NWMLS: Home listing inventory skyrocketed in November as sales and prices both fell further

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November market stats were published by the NWMLS this morning. Home prices slipped to their lowest level since January, and inventory is declining seasonally but hit its highest November level since 2011. Both pending and closed sales continued to slip from last year as well. November’s year-over-year listing growth was an all-time record at a whopping 114 percent.

The NWMLS press release hasn’t come out yet, so let’s get right to the data.

CAUTION

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

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

November 2018 Number MOM YOY Buyers Sellers
Active Listings 4,020 -17.5% +113.9%
Closed Sales 1,811 -11.7% -18.6%
SAAS (?) 1.10 -14.5% +26.3%
Pending Sales 1,926 -16.1% -13.0%
Months of Supply 2.22 -6.5% +162.7%
Median Price* $643,913 -4.0% +2.1%

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

King County SFH Inventory

Inventory fell 18 percent from October to November, and was up 114 percent from last year. We went from the all-time lowest November inventory a year ago to a seven-year high in 2018.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up three percent from a year ago and continued the usual seasonal decline month-over-month.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell 12 percent between October and November. Last year over the same period closed sales dropped nine percent. Year-over-year closed sales were down 19 percent.

King County SFH Pending Sales

Pending sales were down 16 percent from October to November, and were down 13 percent year-over-year.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

The massive surge in active inventory has forced me to adjust the y-axis on this chart. We’ve hit new all-time records each of the last four months.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Year-over-year home price changes edged down again from October to November, to its lowest level since August 2014.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

November 2018: $643,913
November 2017: $630,750
July 2007: $481,000 (previous cycle high)

The Seattle Times hasn’t published their story yet. I’ll update this post when they do.

Update: Here’s the story from the Seattle Times: Seattle-area home prices drop again, with 6-month decline among largest ever

And here’s the NWMLS press release: Home buyers have “window of opportunity” with shift to more balanced market

5.00 avg. rating (95% score) - 2 votes

About The Tim

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

208 comments:

  1. 1
    Dave says:

    Looks like your New Listings chart is broken. Retry?

  2. 2
    The Tim says:

    RE: Dave @ 1 – Oops, sorry about that. Fixed now.

  3. 3
    uwp says:

    “New listings were up three percent from a year ago and continued the usual seasonal decline month-over-month.”

    Sellers “RUSHING” for the exits.

    Edit: to add a little more content…
    New Listing Growth (YOY) last three months:
    Sept: +8%
    Oct: +5%
    Nov: +3%

    The return to a historically average amount of listed inventory seems to be more about over-priced homes sitting rather than a mad rush of sellers.

  4. 4
    Mic says:

    Looks like inventory is going down, the price may pick up again next spring when demand grows?

  5. 5
    Market Psychologist says:

    https://www.seattletimes.com/business/real-estate/seattle-area-home-prices-drop-again-with-6-month-decline-among-largest-ever/

    “King County’s median single-family home price fell to $644,000 in November, all the way down from $726,000 in the spring, according to new figures released Thursday by the Northwest Multiple Listing Service. Prices are also falling faster here than anywhere else in the country.

    The price drop equals 11.3 percent over six months, more than any May-to-November stretch in recorded history for King County. The biggest six-month decline for any time of year happened after the housing bubble popped last decade and prices plunged 14 percent. When the dot-com bubble burst, prices never dropped more than 6 percent in six months.”

    AND IN SOME AREAS THERE IS TOTAL MAYHEM!

    “Looking since the peak spring period, prices have fallen more than $100,000 in the Capitol Hill/Central Seattle area, Queen Anne/Magnolia, Richmond Beach-Shoreline, the Eastside south of I-90, East Bellevue and Redmond-Carnation.”

    ——————

    Imagine the sleepless nights that go with a $100k drop in six months?

  6. 6
    Jake says:

    #5- It’s so fun to laugh at peoples’ misfortunes when they make bad investments isn’t it? Like, if you buy your house at a bad time and pay severely for it, you are likely a really bad person, am I right?

  7. 7
    Market Psychologist says:

    RE: Jake @ 6 – The general public has my sympathy. I only relish in the losses of the specuvestor, bubble-bulls that have encouraged this behavior on this blog. I haven’t made a penny off this bubble, nor have I wanted to.

  8. 8
    TheBenBernank says:

    Does the Seattle Times wait for you to crunch numbers and produce analysis before they publish their articles? ;)

  9. 9
    uwp says:

    By Market Psychologist @ 7:

    The general public has my sympathy. I only relish in the losses of the specuvestor, bubble-bulls that have encouraged this behavior on this blog.

    What percent of home-buyers do you think are speculating and buying second homes?

    That’s why I find all this, “SELL NOW! DON’T BUY! RENT AND WAIT!” talk so useless.

    The vast majority of people are buying homes to live in them. And when they choose to sell their home, they are buying another one. Very very very few people are day-trading (or year-trading) homes.

  10. 10
    steve says:

    I don’t have much sympathy for anybody who could afford to blow 700k on a home expecting it will continue appreciating in value, like it’s an investment. The ride had to end sometime.

    They might have also noticed that the stock market has erased its gains for the entire year, so they’re not the only ones feeling the pinch.

    At this rate, the 400-500k white center crap shacks may fall into the affordable range for a 70k/year peon like myself.

    Plus, its not a misfortune for those “investors.” After all, they still have a roof over their head, have lower property taxes, and due to the loan qualification process should have no problem with mortgage payments.

  11. 11
    Matt P says:

    By Mic @ 4:

    Looks like inventory is going down, the price may pick up again next spring when demand grows?

    Not if inventory picks back up like it usually does in the spring. Prices may go up slightly but won’t spike like last year.

  12. 12
    richard says:

    RE: uwp @ 9
    I know a lot of Microsoft employees have two homes. A friend of mine actually has three homes:
    bought a renton home at 450K(a rental now), a Bellevue home at 550K(a rental now) and their own new home (bought 980K at Redmond). So you see, they bought the 2nd and third home as an investment in the firm belief that the price will go up forever otherwise they won’t leverage themselves so much.
    I also know many Chinese investors bought cougar mountain new homes (toll brothers development,
    2-4million range , 5000-7000 sqft ) and try to rent it out at ridiculous rate (4K-5K/month).
    Again, the house is treated as stock, it is expected to pay either appreciation or dividend(rent).
    Question is how many investors are out there and ready to unload their shares when the market go really south. The first-home buyers will become real suckers if that happens. That’s why the home owner need to be ready to sell and take profit.

  13. 13
    richard says:

    RE: Jake @ 6
    No, it’s their lack of social responsibility, they are part of the reason why the price is so high.
    They fell into the trap of real estate industry and media propaganda and maybe they are a little bit greedy themselves. You see, the system take advantage of human’s weakness and lure them into the bidding wars and eventually a financial ruin will wait for them(those who bought house in recent two years ). It is hard to have sympathy for them. If they hold their ground and don’t give in to greedy sellers who will laugh now?

  14. 14
    Justsomedude12 says:

    By Mic @ 4:

    Looks like inventory is going down, the price may pick up again next spring when demand grows?

    I’m not really seeing it. The slowdown was not seasonal, it began around early last summer. I think it just got to a point where people’s ability/desire to pay ever higher prices reached it’s limit.

    These last few years the primary drivers for appreciation were firing on all cylinders. Not so anymore. We should remind ourselves that these last few years were an aberration, not the norm.

    If I were going to bet on it, and we all are in one way or another, I wouldn’t be betting on a return to price increases within the next few years.

  15. 15
    Rentin’ says:

    Could someone please explain the 40% yoy price gain in Kirkland/Bridle Trails on the Seattle Times chart? Is there some explanation like a lot of new construction? That appreciation seems nuts. Ardell, isn’t this your area?

  16. 16
    Eastsider says:

    According to Mortgage News Daily, the 30yr mortgage rate is now at 4.73%, a substantial drop of .32% from high of 5.05% reached last month. Today’s rate is back to mid-Sept level so RE is not out of the woods yet. It will have to rollback to 4.05% at the beginning of year to turn this market around. But if the rate drops this much, we will be in a recession!

  17. 17
    richard says:

    RE: Eastsider @ 16
    yes, the 30 year rate need to be reversed to 4-4.5% to keep house price flat. but that also mean big inversion between short end and long end of bond yield, a serious recession.
    Our housing market is so sensitive to 1% shift in mortgage rate, it is definitely not a healthy one…

  18. 18
    Jake says:

    Richard #13. It must be hard being so perfect

  19. 19
    Brogrammer says:

    RE: richard @ 13
    I bought in May. I needed a place to live and had saved enough to buy. Why are you so negative towards recent buyers?

  20. 20
    Market Psychologist says:

    Another pattern I’ve noticed is that since the bubble has finally popped that all the bulls have disappeared. I guess bulls hibernate, too!

  21. 21
    Rentin’ says:

    RE: uwp @ 9
    I think you might be underestimating how many of us there are. Those of us who ended up selling a home or moving to the area and renting due to life circumstances, not speculation. For anyone who sold in the last couple of years it was virtually impossible to buy another house right away. I moved here from a lower cost area and wanted to be sure that I liked it before buying a home and committing long-term, especially at insane prices. So I ended up renting. And now that the market is going down so rapidly, it seems prudent to wait it out a bit or risk being underwater immediately, and possibly for a long time. I have several friends in the same boat, so I know I’m not alone. Even with a stable job it’s a risk to be under water. You never know what could happen in life and in the unlikely event I was to lose my stable job I would want to be able to sell without losing my entire down payment. I’m also not planning on trying to time the bottom of the market. If a home I love is listed for a price I can reasonably afford I will make an offer. But I doubt I would find something I love at current prices. Even just erasing gains from 2017/2018 would be a game-changer.

  22. 22
    richard says:

    classic propaganda piece. how can this Millennial author lie to her fellow Millennials like this?

    https://www.forbes.com/sites/alyyale/2018/12/06/2019-real-estate-forecast-what-home-buyers-sellers-and-investors-can-expect/#4feebe570d9a

  23. 23
    DavidE says:

    Some interesting tidbit about SF. I have noticed (historically speaking) that the Seattle housing bubble is the last of the hot markets to peak and also the last to deflate. Remember not too long ago when we were appreciating faster than SF and NY?

    When price drops accelerate in SF and NY, that is when the stuff hits the fan in Seattle.

    “House prices down $265,000 from peak, down $60,000 from year ago. America’s most majestic housing bubble begins to deflate.

    In San Francisco, the median price of single-family house sales that closed in November fell to $1.435 million. This is down a blistering $265,000 or 15.5% from the crazy peak in February of $1.7 million – a time when only the sky was the limit. And down by $60,000 from November 2017.”

    https://wolfstreet.com/2018/12/05/san-francisco-house-condo-bubble-prices-fall/

  24. 24
    whatsmyname says:

    By Market Psychologist @ 5:

    https://www.seattletimes.com/business/real-estate/seattle-area-home-prices-drop-again-with-6-month-decline-among-largest-ever/

    “King County’s median single-family home price fell to $644,000 in November, all the way down from $726,000 in the spring, according to new figures released Thursday by the Northwest Multiple Listing Service. Prices are also falling faster here than anywhere else in the country.

    The price drop equals 11.3 percent over six months, more than any May-to-November stretch in recorded history for King County. The biggest six-month decline for any time of year happened after the housing bubble popped last decade and prices plunged 14 percent. When the dot-com bubble burst, prices never dropped more than 6 percent in six months.”

    AND IN SOME AREAS THERE IS TOTAL MAYHEM!

    “Looking since the peak spring period, prices have fallen more than $100,000 in the Capitol Hill/Central Seattle area, Queen Anne/Magnolia, Richmond Beach-Shoreline, the Eastside south of I-90, East Bellevue and Redmond-Carnation.”

    ——————

    Imagine the sleepless nights that go with a $100k drop in six months?

    The numbers are from the NWMLS King County breakouts, and reflect the median of whatever was selling in the submarket that month, and not necessarily like properties.

    If you think the numbers statistically overcome any differences, then you may also enjoy looking at the most recent breakouts to imagine the nights after 12 month increases of $128K on modest Vashon, $398M in the Bridle Trails area, and some $200K+ increases in other Eastside submarkets.

    One thing that is clear from the Times presentation is that the decreases in sales, and therefore relative weightings, were highly skewed to the more expensive areas, and overstate the general decline, even before a single house declines in value. It’s a wonder our statistical puritans haven’t raised the roof on this, but I guess some statistical errors are more equal than other statistical errors.

  25. 25
    Market Psychologist says:

    RE: whatsmyname @ 24 – Fair point. However, in the first year of our lord Bubble bursting it’s important to note the precipitous fall from the peak, not the YoY, which obscures that things have gone kaploowee.

    The bag holders who bought at the peak are surely sipping their eggnog with some consternation thinking about how they got duped.

  26. 26

    Not to Worry Bubbleheads

    The real health care insurance silver plans [$25K/yr] will see labor hour relief to the insurance companies….lower rates with MUCH lower labor costs. Lay-offs I assume for health care workers professionals, but over-all good for the other 95% of us. This should help with mortgage payments.

    https://www.thetimes.co.uk/edition/news/robot-skills-will-make-surgeons-out-of-nurses-gds3t0tw3

    “Make America Skilled Again” in Health Care Without insane costs? LOL….I love robots now. Bio-engineering in health care can be a Cost Godsend.

  27. 27
    StupidLifeDecisions says:

    By Brogrammer @ 19:

    RE: richard @ 13
    I bought in May. I needed a place to live and had saved enough to buy. Why are you so negative towards recent buyers?

    Their stupidity. This is a slow but steady decline. If you are overvalued tech trash like your name implies, you will be especially hard hit since there are some long overdue days of reckoning ahead for your entire industry. Expect a permanent pay cut and long employment gaps! Your turn to be displaced is coming sooner than you think and that house you bought in May might have to be sold for a lot less than you paid for it.

  28. 28

    Not to Worry Bubbleheads

    https://www.becu.org/planning-and-investing/insured/cds

    If you’re planning on becoming debt free…its getting much easier now. Higher long-term CD rates [about 50% increase in rates from a couple years ago], at a theater near you right now.

    I’m smiling, my retirements all went up about 3%…more $CASH$ pouring into the banks…

  29. 29
    Brogrammer says:

    RE: StupidLifeDecisions @ 27

    I am not trash, just overpaid.
    I’m getting another one then. Should I do it now or wait?

  30. 30

    RE: steve @ 10
    $70K Per Household Income

    Is not peon wages compared to average Seattle area households [average per capita pay about $40K with 1.2 workers per household about average]. Its about the top 30-40% of household incomes….not flamboyant, but not peon level. Welcome to the harsh reality.

    $70K household income per year in Kansas City is living large, in Seattle its “rent forever”….LOL

  31. 31

    RE: Brogrammer @ 29

    LOL Brogrammar

    Is that like “Brokegrammer”??

  32. 32
    Brogrammer says:

    RE: softwarengineer @ 31

    Not yet, but soon I will be displaced and will have a long employment gap.

  33. 33
    Sam says:

    RE: softwarengineer @ 26

    Good luck with that. This is America: you can’t replace doctors with robots because you can’t sue a robot.

    Baby Boomers are retiring at a rate of 10k per DAY and throwing themselves on a healthcare system that’s already stretched. Meanwhile, we’re looking at chronic shortages of doctors and nurses that’s only getting worse as the workforce ages. One authority projects a physician shortage of 125,000(!) by 2030.

    The old are retiring while the young are seeing the light: why take on $500k of student loan debt and spend a decade in hardcore school and hardcore training to make as much as a techie while working longer hours, plus nights, weekends, and holidays under far, far more stress?

    Hard not to be bullish on healthcare workers’ salaries…

  34. 34
    Momentum says:

    The statistics do show this is not a rush to the exists, but instead a decrease in purchasing or purchasers. With increasing inventory and prices dropping is that good or bad? I would argue it can only be bad because if people who own properties as rentals or as foreign investments start running for the exit or to cash out then you have an exponential problem with housing. Right now demand is down, but if supply (as measured as new monthly listing) also drastically increases this spring we may be seeing people trying to catch a hatched instead of a knife. I’m not saying that is going to happen. Who knows, maybe demand dramatically picks up this springs and new monthly listings remains typical for season and we get a return to sellers market, but a falling hatched is equally possible.

  35. 35

    RE: Rentin’ @ 15

    Just letting you know I see this question. Working on the answer.

  36. 36
    Calo says:

    Hi @ The Tim,
    When I went to Altos Research, I found that the price per square feet tends to decrease much slower than the median price.
    Taking the example of Seattle houses, the 90-days moving average of the median price decreased from $824k in May to $732k in November (-11%), while the median price per sqft decreased from $405 to $385 (-5%).
    This seems to tell that the decrease in median prices is also due to a market shift towards selling smaller houses.
    I believe it would be interesting to add some analysis relative to this observation. For example, testing the hypothesis that the inventory growth could come mostly from large expensive houses.
    Thoughts?

  37. 37

    RE: Rentin’ @ 15

    Bottom Line is appreciation YOY is 8% and not 40%.

    I had to go to the map and chart you were referring to in order to get the same geographic space that they were using. They cut out a lot of Kirkland (mostly more affordable areas of Kirkland) and dragged the line into Redmond on the other side of 60-01. I did a free form polygon to capture pretty much the same area. They had 39 houses and I had 38 for 11/2018. Close enough.

    The 8% comes from the ppsf numbers and is more accurate than the 40%. But the majority of the story is that in 2017 you had a lot more builders buying teardowns and fewer new homes sold in the same time period. 2018 had 8 of 38 as new and 2017 had 6 of 55 as new. Add that to 2017 having 19 of 53 selling under $750k with a fair amount of them being teardowns and 2018 only having 5 of 38 selling under $750k.

    Not a Nov to Nov YOY match below but should shed some more light.

    2017 sold for $500k torn down and sold for $1,725,000 in 11/2018. Obviously not “appreciation”, just a much higher price at the same address in November of 2018.

    2017 sold for $415k torn down and sold for $1,265,000 in 11/2018

    So you have more new construction sales as part of the fewer sold in 2018 and more tear down prices as part of the more sold in 2017.

    It’s the mix and the creation of new from old that makes it look like 40%. Median Square footage 11/17 was 2,250 vs 11/18 of 3,050.

    While the 8% increase on a price per square foot basis is not entirely accurate if you apply it to all housing…it’s a lot more accurate than the 40% in the chart.

    Hope that helps. Mostly you have fewer builders buying tear downs and more of those sitting on market skewing the median away from the bottom and toward the price of new vs old.

    Stats in this comment are hand calculated in real time by Ardell and not compiled, verified or published by The Northwest Multiple Listing Service.

  38. 38
    Justme says:

    RE: uwp @ 3

    >>The return to a historically average amount of listed inventory seems to be more about over-priced homes sitting rather than a mad rush of sellers.

    New readers may need a reminder that Uwp is pretty much obsessed with declaring over and over that there is no “mad rush of sellers” or “sellers rushing for the exists”. This is a strawman that Uwp likes to set up and knock down over and over again, hoping that the general public will somehow translate the statements into “Hmm, maybe I should buy now?”. Perhaps especially buy the starter home that UWP would like to unload upon some unsuspecting millenials that he wants to “help” getting a home. That’s the background.

    What we do have is a big fat buyer strike and a big fat inventory increase. With 2X the inventory (King County SFH) and a 20% drop in sales counts, yes, we do have a buyer strike, and it has been building since spring. Everyone except the most gung-ho buyers and most gung-ho sell-side propagandists have seen what is going on, and the bubble is now in full bust mode.

    Seattle TImes:

    “Buyers are seeing far more homes to choose from. Countywide, the number of houses on the market jumped 114 percent year-over-year, easily the largest gain on record dating back to 2000 – led by a whopping 177 percent increase in the city of Seattle. The last three months have now featured the three biggest increases in inventory in history. The trend is entirely attributable to more homes sitting on the market unsold, as opposed to more people putting homes up for sale.”

  39. 39
    Rentin’ says:

    RE: Ardell DellaLoggia @ 37 – Thank you so much Ardell, I really appreciate you looking into this! That makes much more sense. There has been so much construction in the area I’m not surprised by it skewing the data the way it did.

  40. 40
    ess says:

    Any of you renters that are holding off buying a house because of declining house prices – I assume you will continue to rent. Has your landlord provided any incentives such as lower rent to stay another year? Unless there is a decline of population in the Puget Sound area – the person that doesn’t purchase a house continues to rent, and there is no increase of vacant housing unless renters continue to double and triple up at a higher rate than before.

    And if anyone is renting smaller houses (less than 1500 sq foot), it would be interesting to determine if rent for those houses are dropping. One thing this area didn’t produce in the great real estate expansion as of the great recession – modest size single family houses that first time buyers would usually start out in, and lower income renters can afford. Thus as a percentage of the housing stock, small single family houses are less and less of the total available rental market.

    One assumes that more expensive luxury one and two bedroom apartments are going to be the first to experience a decline in rents, as that was where the construction was concentrated.

    This price decline was totally expected, and is part of any market. One really didn’t expect prices to go up forever – regardless of government policies that are the chief culprit in raising housing prices. When salaries catch up (as they have started to increase), inflation kicks in (as it is starting to) and building of new housing is curtailed – there will be once again demand that supply can’t supply. Has happened before in Puget Sound, will happen again. How long this cycle will take to go through is unknown. But one big hurdle – that of Amazon HQ2 has been overcome for Seattle housing. Call Virginia and LIC headquarters – in terms of size – Seattle still the primary HQ1

  41. 41
    Notme says:

    inventory 2X
    unprecedented price drops
    but but but SHORTAGE!!

    -a what-happened-to-the-housing-shortage bubble haiku

  42. 42
    Justsomedude12 says:

    By ess @ 40:

    But one big hurdle – that of Amazon HQ2 has been overcome for Seattle housing. Call Virginia and LIC headquarters – in terms of size – Seattle still the primary HQ1

    I’ve seen it mentioned on here before that Amazon splitting HQ2 into 2 cities is more bullish for Seattle home prices. I don’t think it really matters whether HQ2 was one location or many locations, it’s still 50,000 jobs that aren’t coming to Seattle.

    And as far as the desirability of the 2 locations, I’ve also seen it mentioned that housing costs are somewhat similar to Seattle so not many will want to transfer. But many people would rather live in New York at these prices than Seattle (and some would prefer WA DC). Many Amazon employees don’t have any ties to Seattle, they just came here for the job.

    Not saying there’s going to be a mass exodus of Amazon employees, but I believe the mass hiring from Amazon that was a tailwind for the Seattle RE market is over.

  43. 43
    richard says:

    RE: ess @ 40

    If you are a renter and want to buy a house in recent years. things you wish to happen are

    1. recession, a really big one. A big recession can force many home owners to sell at the same time. Also it tends to drive down rents. Even if FED drops interest rate to zero and start QE4, it still take time to reflate the house price and in the meantime people are scared to buy since they are afraid of job loss. A recession will also force the inexperienced recent home buyers sell their home at a loss and they will not come back to the market compete with you for a long time.

    2. you have to keep your job (being in a good business group in your company, a highly valued employee). and also you are brave enough to buy a house when everybody is afraid.

    So you should wish for a slower job market, weaker corporate earning, corporate debt crisis in 2019, the demise of Amazon. You should hope Amazon recent expansion in the east coast will cost job loss in Seattle. On top of that, the significant drop of Chinese money(Given recent events, Chinese riches may be more hesitant to put their money in U.S.).

    In short term, if homeowner still have steady income, they can hold onto their house and refuse to sell.
    The rent.vs.buy math is not in too much favor to rent.

  44. 44
    Justme says:

    RE: ess @ 40

    You’ve been a bubble monger for years, and now you hide behind “This price decline was totally expected, and is part of any market” AND ” One really didn’t expect prices to go up forever”.

    REALLY? When exactly did you stop advising people that the right thing was to buy-Buy-BUY! at whatever price the market demanded? How much grief , loss and destruction have you caused with your rampant propaganda? (The same goes for many others, including Whatsmyname, Uwp, David-the-puppy, Deerhawke, Erik, Eddiemaster, jon, doug, and many more, including also REIC insiders Kary and Ardell who were loathe to put brakes on while the commission goings were good. Don’t anyone feel left out. )

    Shame on you and the bubble you rode in on.

  45. 45
    whatsmyname says:

    By Justme @ 38:

    New readers may need a reminder that Uwp is pretty much obsessed with declaring over and over that there is no “mad rush of sellers” or “sellers rushing for the exists”. This is a strawman that Uwp likes to set up and knock down over and over again,

    Is that really a super obvious strawman? Because the “sellers rushing the exits” and “sellers crowding the exits” are phrases that were introduced and used here many times as a serious argument by a poster using the handle, “Justme”.

    Another funny thing relating to your post. A “strike” is a mass or organized cessation of activity in order to further a goal. November sales were at about median – meaning half of Novembers have more sales, and half of Novembers have fewer sales.

    Were the half of all Novembers on record with fewer sales than this year also years of buyer’s strikes? Or is the term just utterly meaningless? Or are we not having one now? Or are the years just not comparable because so many more people live here now? Looking forward to your answer.

  46. 46
    Ardell says:

    RE: Justme @ 44

    Seriously? I’ve been a perma bear for quite some time now. Do you just make stuff up as you go? Or are you drunk posting?

    Do you not know what “It’s a better time to sell than to buy” means?

  47. 47
    Justme says:

    RE: Ardell @ 46

    Ardell, show me the post and date after which all your narrative was bearish. I’ll agree that it was before most other bubble mongers, many of which still have not (or never will) fess up to their misdeeds, but NOT sure it was much before the peak in Apr/May/Jun CS.

    If you switch sides close to the peak, most of the damage is already done. And that damage should be on the consciousness of everyone involved.

    No, I don’t post drunk, and there is no reason to believe I do. That’s just slander.

  48. 48
    whatsmyname says:

    RE: Market Psychologist @ 25 – The quick fall from peak would feel more impact for sure, but I think the key is that the numbers are wrong in any event. I posted the sub-markets with big gains not because I believed them, but because they demonstrate how out of whack those numbers can be. Ardell did a great job in this thread of showing how the 40% gain really translates to only an 8% gain when you account for the specific facts. I think something similar would hold true for the big losses mentioned in the Times article, which do after all, come from the same source and methodology.

  49. 49

    RE: Justme @ 47

    I’ve been saying It’s a better time to sell than to buy since late 2016. I have said I believe an upswing lasts 5 to 7 years, with the beginning at 2012, meaning the decline would likely start 5 years from 2012 or 2017 but by 2019 at the latest.

    You need to stop targeting agents as being biased when in fact those who want prices to go down so they can buy more cheaply are clearly much more biased than agents.

    I always have some buyer clients who need to buy and we can usually find something that makes sense. There is not time when NO ONE buys a house. Stop being mad at people for buying a house. There is no strike where no one buys a house. There is also no safety in thinking the market is going to make you a genius, because you can always buy the wrong house in the wrong place at the wrong price in ANY market. You still have to choose carefully, regardless of market condtions.

    People have families. A couple of years or more in a child’s life is too much to waste. You make the best decisions you can for your family, and the financial aspect of it is a consideration…but not the ONLY consideration.

    Stop beating everyone up. Just have your opinion without dragging everyone into your ongoing drama.

  50. 50
    ess says:

    Justsomedude 12

    I’ve seen it mentioned on here before that Amazon splitting HQ2 into 2 cities is more bullish for Seattle home prices. I don’t think it really matters whether HQ2 was one location or many locations, it’s still 50,000 jobs that aren’t coming to Seattle.

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

    It isn’t the jobs that are not coming to Seattle – it is the jobs that could possibly leave Seattle that concerned me. I am very comforted that not only did Amazon choose two locations – but both have high housing prices, opposition to Amazon(LIC) and various state and local income taxes. Seattle is still considered one of the prize areas of the country to reside in – regardless of the mess the local government has made of the area.

    Not that I am privy to the thinking of Amazon, but with all their growth – it only made sense to have other locations for so many reasons. Some of them – diversification of location in the event of natural disasters (earthquakes, fires, hurricanes, snow storms), but the ability to shake down local governments for tax breaks, and the ability to recruit talent from all over the country. For Amazon, or any company to have their entire operation in one location, or even one state makes no sense in this age of telecommunications and political concerns.

    Downturns are a part of real estate, as in any investment. Over time – barring some unfortunate outlier such as Detroit, real estate, as most investments increase in value over time. I am not bothered that the prices of housing are going down – I have stated for years that real estate goes up and down, but up over time. I should know – I have owned rental property for over 40 years. I am pleased that government policies are making long term real estate investments even more beneficial. When we bought our houses – the house was worth much more than the land – now it isn’t even a close call with the land being worth a fortune compared to the improvement. Thanks UGMA.

    And renters may rejoice in the fact that prices are going down. Some may wait until those prices drop and get back into the market with all the other renters that are also waiting. As a result – the market may stabilize much quicker than people believe. In addition – mortgage rates are now moderating, and there is a good chance that they won’t go up much more. On the other hand – they may rise much higher and a lower price house may still have a higher payment if higher mortgage rates are factored into the equation. But one thing I know is certain – that a tenant – especially a long term tenant will have nothing to show for all the money they spent when the tenancy is concluded, and that tenant has no protection in the event rents spike. While no one can predict the future – a 30 year mortgage is predictable, and it is no accident that every survey that compares the net worth of renters to homeowners indicate that homeowners have so much more net worth than renters. But renters – if you wish to rent – please do so! Who am I to dissuade the best renters out there from potential business for myself – those who have the means to buy a house?

    Of course buying a house is a personal decision that must be made weighing various factors, as I have indicated time and time again in the past. The only thing that is certain about the future is that it is uncertain

  51. 51
    Steve says:

    RE: softwarengineer @ 30

    Make no mistake, I live very comfortably, zero debt, xlnt credit, and can buy a 300k condo tomorrow with no issue. I could also probably find a job in Kansas and live large.

    Not sure why you find housing unaffordability lol worthy. You’re a Seattle renter, lol. What’s to lol about? Remember lol means laughing out loud.

  52. 52
    richard says:

    to keep amazon share value, amazon need to boost online retail revenue for the top line and boost aws profit for the bottom line. unforunately, with credit card debt reaching new high in this so called strong economy, amazon will get squeezed, amazon need to continue buy other companies to expand to continue the good story. aws cloud build up need a lot of investment. with 3 head quarters, amazon is more likely to cut seattle headcount to hold its top and bottom lines in a slow economy. because the incentive new york gave to amazon is contingient to its promise of hiring 25000workers with high wages.

  53. 53
    QA Observer says:

    RE: Justme @ 44

    Like! Oh, you also missed, “Buy now, or be priced out forever!”

  54. 54
    Luke says:

    RE: ess @ 50

    This makes absolutely no sense. 50k fewer Amazon jobs in Seattle is some multiple of 50k fewer people in Seattle. The details of how they end up not being in Seattle don’t matter.

    Make no mistake about it, 50k fewer Amazon jobs in Seattle has HUGE implications for the local economy and housing market.

  55. 55
    Deerhawke says:

    Kind of interesting to me that so many people on this blog feel that if they talk trash about the market in Seattle, it will somehow affect the market. They believe they have the ability to talk people out of buying and can thereby make real estate cheaper. As though real estate in Seattle were some kind of limited issue pump-and-dump penny stock.

    This also happened for a little while during the (very brief) period of uncertainty and weakness in 2014. Does anybody remember all the frantic warnings about impending Seattle real estate doom? Anybody remember the warnings of an avalanche of “shadow inventory” that was just waiting to be unleashed? Again and again, we heard that 2008 was just the warm up act. We were going to see 2008 Part II. Don’t forget 2008, 2008, 2008! Shadow inventory! Shadow inventory! Hold onto your cash until the market really gets slammed! So we were told.

    Really, get a grip, bears. You can shout at the market but it is not listening to you. You can’t make it do anything.

    Give it a couple of months and you will see how resilient prices are. This market is showing all the signs of stabilizing after a small shock. And mind you, the month on month numbers don” t mean anything. The year-on-year numbers are all that counts.

    Of course, given the past few days, we could soon see some other phenomenon. One or more members of the Trump family could soon be facing subpoenas. That kind of political instability might be much more devastating to Seattle real estate than anything inherent in this local market. But these developments will have an affect on all assets and all markets across the country.

  56. 56
    justsomedude12 says:

    By ess @ 50:

    Justsomedude 12

    While no one can predict the future – a 30 year mortgage is predictable, and it is no accident that every survey that compares the net worth of renters to homeowners indicate that homeowners have so much more net worth than renters.

    It has also been consistently shown that instead of purchasing a home, renting and investing the money that would have gone towards the home purchase provides a superior return on your money.

    There are plenty of reasons to purchase a home, but getting the best return on your money is not one of them. Especially buying into an inflated market such as Seattle.

  57. 57
    ess says:

    By Luke @ 53:

    RE: ess @ 50

    This makes absolutely no sense. 50k fewer Amazon jobs in Seattle is some multiple of 50k fewer people in Seattle. The details of how they end up not being in Seattle don’t matter.

    Make no mistake about it, 50k fewer Amazon jobs in Seattle has HUGE implications for the local economy and housing market.

    The Seattle real estate market dramatically increased in value way before there was any talk of Amazon growing in size to one hundred thousand employees. It isn’t the loss of future jobs that is of concern – it is the loss of present jobs, and that probably isn’t going to happen. Not only does it not make sense for Amazon, or any company to locate its entire operation in one city, but it may not have been physically possible for Amazon to do so.

  58. 58
    ess says:

    By justsomedude12 @ 55:

    By ess @ 50:

    Justsomedude 12

    While no one can predict the future – a 30 year mortgage is predictable, and it is no accident that every survey that compares the net worth of renters to homeowners indicate that homeowners have so much more net worth than renters.

    It has also been consistently shown that instead of purchasing a home, renting and investing the money that would have gone towards the home purchase provides a superior return on your money.

    There are plenty of reasons to purchase a home, but getting the best return on your money is not one of them. Especially buying into an inflated market such as Seattle.

    Of course it may not make sense to invest in “an inflated market such as Seattle” or anywhere else – just as much as it doesn’t make sense to purchase stocks only at the market highs. I would not and have not done neither.

    Assuming that there are significant savings to renting vs owning over a period of years, it would be grand if the tenant invested the difference in investments. Unfortunately, most tenants don’t do that, while a homeowner is forced to save through their mortgage payments and possible increase in the value of their house. This is why research tends to indicate that homeowners have a much greater net worth than renters, and most of that net worth is tied up in their homes.

  59. 59
    justsomedude12 says:

    By ess @ 57:

    By justsomedude12 @ 55:

    By ess @ 50:

    Justsomedude 12

    While no one can predict the future – a 30 year mortgage is predictable, and it is no accident that every survey that compares the net worth of renters to homeowners indicate that homeowners have so much more net worth than renters.

    It has also been consistently shown that instead of purchasing a home, renting and investing the money that would have gone towards the home purchase provides a superior return on your money.

    There are plenty of reasons to purchase a home, but getting the best return on your money is not one of them. Especially buying into an inflated market such as Seattle.

    Of course it may not make sense to invest in “an inflated market such as Seattle” or anywhere else – just as much as it doesn’t make sense to purchase stocks only at the market highs. I would not and have not done neither.

    Assuming that there are significant savings to renting vs owning over a period of years, it would be grand if the tenant invested the difference in investments. Unfortunately, most tenants don’t do that, while a homeowner is forced to save through their mortgage payments and possible increase in the value of their house. This is why research tends to indicate that homeowners have a much greater net worth than renters, and most of that net worth is tied up in their homes.

    Agreed. Many renters do choose to spend that extra money instead of saving/investing it. They may choose to travel, buy a bunch of stuff, whatever they value in life. They choose those things over net worth. Therefore, to the extent that they indulge in those things, they do come up with less net worth than a comparable homeowner who has saved through the forced savings of paying down the principal portion of a mortgage payment.

    But for those renters who do choose to save/invest the excess, they’re generally going to come out ahead.

    It’s really a comparison of savers vs spenders, rather than homeowners vs renters.

  60. 60
    ess says:

    RE: justsomedude12 @ 58

    No one ever accused the United States to be a nation of savers – that is for sure!!

  61. 61
    justsomedude12 says:

    By ess @ 59:

    RE: justsomedude12 @ 58

    No one ever accused the United States to be a nation of savers – that is for sure!!

    Haha, true that!

  62. 62

    RE: Deerhawke @ 54
    Deerhawke

    Did Trump cut off all your rich elite tax deductions? The other 90+% of households that “slam-dunk” benefited [just look at your paychecks folks] from Trump’s tax cuts would call your “impeachment” comment a good reason to not buy Seattle Real Estate. No way are 90% of the American voters gonna give up our like 2.8% retirement increases under Trump so you can spend it all on illegal aliens instead. Build the WALL and ALL legal Americans save tax dollars.

    My Social Security 2019 increases under Trump aregonna be as big as my COLAs when I worked. The world does not revolve around Deerhawke. Obama was doling out zeros or negative furlough pay in comparison. You may hate the Trump base [deplorables], but the feeling is mutual.

  63. 63
    Justme says:

    RE: Ardell DellaLoggia @ 49

    >>I’ve been saying it’s a better time to sell than to buy since late 2016.

    I can’t verify that claim without a link with a date, but that is a pretty weak claim even if correct. Did you say “don’t buy unless you really, really, really have to?”. I don’t think so.

    Look, Ardell, you are not the dirtiest shirt in the hamper by any stretch. In fact you have been considerably more reasonable and measured in your analysis than most agents. But you still play the game, Participating mostly on the seller side does not absolve you from guilt in yet another nasty housing bubble. But I’m not trying to single you out.

  64. 64
    whatsmyname says:

    By justsomedude12 @ 58:

    But for those renters who do choose to save/invest the excess, they’re generally going to come out ahead.

    I do not believe that I am acquainted with such a creature, although I am sure one exists.

    Thanks to time and the formerly decreasing rate trend, my PITI is currently about $1,000/mo less than what rent would be at my house. How could I save and invest negative dollars as a renter?

  65. 65
    Justme says:

    I’m against all forms of artificially inflated house prices, whether through propaganda, outright lies, mis-characterization, mis-representation, emotional manipulation, collusion, monopolies, manipulation of interest rates, quantitative easing, punishing savers, bank bailouts, bondholder bailouts, socializing losses, frontrunning, corruption, fraud, unfair laws in general, unfair tax laws, or any other scheme designed to profit current owners or select individuals or subgroups at the expense of renters, future generations and the population at large.

    That is my mission. Some people call this “bias”. I call it good morals.

    And I will fight back. I hope not to stoop as low as the bubble mongers regularly do, but since bubble mongers play dirty all the time, don’t expect me to be an angel. Do onto bubble mongers as they deserve.

  66. 66

    RE: Justme @ 62
    Realtors are Like Tax Collectors

    We need them in society so the administration paperwork and escrow is processed expediently. We don’t like tax collectors either, but their job is invaluable none-the less. Attorneys, same logic, you may hate them in general, but when you need one they’re Godsends.

  67. 67

    RE: Justme @ 64
    Yes Justme

    Its called tough love and if we don’t stick up for truth life isn’t worth living.

  68. 68
    whatsmyname says:

    By Justme @ 64:

    And I will fight back. I hope not to stoop as low as the bubble mongers regularly do, but since bubble mongers play dirty all the time, don’t expect me to be an angel. Do onto bubble mongers as they deserve.

    Your squeaks of rage are duly noted. When you say you will not stoop as low as the bubble mongers, is this to say that you will remain above answering the hard questions put to you? You have been asked and ignored many questions which would require you confront the incoherence of your position. But you keep coming back as if they are not out there.

    Like it or not, houses are capital goods which require huge amounts of upfront labor and materials arranged to provide an important service function for a long time. Justsomedude12 thinks they don’t return enough to even bother owning.

    Get some help.

  69. 69
    Justme says:

    RE: whatsmyname @ 63

    That does not mean that buying YOUR house today at today’s price is a good idea. Far from it.

    Since justsomedude12 cannot travel back in time, he does not have the ability to buy your house X years ago. You know that, right?

    This kind of emotional manipulation of buyers is wrong and immoral. I think we might start a list of fallacies, this one might be called “the time travel fallacy” with a dollop of “survivor bias “.

    Hey, whatsmyname, go out and buy a house now. Pay top dollar. After all, after 20 years, you may not have “lost any money”, or at least not nominally (numerically). (sarc off).

  70. 70
    Justme says:

    RE: softwarengineer @ 66

    Agreed. Thanks.

  71. 71
    whatsmyname says:

    RE: Justme @ 68
    Just as today, the payments were higher than rent when I bought it.
    Just as today, there were no guarantees of future appreciation.
    Just as today, there were no guarantees of future inflation.
    Just as today, there was a history of inflation, appreciation, and a FED bias to low inflation.
    You seem incapable of learning. How did you acquire this mishmash of garbage you spout?

  72. 72
    justsomedude12 says:

    RE: whatsmyname @ 63
    I’m talking about purchasing a home at the present time.

    If one could go back in time several years and purchase at that point, of course everyone on this forum would leverage to the hilt and buy as many as they’d let us. Same goes for purchasing a hot stock, or picking the winning lottery numbers.

    But since none of that is possible, one must make decisions in the here and now. So for someone deciding whether to purchase or not purchase at the present time, when it comes to the financial aspect at least it’s a no-brainer. Rent payment beats PITI hands down, and will for years to come (unless home prices drop further).

    But as mentioned before, there are other reasons to purchase a home besides financial.

  73. 73
    Justme says:

    RE: Deerhawke @ 54

    >>Kind of interesting to me that so many people on this blog feel that if they talk trash about the market in Seattle, it will somehow affect the market.

    Speaking up against the REIC propaganda == talking trash about the market?

    >>Really, get a grip, bears. You can shout at the market but it is not listening to you. You can’t make it do anything.

    Really? You have been writing lengthy, soothing missives that sound oh-so-reasonable and oh-so-knowledgable-insider on this blog for years now. Why would you do that unless the propaganda is working? Is it a public service, or are you just trying to keep prices increasing to support your small empire of tear-down-and-triple-the-price at Green Lake? Personally, I think it is the latter.

  74. 74
    Justme says:

    RE: whatsmyname @ 70

    So you bought at inflated prices, maybe near a peak, were underwater for years, and now you want everyone else to overpay as well, to compensate for your mistake?

    Bubble mongers seem to be big on the put-your-money-where-your-mouth-is challenge. I’m challenging you: Go and buy a house now at top dollar,.

    PS: I’m already putting my money where my mouth is: I’m renting.

  75. 75
    whatsmyname says:

    RE: justsomedude12 @ 71 – I would refer you to post 70 (excepting for the last line). No one has or had the benefit of knowing the future when they buy/bought. If you are in a market with a future, going in payments will always be higher than rent, but that will change. It always seems expensive, and you always have to control your appetite for better houses to risk you can handle. These are not signs of impending disaster. This is how it always is for buyers, especially first time buyers.

    I’m good with people renting. I am on the other side of that transaction. And the market does seem iffy right now; there is no need to buy, especially if you don’t really want it, and aren’t comfortable. But recognize the risks you cite for what they are.

  76. 76
    whatsmyname says:

    RE: Justme @ 73 – I explain how the market normally works, and you wrongly assume that means I bought at the top. Then you wrongly assume I was ever underwater. Then you wrongly assume I want to be compensated for the mistakes I never made?

    Speaking of mistakes, perhaps you should have been buying a house in 2015 instead of decrying the imminent disaster here on the Seattle Bubble?

    Like you, I also rent. Unlike you, I rent to tenants.

  77. 77
    Deerhawke says:

    Here in the 705 area (mainly Greenlake, Wallingford, Fremont, Ballard), it is interesting to see the attitude of buyers.

    Wait! The Seattle Times says everything has dropped. Mike Rosenberg said things have plummeted 11 percent! That’s double digits It is one of the biggest drops in the history of real estate! That’s huge!

    But wait, these are the same prices as last Christmas. Maybe a little more. How can that be? And there really isnt that much to look at in my price range that is any good. Still too small and needs a lot of work for $795k. How is this possible? What’s going on?

    To me, it is kind of like people who wait in a long line of traffic and are really hoping to see a terrible fatality accident when they get to the source of the delay. But when they finally get to rubberneck where the flashing lights are, it is just another silly fender bender. And in a little while they will have it cleaned up and the traffic will still be bad.

  78. 78
    justsomedude12 says:

    RE: whatsmyname @ 74
    Yes, I saw your post 70 right after my comment posted. As someone who has owned over a long period of time I understand your points. I just think we are in at least slightly different times than what is normal.

    In recent years the unusual circumstances of ultra low interest rates, enormous tech hiring and possibly Chinese money have propelled Seattle RE prices to levels it wouldn’t normally be at. Now those drivers are substantially diminished and are no longer propelling the market higher.

    For people that haven’t been in the game longer than 10 years, they probably have a skewed view of what is normal for RE. I would just caution people not use the last 10 years or so as a baseline for what to expect. The points in your post 70 have been given a very positive boost by the hot market of recent years. But this was a one time boost due to very unusual circumstances, and is likely over.

  79. 79
    sfrz says:

    This time it is different. Again, this is a FED produced Everything Bubble that is popping. Auto loans, student loans, real estate – all easy money that was printed from air, being funneled to the top 0.01%.

    I don’t care if the next lemming raced to stand in line to bid up an insane amount on a moss pit. What I DO care about, as we all should, is the cartel that is running this ***** show. That’s my fury. The corporate, Goldman squid that has taken over our country.
    Call me what you want.

    “The Greed Is Now Gone
    All that credit had to go somewhere. And it did.

    Rare art fetched record-breaking prices. As did top-end trophy properties the world over. Rare cars and large gemstones commanded the highest prices ever seen. Stocks were bid up to ridiculous Price/Earnings multiples. And the Housing Bubble 2.0 returned to many metros around the globe — housing has never been more unaffordable to more people than it is now.

    Can you feel it? How greed is now giving way to fear?

    Sure, you probably know people who are hanging onto the Wall Street marketing slogans (“Buy the dips…hang on…don’t panic…successful investors don’t sell into weakness, they buy more!”). But the party atmosphere is now over.

    Just ask anyone who bought a house in Seattle in June (now down 11%). Or FAANG stocks in July (down 20%+). Or cryptocurrencies in January (down 80%+).

    We’ve seen more downside volatility in the financial markets this year than in all of 2012-2017.

    Until and unless the central banks reverse their current tightening course, everything is headed lower.

    And I mean everything.

    How bad will it get? Honestly, pretty damn bad. Worse than 2000 and worse than 2008.”
    https://www.zerohedge.com/news/2018-12-08/everything-bubble-has-popped

  80. 80
    Luke says:

    RE: Deerhawke @ 54

    We are down over 10% in 6 months. For the people who bought in the last 6 months, the month over month numbers matter.

  81. 81
    Luke says:

    RE: justsomedude12 @ 55

    You are mixing up correlation and causation.

  82. 82
    Luke says:

    RE: ess @ 56

    More nonsense. Prospects for the future are baked into the valuation of assets.

  83. 83
    justsomedude12 says:

    RE: Luke @ 80 – I’m guessing you’re referring to the post that I quoted, not the part that I wrote.

  84. 84
    Justme says:

    RE: whatsmyname @ 75

    I think you just admitted that you did not suffer from buying at or near a peak in the market. In fact you claim never to have been underwater on your purchase. So then what is your excuse for wanting everyone else to suffer? If you had bought near a peak, it would still be wrong to want others to do the same, but at least somewhat understandable (given the less moral side of human nature). But you don’t even have an excuse. So I guess you are just a run-of-the-mill rentier sociopath. Good to get that cleared up.

  85. 85
    Mark says:

    RE: Justme @ 73

    I think we see the world in the same way.

    I too am one of those apparently rare breeds of high income renter by choice. Our combined income is probably in the top 10% for Seattle, 800+ FICO, no debt. Our rent is very reasonable compared to our income. We max both 401ks and then save aggressively into a mixed stock/bond Vanguard Index portfolio each month over and above that.

    We are sitting this real estate market out and will continue to do so. When I look at my neighborhood and see homes are selling for, I can’t help but wonder…if spending that amount seems unreasonable for us, who is doing all the buying? When I was pre-approved for a mortgage last year and saw what the lender said we could afford I thought that was absolute madness. Maybe people making the median Seattle income are OK being very house poor, not contributing to their 401k accounts, let alone a taxable account? We just do not get it. A owner occupied housing is a box you live in, not a productive, income generating investment. Not contributing to those high return accounts is devastating to the long term performance of your savings.

    As for this current weakness being transient, the Fed wasn’t raising rates and yield curve looked nothing like this in 2014. 2019 will be a whole different environment compared to years past. The era of cheap credit is coming to a close. My two cents.

  86. 86
    whatsmyname says:

    RE: Justme @ 83 – Tim is this you? Are you trying to keep the blog more interesting by adding a lunatic character? I think the character may be moving past the limits of an actual nut job, but just in case its a real person:

    Yes, that’s right. My purchases have been pretty pain free, and very positive experiences. I’m not looking for anyone to have pain. But what about you? As has been pointed out, people buy for many benefits besides financial. But back in 2015 you were using financial fear mongering to try and keep people from the whole experience of owning. We see in hindsight those fears were patently ridiculous. Why did you try to make them suffer not only the lifestyle, but the financial pain as well????? Is it because you would rather bring others down than lift up yourself? Please stop drinking.

  87. 87
    Eastsider says:

    Another Seattle Times article by Mike Rosenberg. Apparently, based on one metrics, the current RE market is the worst since data collection began in 2011.

    Big switch in Seattle homebuying: from most to fewest bidding wars in the country
    https://www.seattletimes.com/business/real-estate/a-big-switch-in-seattle-home-sales-from-most-to-fewest-bidding-wars-in-the-country/

    Just 21 percent of homes sold in the city of Seattle in November had multiple bidders, according to Redfin. That’s the lowest rate since the Seattle real-estate company began tracking in 2011.

  88. 88
    FN Brilliant says:

    RE: Justme @ 73
    I too felt compelled to write in a general agreement with your worldview.

    And to introduce myself as an economics professor at a highly regarded school outside of London, with a good income besides. “Huzzah”, as I imagine you might imagine me saying.

    Although quite wealthy myself, for some reason I imagine homeowners to be generally failing to fund their retirement and savings accounts. I am not sure why I would default to this presumption. But who can solve all of life’s mysteries? Not me.

    I am alarmed to read, and I will never understand, people losing perhaps 10% of value in your Seattle housing market over a period of 6 months. They could achieve an equivalent financial result in the stock market much more quickly – as demonstrated just this week. Efficiency matters! That’s what we say in Britain.

    Good luck, Yanks. 20 pence on the pound, as we like to say.

  89. 89
    northender says:

    RE: Luke @ 79
    The median sale price is down something like 10% – that does not mean every house is worth that much less. Redfin shows my residence value, in south Maple Leaf, to be flat for the last 6 months – no decrease. I do not expect to see substantial value drops for individual houses that are in desirable, close-in locations.

  90. 90
    Robert says:

    RE: Ardell DellaLoggia @ 49

    untrue – myself and a ton of high earners in my network that want to buy house have indeed been on strike since spring. We tabled a bit here and there, shared our experiences, etc. and bottom line, just not interested in buying trac shacks for 500 or ugly mobile homes dressed up like a trac shack for 470. They weren’t fooling anyone with that fashionable “peppercorn” paint job to the exterior. We got sick and tired of telling RE Agents that we will only look at this and not that and we can’t tell from the photo if there is X,Y,Z that is a deal breaker…and after hours wasted a few times looking at homes that were grossly overpriced where all included X,Y, Z, we threw up our hands and called a group strike.

    We looked far and wide, looked last year too. There were some kind of maybes but since we all learned a lot from the 2008 era, we found nothing that made good sense and we passed this knowledge down to our kids and their network. It may be a small strike, but is one indeed where we decided to hunker down in the houses we have that we bought at bottom between 09-12. Not falling for the trac shacks for 1/2 a mil and up with their glued on particle board and pampas grass and mustard “Designer Colors” . It’s just stupid, tasteless, and will turn your hard earned life hours into vapor.

  91. 91
    Luke says:

    RE: northender @ 87

    Well, if that’s what Redfin says, you know it must be true.

    Good thing it was all those other peoples’ houses that dropped in value, and not yours.

  92. 92
    LessonIsNeverTry says:

    By whatsmyname @ 63:

    By justsomedude12 @ 58:

    But for those renters who do choose to save/invest the excess, they’re generally going to come out ahead.

    I do not believe that I am acquainted with such a creature, although I am sure one exists.

    Thanks to time and the formerly decreasing rate trend, my PITI is currently about $1,000/mo less than what rent would be at my house. How could I save and invest negative dollars as a renter?

    Yep, they do exist. I’m one.

    Buying, once you consider everything (including the exit costs to sell and convert capital gains to cash), is definitely better than renting but on a longer time scale than is commonly acknowledged, especially with recent tax law changes. For those that were fortunate enough to be on the recent rocket ship ride from 2012 onward, buying was obviously a MUCH better option and those owners tend to be dismissive of renters. The bias of good fortune smiles upon us all. Happy renters should not feel they are missing out on anything at current prices or trends.

  93. 93
    LessonIsNeverTry says:

    RE: northender @ 87 – ” I do not expect to see substantial value drops for individual houses that are in desirable, close-in locations.”

    …. unless the current buyers strike continues into spring, supply returns to the level of past years, mortgage rates continue to rise, a recession ends the near-longest recovery ever, or the unemployment rate increases from the current record lows, or the current market momentum does not perpetuate. As long as none of those outcomes occur I’m in complete agreement.

  94. 94
    richard says:

    RE: Eastsider @ 86
    mike rosenberg has been a real estate cheer leader for a while. not long ago he poses as a housing guru saying buyer gotta buy quickly since even crash happens the price will drop 20% most(using last crash percentage as a hard limit).
    i am happy to see him pretty depressed shown in a recent interview in link below. in this interview,he still trying to deny recent slow down and imply the coming spring the price will sprin g back.

    https://youtu.be/wFO3OlOmCfs

  95. 95
    Eastsider says:

    RE: LessonIsNeverTry @ 89 – Even with a once a lifetime “rocket ship ride”, Seattle RE still underperforms the stock market. The S&P 500 index was at 1257 on 12/30/2011 and closed at 2633 last Friday. That is a gain of 110%. Historically, RE tracks inflation and stocks outperform inflation by a huge margin.

    As long as economic growth continues, stock will always outperform housing over time. Homeownership is at well over 50% so it is difficult for home prices to appreciate much faster than inflation. On the other hand, top 1 percent of households by wealth owns nearly 38 percent of all stocks shares. And GDP growth tends to benefit top 1 percent disproportionately.

  96. 96

    RE: Eastsider @ 92
    Stocks, $CASH$ and Incomes Just Require Tax Maintenance

    A house [if sold with Capital Gains] requires MASSIVE Federal Taxes when $CASH$ed i n too…then you get the “additional or extra” MASSIVE maintenance bills on these Seattle Museum pieces built in the 20s…LOL

    My advice, flip ’em like Erik before the maintenance dam breaks. Add in price decreases in 2019+?

  97. 97
    Notme says:

    Most bubble-mongers
    have bought no house for years now
    what does that tell you?

    -a do-as-I-say,-not-as-I-do bubble haiku

  98. 98
    ess says:

    By Eastsider @ 92:

    RE: LessonIsNeverTry @ 89 – Even with a once a lifetime “rocket ship ride”, Seattle RE still underperforms the stock market. The S&P 500 index was at 1257 on 12/30/2011 and closed at 2633 last Friday. That is a gain of 110%. Historically, RE tracks inflation and stocks outperform inflation by a huge margin.

    As long as economic growth continues, stock will always outperform housing over time. Homeownership is at well over 50% so it is difficult for home prices to appreciate much faster than inflation. On the other hand, top 1 percent of households by wealth owns nearly 38 percent of all stocks shares. And GDP growth tends to benefit top 1 percent disproportionately.

    Have you accounted for the fact that most purchasers of real estate only put 20% or so down when they buy real estate? If you are comparing the dollar value of the S and P index to the dollar value of real estate prices that have both increased over time, that is not exactly a correct comparison as there is a five time multiplier factor in real estate as compared a S and P shareholder that is buying a regular S and P fund.

  99. 99
    Eastsider says:

    By ess @ 95:

    Have you accounted for the fact that most purchasers of real estate only put 20% or so down when they buy real estate? If you are comparing the dollar value of the S and P index to the dollar value of real estate prices that have both increased over time, that is not exactly a correct comparison as there is a five time multiplier factor in real estate as compared a S and P shareholder that is buying a regular S and P fund.

    Sure, leverage amplifies gains (and losses too!) Have you considered a correction of 20% (or 10% if you include transaction costs) would wipe out your equity completely? Many people lost their homes in the last crash and never recovered. They could not even write off the losses on their tax returns.

    So you borrow 80% at 5% interest rate. If home prices do not appreciate 5% annually, you are losing badly amplified with your leverage! You better pray that Seattle RE prices increase at least 5% a year because your home is a depreciating asset. According to the IRS schedule, building depreciates (to zero) over 27.5 years.

    Finally, the cost of a round trip transaction in RE approaches 10%. And cost of a stock transaction today approaches zero! For all those cash buyers out there, stock is definitely a no brainer over the long term. To be clear, I am not advocating either stocks or RE at this time…

  100. 100
    Matt P says:

    How’s the weekend update look?

  101. 101
    ess says:

    RE: Eastsider @ 96

    I was merely responding to your example of price increase for the seven year period you suggested. Of course there are risks if the price of housing deteriorates.

    There are other factors to be noted that separate a house purchase from a stock fund purchase over seven years. Traditional mortgage rates will result in the P and I payment remaining the same. and although property taxes may increase – rents certainly did during the time frame you posted in your example.

    And yes – there are expenses in buying and selling real estate which are somewhat offset by the principal accumulations over the seven year period that you provided in your example, not to mention the healthy increase in real estate prices over that time. Of course there are non tangible benefits of owning a house that are measured in different ways for different folks.

    It is an interesting time to be investing with the stock market, bond market and real estate market all in turmoil.

  102. 102
    Realistic says:

    By Eastsider @ 96:

    To be clear, I am not advocating either stocks or RE at this time…

    That post made a lot of sense, but what investment do you guys recommend in the current economy? Maybe multifamily RE, mobile home park, gold, money market at 2% APY, or something else?

  103. 103
    Kelly says:

    By Justme @ 72:

    RE: Deerhawke @ 54

    >>Really, get a grip, bears. You can shout at the market but it is not listening to you. You can’t make it do anything.

    Really? You have been writing lengthy, soothing missives that sound oh-so-reasonable and oh-so-knowledgable-insider on this blog for years now. Why would you do that unless the propaganda is working? Is it a public service, or are you just trying to keep prices increasing to support your small empire of tear-down-and-triple-the-price at Green Lake? Personally, I think it is the latter.

    So true and his cherry-picked anecdotes are pretty nauseating. I don’t even bother reading his “missives” anymore.

  104. 104
    Deerhawke says:

    RE: Kelly @ 99

    Kelly, you go right ahead and listen to Justme/Sfrz about real estate and Software Engineer and David about politics. Those guys are geniuses who will never steer you wrong.

  105. 105
    sfrz says:

    RE: Deerhawke @ 100 – Somebody is getting testy. Market tanking over there in Tent/RV city? Camps backing up to your greenbelt?

  106. 106
    Erik says:

    RE: Deerhawke @ 100
    Anyone with half a brain and knows something about real estate can tell you know a lot and Justme is ignorant. I skip Justme’s comments and read yours. Keep on posting so I have something intelligent to read.

  107. 107
    Eastsider says:

    Here is an update on Fed Funds Future. We still expect a 1/4pt rate hike in December. However, the probability of at least one rate hike in 2019 has decreased to 46.5% from 87.9% a month ago. We can now expect an increase of .25%-.5% in 30 year mortgage loan rates over the next twelve months. Note that this is a prediction and not a fact. LOL.

  108. 108
    sfrz says:

    The Goldman Vampire Squid. aka Blackstone, Fed Reserve, US Treasury.

    “…ultimately what we’re talking about here is the haphazard, slap on the wrist, failure to truly enforce the rules and regulations equitably across the system. And that creates the imbalances that you see, for example, in Goldman Sachs, and that you see in the system in general. One of the things that happened as a result of Glass-Steagall coming down was that a lot of the investment bankers were allowed to take over the commercial banks. And those investment bankers knew nothing about banking, and Goldman is a great example of that. I mean, when I arrived three years in after the financial crisis, what was one of the things that was very shocking to me was going into meeting after meeting with Goldman senior management and hearing them lie, doublespeak, and most shockingly of all, insist that they didn’t have to comply with the law. And that is a problem. Because a bank that doesn’t believe, or management at a bank that doesn’t believe they have to comply with the law–you bet they are not supervising their employees correctly, and they’re not incentivizing employees correctly in terms of how to do their job. So their behavior is injecting enormous risk into the system.”
    https://www.truthdig.com/articles/wall-streets-corruption-runs-deeper-than-you-can-fathom/

  109. 109
    whatsmyname says:

    By Matt P @ 97:

    How’s the weekend update look?

    Well, while we’re waiting….. King County SFR listings dropped by around 200 this week, much the same weekly drop as they averaged last month, and also last year at this same time.

    If we had a chart, you could see that listings now are about 2,000 higher than this point in 2017. If we had a much bigger chart, you could see that listings now are about 6,000 lower than this point in 2007.

    New listings in November were matched almost perfectly with new listings in 2017, and following a similar trajectory. If that holds, and it seems reasonable given the symmetry in related numbers, we should now expect new listings for the month to be under 1500. December is the only month on record (except for November 2015) where we ever have new listings at less than 1500, so it’s a pretty low number without being irregular in that respect. Just the same, someone will probably point out that “new” listings is looking to be in the lowest 8% on record.

  110. 110
    Erik says:

    RE: whatsmyname @ 109
    Thanks for putting it into perspective. It’s interesting that inventory is still 6000 lower than we were at this time in 2006.

    Someone once told me the real estate market is alive from March until September. Seems like you may be trying to extrapolate data from a dead market. This time of year seems to be constant and summer seems to be when change happens.

  111. 111

    RE: Realistic @ 102
    $CASH$ is $CASH$

    If its in a tax free locked box….get it out. The interest is too low to block access in an i.e., 4-5 YO CD. Its up to 3% now, but even that’s too low to block access to your money.

    My retirement planning taught me that the “locked tax free box” 401K can deliver 20 years of monthly annuities at 0% or 1% interest and it doesn’t make much difference between the two, because the interest rate is a joke.

  112. 112
    Eastsider says:

    Here is one factor contributing to the lack of inventory –

    “The same home today would not only cost 50% more (nearly $300K), but the interest rate on the mortgage would also be >1.5% higher. The $741 monthly mortgage payment on that house in 2012 (assuming 20% down) would be $1,257 today, a 70% increase to purchase the same home.”

    Here’s what mortgage ‘rate lock’ looks like, in one chart
    https://www.marketwatch.com/story/heres-what-mortgage-rate-lock-looks-like-in-one-chart-2018-12-10

  113. 113

    RE: Erik @ 110
    Location, Location, Location

    Can affect demand, and some areas are far worse than others I imagine. They’ve froze my HOA fees at $185/mo the last 3 years…that’s a lot better than the Renton HOAs Condos i heard about…$600+/mo. Property tax hikes have got to end soon, or we’ll all be forced to move….LOL

    Those monthly fee payments are like termites on a budget…they go on and on…

  114. 114

    RE: Erik @ 106
    I Disagree Erik

    Deerhawke is way too establishment and heavy on large tax deductions going to high rolling RE investors. That’s why we have income disparity.

    Nope, the electoral college states “bottom 90% household incomes” need tax protection too. I do think Deerhawke is supporting his agenda well, but it don’t match Populist at all and when he mentioned impeachment scare on Trump…well let’s put it this way, its not gonna happen, but it appears [to some degree] to destroy market stability psychology, i.e., real estate and stocks [and Dems chances at 2020 too I’d add]. Trump’s base got their tax cut $CASH$ and no one’s gonna “silver tongue devil” it out of their pocket books…

  115. 115
    Deerhawke says:

    RE: Erik @ 106

    Thanks Eric. A couple of thoughts on the current market.

    1) This is a pause. A breather. The market was way out over its skis and had to get back to basics at some point. I had been saying a pullback was inevitable for a long time. I also said that the longer that took and the more accumulated stupidity had to be purged from the system, the worse it would be.

    2) Since it took so long and there was so a built-up reserve of greed, fear and folly, I am actually surprised at how mild this pullback is. To me, that is the real news right now.

    3) The stuff that was selling at seriously inflated prices is what is really getting hammered. House on a busy street? (Should have sold that in January. ) House in Upper Rainier Valley that you want to market as the CD at CD prices? (Right, should have put that on the market in January too.) Fixer with weird floor plan that is a demonstration of 1970’s tacky desigm? (Yup, ditto remarks above about January.) People now are not buying the overstretch marketing and are no longer allowing themselves to be fooled.

    4) Value still sells. Sometimes at a few percent off last year at this time. Sometimes at price. But more than you think, even now, you still see multiple bids. Not like 2017 where you had 20 bids and an OK-Corral shootout. But a couple of people who have done their due diligence and compete with dollars and terms to see who gets the house.

    5) So putting 4 and 5 together, the better parts of better neighborhoods will likely keep their value best. The houses and neighborhoods that were most of a stretch in 2016 and 2017 will get hurt the most.
    People will want close-in neighborhoods because our commute just keeps getting worse.

    6) Marketing and sales matter again. In a crazy market, everything gets multiple offers so why pay for experience? Now, you really need that person with the background and the ballast. The one who can help you address potential sales objections, price the project well, show it to its best advantage, negotiate skillfully and close the deal. (And no, I am not a real estate agent. And yes, I think 3/6% is a lot of money.)

    7) The longer short-term and medium term forecast for the area remains the same. Seattle and Eastside area real estate will outperform most other areas across the country. The transformation of our regional economy continues apace. Look at the amount of commercial real estate being built by or for name tech firms. Just read the Puget Sound Business Journal for a month. Amazon is set to hire more people in this area the next two years than the last two years. And many people who might have thought about leaving if HQ2 were going to Austin or Raleigh might stay when the choice is Arlington or Queens. Google, Microsoft, and Facebook– all building out multiple spaces and hiring like mad. As Seattle drops the viaduct and begins to build out the waterfront esplanade, the parallel will become clear. Seattle is the area’s San Francisco and BKR (Bellevue, Kirkland, Redmond) is the peninsula and Silicon Valley. Look at the long term growth of real estate values in San Francisco and Silicon Valley. Think those areas never saw dips and corrections?s But longer term, would you rather have bought there or in Sioux Falls?

    8) If there is a danger to our regional economy and the regional real estate market, it is from a national recession linked to national political events. This expansion is very long in the tooth. We are quite overdue for a recession. And unless you live under a rock, all the talk about Cohen, Manafort and Flynn last week lets you know that Trump committed well-documented impeachable offenses. Hard to say what happens next, but things could move slowly toward 2020– or very quickly. The period after Watergate was a rough time for the stock market and real estate.

  116. 116
    Matthew says:

    Where’s Helicopter Ben when the markets needs him?!

  117. 117
    uwp says:

    The recent HQ2 decision is good in the sense that we have been operating with the knowledge that Amazon was going to put 50,000 jobs in “a second headquarters” since September of 2017. That was already decided. The good news is the final decision was not a 2nd headquarters that will rival Seattle in size in an appealing area, but two smaller locations in expensive areas that may be somewhat appealing, but aren’t natural (and cheaper) choices for your typical PNWer like Denver or Austin might have been.

    The folks bemoaning HQ2 seem to think Amazon was all set to hire 50,000 more people in Seattle, and that it was already baked in to home prices. Serious question: Are there many cities with single employers of over 50,000 employees? I found this list: https://www.gobankingrates.com/making-money/business/biggest-employers-major-cities/ and most employers top out at around 30,000 employees in one city.

    The largest employer in LA (outside of government) is Kaiser with 36,000. LA County has 10 million people. King County has 2.

  118. 118
    Market Psychologist says:

    https://www.nrtoday.com/how-much-longer-will-the-housing-boom-last/article_f9bd5198-827f-50ee-a31d-f9a7a1764384.html

    Perhaps the home price increases are now a self-fulfilling prophesy. As John Maynard Keynes argued in his 1936 “General Theory of Employment, Interest and Money,” people seem to have a “simple faith in the conventional basis of valuation.”

    If the conventional basis is now that home prices are going up 5 percent a year, then sellers, who would otherwise have no idea what to ask for their houses, will just put a price based on this convention. And likewise buyers will not feel they are paying too much if they accept the convention. In the United States, we may believe that the process is all part of the “American dream.”

    It can’t go on forever, of course. But when it will end isn’t knowable. The data can’t tell us when prices will level off, or whether they will plunge catastrophically. All we do know is that prices have been roaring higher at a speed rarely seen in U.S. history. — Robert J. Shiller

    —————

    Great stuff in this article. As a psycholgist (wink, wink) I think Shiller’s point that socio-psychological factors are the main drivers of housing bubble 2.0 is correct. If we step back and look at the narrative in Seattle, I think it can be clearly seen: lack of land, tech jobs, PNW’s natural beauty, Chinese buyers, etc. All play a role, to be sure, but the story is what is most important. It’s the story that is convincing/alluring/scaring otherwise smart, prudent people to sign on the dotted line for shacks that are just not worth it. Time will tell, indeed.

  119. 119
    Deerhawke says:

    RE: Market Psychologist @ 118

    Shiller is a smart guy and always worth reading.

    Of course it is all about psychology. When my parents bought their first house in 1958, they stretched as far as possible to get the $15,000 VA loan for their new 1250 sf 3 bedroom 1.5 bath house in the burbs. My brother still owns it and I am shocked at how tiny it is when I go back there. 10 x 10 kitchen. 10 x 12 dining room. No appliances included. Formica countertops. Vinyl on the kitchen and bath floors. The only tile in the whole house was on the wall behind the tub (tiling the other two side walls was an upgrade).

    But it seemed like a castle for an immigrant Catholic family of 6. It was in a suburb with a good (meaning white) school and it was 200 sf bigger than the place they had been renting in the old parish downtown. Mom and Dad had their own room and wouldn’t have to sleep on the pullout sofa anymore.

    Now a family of three sees 3000 sf as cramped. All counters are covered with quartz because these days even tenants scoff at Formica. Eight foot ceilings? Oh no–gotta be 9 or even 10. And you not only want appliances included but huge ones covered with stainless steel. What’s this– vinyl? How about tile instead? And what’s this– carpet in the living room and dining room? Where are the hardwoods? The list goes on and on.

    When we even use the word “house” nowadays, it brings to mind a very different picture from a generation ago. That is part of the social psychology of housing prices.

    When we change our expectation of what we should get, we can change our expectation of what we should pay.

  120. 120
    Justsomedude12 says:

    RE: Deerhawke @ 115 – To be honest, Seattle isn’t San Francisco, and never will be. There are many more people around the country and around the world that would prefer to live in San Francisco than Seattle. It’s just the truth. Seattle’s recent run up in RE prices has led this area to be a bit cocky.

    People come to Seattle primarily for jobs. People come to San Francisco for that same reason, but also for the area itself. I know there are some hard core Seattleites who will disagree, but on the whole this is true.

  121. 121
    SeaMillie says:

    RE: Justsomedude12 @ 120
    As a native Seattleite who has lived in San Francisco I agree (I have moved back home). Everyone tries to make some comparison as a prediction of market direction, but there are vast differences in zoning rules, tax incentives, weather, and other factors that will always set California on a different level than the rest of the West Coast (provided climate change doesn’t alter the landscape down the road). Prop 13, NIMBYISM on a scale that drawfs Seattle, the best climate on the west coast, and a more open population to newcomers will make the Bay Area more expensive than Seattle. As to where the market is going, Seattle seems to be cementing itself as a leader in bringing in cloud computing jobs, which for the moment, seems to be where much of tech is heading. That being said, while people expolate job growth and stock price growth in the tech sector which is the ONLY thing that matters on the demand side, this can change extremely quickly. Everything in life and especially markets is cyclical. We have had an amazing run here, but the headwinds to runaway growth seem to be popping up everywhere you look even within housing (look at Trump’s potential nominee for the FHFA who has endorsed removing the MID and getting rid of govt backed 30 year loans).

  122. 122
    uwp says:

    Just for fun, I went back to look at the SeattleBubble post for November 2013 NWMLS stats. It was the closest to 2018 in terms of inventory per the charts above. And it was actually a pretty similar month activity-wise: within 5% of 2018’s listed inventory, closed sales within 2%, pending sales within 1%.

    Here is some of the 2013 commentary on the inventory levels (I have removed usernames to protect the innocent):

    “Inventory continues to follow the same trend as every year… it looks 2013 will close out as the second-worst year on record for inventory.”

    “Twenty-four months ago…people who did buy at that time had more inventory to choose from… That seems much more favorable than today’s post price hike, minimal inventory world.”

    “more buyers would probably be in the market at these prices if there were better inventory.”

    “this low inventory will only drive up prices.”

    https://seattlebubble.com/blog/2013/12/05/nwmls-sales-prices-slipped-november/

    Strangely, I could find no comments on “Buyer’s Strikes” or Sellers “rushing for the exit.”

  123. 123
    Jake says:

    @Justsomedude12 “I know there are some hard core Seattleites who will disagree, but on the whole this is true.”

    I don’t know if I would call myself hard core, but having met a ton of people who grew up outside the city who came here for reasons than other jobs, I would love to see some statistical evidence that people come for reasons other than jobs in SF in some higher proportion than Seattle. Not saying you’re wrong, but your assumption seems just as anecdotal as mine.

  124. 124
    Justsomedude12 says:

    RE: Jake @ 123 – Definitely tough to prove one way or another. But I think if one were to take a poll around the United States and the World asking if Seattle or San Francisco is a more desirable place to live, I’m pretty confident San Francisco wins hands down.

  125. 125

    RE: Justsomedude12 @ 124

    I prefer Seattle to San Francisco. I’m not from here. I rarely go to San Francisco anymore. Too foggy and hilly. I just asked my partner Kim who grew up in San Francisco and has lived in Seattle since he got back from Nam in 69. He stayed in Seattle mostly since then.

    He said “Don’t forget what Mark Twain said about San Francisco ‘“The coldest winter I ever spent was a summer in San Francisco.” :)

    One of my daughter’s just moved up to Fair Oaks (near Sacramento) from L.A. We lived in Granite Bay at one time near there and in South Bay L.A. where two of my daughters still live and I visit often.

    I wouldn’t put San Francisco ahead of Seattle, and as someone here just said I have had clients who moved there…and moved back here.

  126. 126
    Matt P says:

    By Ardell DellaLoggia @ 125:

    RE: Justsomedude12 @ 124

    I prefer Seattle to San Francisco. I’m not from here. I rarely go to San Francisco anymore. Too foggy and hilly. I just asked my partner Kim who grew up in San Francisco and has lived in Seattle since he got back from Nam in 69. He stayed in Seattle mostly since then.

    He said “Don’t forget what Mark Twain said about San Francisco ‘“The coldest winter I ever spent was a summer in San Francisco.” :)

    One of my daughter’s just moved up to Fair Oaks (near Sacramento) from L.A. We lived in Granite Bay at one time near there and in South Bay L.A. where two of my daughters still live and I visit often.

    I wouldn’t put San Francisco ahead of Seattle, and as someone here just said I have had clients who moved there…and moved back here.

    Except Twain almost certainly never said that and even so, the overall weather in San Fran is far milder than Seattle – it never gets as hot nor as cold. You also never end up with days where it’s dark when you get up to go to work and dark when you leave again.

    https://www.snopes.com/fact-check/and-never-the-twain-shall-tweet/

  127. 127
    Steve (Programmer) says:

    San Francisco is far superior to seattle, pricing excluded. Seattle has been the outpost for SV for the laSt 5 years, but now boulder Denver Austin New York San Diego etc are growing large tech sectors. I would not bet on SV companies continuing to grow in Seattle at large rates. Seattle prices should be 30% lower than they are to reach equilibrium. Obviously a made up number but the factors that drove growth in 2012 are diminishing and people should realize that. It’s a good thing! I miss WA from 15 years ago! Maybe I’m hopeful.

  128. 128
    justsomedude12 says:

    By SeaMillie @ 121:

    RE: Justsomedude12 @ 120
    We have had an amazing run here, but the headwinds to runaway growth seem to be popping up everywhere you look even within housing (look at Trump’s potential nominee for the FHFA who has endorsed removing the MID and getting rid of govt backed 30 year loans).

    I saw something about this today as well. Wow, if they removed government backing for mortgage loans, or even just scaled it back, that would make for some interesting times indeed.

  129. 129
    richard says:

    who will pay this time? a nice interview with Nassim Taleb .
    please check starting minute 7.

    https://www.youtube.com/watch?v=62rfLjnPxKE

  130. 130
    Eastsider says:

    By justsomedude12 @ 127:

    By SeaMillie @ 121:

    RE: Justsomedude12 @ 120
    We have had an amazing run here, but the headwinds to runaway growth seem to be popping up everywhere you look even within housing (look at Trump’s potential nominee for the FHFA who has endorsed removing the MID and getting rid of govt backed 30 year loans).

    I saw something about this today as well. Wow, if they removed government backing for mortgage loans, or even just scaled it back, that would make for some interesting times indeed.

    This is a good first step. When the govt gets involved in (subsidizing) a market, be it housing, education, or healthcare, it distorts the market. So we end up with expensive housing, education, and healthcare despite all the subsidies! Nearly all mortgages following the housing crash were underwritten by uncle Sam. Without the subsidies, mortgage interest rates would probably be at least 1% higher and home prices would be a lot lower today (hint hint on future home prices lol).

  131. 131
    Erik says:

    RE: uwp @ 122
    Good one UWP! People like to extrapolate the trajectory of inventory and price change.

  132. 132
    Eastsider says:

    RE: Erik @ 131 – Not saying that the current housing market is doomed, but both of you could have made the same asinine comment comparing 2009 housing market to that of 2006!

  133. 133
    Justsomedude12 says:

    RE: Eastsider @ 130 – I think mortgage interest rates being 1% higher is conservative.

  134. 134
    uwp says:

    By Eastsider @ 132:

    RE: Erik @ 131 – Not saying that the current housing market is doomed, but both of you could have made the same asinine comment comparing 2009 housing market to that of 2006!

    I don’t understand.
    I was comparing November 2018 inventory to November 2013 because they were similar months in stats (inventory/sales/pendings). A few select people are saying we currently have a rush of sellers and no buyers, but the comparison makes clear that no one thought those things when the numbers where almost the exact same in 2013. In fact, they felt inventory was uncharacteristically low

    I don’t know how 2009 and 2006 are similar. 2009 had over 1,000 more SFH on the market than 2006 (about 3,000 more than we have right now). Closed (and pending) sales were hundreds lower than similar months in 2006. I’m not quite sure the point you are making. 2009 ended up being a better time to buy than 2006 price-wise. Although, I would guess most folks had a tougher time buying a house at the bottom of the recession than in 2006.

  135. 135
    Eastsider says:

    RE: uwp @ 134 – First, I don’t believe there is a ‘rush’ of sellers. But the market does not need a rush of sellers to decline. Just take a look at the oil market, changes in supply or demand by 5% could cause oil price to drop in half. Seattle home prices are near extreme valuation so the market will be more volatile because supply/demand is relatively thin.

    Second, Fed funds rate was at zero in Nov 2013. Given the housing market’s dependence on interest rate, you can’t compare Nov 2013 to Nov 2018. Further, economic growth and employment conditions are vastly different. Basically you are cherry picking facts to support a narrative/agenda.

  136. 136
    Eastsider says:

    By Justsomedude12 @ 133:

    RE: Eastsider @ 130 – I think mortgage interest rates being 1% higher is conservative.

    Nobody really knows. We haven’t had price discovery in a free market. People who have not experienced free market may have a distorted view of the market. Long term, this is not sustainable.

  137. 137
    Deerhawke says:

    RE: SeaMillie @ 121

    Of course Seattle is not San Francisco. I said there were parallels. I was using San Francisco and the Bay Area as an analogue, not a symmetry.

    But part of the reason that growth is coming here rather than occurring there is some of the factors you alluded to. It is incredibly difficult to build anything in San Francisco. And it is incredibly difficult to build housing in Silicon Valley, although not to build office space.

    When I first moved to Seattle in the early 90’s, it was a much smaller place with a very different feel. A friend called it Cincinnati on the Sound. Boeing was the big dog in town, although this small firm called Microsoft was starting to make some waves. At that point, there was really no ability to even make a credible comparison to the Bay Area. Anything entrepreneurial had to be routed through San Francisco. All the VCs and major law firms were there. All the corporate entrepreneurial infrastructure was there. Not so now. We have our own infrastructure and it is financing and papering more than just cloud computing. It is everything related to the cloud. It is medical and biotech and agribio and travel and transportation and food and really … you name it. It is a highly diversified economy. This is not your father’s Seattle.

    Long term,the analogy between SF/Silicon Valley and Seattle/Eastside will become clearer and more accurate. You can argue about similarities and differences, but now, at the very least, it is a real discussion.

  138. 138
    Justme says:

    Weekend Update, graphical edition:
    (apologies for the late post, I was occupied for a few days, this may happen from time to time)

    Weekend active inventory update, King County, graphical edition. As always, click on link, then click once more for enlarged view. The graphs compare 2018-versus-2017 inventory on an hourly basis.

    King County SFH active for-sale inventory 2017-versus-2018 on 2018-12-08
    https://imgur.com/a/OxTjjn2

    King County Condo active for-sale inventory 2017-versus-2018 on 2018-12-08
    https://imgur.com/a/Ew5dYIl

    Year 2018 KC SFH active inventory outnumbers year 2017 by a ratio that has been above 1X since mid-March, and has been on a upward trend all year long. Three weeks ago the ratio passed 2.0X for the first time, after a late-season surge. Since then there has been a swing down (Nov30/Dec1 Fri/Sat volatility effect?), followed by a new high for the year during the week. Because Dec is the tradional low season for listings, some noise and swings and volatility are to be expected, but it is notable that there was a new high. Here are the graphs of the factor (2018/2017 ratio):

    King County SFH active for-sale inventory ratio 2018/2017 on 2018-12-08
    https://imgur.com/a/U82SIAk

    King County Condo active for-sale inventory ratio 2018/2017 on 2018-12-08
    https://imgur.com/a/80A7Jdw

    The trend is continual and upward. For KC Condo inventory, the ratio 2018/2017 dropped to about 3.2X after breaking 3.5X for the first time three weeks ago. The above observation about volatility applies here as well.

    There remains a notably elevated crowd of sellers at the exits of the KC housing market, the largest crowd of any of the years 2012-2013-2014-2015-2016-2017-2018. One has to go back to 2011 to find a larger set of listings in the same week of the year.

    Reader alert: Watch out for rampant mis-characterization of the graphs and what they say, various attempts at mis-direction, and generally that propagandists try to sow uncertainty about what the graphs say. Please examine each graph yourself, it is worth the time.

  139. 139
    uwp says:

    By Eastsider @ 135:

    Second, Fed funds rate was at zero in Nov 2013. Given the housing market’s dependence on interest rate, you can’t compare Nov 2013 to Nov 2018.

    So would you say if the housing market had similar activity numbers in the two months (which it did), than it would be a sign that today is a stronger market, because it isn’t being supported by 0 percent rates?

  140. 140
    Deerhawke says:

    RE: uwp @ 122
    RE: Eastsider @ 135

    UWP–Great posting. Thanks for the perspective of time.

    And yes, Eastsider, interest rates were very low then but that was about the only factor that was getting people back into the housing market. After the pain of 2007-2011, there were still a ton of people sitting on the sidelines, talking about the downside and wondering when all that shadow inventory would flood the market. Banks were still wondering if they should take the risk of lending to builders. In hindsight, 2013 was a fantastic time to buy or to build. But nobody ever has the benefit of hindsight in the moment. Just like right now.

  141. 141
    Eastsider says:

    By uwp @ 139:

    By Eastsider @ 135:

    Second, Fed funds rate was at zero in Nov 2013. Given the housing market’s dependence on interest rate, you can’t compare Nov 2013 to Nov 2018.

    So would you say if the housing market had similar activity numbers in the two months (which it did), than it would be a sign that today is a stronger market, because it isn’t being supported by 0 percent rates?

    Of course today’s market is stronger than 2013 based on prices alone. But 2013 market is on the way up and the current market is on the way down (or moving sideway?)

  142. 142
    SeaMillie says:

    RE: Deerhawke @ 137 – I agree on the parallels, and I also agree Seattle is forever changed and anyone wishing to go back to the grunge days where you could be an artist and afford to rent an apartment on Capitol Hill are long gone. When traveling abroad people used to give me blank stares when I said I was from Seattle, now a good portion of people immediately associate it with Amazon/Microsoft/etc. The two wealthiest people in the world live here. My argument is the incentives for holding real estate long term in CA vs WA are not the same. Property taxes will continue to rise here, the rises are capped in CA. It’s impossible to build in SF, Seattle will continue to upzone and create more housing on a relative basis. The weather in Seattle is miserable for 5 months out of the year, outside of SF in the summer, the Bay Area has a mediterranean climate. If the democrats in WA get their way, we may have an income/capital gains tax here in the near future. I believe Seattle will trend with the Bay Area, but trend at a discount. Long term I’m a bull on Seattle real estate, short/medium term, it’s unclear at the moment.

  143. 143
    Eastsider says:

    RE: Deerhawke @ 140 – Well, no one saw the effect of FED policies on markets (housing, stocks, asset) in the early years. If you believe in efficient market, given the publicly available information/data in 2013, then prevailing prices were ‘fair’. You seem to imply that you know what prices will be in 5 years time. I would refrain from making such predictions.

    That said, my advise on housing is based on the affordability index which is indisputably unaffordable today!

  144. 144

    RE: Eastsider @ 141
    Add in QE Welfare to the Banks in 2013

    And there’s no comparing 2013 to 2018…we’re in a new paradigm folks, its all changed since the Trump Tax Cuts. BTW, today Rassmussen released Trump’s approval numbers after the Mueller Witch Hunt indictments…its gone up to 49%…Obama never saw this kind of approval rating, ever.

    http://www.rasmussenreports.com/public_content/politics/trump_administration/prez_track_dec11

    God Bless Trump for my LARGE Social Security COLA and Medicare Part B cost freeze too for 2019. Obama gave me zeros and added YOY costs to Medicare Part B making the SS COLA YOY negative percentage in comparison, and he’s for the bottom 90% of household incomes??? LOL ….what else do we really vote for besides our pocketbooks folks…Mother Goose tales that are fiction to the real middle income/class?

    Did you watch it on TV this morning Bubbleheads? Trump, Pence, Pelosi and Schumer having a budget negotiation [live screaming match? LOL] for 2019 WALL funding…the military will build it anyway says Trump….LOL. This is the real reason behind the Mueller Probe, stop the WALL funding. Pelosi and Schumer wanted this meeting PRIVATE BTW….be careful what you wish for. Ya can’t stop Trump, give up Open Border Party. Its his IQ?

  145. 145
    Brad says:

    Is there a way to filter out all the comments by softwareengineer ans the haikus? It’s worse than comments on youtube.

  146. 146
    Justme says:

    RE: Matt P @ 100
    RE: Justme @ 138

    Weekend update, graphical edition is out belatedly. Correction to link mix-up

    King County SFH active for-sale inventory 2017-versus-2018 on 2018-12-08
    WRONG: https://imgur.com/a/OxTjjn2
    RIGHT: https://imgur.com/a/tBUCjh8

  147. 147
    Deerhawke says:

    RE: Eastsider @ 142

    Hold it. Nobody saw the effect of Fed policies? Of course they did. Economists work at the Fed. Really smart ones. The whole idea was to reflate the economy so that we could keep a nasty recession from turning into a decade-long depression. Not enough was being done by US government fiscal policy (meaning government taxing and spending power), because of entrenched conservative ideology (Do nothing. The market will fix it.) So the Fed helped with the heavy lifting through monetary policy. It was known at the time that this would have effects on exchange rates, asset prices etc.

  148. 148
    redmondjp says:

    By Deerhawke @ 144:

    RE: Eastsider @ 142

    Hold it. Nobody saw the effect of Fed policies? Of course they did. Economists work at the Fed. Really smart ones. The whole idea was to reflate the economy so that we could keep a nasty recession from turning into a decade-long depression. Not enough was being done by US government fiscal policy (meaning government taxing and spending power), because of entrenched conservative ideology (Do nothing. The market will fix it.) So the Fed helped with the heavy lifting through monetary policy. It was known at the time that this would have effects on exchange rates, asset prices etc.

    Hilarious! Yes, that confounded live-within-your-means conservative ideology – let the market set the prices – no, we need Big Government to intervene and give out unlimited play money to everybody so we can all party like it’s 1999 again!

    There was a time in this country when people actually did live within their means, and most people were poor (but NOT in debt). And it worked just fine. Now of course this is strong tonic for all those who profit handsomely from a high-churn, debt-based economy.

  149. 149
    Rentin’ says:

    RE: Justme @ 138
    Thank you for putting these charts together Justme, it’s been really fascinating to watch over time (along with all of Tim’s charts of course). I’m very curious about whether or not this will continue into the new year. Spring might be really interesting if it does.

  150. 150
    Eastsider says:

    By Deerhawke @ 144:

    RE: Eastsider @ 142

    Hold it. Nobody saw the effect of Fed policies? Of course they did. Economists work at the Fed. Really smart ones. The whole idea was to reflate the economy so that we could keep a nasty recession from turning into a decade-long depression. Not enough was being done by US government fiscal policy (meaning government taxing and spending power), because of entrenched conservative ideology (Do nothing. The market will fix it.) So the Fed helped with the heavy lifting through monetary policy. It was known at the time that this would have effects on exchange rates, asset prices etc.

    LOL. Had you known Fed policies would inflate all assets to this extent, you would have leveraged bigly and be retired today. The ‘economists’ working at the Fed are probably still working today. I lost you every time you brought politics into discussion.

  151. 151
    Deerhawke says:

    RE: redmondjp @ 145

    Right. I notice that Republicans stopped screaming about the deficit and quieted down about that confounded live-within-your-means conservative ideology right around, oh, January 20, 2017. Suddenly they all became born-again Keynesians?

    RE: Eastsider @ 147

    Actually I did know (or at least I guessed) and I did leverage bigly. And if I wanted to be retired today, I would be. I don’t like golf. I am as busy as I want to be, but I like what I do.

  152. 152
    TimingTheMarket says:

    Does anybody have a way to estimate the market trends for Eastside homes >1M. I realize that this segment is getting hit hard based on some listings, e.g. https://www.zillow.com/homes/for_sale/10215-125th-Ave-NE-Kirkland,-WA-98033_rb/

    Looking for some suggestions to quantify and track it in a meaningful way.

  153. 153
    Eastsider says:

    RE: Deerhawke @ 148 – Sounds like you know what you are doing and I wish you success in this market. But I would strongly discourage others to follow suit. You do not buy at the top of market, period.

  154. 154
    Scotsman says:

    Still lots of room to grow. Looking long term- say 5-10 years, I wouldn’t head for the exits yet. According to the California Association of Realtors, the median price of a home in the Bay Area (greater metro) is around $900,000. The median home value in Seattle-Tacoma-Bellevue Metro is $488,600. They have tech. We have tech. They have increasingly high business and personal taxes. My money is on a lot more jobs continuing to head north rather than south. Temporary stabilization isn’t a collapse. Shall we look at 20-30 year trends?

  155. 155
    Justsomedude12 says:

    RE: Scotsman @ 150 – But again, there’s a reason the Bay Area is more expensive than Seattle-Tacoma-Bellevue, and probably always will be. It’s an apples to oranges comparison. It doesn’t mean Seattle-Tacoma-Bellevue has room to appreciate and catch up.

    If there was still lots of room to grow it would have kept on growing, instead of hitting a wall and reversing early last summer. That didn’t just happen for no reason.

  156. 156
    Justme says:

    RE: Robert @ 90

    Keep the buyer strike going, Robert. The strike may be more informal than almost any labor/industrial strike, but the buyer strike is every bit as effective, in fact more effective than most labor strikes have ever been.

    Result: More than double the active inventory YOY, sales nevertheless down by 20% YOYO, local median prices down 14% since the peak.

    We don’t need a formally organized buyer strike for this to work. The informal one is working just fine. Every renter got a 14% reduction just by waiting 8 months or so. Not too shabby, and there is more where that came from. Everyone just keep it up.

  157. 157
    Scotsman says:

    RE: Justsomedude12 @ 151 – Ummmm…the reason it “reversed” last summer is because 20% annual appreciation isn’t sustainable without input from significant outside forces. Take a look at the charts at the top of the page- there’s a pattern where the market touches new highs in YOY growth and then drops back. 20% appears to be a pretty consistent upper limit.

    Seattle and the Bay Area are pretty much apples/apples as far as high wage tech employment goes- except it’s cheaper to do business in WA, personal taxes are less, housing is less, and the regional amenities are similar enough that for many it’s a wash. Employers/employees tend to want to go where it’s cheaper, all else being equal. If that wasn’t the case we’d be looking back at decades of flat prices with small gains for inflation. Think Midwest. Seattle is much more geographically constrained than many of the alternatives, limiting the potential for relevant housing growth. The people keep coming. I pay little attention to inventory/sales info as they are the last indicators of where the market is headed. Look at business growth and regional economics as a whole, that where the leading indicators reside.

  158. 158
    Justme says:

    Oh, and thanks to many for their comments and/or support. That includes all the regular bubble-busters, as well as new/new-ish or less frequent posters such as Luke, Mark, QA Observer, FN Brilliant, Kelly, Robert, Rentin’ and more. Your comments have been noted and enjoyed.

  159. 159
    whatsmyname says:

    RE: Justme @ 138 – Don’t worry about the late post; some interesting things happened while you were gone. (We can talk later). The graphs look pretty, but I think the bombshell was this:

    “Reader alert: Watch out for rampant mis-characterization of the graphs and what they say, various attempts at mis-direction, and generally that propagandists try to sow uncertainty about what the graphs say. Please examine each graph yourself, it is worth the time.”

    Holy smokes. Very important stuff, but I think what we need is some help on how to recognize on logic misdirection on the graphs so we know it when we see it. Do you think the misdirectors will try and focus on a single outlier, while blinkering us from a larger context? Will they maybe just lay out some vague charges that we can’t really measure in any way? What are the specific misdirections that they are using? Thanks for the answers in advance, man. I really think it’s your turn to shine.

  160. 160
    whatsmyname says:

    By Robert @ 90:

    RE: Ardell DellaLoggia @ 49

    untrue – myself and a ton of high earners in my network that want to buy house have indeed been on strike since spring. We tabled a bit here and there, shared our experiences, etc. and bottom line, just not interested in buying trac shacks for 500 or ugly mobile homes dressed up like a trac shack for 470. They weren’t fooling anyone with that fashionable “peppercorn” paint job to the exterior. We got sick and tired of telling RE Agents that we will only look at this and not that and we can’t tell from the photo if there is X,Y,Z that is a deal breaker…and after hours wasted a few times looking at homes that were grossly overpriced where all included X,Y, Z, we threw up our hands and called a group strike.

    We looked far and wide, looked last year too. There were some kind of maybes but since we all learned a lot from the 2008 era, we found nothing that made good sense and we passed this knowledge down to our kids and their network. It may be a small strike, but is one indeed where we decided to hunker down in the houses we have that we bought at bottom between 09-12. Not falling for the trac shacks for 1/2 a mil and up with their glued on particle board and pampas grass and mustard “Designer Colors” . It’s just stupid, tasteless, and will turn your hard earned life hours into vapor.

    We have something in common; investing in houses. But we also have some differences. Let me see if I have this straight. You have a network of high earning investors? And your kids network with kids of the network members rather than you? And they would be able to buy houses as well if you hadn’t warned them? Now, do I have it right that you talk together, but you don’t buy together? But you all committed to each other to quit RE investing as a group after literally hours of wasted time? Very interesting, but the most interesting part to me is: What is the X,Y and Z that are deal breakers for all of you, and were part of every house the realtors showed you? As a guy who buys houses, I am really wondering what you were running into. Thanks.

  161. 161
    Justme says:

    RE: richard @ 94

    Hi richard, I follow Mike Rosenberg on twitter and I think he is not really a bubble monger. Rosenberg was indeed pretty subdued in the interview you linked, but I think that is more due to being a journalist and his employers not wanting their journalist employees to say things that will cause less advertising revenue. It is one thing for Rosenberg to report “negative facts” that come from other sources. He does that all the time and his editors probably cannot reasonably bury those stories. But when Rosenberg appears as himself on TV, he has to be careful not to offend his advertisers with his personal opinions. That’s what I read between the lines of his TV interview. See what I mean?

    Newspapers love bubbles of any kind. It is good for their advertising business. Traditionally, REIC advertising has been a big source of revenue. It is a possibly a bit less so now, but who knows, maybe percentage-wise it still a quite significant source of revenue. In any case, newspapers still are very aware of the hand that feeds them. TV stations may be a little different, and often more critical nowadays, but TV stations do get the occasional NAR advert campaign tossed their way to keep them compliant.

  162. 162
    ess says:

    Here is a housing optimist. Don’t know if I would hide out in the housing market in the next recession, but he does point out that housing construction has not kept up with population growth, and that millennials who have not been buying may start to think about purchasing a place for themselves. We shall see!

    https://www.cnbc.com/2018/12/11/housing-could-be-an-unlikely-place-to-hide-out-if-a-recession-is-coming.html

    Also, I wonder if anyone here is residing in the same apartment or house where the rent has been lowered in the past 6 months? Has anyone heard from their landlord that their rent is going down the next time the lease comes up for renewal?

  163. 163
    justsomedude12 says:

    RE: Scotsman @ 153 – We can debate various details/minutiae all day long, bottom line is that people have reached a limit about what they’re able/willing to pay for a home around here. There is a limit. It has been reached.

  164. 164
    richard says:

    RE: ess @ 158
    stop midleading people into buying a house with your weak argument like millenial demand. demand is always there, ok. do you want a mansion, do you want to live a lakeview house, do you want a porsche. yes, if course, the demand is always here. but can you afford? no. then demand has nothing to do with the market.
    only two things matter: chinese money and interest rate.

  165. 165
    richard says:

    RE: Justme @ 157
    even if you are right about mr rosenerg , i think he still bear responsibility for poentially misleading people into financial ruin. when i listen to kiro7 radio tom curley show, they reference seattletimes a lot on the subject. for the same reason, this radio show is highly pro real estate. so the seattletimes should put a disclosure upfront saying they are sponsored by real estate complex. or mr rosenberg can stop pretending he is some kind hoysing guru having a crystal ball. it is disgusting for them to fool viewers with these massive one sided story. i hope they one day can repent when all the bubble crashes ans settles.

  166. 166
    Matt P says:

    By ess @ 158:

    Here is a housing optimist. Don’t know if I would hide out in the housing market in the next recession, but he does point out that housing construction has not kept up with population growth, and that millennials who have not been buying may start to think about purchasing a place for themselves. We shall see!

    https://www.cnbc.com/2018/12/11/housing-could-be-an-unlikely-place-to-hide-out-if-a-recession-is-coming.html

    Also, I wonder if anyone here is residing in the same apartment or house where the rent has been lowered in the past 6 months? Has anyone heard from their landlord that their rent is going down the next time the lease comes up for renewal?

    Millennial demand will be countered by boomers downsizing and dying.

  167. 167
    sfrz says:

    Yellin is yellin’. Watch out. Cash is king. Gold is a god.
    “Former Federal Reserve Chair Janet Yellen told a New York audience she fears there could be another financial crisis because banking regulators have seen reductions in their authority to address panics and because of the current push to deregulate.”
    https://www.cnbc.com/2018/12/11/yellen-warns-of-another-potential-financial-crisis.html

  168. 168
    richard says:

    The following video about Australia housing market is worth watching. I am not saying the same thing will happen here but for potential home buyers, it is necessary to understand the risk of borrowing so much money on a house. The market can flip quickly.
    The 30 year mortgage rate just dropped a little bit to 4.6%, you want in or stand by, your choice.

    https://www.youtube.com/watch?v=BNAqA7R95Wo

  169. 169
    sfrz says:

    RE: Justme @ 152
    Is Lars on this blog? If so, I agree. I’m just kicked back watching the lemmings the past couple of years, rushing to get in line to sign their lives away while their minds are frenzied with FOMO.

    He had this to say over on the HBB:
    “lars
    December 11, 2018 at 9:36 am

    Many of us in the PNW area that bought nice houses (well built, non track, non-fishbowl, privacy, fair value) near the bottom and have been looking for houses in the frenzy over the last couple of years for the next phase in life are simply on strike. This includes my “high earning” tech network far and wide and our kids who are out of college, renting. We’ve all had it and share notes about the outrageous pricing we have seen and how many Crook Estate Agents we’ve moved through because they don’t listen, they don’t care, and we refuse to be swindled like so many of our friends were in the era leading up to 2008…on strike, not buying until we find fair value and digging in our heals.

  170. 170
    Scotsman says:

    Going to be a lot of disappointment around here waiting for the next collapse- Seattle still has a long way to go….up. Here’s a nice little fixer in San Jose- compare to your Ballard/North Seattle craftsman for $500K: https://www.zillow.com/homes/for_sale/San-Jose-CA/fsba,fsbo_lt/house_type/19718109_zpid/33839_rid/2-_beds/500000-950000_price/2019-3835_mp/globalrelevanceex_sort/37.365348,-121.847005,37.329799,-121.901937_rect/13_zm/0_mmm/

  171. 171
    Scotsman says:

    Oh- you want to live in a better neighborhood, up north just a bit, out of the ghetto? Yeah, the trains are noisy, but that Pergo is sweet. Here ya go: https://www.zillow.com/homes/for_sale/fsba,fsbo_lt/house_type/15566951_zpid/2-_beds/500000-950000_price/2019-3835_mp/globalrelevanceex_sort/37.516194,-122.162733,37.445221,-122.272596_rect/12_zm/0_mmm/

    Seattle housing costs are nothing compared to what they will be in 5 years. California shows what’s not only possible, but likely, for the Seattle area. Who knows, in a couple of years we may also have our own crap covered sidewalks and even more homeless and crime.

  172. 172
    redmondjp says:

    RE: Deerhawke @ 148

    Republicans /= conservatives

    That’s why I now consider myself to be an independent.

  173. 173
    Richard says:

    Are You Ready for the Financial Crisis of 2019?
    not an anti-trump piece

    https://www.nytimes.com/2018/12/10/style/2019-financial-crisis.html

  174. 174
    Justme says:

    RE: richard @ 161

    I haven’t listened to TomAndCurley. SeattleTimes’ MikeR articles often have decent data, but there is no law against people twisting the data for their purposes, as we see here on the blog all the time. That may be what is happening on that radio show.

  175. 175
    Justsomedude12 says:

    RE: Scotsman @ 166 – Seattle ain’t San Jose, Bro.
    But here’s a tip: Use Manhattan NYC as your proof of how high Seattle real estate prices can go, it will give you a much higher ceiling!

  176. 176
    Deerhawke says:

    RE: Matt P @ 162

    “Millennial demand will be countered by boomers downsizing and dying.”

    I think there is no doubt that eventually boomers will die. Safe argument there.

    But the boomers may last a lot longer than the previous generation and continue to take up valuable space. I look at my neighborhood and all the older boomers in their 70’s and 80’s continue to …just…hang… on. Three boomer households moved out in the last few years. They moved to slightly cheaper areas around the Sound and all upsized. Bigger houses on bigger lots in Olympia and on Hood Canal. Replaced by two milennial couples and a boomer couple moving closer to the city from Issaquah. One boomer neighbor died this year and was replaced by a boomer couple from Austin.

    So from what I am seeing around me, it is more of a mixed picture. The boomers have the money. They like their space and they want to be near the amenities. Been to the Rep or the opera or the ballet recently? All silver haired boomers.

    When New York City got nicer and safer in the 90’s, many of the new condo buildings near Lincoln Center filled up with older couples who sold their places in Westchester County to move back into the city. With the Viaduct being replaced by the esplanade and with light rail moving north, I will bet we see the same thing here.

  177. 177
    Brian says:

    Too many people try to compare Seattle to San Francisco but seem completely unaware of the affect of Proposition 13 on San Francisco’s real estate prices. The extremely low tax rates allowed by proposition 13 mean people have little to no incentive to sell. They live in the same house their whole lives, with nearly the same property tax rate, and then pass the house and tax rate on to their heirs.

    That doesn’t happen here. Tax rates go up, like the crazy amount we’ve seen in the last few years. Eventually people get priced out and/or sell and move somewhere else where it’s cheaper. Some homeowner dies and the heirs don’t have less reason to keep the house than in San Francisco. All this adds up to chronically low inventory in San Francisco, which means higher and higher prices.

    Expecting Seattle to follow San Francisco’s real estate prices is unrealistic to say the least.

  178. 178

    RE: softwarengineer @ 143
    Trump is Trying to Help the Home Sellers

    By opposing any more interest rate hikes….but his new fed Chairman isn’t listening. The economy is too strong to restrain interest rates? No one knows why anymore, the “tax cut” new paradigm changes all the rules?

    They can say even Trump doesn’t know all the details, he’s learning new ones as we go? Stocks WAY up today after the big WALL fight with the Open Border Party…LOL, the WALL government shutdown threat is good for stocks [real estate too?]? Ya see why predictions are a joke now?

  179. 179

    RE: Brian @ 173
    Seattle is a Has Been City

    Its a “has been” Boeing Manufacturer, “has been” clean air [SF is has been clean air too]…but SF has a real punch to your taxes…CARBON TAXES in 2020. Mandatory Chinese Solar Cell Systems on new construction in 2020 [used homes too soon?]. Throw that new $50,000 gas car in the trash, its illegal in 2026 when electric golf carts replace real gas cars. Dig deep like France California, the CARBON TAXES soon, at a theater near you. Seattle next?

    Then the Populist CARBON TAX riots like France? Why are we getting the CARBON TAXES when China puts out all most of the the dirty fossil fuel smokes?

  180. 180
    Deerhawke says:

    RE: ess @ 158

    I believe one of my units will stay at the same rent and two will increase a few percent. This time of year rents are always much lower and more negotiable . It is hard to tell what the trend will be until later in the spring.

    But then again, nobody really knows when they will have to cut their rent. In 2010, everybody was moving back in with Mom and Dad, doubling up in one bedrooms, you name it. The number of tenants suddenly dropped, tenants got snooty and picky, and rents dropped a lot. It always takes you by surprise when you suddenly cant rent a place after 13 years of never missing a month.

  181. 181

    Capital Gains Taxes on Real Estate Sales for $CASH$ to Retire

    Can be eliminated [so will the $CASH$ too, most likely] by trading up in SF. The problem: you own expensive real estate with no Capital Gains for $CASH$ [unless you 2nd mortgage]…LOL

    Nope, the dimwits make comments like “I don’t save money because the interest is 30-40% taxable. LOL, you still will keep 60-70% of it…same logic here, yes the Capital Gains get taxed 30-40% by trading down in price, like Kansas City, but the remaining $CASH$ allows you to live large and debt free. Why is this bad economic planning?

    Then the MASS 2020/2026 CARBON TAX is added in too in California…money grows on trees, not to worry?

  182. 182
    Eastsider says:

    By ess @ 158:

    Here is a housing optimist. Don’t know if I would hide out in the housing market in the next recession, but he does point out that housing construction has not kept up with population growth, and that millennials who have not been buying may start to think about purchasing a place for themselves. We shall see!

    https://www.cnbc.com/2018/12/11/housing-could-be-an-unlikely-place-to-hide-out-if-a-recession-is-coming.html

    The millennial generation has the least wealth in generations. Many, including doctors and lawyers, are heavily indebted. It is a bit of a stretch to think that they will transfer more wealth to the boomers by buying overvalued homes.

  183. 183

    Estimating the New CARBON TAX for Mandatory Solar Roof Systems

    https://news.energysage.com/how-much-does-the-average-solar-panel-installation-cost-in-the-u-s/

    Its about $20,000 today…but Seattle building contractor/maintenance costs are always higher than national average. Then the maintenance costs….I imagine storm damage is especially likely on these flimsy/glass-like cells. The fun goes on and on…

    I’d budget about $500/mo on a home improvement loan for the coming [?] Seattle CARBON TAX monthly costs. Or just spend your retirement savings…LOL….ohh…I forgot, add in your lost $CASH$ from forced sales of your newer gas car…

  184. 184
    ess says:

    RE: Deerhawke @ 176

    Yes – about that time was the only time we actually dropped our rent from one tenant to the next because of the great recession. I remember that era well – but survived it just fine.

    I usually tell my tenants that are already in the premises that rent won’t be going up unless the taxing authorities do something really crazy. Better to have long term renters than constant turnover. I can afford charge lower than what I can get at top dollar to avoid the hassle of getting new tenants. So when they eventually move out – I can raise my rents a few bucks and still be competitive,

  185. 185
    ess says:

    RE: Eastsider @ 178

    So you are suggesting that there will be a new class of individuals that will never be able to afford to buy – but will always be renting? Perhaps yes, perhaps no. Loans get paid – job prospects and salaries improve. On the other hand – if there is this new class of buyers that will never be able to purchase – most modest rental properties should not have too much trouble renting to growing number of renters. Thus those who have owned modest homes and less expensive condos as investments for a number of years will be in the best position going forward.

  186. 186

    RE: Deerhawke @ 172
    I Also See Them in Disabled Homes

    Broke and limping around.

  187. 187

    RE: ess @ 180
    Good Renters are Like Gold

    Try not to raise their rent, replacing them is far worse costs…

  188. 188
    Eastsider says:

    RE: ess @ 185 – It is already happening in Vancouver BC. Many locally born millennials are priced out. But rents will continue to be cheap relative to the costs of owning/maintaining a home. Current rental cap rate makes Seattle rental properties bad investments. Even if you believe Seattle homes will continue to appreciate due to tech employment, you are better off buying those tech stocks that will appreciate* far more than housing in all likelihoods.

  189. 189

    Great Blogs Bubbleheads on Somewhat Non-partisan Contentious Topics

    Nice to see all partisan opinions represented too and the quality of the blogs is getting better as we team together better with time.

    Time for some humor to stress relief:

    https://www.theguardian.com/world/2018/dec/12/high-tech-robot-at-russia-forum-turns-out-to-be-man-in-robot-suit

    Even the Russian Youth are laughing at the phony AI robot…a man in a Robot Halloween costume…LOL

  190. 190

    RE: Eastsider @ 188
    Google Moving to Russia or China Now?

    Where American law makers can’t question its Chinese Operation Dragonfly political biased search engine? Facebook next? Maybe India will be the new HQs? The CEO came on like a circus barker, not a real CEO when I saw him at the government indictment hearings yesterday. A man wearing a top hat and paper mustache sat in back of the Google CEO….making the serious government hearing look like a joke…

  191. 191

    RE: Brad @ 145
    Haven’t Heard from You Brad

    Besides insulting SWE, ya got some facts to add? Cat got your tongue?

  192. 192
    Justsomedude12 says:

    By softwarengineer @ 190:

    RE: Eastsider @ 188 – Facebook next? Maybe India will be the new HQs?

    This makes me wonder…why wouldn’t Amazon, Facebook, Google, etc outsource some of their software engineering to India at about 1/10 the cost of here in the States? Wouldn’t need to outsource all of it or anything, even 10-20% would be huge. Word on the street is that there are a few software coders in India.

  193. 193
    ess says:

    RE: Eastsider @ 188

    I lived up there for two years when I couldn’t get a job here because of a Boeing bust, married a local gal – and my in laws reside all over the greater Vancouver area. I have seen personally and heard stories of what is going on up there. Apparently the price of single family houses is starting to decline with the advent of taxes on foreign buyers. Still too expensive for many perspective homeowners to buy, especially single family houses. I had read a year or two ago that the prices of Vancouver housing – compared to salaries were right up there in terms of inability to afford a place.

    Of course tech stocks have their own risks, and the renter has to invest in them, or any other investment vehicle to begin with. That a large percentage of Americans don’t even have money in the bank for emergencies – I rather think that for many of them investing is out of the question, and they should concentrate on their six month emergency cash reserve.

    No doubt about it – housing in this area is a tough issue for those who rent or want to buy at this time. And the uncertainty of prices, after all the bidding wars – it must be exhausting for perspective buyers.

  194. 194
    sfrz says:

    RE: Justsomedude12 @ 192 – Setting up shop in Vancouver, as the visa process much quicker.
    “Coupled with Canada’s comparatively relaxed immigration policies, the country’s tech sector has long drawn interest from major American technology giants that need foreign talent but are constrained by the historically unpredictable nature of U.S. immigration policy. Facebook (fb, +1.99%), Boeing (ba, +1.85%), Microsoft (msft, +0.80%), and Amazon (amzn, +1.60%) all have offices in Vancouver, filling them partially with foreign workers on temporary visas who can then collaborate with colleagues in California and Washington State.”
    http://fortune.com/2017/07/25/immigration-canada-visa-vancouver/

  195. 195
    Justsomedude12 says:

    RE: sfrz @ 194 – Gotcha. But I was meaning using Indian workers who continue to reside in India. Like companies outsource their call centers there.

    They couldn’t do that with all of their engineers of course, but why not 20% of them or something? To do the grunt work type of coding for instance.

  196. 196
    N says:

    As a group Realtors are always the optimists (or ultimate sales people)… I like how many realtors in this piece are blaming the mid term election on the slowdown, especially in previously hot markets like Denver.

    https://www.marketwatch.com/story/market-correction-or-midterm-speed-bump-heres-what-real-estate-agents-are-saying-about-the-housing-market-2018-12-12

    In November, just about everyone was hopeful for a spring rebound. Perhaps more surprising was that many respondents said one was already beginning, with the midterm elections in the rearview mirror. Some long-running trends persisted – inventory is nonexistent at affordable price points – and some new ones appeared – international buyers aren’t showing up to the coastal cities where they once flocked.

  197. 197
    Deerhawke says:

    RE: Brian @ 173

    I agree that Prop 13 is one of the reasons for higher housing prices in SF. Another is that there is not a lot of new housing inventory because their permitting process is even worse and more byzantine than ours (and that is really saying something). I am sure rent control is a major factor since it appoints winners (longer term residents and their offspring) and losers (everybody else).

    But all of this flies in the face of those who say that the price of housing in Seattle cannot possibly go up because it would then be unaffordable. Is it not more unaffordable in San Francisco? How is that possible if we are using the same metric?

  198. 198
    Eastsider says:

    According to Salary.com, software engineers in Boston and Seattle are paid similar salaries.

    According to Zillow, the median home value in Seattle is $733,400, and $593,500 in Boston.

    Who say that the price of housing in Seattle cannot possibly go down? (Answer: people with vested interests in Seattle RE.)

  199. 199
    Deerhawke says:

    RE: Eastsider @ 182
    _______________

    The millennial generation has the least wealth in generations. Many, including doctors and lawyers, are heavily indebted. It is a bit of a stretch to think that they will transfer more wealth to the boomers by buying overvalued homes.
    ______________

    I have a kid who is a doc finishing his residency. Of course he has low six-figure debt, but I also see the solicitations that come in the mail. I don’t worry about the prospects of someone who can start right after residency at $200-225K plus signing bonus and benefits. For surgeons, add $75-100K. BOA and other banks have special “doctor loan packages”. 5% down, low interest, $1.5million loan amount.

    Young lawyers are truly getting hammered. High loans, low initial salary, lousy prospects. I am a builder– do you really expect me to shed tears for lawyers? I won’t even rent or sell to them. (And yes discrimination on the basis of employment is completely legal.) This has been a long time in coming. Way too many lawyers in this country.

    You are absolutely right about the rest of the millennial generation. They got hosed. High costs for education and so lots of student debt. Meh salaries. High costs for housing.

    The millennials that I have sold to are in tech, finance, medicine or some combination thereof. Or they have parents/grandparents in those fields who have the resources to write the check. In my area, a young couple came through with her parents. The parents bought the home all cash in a 2-comma bidding war. A few months later, it was deeded to their daughter “for love and affection”. This is more common than you might imagine. At least for some, the transfer of wealth is from boomers to millennials.

  200. 200
    Deerhawke says:

    RE: Eastsider @ 198

    This is apples and oranges. Most of my family lives all along Route 3. Boston is definitely no real estate bargain.

    You are comparing mainly single family homes in Seattle to mainly 1 and 2 bedroom condos in Boston. If you were to compare all the area inside Route 93 to King County, you might get a more valid comparison. But a lot of the people who relocate here from Boston (including my project manager) feel that Seattle is expensive, but a way better value proposition. These days even Southie is expensive.

  201. 201
    Eastsider says:

    By Deerhawke @ 199:

    The millennials that I have sold to are in tech, finance, medicine or some combination thereof. Or they have parents/grandparents in those fields who have the resources to write the check. In my area, a young couple came through with her parents. The parents bought the home all cash in a 2-comma bidding war. A few months later, it was deeded to their daughter “for love and affection”. This is more common than you might imagine. At least for some, the transfer of wealth is from boomers to millennials.

    This is a small minority. The vast majority simply don’t have the means to afford homes at today’s prices. What percentage of millennials can afford million dollar homes anyway?

    Here is a sobering ST article from a few years ago –

    Young doctor deep in debt gets a financial plan to ease worries
    https://www.seattletimes.com/business/young-doctor-deep-in-debt-gets-a-financial-plan-to-ease-worries/

  202. 202
    BacktoBasics says:

    Don’t blame Seattle housing price. Everything is expensive. I remodeled two very basic bathrooms and they cost me $15,000. MD complain expensive house price. Why none complain expensive healthcare price. Seattle housing is just some % living cost. There are too many other expensive cost to consider. Overall, all cost is just market behavior.

  203. 203
    BacktoBasics says:

    By SeaMillie @ 142:

    RE: Deerhawke @ 137 – I agree on the parallels, and I also agree Seattle is forever changed and anyone wishing to go back to the grunge days where you could be an artist and afford to rent an apartment on Capitol Hill are long gone. When traveling abroad people used to give me blank stares when I said I was from Seattle, now a good portion of people immediately associate it with Amazon/Microsoft/etc. The two wealthiest people in the world live here. My argument is the incentives for holding real estate long term in CA vs WA are not the same. Property taxes will continue to rise here, the rises are capped in CA. It’s impossible to build in SF, Seattle will continue to upzone and create more housing on a relative basis. The weather in Seattle is miserable for 5 months out of the year, outside of SF in the summer, the Bay Area has a mediterranean climate. If the democrats in WA get their way, we may have an income/capital gains tax here in the near future. I believe Seattle will trend with the Bay Area, but trend at a discount. Long term I’m a bull on Seattle real estate, short/medium term, it’s unclear at the moment.

    The Global warming trend will make Seattle the next SF and SF become another LA. This is real.

  204. 204
    whatsmyname says:

    RE: Justme @ 138 – Thought I’d touch bases with you again on the distortion of your graphs problem. If it’s too hard to generally describe the sorts of misrepresentations you are suffering, maybe you could just briefly describe a couple of specific examples. You, yourself, thought this would be important for the readers.

  205. 205
    ess says:

    SeaMillie says:
    December 11, 2018 at 9:53 am
    When traveling abroad people used to give me blank stares when I said I was from Seattle, now a good portion of people immediately associate it with Amazon/Microsoft/etc.

    Interesting. A few years ago we were walking in a tourist area in Budapest, Hungary with an Italian couple in their late 20s we had met and struck up a conversation. When we were discussing our various homes and we indicated the Seattle area was us, the response was not Amazon or Microsoft but……..

    Jimi Hendrix

    In the age of Microsoft and Amazon I found that to be an interesting response, but I guess Seattle is known the world over for a few other things and people.

  206. 206
    justsomedude12 says:

    By SeaMillie @ 121:

    RE: Justsomedude12 @ 120 – We have had an amazing run here, but the headwinds to runaway growth seem to be popping up everywhere you look even within housing (look at Trump’s potential nominee for the FHFA who has endorsed removing the MID and getting rid of govt backed 30 year loans).

    Just heard a segment on NPR’s Marketplace about Trump’s FHFA nominee and how he could remove government backing for the 30 year mortgage. Sounds like it is a possibility. They mentioned the detriment this would have on home prices nationwide.

  207. 207
    kenmorem says:

    By Deerhawke @ 199:

    RE: Eastsider @ 182
    _______________

    The millennial generation has the least wealth in generations. Many, including doctors and lawyers, are heavily indebted. It is a bit of a stretch to think that they will transfer more wealth to the boomers by buying overvalued homes.
    ______________

    I have a kid who is a doc finishing his residency. Of course he has low six-figure debt, but I also see the solicitations that come in the mail. I don’t worry about the prospects of someone who can start right after residency at $200-225K plus signing bonus and benefits. For surgeons, add $75-100K. BOA and other banks have special “doctor loan packages”. 5% down, low interest, $1.5million loan amount.

    Young lawyers are truly getting hammered. High loans, low initial salary, lousy prospects. I am a builder– do you really expect me to shed tears for lawyers? I won’t even rent or sell to them. (And yes discrimination on the basis of employment is completely legal.) This has been a long time in coming. Way too many lawyers in this country.

    You are absolutely right about the rest of the millennial generation. They got hosed. High costs for education and so lots of student debt. Meh salaries. High costs for housing.

    The millennials that I have sold to are in tech, finance, medicine or some combination thereof. Or they have parents/grandparents in those fields who have the resources to write the check. In my area, a young couple came through with her parents. The parents bought the home all cash in a 2-comma bidding war. A few months later, it was deeded to their daughter “for love and affection”. This is more common than you might imagine. At least for some, the transfer of wealth is from boomers to millennials.

    i saw this post on another forum today that is appropriate to your post DH:
    “I think Donald Trump is the inevitable conclusion to the baby boomer generation. They inherited a postwar economy unlike anything ever seen before, have amassed more personal wealth than any group of people in history, flagrantly strip mined the planet’s resources to make it happen, then blamed their own children for ruining everything by being lazy and entitled. What could be a more fitting capstone to their generation than electing their archetype to the presidency?”

  208. 208
    Matt P says:

    By Deerhawke @ 176:

    RE: Matt P @ 162

    “Millennial demand will be countered by boomers downsizing and dying.”

    I think there is no doubt that eventually boomers will die. Safe argument there.

    But the boomers may last a lot longer than the previous generation and continue to take up valuable space. I look at my neighborhood and all the older boomers in their 70’s and 80’s continue to …just…hang… on. Three boomer households moved out in the last few years. They moved to slightly cheaper areas around the Sound and all upsized. Bigger houses on bigger lots in Olympia and on Hood Canal. Replaced by two milennial couples and a boomer couple moving closer to the city from Issaquah. One boomer neighbor died this year and was replaced by a boomer couple from Austin.

    So from what I am seeing around me, it is more of a mixed picture. The boomers have the money. They like their space and they want to be near the amenities. Been to the Rep or the opera or the ballet recently? All silver haired boomers.

    When New York City got nicer and safer in the 90’s, many of the new condo buildings near Lincoln Center filled up with older couples who sold their places in Westchester County to move back into the city. With the Viaduct being replaced by the esplanade and with light rail moving north, I will bet we see the same thing here.

    I got to every PNB show. The crowd skews a lot younger than the Opera and Symphony. I don’t go to the Symphony much here because it’s too expensive. I used to go a lot in Tampa and my wife and I were always the youngest couple there unless we brought friends and I’m nearly 40. There are plenty of younger people at the ballet though because only young people can do it so more of them go to see it. Still, those arts have always been the passtimes of the elderly.

    Your example of NYC is just what I said: Boomers downsizing from houses to apartments to be closer to their needed medical services.

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