationally (and internationally)? Just a bunch of random SBB “permabears” skewing the numbers? You love the trees, but are lost in the forest.

    You’re missing what I’m saying entirely. I’m saying the opinions of the Permabears are worthless because they always say the same thing and try to force the facts into supporting their opinions, rather than looking at the facts and trying to determine what is happening. Again a week or so ago I listed off 5-10 things that could be causing our market to be reacting the way it is. The issue isn’t denying that something is happening, but having a some idea what is happening. Justme doesn’t have an F’n clue what is going on, but that doesn’t stop him from repeating the same nonsense over and over and over, and eventually some believe him. It’s similar to the partisan nonsense repeated over and over by politicians.

  157. 407

    RE: Kary L. Krismer @ 406 – BTW, this is the post I was referring to regarding multiple factors at play. It was from the multi-county data thread. Wreckingbull after that suggested buyer weariness as an additional factor, which is likely true too.

    By Kary L. Krismer @ 67:

    Recent comments have caused me to want to create a list of the many things that are likely affecting this market. While I have my pet issue (sellers/agent overpricing), I’ve never claimed that’s the only factor as some people claim with their pet factors. So here’s a go. Feel free to add items I might have missed.

    First, let’s look at the reduction in the number of multiple offer situations. We seemingly went quickly from a situation of multiple offers the first week being rather typical to many properties staying on the market longer than a week. Unfortunately, we never really had good data on the number of multiple offers, just random reporting of questionable data (e.g. do you have four offers or two when two are $50,000 over list and two are $50,000 under list or without approval letters, etc.). But where did those buyers go? It’s possible they bought houses. Maybe week one the average multiple offer number was four buyers, the next week three, the next week two, etc. Perhaps some of those multiple offers were due to buyers unethically making offers on more than one property at a time. Or it’s possible some dropped out due to rising interest rates. While interest rates covered separately, how likely is it that someone willing to get into bidding wars is likely to drop out entirely over somewhat modest increases in interest rates? There’s also HQ2, which could impact Amazon employees who have not yet bought a house. Maybe they want to see what their options will be before committing to buying, particularly the newer employees who are maybe finding it difficult to find friends in Seattle. Perhaps more widely available downtown apartments are keeping people away from buying. While apartments are not a perfect substitute for a house, if you’re younger and don’t have kids then living in an urban environment is pretty nice. Finally, there’s also the fact that Seattle isn’t as “nice” as it once was. Homelessness, lots of bad press about Seattle’s government, smoke filled summers, traffic, etc. Perhaps a lot of people don’t like the direction the area is moving and don’t want to commit long term.

    Sellers/Agents pricing too high. Since this is my pet theory I won’t say a lot about it. But suffice it to say buyers won’t pay whatever a seller asks, and if the seller asks too much perhaps no one will make an offer. That leads to price reductions, longer time on market and rising inventory.

    Rising interest rates. Clearly this affects what some buyers can pay, effectively driving them out of the market, and it also impacts what most buyers are willing to pay. And this connects in with the pricing too high issue—even pricing at the same price as two month’s prior might be too high for some markets. On the other hand, fear interest rates might rise further could get some buyers to jump. Overall though, this is almost certainly mainly negative.

    Rising taxes. Basically the same analysis as the interest rates, but a double whammy at the same time.

    Smoky summers. Mentioned above, this undoubtedly had a significant impact on view properties, and went on long enough it could even have impacted bot the volume and mix of properties sold in September. But as to the value of a view, how do you assess what you can’t see? And this being the second year in a row, is that view now worth as much? If you own a view property does it make you more likely to want to sell? If you work for Amazon does it make you more likely to want to go to wherever HQ2 will be since that area might be less polluted? Bottom line the pollution is clearly negative and goes beyond just views to health concerns.

    More sellers due to higher prices. This just seems logical. Unfortunately, those who are likely to sell due to higher prices are probably also more likely to price too high. Or perhaps they aren’t even that interested in selling, but willing to move if the price is right. And of course, some might be trying to time the market. Clearly this leads to more listings, and given the shortages that is good, unless the market overreacts.

    Fewer foreign buyers. Like multiple buyers, we really don’t have good data on this. We do though have exchange rate data, and at least some currencies (e.g. China’s) are going the wrong direction for house purchases here, making the effective price higher.

  158. 408

    RE: Kary L. Krismer @ 407
    Great List Kary

    Its definitely multi-factorial.

    I’d add the embarrassing one too….Seattle is like on top of the list for hopeless HOMELESSNESS.

    https://www.infowars.com/more-than-half-a-million-people-americas-homelessness-crisis-is-rapidly-exploding-on-both-coasts/

  159. 409

    This is a public service announcement!

    I think the VA has been cracking down on this, but vets used to get hit with solicitations for refinancing. I’ve been working through undoing two VA refinance transactions to prepare for a sale, but not only were the terms likely questionable, both transactions actually managed to mess up the paperwork in a manner that impacted title in a completely unnecessary way. It’s sad how these companies target vets, but again, seemingly the VA is cracking down. The entity that was involved with these two transactions has reportedly been barred from doing future VA loans, but I don’t know that they had to give up any of their ill-gotten gains.

  160. 410
    Notme says:

    Not a buyer strike
    just unwilling to pay price
    totally dif’rent

    -a clear-as-ink parody bubble haiku

  161. 411

    By Notme @ 410:

    Not a buyer strike
    just unwilling to pay price
    totally dif’rent

    -a clear-as-ink bubble haiku

    I like these, but it is different. A buyer strike would be when they were unwilling to make an offer on any property, not just the overpriced properties.

    What we had was a buyer frenzy, where some buyers were willing to overpay on reasonably priced properties. That was abnormal. It’s not clear the current market is abnormal on the buyer side.

  162. 412
    Notme says:

    Is a workers strike
    when won’t work for any wage?
    I do not think so

    -a some-people-trying-to-redefine-buyer-strike bubble haiku

  163. 413
    Matt P says:

    Amazon continues to drop in share price. That certainly won’t help house sales.

  164. 414

    RE: Kary L. Krismer @ 409
    American Mortgage Commercials Push 2nd Mortgages on Vets Like Free Halloween Candy

    They make it sound so easy [like Rocket Mortgage]…just push a button on your handy iPhone and you’re automatically approved to close. Quite the opposite of the reality you have detailed.

    The small print is impossible to read on American Mortgage ads to vets, but Washington State prohibits some of this snake oil sales…maybe you know if its even possible…but who wants it possible anyway?

  165. 415
    Greg says:

    By softwarengineer @ 385:

    RE: David B. @ 347
    Trump’s Deficits Went Into the Underfunded Military and Obama’s Health Care Mess

    No Equitable Adjustments welfare to the banks like Obama….no comparison. Obama’s rally yesterday would fill a gas station ….Trump’s was 100,00 in Texas….Superbowl sized.

    You can’t give Obama credit for today’s economic growth without equitable adjustments welfare to the banks, Trumps’ lower taxes alone did it.

    You can’t find the slightest bit of proof to back up your attention seeking nonsense.

    You are all mouth no trousers.

  166. 416
    ess says:

    RE: Deerhawke @ 382
    So to put it in a nutshell, Seattle renters have been paying more over time but getting a lot less

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

    This may be true – but look on the bright side. For all that rent for that tiny little place – those renters are getting the use of a few machines in an exercise room that they probably won’t use, rather than a full gym facility for 30 -40 dollars a month down the street! What a deal!

  167. 417
    ess says:

    RE: Kary L. Krismer @ 406

    Rising interest rates. Clearly this affects what some buyers can pay, effectively driving them out of the market, and it also impacts what most buyers are willing to pay. And this connects in with the pricing too high issue—even pricing at the same price as two month’s prior might be too high for some markets. On the other hand, fear interest rates might rise further could get some buyers to jump. Overall though, this is almost certainly mainly negative.

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

    Which is interesting, because in a historical context – “rising interest rates” of five percent or so for most individuals in past decades would have been considered a financing coup.

  168. 418
    Justme says:

    RE: ess @ 417

    >>Which is interesting, because in a historical context – “rising interest rates” of five percent or so for most individuals in past decades would have been considered a financing coup.

    We shouldn’t ignore that price-to-income ratio also was much more favorable in “past decades”. Price matters, unless you are in a delusional panic-buying mode. Well, actually, even then it matters. It’s just that so many people have not figured it out quite yet.

  169. 419

    By ess @ 417:

    RE: Kary L. Krismer @ 406

    Rising interest rates. Clearly this affects what some buyers can pay, effectively driving them out of the market, and it also impacts what most buyers are willing to pay. And this connects in with the pricing too high issue—even pricing at the same price as two month’s prior might be too high for some markets. On the other hand, fear interest rates might rise further could get some buyers to jump. Overall though, this is almost certainly mainly negative.

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

    Which is interesting, because in a historical context – “rising interest rates” of five percent or so for most individuals in past decades would have been considered a financing coup.

    Yes, but the marginal change is up, and people have very short memories.

    Just think how minimal the change is on a typical car purchase, but it’s probably affecting cars too.

  170. 420

    By Justme @ 418:

    Price matters, unless you are in a delusional panic-buying mode. Well, actually, even then it matters. It’s just that so many people have not figured it out quite yet.

    The one time it shouldn’t matter (as much) is if the house has some feature or characteristic you need which is difficult to find. Then it might be worth over market to you, assuming you’re possibly the only one terribly interested in that feature.

    I can’t think of a good house example to share, so I’ll use an analogy. I can only remember that I had two of my Chapter 7 bankruptcy clients reaffirm a car loan in bankruptcy (where they again become liable on the debt). I advised most to just keep paying on the car loan to keep the car, which was possible back then if they weren’t delinquent. If they got into trouble or simply wanted to give up the car, they’d be free to do that if they didn’t reaffirm.

    One of the two exceptions was a van that had been outfitted for the debtors’ disabled son. Absent reaffirmation the van would have been more at risk of repossession–even a day late could have triggered repossession. So it wasn’t worth the risk, even though they probably owed more on the van than it was worth.

  171. 421

    Old topic–that high rise in Seattle that had to be torn down because it was improperly constructed. Well the new building is apparently finished. Search on Google Maps for 2nd and Wall Street in Seattle and then check out the Street Views going back to 2007. Building, vacant lot, building. And the aerial still shows a hole in the ground.

    Here’s a link to the Seattle Times’ story about it back in the day. https://www.seattletimes.com/seattle-news/9-year-old-belltown-high-rise-too-flawed-to-fix/

  172. 422
    ess says:

    RE: Kary L. Krismer @ 421

    Wonder what the litigation costs of that fiasco will be. A lawyers billing paradise!

  173. 423

    RE: ess @ 422 – I think it’s past-tense at this point, but yep, unless an insurance company stepped up and paid for its insured’s obvious error–rather unlikely.

    What’s sad about the situation is if nine subcontractors were sued, probably at least seven of them were not at fault, but still having to deal with it and pay their attorneys.

  174. 424

    China and Japan Teaming Up to Replace All Humans With Robots in Large Restaurant Chain in News Today

    https://www.bloombergquint.com/pursuits/robots-serving-spicy-soup-is-key-to-hotpot-chain-s-expansion

    Why do we need the $15/hr minimum wage in Seattle now? Assuming the robots take all the restaurant jobs soon, Seattle’s main life blood for local jobs is drained?

  175. 425
  176. 426
    Deerhawke says:

    By N @ 389:

    @Deerhawke 382 – Certainly that’s the bull scenario.

    I’ve said this long before the market change the last few months, and that is unless wages march up from here it’s hard to see much sustained price growth. I would bet a top 3 reason for this current market change is affordability.

    And projecting going back to $300/yr rent increases in 2-3 years (equates to double digit increases on an average rental) seems bullish. Especially considering the record breaking inventory coming on line. But the more the job mix changes from blue collar to six figure tech jobs the more it could become a reality, and if the market holds and goes up from here that’s another plus.

    Plenty of question marks, but then again there always are.

    The market adjusts. It always does. Not necessarily in ways we first suppose. Not necessarily on a timeline we are able to predict with any certainty. But it adjusts.

    You say it is hard to see a growth in rents without a growth in incomes. Similarly, it is hard to imagine how most landlords are going to deal with flat rents coupled with rising costs.

    Maintenance costs are rising because construction costs are rising.

    People want low rents but have certain elevated expectations of what they will get. (“What is this? Carpet? White appliances? Formica? Are you kidding me? I have never lived in a place without hardwood floors, stainless appliances and quartz countertops!)

    The property tax hikes after McCleary really was a wake up call for many. (It is probably one of the reasons for the bump in inventory this spring.) Now we have another substantial education levy that is on the ballot. And there are other levies being proposed and are in the preparation stage. Transportation, infrastructure, education, parks, homelessness services, public housing, etc. etc.

    Don’t get me wrong. I think most of these things that we are raising taxes for are things we need. Taxes are the price we pay to live in a civilized urban society.

    Putting this together, at some point if landlords aren’t making any money on their rentals or seeing the prospect of substantial appreciation (or some combination of the two), why be in this business? They can make other choices. The big apartment builders are already putting on the breaks (or their investors and banks are). Lots of projects are being turned into condos. The smaller/medium size apartment owners are starting to look hard at condo conversion. The Mom and Pop landlords who own a few single family houses will eventually sell them off. A lot of people (especially Asians) who have been buying up single family houses to rent them out (mainly as a bet on appreciation) will stop.

    And on the demand side, people will continue to come into the area because the jobs are here. Some will buy. A lot will have to rent.

    The flat spots in the rental market don’t last forever. Eventually the market stabilizes. Then rents will creep up a bit. And then rents will spike.

    The politicians will pander. (Omigosh, rents have gone up X percent in the past two years! This is totally unacceptable! We need rent control!) Of course, they will not want to talk about how things look over 5 or 6 years because that dilutes their narrative.

    Over time the slope of the curve that you see in the Times piece will reassert itself.

    Let’s face it. Over time, affordability has dropped since the 70’s. Over time, you see people paying more in rent and getting less square footage. Or they get a longer and less predictable commute.

    From a societal perspective, I would love to see that pattern change, but I don’t see how it is going to happen.

  177. 427

    RE: softwarengineer @ 424 – Just make sure you tip the robots! https://www.imdb.com/title/tt6803124/?ref_=ttep_ep7

    And totally unrelated, but I would also highly recommend “The Lost Art of Forehead Sweat” episode too.

  178. 428

    By Deerhawke @ 426:

    The property tax hikes after McCleary really was a wake up call for many. (It is probably one of the reasons for the bump in inventory this spring.)

    I mentioned increased taxes as a deterrent for buyers, but interesting thought applying it as motivation for sellers. Given the press covered one person who claimed to be selling for that reason, the number is likely at least 1. But given the fact the number of new SFR listings in King County has only increased by 1,623 YTD through the end of September (27,187 v. 26,187 or roughly 6.2%) and that difference result is possibly overstated due to increased cancelations and relisting YOY, increased taxes could in fact be the major reason for the slight bump up in new listings.

    (Note I’m not talking about the number of active listings–new listings.)

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

  179. 429

    RE: softwarengineer @ 425
    I Have No Idea Why Tim’s S/W Website Turned My Blog to All Blue URL Print

    I hope this test works normal again…LOL

  180. 430

    Remember That 5G Cell Tower Safety Engineering Article From About a Week Ago?

    The EMF coming from a 5G cell emitter is the same type the DOD uses for stunning humans in crowd control….not something you want near your home purchase….health effects, yes. Well its being grandstanded now as the new AI wonder technology to be installed everywhere to astound us all at the high tech Ringling Brothers’ Circus…we’re doomed….LOL

    https://contrarianfinance.com/5g-super-cycle/?eid=MKT385319&src=Yahoo

  181. 431

    RE: Greg @ 415
    LOL Greg

    First off where’s your proof the Obama economy with equitable adjustments [welfare to banks] debt is a good long term plan for America? Socialism IOWs….from your Venezuelan Mother Goose Fairy Tale Book? Did ya hear Greg, the Venezuelan women refugees are going into prostitution for food now, in today’s news? Tax and spend our way into prostitution for a career?

    https://www.yahoo.com/news/venezuelan-exiles-turn-prostitution-feed-families-030843061.html

    Venezuela compared to those “healthy [some fat] Central Americans Caravan” as an asylum excuse is 100 times worse than Central America. My Latina friend has family in Venezuela and she fears they’ll all starve to death soon. She was crying about it on the phone with me…I told her I’d have my church pray for them.

  182. 432
    ess says:

    RE: softwarengineer @ 425

    True – but interest rates, along with money markets, CDs and short term bond funds are yielding higher interest rates than before, and are finally producing some income for savers. I noticed one large money market fund increased its yield from under half a percent to over two percent in less than a year. That is a substantial increase for savers.

  183. 433
    Brian says:

    By Deerhawke @ 426:

    Let’s face it. Over time, affordability has dropped since the 70’s. Over time, you see people paying more in rent and getting less square footage. Or they get a longer and less predictable commute.

    You know what else has been dropping since the 70s? Bond and mortgage rates. That allowed people to afford a higher price house than they used to. Now rates are finally increasing. Bad sign.

  184. 434
    redmondjp says:

    By Brian @ 433:

    By Deerhawke @ 426:

    Let’s face it. Over time, affordability has dropped since the 70’s. Over time, you see people paying more in rent and getting less square footage. Or they get a longer and less predictable commute.

    You know what else has been dropping since the 70s? Bond and mortgage rates. That allowed people to afford a higher price house than they used to. Now rates are finally increasing. Bad sign.

    It may be a bad sign for borrowers, but it’s a long-overdue good sign for savers and for retired folks who depend upon a fixed income that includes low-risk investment vehicles.

  185. 435
    kenmorem says:

    i really don’t understand the ‘good news for savers’ viewpoint. if banks are paying a higher interest rate, this means inflation is higher. you are still losing the battle against inflation, no?

    1% interest rate + 4% inflation = 3% interest rate + 6% inflation.

  186. 436
    Eastsider says:

    By kenmorem @ 435:

    i really don’t understand the ‘good news for savers’ viewpoint. if banks are paying a higher interest rate, this means inflation is higher. you are still losing the battle against inflation, no?

    1% interest rate + 4% inflation = 3% interest rate + 6% inflation.

    Interest rates have been below inflation rate for almost a decade. They have finally caught up with ‘official’ inflation rate this year.

    Under normal economic conditions, interest rates > inflation rate. We have had a lousy 10 years in economic terms.

  187. 437
    Andy Terentjev says:

    Artificially low interest rates to help get us out of the last economic bubble will have consequences that most cannot predict. The drops in stock market are scaring people and their 401Ks. This is not 2008, but one never knows.

  188. 438
    Deerhawke says:

    RE: redmondjp @ 434

    I am 63 and have no real empathy for old people with money who feel that they should have some kind of FDIC insured, preferential rate of return on their capital. The greedy geezers want it even when the economy turns south for all the rest of us, even when they are being supported by those of us still working, even when they are totally being a burden on the millenials. No matter what, they feel entitled to … what they can grab from the rest of us.

    Hey you old Boomers. Either take some risk in the equity markets or face that awful choice of selling the RV or getting a job as a greeter at Walmart!

  189. 439
    Erik says:

    RE: kenmorem @ 435
    5% does not equal 9%

  190. 440
    whatsmyname says:

    RE: Eastsider @ 436 – Which rates are you talking about?

  191. 441
    Erik says:

    RE: Deerhawke @ 438RE: Deerhawke @ 438
    Old people bother me too.

  192. 442
    Matt P says:

    Amazon was up 7% today on anticipated earnings … and down again 7% after hours once earnings were released. They also said they expect much higher expenses in the 4th quarter but wouldn’t say why and that revenues would be down this holiday season.

  193. 443
    Eastsider says:

    By whatsmyname @ 440:

    RE: Eastsider @ 436 – Which rates are you talking about?

    How about 1 yr treasury yield –

    https://www.macrotrends.net/2492/1-year-treasury-rate-yield-chart

  194. 444

    By kenmorem @ 435:

    i really don’t understand the ‘good news for savers’ viewpoint. if banks are paying a higher interest rate, this means inflation is higher. you are still losing the battle against inflation, no?

    1% interest rate + 4% inflation = 3% interest rate + 6% inflation.

    Don’t forget about income taxes cutting into the 3% interest.

  195. 445
    Eastsider says:

    RE: Deerhawke @ 438 – Hmm, a retiree putting money in a FDIC insured CD is greedy! Wow. Where is the proof that “they are totally being a burden on the millennials”? As far as I can tell, many millennials are still dependent on their Boomers parents.

    That said, I would agree that Boomers take more out of SS and Medicare than they put in. But do you want to rein in SS and Medicare benefits? Nah, I don’t think so.

  196. 446

    I decided to look at the idea that the significantly higher real estate taxes caused a spurt in new listings. The new tax bills came out sometime in February. For March the new listings YTD was up by only about 300 over 2017. April roughly 550, so almost as much of an increase as Jan-March in one month. May was up by over 1,100 from 2017, so again as many more that month as the rest of the year. Jump ahead to August and it’s only about 1,300 over 2017, so the increases dropped to a crawl. And again, September was up about 1,625. Keep in mind by that point if not the August figures we were likely seeing more cancel/expired relisting.

    Obviously that’s not conclusive, but April-May seemed to be the high point and it’s not that hard to believe that out of all the houses in King County that 800 owners between April and May decided to sell due to higher taxes.

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

  197. 447
    Luke says:

    By Erik @ 439:

    RE: kenmorem @ 435
    5% does not equal 9%

    Oh my.. I’m sure you were so proud of yourself for catching that too..

  198. 448
    Deerhawke says:

    RE: Eastsider @ 445

    I have lived in Europe and in Japan and they have socialized medical care. Works amazingly well and the proof is superior morbidity/mortality figures and cost figures. It is not a highly politicized topic. If you think about it, it works kind of like the socialized roads we have in this country. Or like our overgrown socialized military. So my solution for Medicare is– Medicare for all. Oh, and we need to get the drug companies under control. (It is probably the only topic I agree with Trump on– although I doubt Republicans on Capitol Hill will let him actually do anything there. They will just let him rant and then show him some other shiny object.)

    Social security is an amazing program that needs to be put on a sound financial basis to take account of changes in demographics. The math is quite simple. The sooner it happens the better.

    Yes, it is late in the month and we are waiting for real estate news from The Tim. Next posting I will stay on topic.

  199. 449

    Amazon Profits Suddenly Drop 10%

    High Tech in trouble now? Slower Seattle AMZ sales?

    https://www.reuters.com/article/us-amazon-com-stocks/amazon-shares-sink-10-percent-on-growth-worries-idUSKCN1N01L0

    I think we need to watch it with an open mind, especially if we own AMZ stock.

  200. 450
    Erik says:

    RE: Luke @ 447
    It went for the throat on that one. There is no debate to be had. A knockout punch if you will.

  201. 451

    RE: Deerhawke @ 448
    LOL Deerhawke, They Come To America From Canada to Get Private Healthcare Because the Socialized Hospital Lines Waits are Way Too Long

    Even Obama VA Hospitals cutbacks forced waiting in long ques for care for our returning warriors…Trump gave them private health care options because military patients were dying waiting. Do you pay in to Social Security Deerhawke? Will you use it when you retire? Social Security Recipients paid in more than they’ll ever draw out in a life time, so why is it in trouble? To allow NWO OVERPOPULATION borrowing from it for more debt and short term mortgage interest decreases, while retirees got robbed? Sounds like a plan?

    How about a real plan Deerhawke? Make all employers offer inexpensive health care [well folks will drive the cost WAY down] with mandatory full time employment….trickle that CEO tax cut down to the workers. Why are you against this? Neither Hillary or Trump suggested this, I am.

  202. 452

    By Deerhawke @ 448:

    I have lived in Europe and in Japan and they have socialized medical care. Works amazingly well and the proof is superior morbidity/mortality figures and cost figures. It is not a highly politicized topic. If you think about it, it works kind of like the socialized roads we have in this country. Or like our overgrown socialized military. So my solution for Medicare is– Medicare for all. Oh, and we need to get the drug companies under control. (It is probably the only topic I agree with Trump on– although I doubt Republicans on Capitol Hill will let him actually do anything there. They will just let him rant and then show him some other shiny object.)

    Assuming you’re not going to have a free market for medical care, which we haven’t had for over 60 years, you’re either going to need to have it government constrained or insurance restrained. The problem with having it insurance restrained is people treat the money they pay as if it were free money that just magically appears somehow, so spending gets completely out of control–and the price of drugs is a good example. Assuming it’s government controlled it will be slow to change and the changes will be more political. But it’s probably better than the current system in that now which doctors you can see are very likely to be highly fractured, with most of the available doctors simply outside your plan, greatly limiting your choices.

    Social security is an amazing program that needs to be put on a sound financial basis to take account of changes in demographics. The math is quite simple. The sooner it happens the better.

    The changes are at least 10 years overdue. And each year that passes the size of the necessary change increases. The politicians have not been serving us well at all. It’s almost as if they’re so incompetent that they would create a situation where the economy was so out of kilter that it suffered significant financial shock as large financial entities collapsed causing something called The Great Recession. /sarc

  203. 453

    Good News if You’re a BECU Customer

    Adobe eStatements access restored on bank website.

    That Malware issue on adobe S/W updates now requires a 2nd “adobe” anti-virus S/W separate bill from Live Safe McAfee now? Why wasn’t the fix in the active 1st version [without additional cost] too?

    High Tech Organized Crime wants more protection money now…now they charge extra for each S/W file you need protected from malware? LOL…the fun goes on and on…

  204. 454

    The Washington State Hanford Plutonium Plant Went on Lock Down

    It sounded phony, but an alert was issued:

    https://www.thesun.co.uk/news/7591972/nuclear-hanford-vit-take-cover-alert-plutonium-uranium/

    Reminds me of electric vehicle Lithium Batteries spewing toxic heavy elements over large sectors of Chinese real estate. Very similar in a safety engineering sense.

  205. 455

    RE: Eastsider @ 445
    The Open Border Folks Love to Blame the Innocent

    Math and science failure in local public schools is touted as the “fault of the parents, not teachers or staff”….LOL….their planning book is MAD magazine…

  206. 456

    RE: Erik @ 450
    Hey Erik

    Weren’t you wearing a “black belt” lately? LOL

  207. 457
    Eastsider says:

    RE: Deerhawke @ 448 – I would agree that some kind of socialized medicine is in our future. However, most people advocating for it have no idea or do not care about cost. It is similar to free housing, free college, free heating, free food, free transport, free childcare, free whatever politicians use to pander for votes. They all sound great but we will end up like Venezuela. I wish intelligent people like you would give more thoughts to such policies. But with recent Kavanaugh and Caravan events, I do not think reasons and logics work today.

    Okay, I will try to stay on topic next.

  208. 458
    Luke says:

    By Erik @ 450:

    RE: Luke @ 447
    It went for the throat on that one. There is no debate to be had. A knockout punch if you will.

    Strike two

  209. 459
    Blake says:

    Interesting…
    https://www.bloomberg.com/news/articles/2018-10-26/a-good-gdp-report-has-bad-news-for-housing?srnd=premium

    But there’s one part of the (GDP) report that should raise some red flags. Residential investment fell 4 percent, marking the third straight quarterly decline. That hasn’t happened since late 2008 and early 2009. On top of that, the government said earlier this week that purchases of new U.S. homes fell in September by more than estimated to the weakest pace since December 2016. Also, existing home sales are running at the lowest rate since 2015.

    Now, no one is calling for a real estate crash, but it’s clear that 30-year fixed mortgage rates hovering around 5 percent — the highest since 2011 and up from less than 3.50 percent in late 2016 — are starting to bite. The National Association of Realtors says housing affordability is the lowest since 2008. And with the Federal Reserve still leaning hawkish, with more interest-rate hikes coming, housing will probably become even more unaffordable.

    There’s an old saying among realtors that prospective homebuyers aren’t buying home prices, they’re buying a monthly mortgage payment — and those monthly payments are getting very expensive. According to Black Knight’s August Mortgage Monitor, the monthly payment on the average home has jumped by 16 percent since the start of the year. That’s up from a 3 percent increase in 2017, illustrating the effect of rising rates on affordability.

  210. 460

    By Eastsider @ 457:

    RE: Deerhawke @ 448 – I would agree that some kind of socialized medicine is in our future. .

    We already have some form of socialized medicine. People can get sick and then between November 1 and December 31 (or later) they can apply to be covered by insurance the next year. Others covered by the same insurance company plan will pay for their care through increased premiums the following year, unless they make less than about $60,000, in which case the government will pay part of their premium (but not part of their medical costs unless under Medicaid). It’s socialized medicine, but some of the social groups are very tiny (e.g. people in Washington State with an individual plan by _______ insurance company or PPO).

    BTW, the result of the people joining my insurance pool last year in November-December resulted in my premiums rising in excess of 20% for next year, unless maybe I change plans (again). That’s how it works.

  211. 461
    Blake says:

    By Eastsider @ 457:

    RE: Deerhawke @ 448 – I would agree that some kind of socialized medicine is in our future. However, most people advocating for it have no idea or do not care about cost. It is similar to free housing, free college, free heating, free food, free transport, free childcare, free whatever politicians use to pander for votes. They all sound great but we will end up like Venezuela. I wish intelligent people like you would give more thoughts to such policies. But with recent Kavanaugh and Caravan events, I do not think reasons and logics work today.

    Yup yup yup… if we had single payer/medicare-for-all we’d spend so much MORE on healthcare… like those other countries that have socialized healthcare:
    https://kaiserfamilyfoundation.files.wordpress.com/2011/04/health-care-spending-in-the-united-states-selected-oecd-countries_chart11.gif

    Oh wait…??

    “Venezuela?”… Why don’t you shout Germany!, Switzerland!!, or Denmark!!?
    Oh… I know why. Because then your senseless “argument” falls apart!

    Eastsider wrote: “I wish intelligent people like you would give more thoughts to such policies.”
    hah ha hah ha!! OMG!
    Trump is just a symptom of the larger problem with millions of Americans simply spouting nonsense that has no basis in facts.
    Their brains no longer work… this country is doomed!!

  212. 462

    RE: Blake @ 461 – Yep, it would not be more expensive, and that’s largely because of what I noted above: “The problem with having it insurance restrained is people treat the money they pay as if it were free money that just magically appears somehow, so spending gets completely out of control–and the price of drugs is a good example. “

  213. 463
    sfrz says:

    RE: Kary L. Krismer @ 462 – Kinda like the Pentagon and their spending. Corporate welfare. Gee. I wonder where we could get some money for health care, infrastructure, education.

    In fiscal year 2016, the Pentagon issued $304 billion in contract awards to corporations—nearly half of the department’s $600 billion-plus budget for that year. And keep in mind that not all contractors are created equal. According to the Federal Procurement Data System’s top 100 contractors report for 2016, the biggest beneficiaries by a country mile were Lockheed Martin ($36.2 billion), Boeing ($24.3 billion), Raytheon ($12.8 billion), General Dynamics ($12.7 billion), and Northrop Grumman ($10.7 billion). Together, these five firms gobbled up nearly $100 billion of your tax dollars, about one-third of all the Pentagon’s contract awards in 2016. https://www.thenation.com/article/heres-where-your-tax-dollars-for-defense-are-really-going/

    And remember: The Pentagon buys more than just weapons. Health care companies like Humana ($3.6 billion), United Health Group ($2.9 billion), and Health Net ($2.6 billion) cash in as well, and they’re joined by, among others, pharmaceutical companies like McKesson ($2.7 billion) and universities deeply involved in military-industrial complex research like MIT ($1 billion) and Johns Hopkins ($902 million).

  214. 464
    Eastsider says:

    RE: Blake @ 461
    I did say that some kind of socialized medicine is in our future. No?

    I am pretty sure the US subsidizes medicine in many countries via prescription drug prices, including Germany!, Switzerland!!, or Denmark!!

    Here is a recent study on the cost of “Medicare for All” –
    ‘Medicare for All’ Would Cost $32.6 Trillion Over 10 Years, Study Says
    https://www.bloomberg.com/news/articles/2018-07-30/study-medicare-for-all-bill-estimated-at-32-6-trillion

    A couple quotes –
    – Its findings are similar to those of several independent studies of Sanders’ 2016 plan. Those studies found increases in federal spending over 10 years that ranged from $24.7 trillion to $34.7 trillion.
    – Sanders’ office has not done a cost analysis, a spokesman said.

  215. 465
    Eastsider says:

    RE: Kary L. Krismer @ 460 – There is no longer a mandate on Obamacare. Healthy people will refuse to join so insurers will lose BIGLY next year. 2020 is the year Obamacare marketplaces implode everywhere.

  216. 466

    By Eastsider @ 465:

    RE: Kary L. Krismer @ 460 – There is no longer a mandate on Obamacare. Healthy people will refuse to join so insurers will lose BIGLY next year. 2020 is the year Obamacare marketplaces implode everywhere.

    I’m not sure the mandate was ever much of a mandate. Compared to the cost of insurance, the tax penalty was relatively slight for most people. And you could avoid ever paying it by just not overpaying your taxes (it could only be collected from refunds). But sure, the elimination of the mandate not going to help the marketplaces.

    And don’t forget, the entire federal preemption of health care insurance could implode due to that change, because the mandate tax was what bootstrapped the entire program into being Constitutional. Now that is gone, but there are arguments against that.

  217. 467
    Market Psychologst says:

    Investors are cashing in on their overpriced stocks. Houses, too? I think so. My new favorite hobby is scrolling through Zillow and seeing all the properties with their cute price cuts. Do they really think cutting $10k off on their one-bedroom condo priced at half-a-million dollars is really going to make us jump?

  218. 468
    Brian says:

    By Market Psychologst @ 467:

    Investors are cashing in on their overpriced stocks. Houses, too? I think so. My new favorite hobby is scrolling through Zillow and seeing all the properties with their cute price cuts. Do they really think cutting $10k off on their one-bedroom condo priced at half-a-million dollars is really going to make us jump?

    Yeah, some of the price cuts are really funny. I’ve seen them as low as $1K on something that’s been sitting two weeks. What a joke.

  219. 469

    By Market Psychologst @ 467:

    Investors are cashing in on their overpriced stocks. Houses, too? I think so. My new favorite hobby is scrolling through Zillow and seeing all the properties with their cute price cuts. Do they really think cutting $10k off on their one-bedroom condo priced at half-a-million dollars is really going to make us jump?

    What that’s designed to do is get the listing noticed–some lists that get emailed out or read are lists of changes. That’s why you might also see a price increase.

    Of course it’s better to price right in the first place, but . . ..

    And as Ardell has mentioned, too small of a change can get the agent fined.

  220. 470
    JOE says:

    Now that tech stocks are down more than 10% in 30 days, I expect real estate has dropped some more. Anybody that had a $100,000 down payment now has only $90,000, plus a more uncertain job outlook. The problem with bubbles is they pop.

  221. 471
    Matt P says:

    By JOE @ 470:

    Now that tech stocks are down more than 10% in 30 days, I expect real estate has dropped some more. Anybody that had a $100,000 down payment now has only $90,000, plus a more uncertain job outlook. The problem with bubbles is they pop.

    Depending on your stock options, it could be far less than $90k or even nothing at all.

  222. 472
    pfft says:

    By Eastsider @ 457:

    RE: Deerhawke @ 448 – I would agree that some kind of socialized medicine is in our future. However, most people advocating for it have no idea or do not care about cost. It is similar to free housing, free college, free heating, free food, free transport, free childcare, free whatever politicians use to pander for votes. They all sound great but we will end up like Venezuela. I wish intelligent people like you would give more thoughts to such policies. But with recent Kavanaugh and Caravan events, I do not think reasons and logics work today.

    Okay, I will try to stay on topic next.

    Oh God people stop talking about Venezuela. You guys have no idea what happened there. Republicans have been fear mongering about socialism forever. Didn’t Reagan say medicare would lead to tyranny? Still waiting.

  223. 473
    pfft says:

    By Kary L. Krismer @ 462:

    RE: Blake @ 461 – Yep, it would not be more expensive, and that’s largely because of what I noted above: “The problem with having it insurance restrained is people treat the money they pay as if it were free money that just magically appears somehow, so spending gets completely out of control–and the price of drugs is a good example. “

    Link or it never happened. If that is true why do countries with universal healthcare spend much less money per capita than we do?

  224. 474
    pfft says:

    By Eastsider @ 464:

    RE: Blake @ 461
    I did say that some kind of socialized medicine is in our future. No?

    I am pretty sure the US subsidizes medicine in many countries via prescription drug prices, including Germany!, Switzerland!!, or Denmark!!

    Here is a recent study on the cost of “Medicare for All” –
    ‘Medicare for All’ Would Cost $32.6 Trillion Over 10 Years, Study Says
    https://www.bloomberg.com/news/articles/2018-07-30/study-medicare-for-all-bill-estimated-at-32-6-trillion

    A couple quotes –
    – Its findings are similar to those of several independent studies of Sanders’ 2016 plan. Those studies found increases in federal spending over 10 years that ranged from $24.7 trillion to $34.7 trillion.
    – Sanders’ office has not done a cost analysis, a spokesman said.

    This is silly. We will spend slightly less on healthcare but who is doing the spending will change. The government will do it instead of the private sector. The % of GDP dedicated to healthcare will nearly stay the same. What about the cost to human life and misery?

    Obama has saved probably at least 100,000 lives.

  225. 475
    MD says:

    Very interested to see the weekend inventory update from Justme. Looking at Redfin, it feels like there’s more inventory on the market, even on a week-over-week basis.

  226. 476

    By pfft @ 473:

    By Kary L. Krismer @ 462:

    RE: Blake @ 461 – Yep, it would not be more expensive, and that’s largely because of what I noted above: “The problem with having it insurance restrained is people treat the money they pay as if it were free money that just magically appears somehow, so spending gets completely out of control–and the price of drugs is a good example. “

    Link or it never happened. If that is true why do countries with universal healthcare spend much less money per capita than we do?

    You might try reading what I wrote before thinking that you disagree with it. I was saying our system is more expensive.

  227. 477
    Erik says:

    RE: softwarengineer @ 456
    Yes, I am a black belt in the Seattle bubble comment section.

  228. 478
    Erik says:

    RE: JOE @ 470
    I think you are wrong. This is a correction or a bear market, not a crash. This is all part of normalcy. Last I saw GDP was 4.2%.

  229. 479
  230. 480

    RE: Blurtman @ 479 – There are at least three reasons that the US spends more on healthcare.

    1. We earn more money. We probably spend more on bananas because of higher earnings too.

    2. Our tax system doesn’t tax employer contributions to health insurance and that means people get more health insurance (now primarily lower deductibles) than what they would otherwise get. That drives up their consumption of health services and medicines.

    3. Insurance when it does kick in means people no longer care what things cost, so price is no longer a hinderance to consumption, which drives up demand and prices. This is the point I have been hitting on above.

    On the topic of Obamacare, last year one of the two traditional insurers pulled out of most of Washington state. I think it’s Regence which is now left, but it could be the other one, I don’t remember. They are now much higher as a percentage than what they used to be, now over 50% higher than say Kaiser. I suspect that’s because healthy people go for the cheaper options and then when they do get sick they switch the next year to Regence where they can get a better choice of doctors. And that drives up the Regence premiums even higher. And while they’re healthy the lousy doctor selection of the cheaper plans doesn’t really matter because the insurance won’t pay until they’ve spent over $5,000, so they can just negotiate a cash rate with the doctor of their choice outside their plan. So Obama didn’t lie–except for your supposedly free physical, you can keep your doctor! ;-)

  231. 481

    RE: ess @ 432
    Yes Even Extra Interest Income

    No matter how small….is better than a kick in the pants…

  232. 482

    RE: Kary L. Krismer @ 480
    Yes…Summed Up Well IMO

    I’d add too that Medicaid before ACA covered everything from 100% dental to doctors’ visits for the American citizen disabled at the U of W medical hospitals….now it covers nothing, except mostly [by dollar weighting] clinic prescribed opioids and Planned Parenthood abortions [$10-15K each?] of well folks. Medicare is another joke, it limits costs to like 50% of actuals and bankrupts doctors. Like the “Stephen King It” Novel…”it all floats down stream” together…

  233. 483

    RE: Matt P @ 471
    My MSFT Program Manager Neighbor Got laid Off a Couple Years Ago After a 20 Year Career There

    He mentioned no income but unemployment and a big severance cash out [his father was horrified that was his future income at about 45-55 years of age]….I’m sure its mostly sucked dry by now…he managed to find P/T work at Starbucks….but that fizzled out too evidently unless he’s teleworking now. He has five kids to feed BTW.

  234. 484

    RE: pfft @ 472
    Center on Blaming Trump for the Package Bombs

    Too much screaming “lock her up” at the rallies Pfft? The Open Border Party likes to blame the innocent for disagreeing with them?

  235. 485

    RE: pfft @ 474
    You’re Assuming The Emergency Rooms Wouldn’t Take Them Without Insurance

    Wrong….the emergency hospital has to take in all life or death cases, they have no choice. No lives saved at all by Obamacare IOWs.

  236. 486

    RE: softwarengineer @ 485 – I think pfft is referring to more preventative care. And he’s not offsetting the people who used to have insurance but no longer do because of the ever increasing cost of insurance. Ignoring the increases in Medicare/Medicaid, the number of insured have not really increased, so for every person added getting subsidies someone who was paying full boat has dropped off.

  237. 487
    Luke says:

    By Kary L. Krismer @ 480:

    RE: Blurtman @ 479 – There are at least three reasons that the US spends more on healthcare.

    1. We earn more money. We probably spend more on bananas because of higher earnings too.

    2. Our tax system doesn’t tax employer contributions to health insurance and that means people get more health insurance (now primarily lower deductibles) than what they would otherwise get. That drives up their consumption of health services and medicines.

    3. Insurance when it does kick in means people no longer care what things cost, so price is no longer a hinderance to consumption, which drives up demand and prices. This is the point I have been hitting on above.

    Kary,

    Not only are the conclusions you’ve reached wrong, but many of your premises are wrong as well. You have absolutely no qualifications, nor have you provided any systematic analysis or review of others’ analysis, to be telling us why healthcare spending in the US is higher than in the rest of the world.

    1. Other countries with higher GDP per capita than the US spend less on healthcare than the US. I know you’ll respond with an excuse that tries to explain why you were actually correct in this assertion, but you are wrong. Period.

    https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

    http://www.oecd.org/els/health-systems/health-expenditure.htm

    2 and 3. We, as individuals, have, on average, some of the highest out of pocket healthcare costs in the world. In fact, within the US the trend has been the opposite of what you suggest, with employees taking on more and more of the cost of their monthly insurance premiums and having higher deductibles and copays. We do not spend more on healthcare because it’s just being “given” to us with no financial responsibility. It’s the opposite. We are making individuals pay more and more out of pocket hoping that it will control the out of control cost of healthcare in the US. Again, I await your excuses. But you’re just plain wrong.

    https://data.oecd.org/healthres/health-spending.htm

    https://www.kff.org/report-section/2018-employer-health-benefits-survey-summary-of-findings/attachment/figure-b/

    https://www.kff.org/report-section/2018-employer-health-benefits-survey-summary-of-findings/attachment/figure-f/

    If anyone wants to know the real reason why healthcare spending is so much higher in the US than other countries, please start here:

    https://jamanetwork.com/journals/jama/article-abstract/2674671

    “Contrary to some explanations for high spending, social spending and health care utilization in the United States did not differ substantially from other high-income nations. Prices of labor and goods, including pharmaceuticals and devices, and administrative costs appeared to be the main drivers of the differences in spending.”

  238. 488
    Blurtman says:

    RE: Kary L. Krismer @ 480RE: Kary L. Krismer @ 480 – “3. Insurance when it does kick in means people no longer care what things cost, so price is no longer a hinderance to consumption, which drives up demand and prices. This is the point I have been hitting on above.” But that should be true as well for countries that have socialized medicine.

    I would like to see a head-to-head, US vs. best socialized medicine plan. of per capita cost to include taxes, spending on health insurance, and out-of-pocket expense. For the socialized medicine plan, the tax component would be expected to be higher. There must be a source of data that breaks out taxes for healthcare from total taxes in the counties that have socialized medicine.

    One possibility – if as a country you spend more, but per capita, each citizens pays less than the best socialized medicine plan, because we kick the can down the road for paying the bill, i.e., continued and increasing borrowing. That would be the American way!

  239. 489
    Matt P says:

    By Blurtman @ 487:

    RE: Kary L. Krismer @ 480RE: Kary L. Krismer @ 480 – “3. Insurance when it does kick in means people no longer care what things cost, so price is no longer a hinderance to consumption, which drives up demand and prices. This is the point I have been hitting on above.” But that should be true as well for countries that have socialized medicine.

    I would like to see a head-to-head, US vs. best socialized medicine plan. of per capita cost to include taxes, spending on health insurance, and out-of-pocket expense. For the socialized medicine plan, the tax component would be expected to be higher. There must be a source of data that breaks out taxes for healthcare from total taxes in the counties that have socialized medicine.

    One possibility – if as a country you spend more, but per capita, each citizens pays less than the best socialized medicine plan, because we kick the can down the road for paying the bill, i.e., continued and increasing borrowing. That would be the American way!

    There are plenty of those studies and it shows that the US spends twice as much on healthcare as anyone else except Switzerland, where we’re 31% higher, but coincidentally (actually not, that’s tongue in cheek), they’re the only other developed country with private national insurance. The government already spends what the rest do and then you throw on private insurance and it’s double. Even if we went Switzerland’s route, it will still be better – everyone is covered and the poor are subsidized.

    As far as the ACA saving lives, this is because people started going to the doctor before their conditions could deteriorate into something that needed an ER visit. It’s ridiculous to argue otherwise and an outright lie if you do.

    Kary et al just like to make things up for some reason. The ACA is crap, but it’s better than the toxic waste dump we had before and we’ll eventually get Medicare for all, which will save everyone a boatload of money. One giant payor negotiating all of the prices – as long as the special interests don’t hamstring it – is the only way to get medical costs down. And don’t say there’s an alternative because there’s not and hasn’t been for 75 years and never will be. The government is around for certain things – roads, infrastructure, healthcare, etc. – and it should be allowed to deal with them.

    Then people will have more money to spend on housing.

    Justme, what did this week look like?

  240. 490
    Justme says:

    Weekend Update: It is time for the weekend update on for-sale inventory for KC/SFH. Listed inventory is at a 6 year high, not exceeded since 2012. The King County SFH for-sale listings declined by 101 units from last week to 4721, a number last exceeded last exceeded (same week) in 2012. As usual, inventory peaked on Friday evening.

    10.26.2018 17:00 4721 (-101) droop=-101/4721=-2.1%
    10.19.2018 22:00 4829 (-29)
    10.12.2018 17:00 4858 (-12)
    10.05.2018 17:00 4870 (-21)
    09.28.2018 20:00 4891 (+54)
    09.21.2018 17:00 4837 (+2)
    09.14.2018 18:00 4835 (+235)
    09.07.2018 19:00 4600 (+230) Friday after labor day
    08.31.2018 19:00 4370 (-103) Friday before labor day
    08.24.2018 17:00 4473 (+112)
    08.17.2018 18:00 4361 (+88)

    Compare with same week(s) in 2017:

    10.27.2017 23:00 2659 (-121) droop=-121/2659=-3.8%
    10.20.2017 18:00 2780 (-73)
    10.13.2017 19:00 2853 (-48)
    10.06.2017 19:00 2901 (-70)
    09.29.2017 22:00 2971 (-21)
    09.22.2017 20:00 2992 (-20)
    09.15.2017 18:00 3012 (+80)
    09.08.2017 19:00 2932 (+234) Friday after labor day
    09.01.2017 17:00 2698 (-258) Friday before labor day
    08.25.2017 20:00 2954 (+14)
    08.18.2017 20:00 2940 ()

    Some seasonal droop is starting to appear, but it is only about half of last year’s value in the same week (-2.1% versus -3.8% in 2017). The SFH absolute inventory level is 1.78x (4721/2659) what it was last year. There continues to be an elevated crowd of sellers at the exits of the King County SFH market. The unwillingness of buyers to pay the prices demanded is palpable. It appears buyers are on strike.

    Note: Graphical update for KC SFH and Condo listed inventory sometime later this weekend.

  241. 491

    By Blurtman @ 487:

    RE: Kary L. Krismer @ 480RE: Kary L. Krismer @ 480 – “3. Insurance when it does kick in means people no longer care what things cost, so price is no longer a hinderance to consumption, which drives up demand and prices. This is the point I have been hitting on above.” But that should be true as well for countries that have socialized medicine.

    Again I’ll refer back in post 452.

    Assuming you’re not going to have a free market for medical care, which we haven’t had for over 60 years, you’re either going to need to have it government constrained or insurance restrained. The problem with having it insurance restrained is people treat the money they pay as if it were free money that just magically appears somehow, so spending gets completely out of control–and the price of drugs is a good example. Assuming it’s government controlled it will be slow to change and the changes will be more political.

    And to add to that, politicians will be slower to call for new coverage because they’ll then have to figure out a way to pay for it. If people don’t like the coverage they’d likely be able to buy supplemental insurance, as occurs with Medicare today.

  242. 492

    By Justme @ 488:

    There continues to be an elevated crowd of sellers at the exits of the King County SFH market.

    The main reason it’s elevated is not because there are significantly more sellers. I clearly refuted that idea with my real estate tax increase analysis in post 446. As of the end of September we’re only up about 1,625 new listings, which is less than a 10% change compared to 2017, and as broken down in post 446 most of that occurred in the months after the tax bills went out. And although I’m not 100% certain that the NWMLS doesn’t strip out the cancel/relist new listings, I don’t believe they do. Assuming they don’t the number of additional sellers is likely very insignificant. What is down is the number of successful sellers, and that has many reasons, including those listed in post 407. But as of the end of September, the closed sales were only down about 2,000 from 2017, which is about 10%.

    The one thing that is really striking is every time I look at the prior 7 day stats for King County SFR, the number of price reductions is either the first or second top category. Right now it’s the first with new pendings being second. Part of that is the insignificant price reductions we recently discussed, but in general overpricing does not seem to be slowing down.

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

  243. 493
    Justme says:

    RE: Kary L. Krismer @ 490

    Kary has a truly bizarre personality. He will find something to express disagreement with even when there is nothing to disagree with. I don’t know if readers are able to follow his convoluted way of disagreeing with something I didn’t say, but his ability to do so is remarkable. Either it is a psychological problem, or it is a lame (but diabolic) way of trying to sow FUD (fear, uncertainty and doubt) about what other people write. Perhaps that’s it. Kary is the only true expert on everything. Anything that anyone else says is wrong, even when it is right, and even when he agrees with you.

    I wrote:

    >>There continues to be an elevated crowd of sellers at the exits of the King County SFH market. The unwillingness of buyers to pay the prices demanded is palpable. It appears buyers are on strike.

    Kary then “disagrees” by quoting only the 1st sentence , and by wrongly re-interpreting said sentence as claiming “lots of new listings this month and every month”, although the 2nd/3d sentence clearly states that the elevated crowd (=inventory) of sellers is (mostly) due to buyers not buying. Just amazing. Give me a +1 if you agree, with me.

  244. 494
    whatsmyname says:

    Dam, if feels good to be a landlord,
    A house owning landlord plays his cards like
    A lot of folks don’t run to the apartments,
    But they gotta live somewhere in the buyers strike.

  245. 495
    Erik says:

    RE: softwarengineer @ 314
    The wife agreed that we will move every one to two years when we were dating. I told her that we can just follow the money and make $100k every year or two and that is better than staying in the same place. It’s a trade off. She agreed. Now that I have a baby on the way, it’s probably gonna be more difficult to uproot her every year or two, but I think I can do it.

    Moving forward, I’m gonna need to finish the remodel before we move. My wife doesn’t like walking on drywall dust and watching out for screws. She will probably like it less when the baby arrives.

  246. 496

    RE: Justme @ 491 – You’re going to have to point to where I disagreed with you. If you’d said “rushing to the exits” again, I would have disagreed. As it was I was just explaining why there is an elevated number of sellers right now.

    Note I didn’t quote or respond to your buyer’s on strike comment. So I wasn’t only quoting the first sentence, I was only quoting the sentence I was responding to. But since you put the additional sentence(s) in your response I will disagree. A strike is when workers do not work. Buyers are buying. Sales are down only about 10% YTD. Not a strike and no matter how many times you say something that is false that will not make it true.

    The one thing you do point out that we actually seem to agree with is that buyer’s won’t pay the price. I describe that from the seller’s side as their pricing too high. Either way you look at it, the result is no sale.

  247. 497
    Justme says:

    RE: Kary L. Krismer @ 494

    Will you ever stop with the “rushing for the exits” nonsense? I used that phrase TWICE. Once in the form of a question, and the other to describe a specific situation with Condo sellers in September.

    Since then, you (and others) have invoked the phrase dozens of times and frequently ascribed the phrase to me as general statement I made, but I DID NOT. And now you said it AGAIN!!!!

    Dear readers, Kary is lying about me.

  248. 498
    Erik says:

    RE: Justme @ 495
    I remember you saying that “sellers are rushing to the exits.” Chalk one up for Kary.

  249. 499
    sfrz says:

    RE: Justme @ 495 – Kary has a case of the “I can’t help its” He’s a used house salesman AND a lawyer (aka liar). When they talk, they work to spin, confuse, and pick. No wonder so many attorneys are drunks. What they do leaves a terrible taste in their mouths. Only alcohol can deaden that taste for a few hours.
    I give you Ex. A “It depends on what the meaning of the word ‘is’ is. If the—if he—if ‘is’ means is and never has been, that is not—that is one thing. If it means there is none, that was a completely true statement. … Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true.” See Clinton 8/17/98 GJ at 59.

  250. 500
    sfrz says:

    Amazon stocks taking a beating. How many of these Seattle Amazonian FBs are sweating right now, using their RSUs as a down payment?
    “Oracle orc:
    I bought last year they did count my rsu income at 70%… Wells Fargo. It would depend on your loans processing agent. Once they see you can’t do cash to close and they are desperate to close they consider whatever they legally can… also usually it is towards your down payment that they use them at that value. Not in qualifying you for the loan amount…

    Intuit Soliloquy:
    I’m a chase private client. Both of my houses were bought using RSUs and other stocks. No issues.

    Google Hangten:
    +1 Wells Fargo
    https://www.teamblind.com/article/Buying-house-RSU-income-uW3q4id6

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