NWMLS: Home prices back in black, snow storm freezes out pending sales

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I’ve gotten way behind recently as life and other projects have gotten busy, and I apologize.

Let’s play some catchup and take a look at February market stats from the NWMLS. The King County median price of single-family homes was basically flat year-over-year in February, inventory was way up from a year ago but not by as much as it has been, and pending sales slipped thanks to the nasty weather.

Before we get into our detailed monthly stats, here’s a quick look at their press release.

Heavy Snowfall Ices February Housing Activity Around Western Washington
Seattle’s snowiest month in 50 years had an obvious chilling effect on February’s housing activity, agreed officials with Northwest Multiple Listing Service. Statistics for last month show pending sales dropped nearly 14 percent compared to the same month a year ago.

“The winter weather brought the market to a halt,” stated John Deely, principal managing broker at Coldwell Banker Bain. He said last month’s series of snowstorms and frigid temperatures had a negative impact on the typical momentum that builds at the beginning of the year.

For once the used home salespeople actually have a good excuse. The once-a-decade snow storm in February definitely caused an unusual decline in the pending sales numbers. That will probably carry forward to March closed sales numbers.

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):

February 2019 Number MOM YOY Buyers Sellers
Active Listings 2,850 +1.1% +109.7%
Closed Sales 1,417 +15.8% +1.0%
SAAS (?) 1.07 -8.5% -6.5%
Pending Sales 1,790 -6.0% -5.5%
Months of Supply 2.01 -12.7% +107.6%
Median Price* $655,000 +7.4% +0.8%

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

King County SFH Inventory

Inventory was basically flat January to February, but thanks to the big gains in 2018 it was up 110 percent from last year. Sales seem to be starting to bounce back so I’m not sure we’ll see another year of big inventory gains in 2019. I hope we do.

Here’s the chart of new listings:

King County SFH New Listings

New listings fell between January and February, and was down six percent from a year ago. I imagine that might be due to the snow storm as well. Hopefully we see the typical big spike in the March numbers.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales rose 16 percent between January and February, and turned in their first year-over-year gain since April 2018.

King County SFH Pending Sales

Pending sales fell six percent month-over-month and five percent year-over-year, but again that was probably mostly due to the two-week snow storm.

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

It looks like the peak growth in inventory might be behind us now.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

I did say last month that “I doubt we’ll see this continue to fall.” And sure enough, it ticked back into the black in February.

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

February 2019: $655,000
February 2018: $649,950
July 2007: $481,000 (previous cycle high)

Here’s the article about these numbers from the Seattle Times: Market turnaround? King County home prices take biggest one-month jump ever

And here’s another good recent article from the Seattle Times that’s worth a read: With King County home prices picking up, are we in for another brutal spring for buyers? Maybe not

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About The Tim

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

325 comments:

  1. 1
    dariakus says:

    Buckle up!

  2. 2
    uwp says:

    Too bad February was so funky. Hard to get a read on the start to this year that will satisfy anyone. It seems like the snow will give everyone excuses for their own narratives.

    In my continuous search (3+br, 1.75+ba, South of Northgate, North of Seward Park), it still seems like good listings go quick. Houses that were sitting since the end of last year are finally clearing out at lower prices (might be some good deals in there, but I never actually checked anything out too seriously).

    I think if rates stay low, and the stock market holds, then I could see the median bouncing back up to last Spring’s prices all over again, and the last few months being a missed opportunity. Or not, of course. I’m glad we don’t have to make any decisions at the moment.

  3. 3
    JWoods says:

    Not to read too much into one month of data, I think people will continue to be surprised by the strength of the housing market.

  4. 4
    Deerhawke says:

    I am still wondering about this “consensus” that the price increase in February was not really indicative of anything because there was a change in the composition of sales. Here is Mike Rosenberg stating the thesis:
    _____

    “Even the recent price uptick might be at least partially a mirage. Prices on the Eastside actually went down a bit last month while home values in Seattle and South King County did not rise as much as the countywide median. How could that be? The mix of homes that sold changed — more homes sold in pricier parts of the county, skewing the overall countywide number higher.”
    _____

    I know that you can skew the median by having more sales at the low end. This would skew median sales lower.

    I know that you can skew the median by having more sales at the high end. This would skew median sales higher.

    But as far as I know, it is pretty hard to skew the median by having more more sales in the middle.

    We had fewer sales on the expensive East Side and in expensive Seattle. This was counter-balanced a bit by fewer sales in the South end. So we had more sales in the middle.

    This strikes me as the definition of a broad based increase in prices.

  5. 5
    Deerhawke says:

    Tim, thank you for updating this. We know you are very busy. Seeing the basic stats in a time series is so helpful.

    Is it possible to get the Redfin and Estately inventory figures put back along the side for comparison?

  6. 6

    RE: uwp @ 2
    Usually My Power Bills Peak out in January at $300+/mo for 24/7 72 degree F Heat in My House

    This year my February Power bill was the peak….about 30% higher than January with much worse “bitter cold” century record freezing. Raw PSE data doesn’t lie. I’ve never saw it this bad to my memory in Seattle, and I’ve lived here most all of my life too…the freezing March mornings seem to be finally over now…never seen early March this cold either…

    Do I still believe in climate change [they say the Earth is 2 degrees warmer than a century ago on the average]….Hades, IMO it requires more research. The 2 degree shift is within the error margin of stable? Melting glaciers are a joke now too?…Hades, the Mt Ranier snow pack [glaciers] has never been this high…questions, questions….we need scientific answers with raw data, not flat Earthers brainwashing us to make snap decisions? Hello Paris Accord….the people are tearing the city apart over the carbon taxes….America tossed that accord in the trash with Trump and guess what? We’ve made real in roads cleaning our air and water 14% better than France. Under this accord France has made absolutely no environmental progress since its inception. That lead in Michigan’s water? Trump cleaned that up as he downsized the EPA [Obama ignored the problem]. What good is the old NWO EPA anyway, just a politically motivated phony government agency run by foreign overlord “do things”?….LOL….raw data doesn’t lie…

    We need more honest businessmen and engineers in America….not more lying attorneys? LOL

  7. 7

    RE: Deerhawke @ 4 – Good Math Logic Deerhawke

    I agree ;-)

  8. 8

    Nano Bot Technology Now Has a Viable Application After 30 Years of Waiting?

    https://www.digitalengineering247.com/article/xjet-to-debut-at-amug-2019

    This may be a new innovation for scientific applications? IMO its vague and unclear. I saw the “phony” nano bot application in furniture polish too [a few years ago]…the product was a complete joke and left a haze on my furniture I couldn’t remove it either…it worked like vegetable oil on my furniture…LOL

    We need another Roswell to get new technology? LOL

  9. 9
    Justme says:

    By JWoods @ 3:

    Not to read too much into one month of data, I think people will continue to be surprised by the strength of the housing market.

    And yet, you just read too much into one month of data. It has been well documented on the previous thread, as well as seattletimes and twitter, that the median bump in February was purely a case of dropping prices overall being offset by a higher level of closed sales in more expensive areas. These very same expensive areas at the same time were the locations where the local median had dropped the most, causing a larger number of buyers to bite there than in the lower priced areas. But you already knew that. You just wanted to ignore it.

  10. 10
    ronp says:

    All I know is that I am amazed new construction by me goes for $733 per square foot in some cases — https://www.redfin.com/WA/Seattle/6029-53rd-Ave-NE-98115/home/147105335

    I really thought that that small development would sit unsold for much longer. Only three of nine left I think. http://www.maiderknowles.com/property/hawthorne-hills-3/

  11. 11
    Matt P says:

    By ronp @ 10:

    All I know is that I am amazed new construction by me goes for $733 per square foot in some cases — https://www.redfin.com/WA/Seattle/6029-53rd-Ave-NE-98115/home/147105335

    I really thought that that small development would sit unsold for much longer. Only three of nine left I think. http://www.maiderknowles.com/property/hawthorne-hills-3/

    The exterior of those things are hideous.

  12. 12
    dariakus says:

    RE: Matt P @ 11 – That’s how I feel about pretty much everything that’s on the market in the region right now.

  13. 13
    Justme says:

    RE: randomseattledummie @ 1082

    QUOTE: There are TONS AND TONS AND TONS of affordable housing units even in “desirable” areas but yes, they need some work, they might have *gasp* formica countertops or *gasp* vinyl flooring in places or outdated carpet and paint colors.

    I think we should all ask @RSD to post links to at least SOME of these “affordable” units in “”desirable”” areas. According to RSD, there are TONS of them out there. Clearly he is not going to buy them all for himself, so I think it is fair to ask that he provides a number of concrete examples.

    Any other people here that would like to know?

  14. 14
    N says:

    There was a remodeling story in the NW homes section of the paper this weekend that quoted the average Seattle kitchen remodel at $145k ($131k for the national avg) and $74k for a bathroom remodel. I knew the numbers were high but this blows my mind. Last decade I feel like a basic bathroom remodel (focus on basic) was more in the $10k range, haha, times have changed.

    No wonder flippers buy a house and list for a quarter million more 6 months later after a refresh. And like last decade of course demand is higher now which equates to higher prices but damn.

    Say you purchase a cosmetic fixer for $600k and spend $225k updating the kitchen and bath. Even if you assume your update only adds 75% of the $225k to the value, that is still a market value increase of nearly 30% through the upgrades – or if you exclude the value of the land it comes to close to 85% value increase to the structure. Brings up a lot of questions potentially about current appraisal practices. Are the feds still monitoring appraisers or is it wide open these days?

  15. 15
    Notme says:

    RE: Matt P @ 11

    MattP: “The exterior of those things are hideous.”

    How can you say that? Look at that list price, 1650k! That price screams good taste, true value, and the guarantee of eternal happiness. Look, a house that costs that much is beautiful and a good value, by definition. Everyone knows that. <—– that was my tagline before I got into the haiku business.

  16. 16
    JWoods says:

    RE: Justme @ 9
    I don’t pay much attention to this month’s number, to me it’s in the “zone of reasonableness”.
    I ignore a lot of people and comments, because they present no value in understanding truth or in my decision making.

  17. 17
    Matt P says:

    What does everyone think about the flat roofs on all these new houses with decks on them? Are they more susceptible to leaks?

    I’m also reading that build quality on the the low end box townhomes (low end in Seattle being 600k now, yeesh) is poor as well. Would a buyer be better off buying a slightly older home, say 10 to 15 years where major defects should have already presented themselves vs a new one?

  18. 18
    Matt P says:

    By Notme @ 15:

    RE: Matt P @ 11

    MattP: “The exterior of those things are hideous.”

    How can you say that? Look at that list price, 1650k! That price screams good taste, true value, and the guarantee of eternal happiness. Look, a house that costs that much is beautiful and a good value, by definition. Everyone knows that. <—– that was my tagline before I got into the haiku business.

    Just a color change would go a long way. That neighborhood looks very bleak. Seattle is already very gray, so maybe they were trying to match that aesthetic.

  19. 19

    RE: N @ 14

    The $10,000 for a bath remodel quote is for a typical 5′ x 8′ “hall bath” and they don’t usually replace the tub when they remodel those. They paint/coat it or fiberglass cover it. The $75,000 bath remodel quote is a gutted 5 piece, large, master bathroom. They are not quotes for the same type of bathroom.

  20. 20
    uwp says:

    By Justme @ 13:

    I think we should all ask @RSD to post links to at least SOME of these “affordable” units in “”desirable”” areas. According to RSD, there are TONS of them out there. Clearly he is not going to buy them all for himself, so I think it is fair to ask that he provides a number of concrete examples.

    Any other people here that would like to know?

    Census.Gov puts Seattle median household income at $80k in 2017, and Tim’s Simple Affordability calculator says that could afford roughly $2,000/month, or 425k with 20% down. There are 239 two-bedroom housing units (non-condo) on Redfin in King County right now under 425k.

    If you open it up to median “Family” households, the Census Bureau has their 2017 income at $121k, which puts affordability at $3,000/month, or around 650k with 20% down. There are over 1,000 3br+ houses (not condos) in King County for 650k or less.

    For married couples with children under 18, the median income in Seattle was $161,000.

    A scary thought for Justme is that more than 25% of Seattle families make over 200k. And 32% in Bellevue!

    I will let him do the math on what those families can afford

  21. 21
    Cameron Nicholson says:

    My wife and I make a combined 330k and she sells t-shirts and I am a financial analyst for a real estate development company. The fact that JustMe can’t afford to buy is laughable! We got 1100 SAT scores and are killing it. Justme? Are you dumb?

  22. 22
    dariakus says:

    By uwp @ 20:

    By Justme @ 13:

    I think we should all ask @RSD to post links to at least SOME of these “affordable” units in “”desirable”” areas. According to RSD, there are TONS of them out there. Clearly he is not going to buy them all for himself, so I think it is fair to ask that he provides a number of concrete examples.

    Any other people here that would like to know?

    Census.Gov puts Seattle median household income at $80k in 2017, and Tim’s Simple Affordability calculator says that could afford roughly $2,000/month, or 425k with 20% down. There are 239 two-bedroom housing units (non-condo) on Redfin in King County right now under 425k.

    If you open it up to median “Family” households, the Census Bureau has their 2017 income at $121k, which puts affordability at $3,000/month, or around 650k with 20% down. There are over 1,000 3br+ houses (not condos) in King County for 650k or less.

    For married couples with children under 18, the median income in Seattle was $161,000.

    A scary thought for Justme is that more than 25% of Seattle families make over 200k. And 32% in Bellevue!

    I will let him do the math on what those families can afford

    I’m curious what that monthly payment affordability calculation is based on. That’s way more than 25% of take home pay, and that’s not taking into account taxes and HOA, etc. For an income of 161k, a quarter of take home pay would be closer to $2500 a month. Which, accounting for taxes, puts you at more like $2200 for just the mortgage. That’s maybe a $425k house…

  23. 23
    kenmorem says:

    i can’t believe some of the junk that spews out of softwareengineer’s keyboard. amazing. and he believes it too.

  24. 24
    Don says:

    There are frequent objections to the style of new houses on the board. What sort of style is appealing to you guys?

  25. 25
    BacktoBasics says:

    That’s good for Seattle home owners. As long as it’s positive and bought 4-5 years ago, home owner still have positive equity gain. The job and incoming population will support Seattle housing (you may call it a bubble). Fed will stop raise interest and 30 year mortgage will stay low at 4-4.5%. A 600k house will cost home owner $2600-$3000/month. For a family earning $120k year, it is acceptable.

  26. 26
    Eastsider says:

    RE: uwp @ 20RE: dariakus @ 22

    From Investopedia –

    Generally speaking, most prospective homeowners can afford to finance a property that costs between 2 and 2.5 times their gross income. Under this formula, a person earning $100,000 per year can afford a mortgage of $200,000 to $250,000.
    https://www.investopedia.com/articles/pf/05/030905.asp

    The 2.0-2.5 ratio is mentioned in numerous financial articles with a simple search. So a median household with income of $80k can afford a $200k house using the formula. For married couples with children under 18 with the median income of $161k, they can merely afford a $400k house.

    The more interesting question is how many households today can afford their own homes? That is a scary thought if you ask me.

  27. 27
    Justsomedude12 says:

    RE: BacktoBasics @ 25 – I think this was written by a robot :)

  28. 28
    Don says:

    RE: Matt P @ 17

    Low slope roofs take more care in detailing during const. and maintenance later than than 4/12 pitch and above, but they help achieve cool outdoor spaces and views when views are available. You can’t sit on a 8/12 and eat a hotdog without being roped up…

  29. 29
    dariakus says:

    By Eastsider @ 26:

    RE: uwp @ 20RE: dariakus @ 22

    From Investopedia –

    Generally speaking, most prospective homeowners can afford to finance a property that costs between 2 and 2.5 times their gross income. Under this formula, a person earning $100,000 per year can afford a mortgage of $200,000 to $250,000.
    https://www.investopedia.com/articles/pf/05/030905.asp

    The 2.0-2.5 ratio is mentioned in numerous financial articles with a simple search. So a median household with income of $80k can afford a $200k house using the formula. For married couples with children under 18 with the median income of $161k, they can merely afford a $400k house.

    The more interesting question is how many households today can afford their own homes? That is a scary thought if you ask me.

    Those numbers better match my own calculations when I’m weighing potential mortgage options.

    And yes I suspet a vast majority of home owners in King county wouldn’t be able to afford the homes they’re in now if they had to buy them today. Prices shot up much faster than wages lately.

  30. 30
    uwp says:

    By dariakus @ 22:

    I’m curious what that monthly payment affordability calculation is based on. That’s way more than 25% of take home pay, and that’s not taking into account taxes and HOA, etc. For an income of 161k, a quarter of take home pay would be closer to $2500 a month. Which, accounting for taxes, puts you at more like $2200 for just the mortgage. That’s maybe a $425k house…

    Hi dariakus,

    The calculator is here: https://seattlebubble.com/blog/2009/03/06/simple-affordability-calculator/

    It’s uses 30% of gross income as the standard for affordability. That’s a pretty standard number.

    The numbers I was using for the monthly payment accounted for taxes (I used 0.9% of purchase price as the tax number). And I was using 4% for interest rate on the loan with 20% down. I didn’t account for HOAs because I specifically ruled out condos, those numbers were just for houses.

  31. 31
    dariakus says:

    By uwp @ 29:

    By dariakus @ 22:

    I’m curious what that monthly payment affordability calculation is based on. That’s way more than 25% of take home pay, and that’s not taking into account taxes and HOA, etc. For an income of 161k, a quarter of take home pay would be closer to $2500 a month. Which, accounting for taxes, puts you at more like $2200 for just the mortgage. That’s maybe a $425k house…

    Hi dariakus,

    The calculator is here: https://seattlebubble.com/blog/2009/03/06/simple-affordability-calculator/

    It’s uses 30% of gross income as the standard for affordability. That’s a pretty standard number.

    The numbers I was using for the monthly payment accounted for taxes (I used 0.9% of purchase price as the tax number). And I was using 4% for interest rate on the loan with 20% down. I didn’t account for HOAs because I specifically ruled out condos, those numbers were just for houses.

    30% of my gross comes out to half my take home pay. I just ran the numbers. That seems like a really irresponsible burden.

  32. 32
    Justme says:

    By Cameron Nicholson @ 21:

    My wife and I make a combined 330k and she sells t-shirts and I am a financial analyst for a real estate development company. The fact that JustMe can’t afford to buy is laughable! We got 1100 SAT scores and are killing it. Justme? Are you dumb?

    The REIC-BMC (bubble-monger-complex) thinks I’m really dumb, but they also secretly would not mind if I was even dumber than I am.

  33. 33
    Matt P says:

    By Cameron Nicholson @ 21:

    My wife and I make a combined 330k and she sells t-shirts and I am a financial analyst for a real estate development company. The fact that JustMe can’t afford to buy is laughable! We got 1100 SAT scores and are killing it. Justme? Are you dumb?

    Ah yes, the old insult everyone who isn’t as fortunate as you are attack. Great for winning debates.

  34. 34
    uwp says:

    By Eastsider @ 26:

    RE: uwp @ 20RE: dariakus @ 22

    From Investopedia –

    Generally speaking, most prospective homeowners can afford to finance a property that costs between 2 and 2.5 times their gross income. Under this formula, a person earning $100,000 per year can afford a mortgage of $200,000 to $250,000.
    https://www.investopedia.com/articles/pf/05/030905.asp

    LOL. It will only be affordable if Seattle area buyers are getting houses with sub-$1,000 mortgage payments.

    (Also from the same article: “A good rule of thumb is that PITI should not exceed 28% of your gross income. However, many lenders let borrowers exceed 30%, and some even let borrowers exceed 40%.” Hmmm…)

  35. 35
    Bumble says:

    By Cameron Nicholson @ 21:

    My wife and I make a combined 330k and she sells t-shirts and I am a financial analyst for a real estate development company. The fact that JustMe can’t afford to buy is laughable! We got 1100 SAT scores and are killing it. Justme? Are you dumb?

    Wow. Maybe when you are clearing 7 figures a year you’ll be able to afford some class.

  36. 36
    uwp says:

    By dariakus @ 31:

    30% of my gross comes out to half my take home pay. I just ran the numbers. That seems like a really irresponsible burden.

    Well, I don’t know what to tell you. The 30% of gross income is a standard that has been around for a long time. It’s been used by the gov since 1981: https://www.census.gov/housing/census/publications/who-can-afford.pdf

    Somewhere around 40%+ of all renters country-wide pay 30% or more of their incomes in rent.

  37. 37
    dariakus says:

    By uwp @ 35:

    By dariakus @ 31:

    30% of my gross comes out to half my take home pay. I just ran the numbers. That seems like a really irresponsible burden.

    Well, I don’t know what to tell you. The 30% of gross income is a standard that has been around for a long time. It’s been used by the gov since 1981: https://www.census.gov/housing/census/publications/who-can-afford.pdf

    Somewhere around 40%+ of all renters country-wide pay 30% or more of their incomes in rent.

    Maybe I’m reading this wrong but I don’t see it mention gross income anywhere. In fact much of it is worded as if referring to take home pay. Which makes a lot more sense. 30% of gross salary comes out to 50% of take home pay which this paper deems severely burdened. And I would agree.

  38. 38
    dariakus says:

    RE: dariakus @ 36 – Sorry for the double post, but it goes one further–it considers 30% and above to be in the “burdened” category. That’s not a positive descriptor. Also note the year of this study–at the peak of the last bubble. I’ve always heard 20-25% of take home pay, and that’s always worked out for me whether renting or buying.

  39. 39
    JWoods says:

    RE: uwp @ 35
    RE: dariakus @ 31
    The one ratio to watch is monthly debt payment to gross income, most mortgage limit it to 43%.

    @dariakus: you seem to be a pretty nice guy, I’m not trying to convince you to buy or continue to rent, but I’ll share with you my 2 cents:
    You can’t have it both ways, live in a nice house meeting your expectations AND it only costs 20% of your income. Phycologically, people always want to have the house slightly above their means. So either you lower your expectations, or become a lot more thrift, cut back on vacations, dinning outs, Starbucks etc.

    Remember the curved grading system analogy? You’re competing in an A level school district with all the other smart, hardworking, thrift talents from all over the world, it’s very hard to get A grade, but from what I learned about you B/B+ grade is totally achievable.

    I intentionally maintain my debt to income ratio to be >40%, mortgage is the cheapest money you can get anywhere, period. With current 4.25% and mortgage deduction, you are effectively getting 30 year, non-recourse loan at 3%!!! I maintain high level of liquid funds for rainy days, which also allows me to act on opportunity swiftly. I don’t pay off my mortgages even I could, because not only I think I can beat 3% annual return, I also have a lot more flexibility this way.

    I know this is very controversial, but I would put it out there: when you have rising income, with a rising market like Seattle, borrow as much mortgage as you can, responsibly.

  40. 40

    RE: kenmorem @ 23

    Be nice. He thinks we are all blogging here and we are all posting blogs. :) I tried to tell him 10 years ago or more that The Tim is the only blogger and Seattle Bubble is the blog. We are commenting on his blog. But hey, if 90% of the people commenting here can be “the REIC” per JustMe, I guess everyone can be a blogger. :)

  41. 41
    dariakus says:

    RE: JWoods @ 38 – Ah, but I have owned a home exactly where I wanted and for a price I could afford. In fact, I’ve also always managed to rent in that 20-25% bracket for something highly desirable as well.

    It’s just that certain metropolitan areas make this very difficult with their average housing costs, and Seattle is now squarely in that upper echelon.

  42. 42
    dariakus says:

    RE: dariakus @ 40 – I am having a very hard time finding anyone advocating spending 50% of your take home pay on mortgages. Most things say around 25-30 and many financial advisors say never go over 30.

    Everyone’s situation is different of course but I can’t fathom dumping more than 30% of my take home pay into anything.

  43. 43
    Matt P says:

    Everyone’s take home pay is different. Spending 50% of take home on housing after maxing 401ks and HSAs while still making the max roth contribution each year is a far cry from 50% of take home while doing none of that.

  44. 44
    dariakus says:

    RE: Matt P @ 42 – It’s true. I also fail the “2.5x your annual salary” test… even at gross I’d have to move quite a long way away to afford anything using that guideline.

    I understand my situation is unique (most everyone’s is honestly), but currently I’m a content renter :)

  45. 45
    randomseattledummie says:

    RE: softwarengineer @ 6

    6 posts in and you have already turned the topic to climate change denial?! What goes on in your mind must be a fascinating place to be.

  46. 46
    Deerhawke says:

    By Justme @ 9:

    By JWoods @ 3:

    Not to read too much into one month of data, I think people will continue to be surprised by the strength of the housing market.

    _____________
    It has been well documented on the previous thread, as well as seattletimes and twitter, that the median bump in February was purely a case of dropping prices overall being offset by a higher level of closed sales in more expensive areas. These very same expensive areas at the same time were the locations where the local median had dropped the most, causing a larger number of buyers to bite there than in the lower priced areas. .

    _____________

    When someone starts a sentence with “It has been well documented that” or “there is broad consensus on the fact that” then generally what follows is a non-persuasive narrative dressed up with a snooty attitude. And Twitter is now a footnoted source?

    Fact– the expensive areas of Seattle and the East Side mainly dropped (with the exception of Bellevue west of 405). It is really hard to imagine that increased sales at greatly increased prices in Renton could push up overall King County prices by $45,000. But if that is true, then that is really the definition of a broad-based movement in the market. (Wow, suddenly Renton is the chichi new hotspot? Who knew? The Olive Garden is sure to be replaced by an Ethan Stowell couture eatery. )

    Ardell, do you have a thought on what you see in the numbers?

  47. 47

    RE: Deerhawke @ 45

    I ran all the numbers earlier today when this post came out, but the results were a bit ho hum and even somewhat odd to me in places, so I didn’t post them. But since you asked…

    Total Sales 1,904 Feb this year vs 1,953 Feb last year. Ho Hum

    Houses not townhouses or multi-level (some townhouses are listed as multi-level so I have to hand sort those) there aren’t many multi-levels so here are the numbers without them.

    1,478 this Feb vs 1,458 last Feb. Ho Hum Median Price $650k this year vs $630k last year. Another Ho-Hum

    The oddities were 1 bedroom condo price drop and non-condo townhome median being higher than SFH median. I’ll double check those after I watch The Voice. :)

    P.S. Good thing there was a commercial pretty quick. I forgot the disclosure. Required Disclosure: Stats in this post are not published, verified or compiled by The Northwest Multiple Listing Service and are hand calculated in real time by Ardell.

  48. 48
    S-Crow says:

    RE: dariakus @ 41 – You mentioned: “I am having a very hard time finding anyone** advocating spending 50% of your take home pay on mortgages. Most things say around 25-30 and many financial advisors say never go over 30”

    **Anyone? Try the Mortgage industry followed by the real estate industry! There is heavy reliance on getting first time buyers into housing to keep the churn moving the market. It’s critical actually. It’s one of the reasons for the lobby to eliminate student loan debt as a factor in qualifying ratio’s!

    Who’s backing these loans? The Motherships of course:

    1) F – H – A
    2) Fannie Mae and Freddie Mac expanding qualifying ratios to absurd levels based upon the absurd metric of Gross Income (not after tax income).

    From the trenches: What’s really sad is seeing people with $136,000 in student loan debt and gross income of $5,250…. Not including Credit Cards or the $580/mo car payment with over 60 mos left on the loan. Approved!

    Working in the Escrow biz is really quite the lens into the financial dry rot that our debt driven real estate industry blesses.

    People complain about housing prices? Require lenders to portfolio their loans. Require 10% down. Require rear end ratio’s to not exceed 30% of NET Income. Nevermind. It would crash the market.

  49. 49
    Realistic says:

    There used to be a link “Map Nearby Homes For Sale” in listings shown by Redfin under the Google map. It would lead to a map with sold homes in the vicinity of the current listing. It seems Redfin redesigned this sometime last year and that link doesn’t show up anymore. Does anyone know if there is still such a shortcut hidden somewhere? I can still see it in sold listings but I’m more interested in the active ones.

  50. 50
    Erik says:

    RE: dariakus @ 43
    If you continue to be a fraidy cat you will end up poor for sure. If you buy and take chances, you may end up poor, but likely not, as real estate generally goes up in value.

    I win at monopoly about 70% of the time. I go hard in the beginning buying all the property I can and then trying to get the first monopoly. I like the violet and orange properties best in the beginning as houses are only $100 each and they pay well if you have 3 or more houses. I mortgage my other properties to afford hotels first. If someone lands on those with hotels early in the game, it can really change the course of the game. Next, I like to win with a monopoly on some higher end real estate. I just play the odds towards the end and not overextend myself too much. Why am I telling you all this? Same concept is true in real life. You have to take risk in the beginning so you can play it safe and “diversify” later. Reading Forbes or listening to bad advice from people like wreckingbull confuses people. Your approach in the beginning cannot be the same later on if you want to win.

  51. 51
    dariakus says:

    RE: Erik @ 49 – I’m very far from the beginning :). I played the game of houses and lost big in 2006–so big that i never recovered in time to buy again before affordability skyrocketed past me. If I’d never bought in ‘06 I could have easily bought in 2012 or so. But now that’s all water under the bridge. I’m retiring with almost eight figures in a decade, at which point I’ll buy some small home to retire in—and it won’t be in this area, barring massive drops in the market.

  52. 52
    N says:

    @ Dariakus – I am +1 with you on this. It’s a really good discussion to have, too bad others don’t seem interested in the merits (both pro and con). We are a family with a similar income to the example posted and if you care about funding your retirement you are completely right, its a challenge finding a house that works that fits any reasonable criteria of what a monthly housing payment should be to allow you to put anything meaningful into retirement and not be paycheck to paycheck. Of course you do it when you don’t have a choice (been there done that) but once you do you don’t exactly want to go back to paycheck to paycheck just so you can pay the bank and realtors and a little principal each month.

    Until the last 12 months renters were in a tough place as rents continued to increase but since then renting seems to be cheaper on a monthly basis if you don’t have that burning desire to own. Now, most people are looking at $1,000k more a month to own then rent an average house. In the long run the home buyer may win but $1,000k a month is a lot of take home pay for that $150k income. And tat $100k+ you don’t spend on a down payment gets a darn good start on saving that first million in an investment account.

    I suspect if your on pace to hit 8 figures in 10 years that your a max saver and have prioritized that which given the two choices is an excellent way to go and owning or renting will not matter to your financial picture. Of course you won’t find agreement on here, where some posters put all their eggs in real estate.

    As to 2.5x your annual income. It’s a good rule of thumb but even so called Bogleheads will sometimes let that run up close to 4-5 times for VHCOL like Seattle. Otherwise to buy a $700k house you would need to make $280k a year and while some do there are a lot more buying houses that don’t make that kind of money. And when you consider the number of houses sold in the past 5 years of course the vast majority of homeowners bought at a much lower price and would not be able to buy at today’s prices and maintain their lifestyle.

  53. 53
    Eastsider says:

    Just read an interesting piece. A snippet –

    When home prices stopped rising in 2006 and then began to decline, homeowners started defaulting in droves. Of those who bought a house in 2003, 10% had defaulted by 2009. Those who purchased in the peak bubble year of 2006 saw their equity evaporate almost overnight. By the end of 2009, 40% of this cohort had defaulted on their mortgage.

    Here is the real shocker: Lauffer found that of those homeowners who defaulted by 2009, 40% of them had purchased their home in 2003 or earlier.

    Opinion: Why out-of-control bubble-era mortgages still threaten to smash major U.S. housing markets
    https://www.marketwatch.com/story/this-bubble-era-mortgage-trick-could-smash-major-us-housing-markets-2019-03-18

  54. 54
    Deerhawke says:

    RE: Ardell DellaLoggia @ 46

    Thanks Ardell. February was Ho Hum. I like that. You realize that saying something is “Ho Hum” simply will not sell papers or produce clicks on the internet.

    Nonetheless I appreciate your telling us when you think something is simply boring and that it does not confirm or deny any particular theory or narrative.

    Without better information I am going to put February’s data aside as a one-off, in part because of the weather. The next set of stats in two weeks will be much more telling.

  55. 55
    Luke says:

    RE: Erik @ 49

    Yes, because investing in real estate in real life is just like the game of Monopoly..

    Hearing stupid and over-leveraged people’s stories about how easy it is to make money on real estate only helps to confirm my suspicion that we are in another bubble fueled by irresponsible debt.

  56. 56
    Whitechoco says:

    I have been a potential home-buyer for the last 12 months, definitely on the sideline watching things unfold. My wife and I pulled the trigger on a Snohomish County house last week. It has nice sound views in a good area, and we are able to make it work on just my one blue collar income and a nice downpayment (she is a stay at home mom with our 1 year old). As frightening as the run up in prices have been, one thing that is encouraging is the continued growth of Microsoft and Amazon in the area. Seattle has become a technology mecca over the past decade similar to silicon valley. If global warming patterns persist Seattle will continue to thrive as the west coast champion for growth. Sure I would have preferred to have purchased 5 years ago, but for one I wasn’t in the area and secondly I didn’t have the secure paying job until now. I for one was drawn to the pacific northwest due to the higher wages than most of the country. It goes to say something that I was able to still buy a nice view house with a single income. Sure things will be tighter for a couple years than if I had continued to rent, but for my family the security of locking in our costs and enjoying home ownership pushed me to make that decision.

    Additionally I am reading that the fed may be in a bit of a conundrum where they need to allow slightly higher inflation to maintain growth in the gdp. It appears that for the next couple years they will maintain lower interest rates while allowing inflation to go beyond their “normal” 2% target rate. If that is the case all asset classes including housing will over time continue become “more affordable” as wages are increased to keep up with inflation and the value of the almighty dollar continues to decline as it has historically done since its inception.

    Housing may go down in value this year , or next year, but at the end of the day a potential buyer who is sitting out of the market is placing bets on the wrong side of the table. As long as the government has the ability to print money and devalue the value of currency through inflationary practices, assets will become more expensive to purchase in the long term as workers and goods such as building materials and labor demand higher prices.

    I’m open to hearing opposing arguments to this.

  57. 57
    Matt P says:

    RE: N @ 51 – The reason 2.5x doesn’t apply to high income earners is because disposable income increases as salary goes up but essentials do not. Food more or less costs the same (high income might want to buy more expensive items, but they don’t have to), child care, diapers, gas, cay payment, etc etc. A $150k income family might spend 15% on essentials outside of housing whereas the $75k family spends 30%. The $150k family therefore has a lot more left over for housing and unless they’re spending on cars they can’t afford, they’re going to be ok with a more expensive house.

  58. 58

    RE: Realistic @ 48

    To see the solds with the actives on the map you put in your search, I just put in Finn Hill to test it. That picks up all the actives. Then you click more filters and turn on the sold button for whatever period of time you want to go back to and you will see the actives and solds on the same map. I’m not sure how you used to do it, but that is how I’ve always done it and it still works. You can likely hit that sold button from the getgo, but I usually look at the actives first to narrow down my search a bit more and then go to “more filters” and add the sold button. I only use Redfin this way when I’m looking at property in other States, since locally I use the mls.

    Hope that gets you to where you are trying to go.

  59. 59
    N says:

    @Matt P – My point had to do with HCOL areas not high income households. Certainly at a certain income level the 2.5x doesn’t matter but I think many would be surprised what $150k actually amounts to in monthly take home, especially if your a max saver (saving ~$46k for a couple).

    But my statement that 2.5x doesn’t apply in HCOL or VHCOL areas like Seattle or SF is valid and I think you are agreeing with anyways.

  60. 60
    Realistic says:

    By Ardell DellaLoggia @ 56:

    RE: Realistic @ 48

    To see the solds with the actives on the map you put in your search, I just put in Finn Hill to test it. That picks up all the actives. Then you click more filters and turn on the sold button for whatever period of time you want to go back to and you will see the actives and solds on the same map. I’m not sure how you used to do it, but that is how I’ve always done it and it still works. You can likely hit that sold button from the getgo, but I usually look at the actives first to narrow down my search a bit more and then go to “more filters” and add the sold button. I only use Redfin this way when I’m looking at property in other States, since locally I use the mls.

    Hope that gets you to where you are trying to go.

    Thanks, but what I was looking for was a link from the listing page. I’m already on a listing page of a house for sale, I scroll down through the data and under the Google map widget there used to be a link “Map Nearby Homes For Sale”. Clicking it would take me directly to a filtered map of sold houses zoomed in to the area of the house I clicked from. This still works when I’m viewing a sold listings but not active ones. I am aware I can manually do it by going to the map page, navigating to find the area of the house I was looking at, zooming, and applying filters. But it used to be easier with just one click.

  61. 61
    Blurtman says:

    The Soylent Green solution.

    KOMO News Special: Seattle is Dying

    Seattle Is Dying. It’s a harsh title. Someone on social media even called it a “hopeless” title. I’ll admit to you that I wrestled with the name for some time. Too dramatic, I wondered? Too dark? In the end I went with it because I believe it to be true. I believe that Seattle is dying. Rotting from within.

    https://komonews.com/news/local/komo-news-special-seattle-is-dying

  62. 62
    Erik says:

    RE: Luke @ 54
    You are calling me stupid and overleveraged? That stings Luke, that really stings.

  63. 63
    Erik says:

    RE: dariakus @ 50
    If you have 10 million, you should talk to my friend. My friend only has 5.4 million and makes $20k/mo just in dividends. With 10 and the same portfolio, you could make almost $40k/mo in dividends each month. With $40k/mo, you don’t need to live in a small home and worry about money.

    I’m a poor person, so I take more risk because I don’t want to wait until I’m old to retire. You should take the latter approach and diversify if you have that much wealth.

  64. 64
    Erik says:

    RE: dariakus @ 50
    How’d yah get all the money? What’s the secret?

  65. 65

    RE: N @ 14
    The Money Return From Remodeling Has Always Been a Joke For Decades Too

    The contractors ride around in their shiny new $70,000 trucks and wear Rolex watches….these greedy folks want all your homes equity…

    Consider being your own contractor, its risk is there, but funding the greedy rich contractor has been eliminated…if you don’t have any construction skills, don’t remodel, its a waste of money…

  66. 66
    Anonymous Coward says:

    By dariakus @ 31:

    30% of my gross comes out to half my take home pay. I just ran the numbers. That seems like a really irresponsible burden.

    Let me guess, you have no dependent children which qualify for the child tax credit nor do you own…. 30% of my gross works out a bit less than 40% of my take home. (And that’s after being a grand or two away from maxing out my annual 401(k), and after supplemental life and supplemental disability, and my HSA contribution, etc, etc…)

  67. 67

    RE: Blurtman @ 59
    Yes Blurtman

    Its like a train crash in slow motion. With the indictments against the NWO Boeing [they essentially do their own FAA certifications now] and Microsoft Security Problems, both Seattle area companies under FBI probe too…its hit the fan. They’re sizing up Boeing safety and NWO FAA folks for prison orange suits now? But Seattle RE is safe? I see Detroit is similarly getting a stomach punch from GM too…closing plants and moving jobs to China too…Detroit’s RE is worthless now…Seattle and Detroit sister NWO cities now?

  68. 68

    RE: Anonymous Coward @ 64
    The Child Tax Credit Helps

    But retirees really see the effect of net pay is all ya got left…ya can make like 70-80% of your old gross pay and take home MORE net pay…remember this when ya do your retirement planning…

  69. 69
    JB says:

    UWP

    Why “north of Seward Park?” Seward Park is one of the coolest neighborhoods in all of Seattle. The park itself is fantastic, particularly during the summer. There are currently some good listings in the area. Personally I think the coolest parts of Seattle are found driving from Madison Park to Seward Park along lake Washington. RE: uwp @ 2

  70. 70

    RE: Erik @ 62
    I’m Too Polite to Lying Bloggers Erik?

    I’d tell you to just ignore them, but they are very hurtful and they lie knowingly too..we aren’t perfect Erik, but we control our blogs much better and try to stick to raw data, not opinion…we aren’t perfect at it, but who is?

  71. 71
    dariakus says:

    By Erik @ 62:

    RE: dariakus @ 50
    How’d yah get all the money? What’s the secret?

    It’s all in retirement accounts right now so I can’t touch it easily for another decade, at which point I’ll be retiring early and comfortably. As for how I got there, I maxed out my 401k from 22. Never changed course even during the crash in 08. Invested 100% in stocks but have the risk spread across multiple major sectors. Also contributed to IRAs as I could above and beyond the 401k. And have carried zero debt my entire life (buy only used cars with cash, never carry a credit card balance, no student loans—paid those off within two years after college while eating only rice and beans).

    I appreciate that you (and many others!) have been successful with real estate! It’s definitely a viable way forward. Just not the way I chose :)

    I wish you continued luck and prosperity!

  72. 72
    dariakus says:

    By Anonymous Coward @ 64:

    By dariakus @ 31:

    30% of my gross comes out to half my take home pay. I just ran the numbers. That seems like a really irresponsible burden.

    Let me guess, you have no dependent children which qualify for the child tax credit nor do you own…. 30% of my gross works out a bit less than 40% of my take home. (And that’s after being a grand or two away from maxing out my annual 401(k), and after supplemental life and supplemental disability, and my HSA contribution, etc, etc…)

    Five dependent children plus a stay at home spouse, actually :)

  73. 73

    RE: softwarengineer @ 65
    Hey Blurtman…

    Have you replaced that shrapnel “terrorist Takata Japanese engineered air bag bomb” in your car yet? I’m going to the Dodge dealer this morning to replace mine….the passenger air bag is the one that explodes with shrapnel in your eyes…

    The passenger air bag is in the dash board and apparently has to “blow a hole” in the dash board to actuate…perhaps its time to eliminate exploding safety devices that can kill kids too….LOL

    They’ll probably put the same bomb in my car anyway, like phony NWO Boeing MAX 8 safety…LOL

  74. 74
    JB says:

    By dariakus @ 50:

    RE: Erik @ 49 – I’m very far from the beginning :). I played the game of houses and lost big in 2006–so big that i never recovered in time to buy again before affordability skyrocketed past me. If I’d never bought in ‘06 I could have easily bought in 2012 or so. But now that’s all water under the bridge. I’m retiring with almost eight figures in a decade, at which point I’ll buy some small home to retire in—and it won’t be in this area, barring massive drops in the market.

    Affordability skyrocketed past you yet you have a net worth of nearly 10 million? Hmmm. For $1 million you could buy a beautiful home in the Seattle area and still never have to worry about money. There seem to be some inconsistencies in your posts.

  75. 75
    LessonIsNeverTry says:

    RE: JWoods @ 38 – ” With current 4.25% and mortgage deduction, you are effectively getting 30 year, non-recourse loan at 3%!!! ”

    Everyone, please keep in mind that Washington is NOT a non-recourse state. It is *optionally* non-recourse. Most bad mortgages are never pursued so it seems non-recourse and is mislabeled as such online.

    It is up to each person if it is acceptable to risk a mortgage and I hate seeing incorrect information being peddled as truth. Frankly, it should also make you wonder about the wisdom of people’s overall strategy when they don’t get the fundamental rules of their state correct.

  76. 76
    LessonIsNeverTry says:

    By N @ 51:

    @ Dariakus – Until the last 12 months renters were in a tough place as rents continued to increase but since then renting seems to be cheaper on a monthly basis if you don’t have that burning desire to own. Now, most people are looking at $1,000k more a month to own then rent an average house.

    This is correct. Currently skews in favor of renting versus buying for upper middle class, especially after tax law changes. Obviously highly dependent on people’s income, etc, but current breakeven for a reasonable upper middle class family is:

    10 year breakeven with house closing costs
    R3500 = 750k
    R4000 = 850k
    R4500 = 950k

  77. 77
    Matt P says:

    RE: LessonIsNeverTry @ 71 – Washington is defacto nonrecourse because 99% of foreclosures are non-judicial. Only in a judicial foreclosure can they get a judgement against the borrower and banks will only pursue it if you have a lot of liquid assets.

  78. 78
    JWoods says:

    RE: LessonIsNeverTry @ 71
    I’m no legal expert, can you give definitive source for non recourse vs recourse in Washington state? How often do lenders pursue legal recourse in mortgages in Washington?

  79. 79
    dariakus says:

    By Matt P @ 73:

    RE: LessonIsNeverTry @ 71 – Washington is defacto nonrecourse because 99% of foreclosures are non-judicial. Only in a judicial foreclosure can they get a judgement against the borrower and banks will only pursue it if you have a lot of liquid assets.

    Yeah, I’d imagine most people who foreclose have very little in liquid assets. Can’t squeeze blood from a rock and all that.

  80. 80
    N says:

    @dariakus 69- You are my hero, congrats!! You are probably well aware but you’d find more like minded people (risk adverse is a term that comes to mind) on the Bogleheads forum.

  81. 81
    S-Crow says:

    RE: dariakus @ 68 – You mentioned: “And have carried zero debt my entire life (buy only used cars with cash, never carry a credit card balance, no student loans—paid those off within two years after college while eating only rice and beans).”

    Blog post of the year.

  82. 82
    dariakus says:

    RE: S-Crow @ 77 – Thanks! I want to be clear: I definitely would prefer to own a home, but the trade offs I’d have to make in terms of quality of life in order to purchase just don’t add up at the moment. That may change in the future, and I’ll happily buy. But for now I’m content without drastically lengthening my commute, ending all of my kids’ extracurricular activities, changing their school out from under them, and having less money to spend on their college and on just enjoying life. I’ve prioritized other investments to make sure myself and my family are taken care of. Real estate isn’t the only way :)

  83. 83
    dariakus says:

    RE: JB @ 74 – “retiring with almost ten figures in a decade” means I’ve got retirement accounts that will be worth nearly ten million when I retire in ten years. I can’t touch that money right now without penalties, so it doesn’t count :)

  84. 84
    JWoods says:

    RE: Whitechoco @ 56
    Congratulations!
    I was in a similar situation as you 18 years ago, I don’t think I knew as much as you do then. It sounds like you’ve got a nice home, enjoy it with your family.

  85. 85
    ess says:

    By Matt P @ 57:

    RE: N @ 51 – The reason 2.5x doesn’t apply to high income earners is because disposable income increases as salary goes up but essentials do not. Food more or less costs the same (high income might want to buy more expensive items, but they don’t have to), child care, diapers, gas, cay payment, etc etc. A $150k income family might spend 15% on essentials outside of housing whereas the $75k family spends 30%. The $150k family therefore has a lot more left over for housing and unless they’re spending on cars they can’t afford, they’re going to be ok with a more expensive house.

    Every time I go to an affordable housing summit in our town, or testify at a council hearing on this matter, I bring up the very same issue – but the 30% mantra and above which indicates housing problems for people is so ingrained with these folks – they can’t figure out the simple logic of the following example and continue on their merry 30% way:

    1. Couple A – combined income – 4000 dollars a month – they spend 1000 dollars a month on a small basement apartment – spending 25% of their gross income on housing – they are not” house insecure ” by government definition.

    2. Couple B – combined income 12,000 dollars a month – they spend 5000 dollars a month on a beautiful house with an expansive view of Puget Sound – spending almost 50% of their gross income on housing – they are “house insecure” by government definition.

    Who is in the better financial situation – and who would you rather be?

    Thus the 30% rule is usually a poor and lazy indicator because other factors are not assessed.

    2.

  86. 86
    JWoods says:

    RE: dariakus @ 71
    Congratulations! That’s awesome to hear you’re doing so well by just following simple practice of save and invest, all roads lead to Rome, there are certainly other ways than RE.

    Are you just buying index funds? How long have you been investing?

  87. 87

    RE: JWoods @ 78

    One of my favorite topics so I’d like to expand on this a bit. Non-Recourse is not a benefit in my opinion. I’ve worked in both Lien Theory and Title Theory States.

    The with Recourse States require a Judicial Foreclosure. Judicial Foreclosures take much longer and usually a minimum of one year and sometimes two years.

    If someone loses their job in a Recourse State and it takes 6 months for them to find a new and comparable job, they still have time to not lose their home. They can get back on track and work out what is called a “forbearance” where those 6 months of missed payments get added to the end or divvied up over a “makeup” period of time.

    In a NON-Recourse State where most of the foreclosures are Trustee Sales, non-recourse at least as to the primary lender, buyers sign a Deed of Trust at closing that allows the Trustee (acting on behalf of the lender) to begin foreclosure on the first day after your 4th missed payment is due. This doesn’t give someone much time to get back into a new job and have their first paycheck from the new job and catch up on other debts as well.

    Yes…if you say OK to take my house with only 4 missed payments vs 12 to 24 missed payments, then they have to take what they receive at the foreclosure sale and not come after you for the difference. But agreeing to let your house go with 4 missed payments vs 12 to 24 is not really an advantage if you don’t want to lose your home.

    In non-recourse states with Deeds of Trust and Trustee sales, the lender has the option to go with a Judicial Foreclosure. How often does that happen? Usually when they see that the collection of the difference is likely worth going the longer and more expensive Judicial route. AKA, someone like Dariakus with a “10 figure savings” for the lender to grab would be a good target for Judicial vs non-judicial foreclosure, as example. Someone with $10,000,000 in savings wouldn’t likely get the benefit of non-recourse if defaulting on a million dollar house.

    But someone claiming to have $10,000,000 in savings saying they can’t afford to buy a house is simply a matter of choice vs an “affordability” argument. Clearly they could buy a house all cash or with a substantial downpayment so as to fit the mortgage into their desired 2.5 times net income.

    The majority of lenders go with the Trustee Sale in States that require a Deed of Trust be signed by the buyer at time of purchase, except in high end where the net worth of the owner causes Judicial to make sense. We just saw one in the comments here recently. Someone thought a house sold for $650ish that sold a year ago for $750ish and called it a $100,000 loss/price decline, but I pointed out it was a Judicial Foreclosure with the high “sale” being the bank foreclosing with legal fees, interest and penalties added to the debt of $750k.

    Recourse sales usually have a Right of Redemption where the person losing their house has the right to reclaim their house by paying even AFTER the foreclosure. So don’t be too happy about being in a non-recourse State. It just makes it more likely you will lose your home over a 30 year period due to temporary job loss, especially if that happens in the earlier part of the loan.

  88. 88
  89. 89
    N says:

    @Ess 85 – Of course I’d rather be couple B, but I’d rather have couple A’s rental. Couple B has the opportunity to really get ahead with their $140k income as dariakus has demonstrated but spending 40% of their gross / 60%+ of net on housing squanders that opportunity for quality of life or living beyond your means if you will.

  90. 90

    RE: ess @ 88

    Lots of chatter about that over the last 10 days or so. Rob does a pretty good job of breaking it down and you can see some not too well informed agent comments. Rob is not an agent.

    There is a follow up post “Do not minimize Ragnarok” Serious Legal Threat Part 2 that is also worth reading.

    https://notorious-rob.com/2019/03/gotterdammerung-a-very-serious-legal-threat/

  91. 91
    QA Observer says:

    RE: ess @ 88

    Finally! I have multiple agent friends and I can never seem to calculate how their hour-for-hour labor and services justify 3% commission. I am sure this has been written and justified by someone in the business on this blog, but I would like a refresher for my own sanity.

    Example: $700,000 closed price x 0.03 = $21,000.
    Assumption: 1 property @ 3 week closing time frame = 21 days (12 hour days) = 252 hours
    $21,000/252 hours = $83/hour

    I feel the NAR has a huge lobbying effort that keeps the gravy-train rolling. Why not! Is this REIC that JustMe antagonizes?

  92. 92
    uwp says:

    By Matt P @ 42:

    Everyone’s take home pay is different. Spending 50% of take home on housing after maxing 401ks and HSAs while still making the max roth contribution each year is a far cry from 50% of take home while doing none of that.

    This!
    Using “take home” pay can vary so much from person to person. Does a dual income family have lower pay purely because they are able to max two 401ks, rather than one? What about the worker who has an HSA vs one who doesn’t even have that option?

    I appreciate that dariakus has a great deal on a rental, but many people do not.
    46% of Seattle/Bellevue/Tacoma renters pay 30% (or more) of their gross income in rent.
    http://www.jchs.harvard.edu/state-nations-housing-2018/?share=graph8

  93. 93
    ess says:

    RE: N @ 89

    Of course – one should always live under their means. I have found it a pathway to success both personally and for others.

    But that is not the issue – as that is a personal choice amongst individuals as to how they spend their assets.

    What concerns me that government uses the “30% rule” in all cases to justify the development of subsidized housing of all types.

    For those of you who are not familiar with the “30% rule” and its ramifications – it goes something like this.

    A family unit (not defined) is “cost burdened” if they are spending more than 30% of their gross income on housing – which includes related housing expenses. This applies to both renters and home owners.

    And if a family unit is spending more than 50% of their gross income, then they are labeled “severely cost burdened”

    Residentially “cost burdened”? A definite problem that only government can solve.

    As a result – some very wealthy cities in the Puget Sound area – as well as other parts of the US , the figures indicate that many are housing cost burdened.

    Of course – there are so many permutations and situations that make this figure almost useless to apply.

    For example, there is no accounting for the size of a family unit, so a single person, a couple with no kids, and a family with numerous kids are all viewed as the same for the 30% analysis.

    There is no accounting for and differentiation between a family unit that is renting and has no housing assets, and owners that have a great deal of equity built up, and have other options such as relocating if they truly do have financial problems paying taxes and upkeep.

    There is no accounting for income generated by other assets, and other assets in general. Thus a widow who applies 35% of her income for housing may own her residential property outright, and have a substantial portion of her income generated by low paying bonds and bond funds. That widow may be a millionaire plus – but is considered residential “cost burdened” although the problem is resolved by invading principal.

    There is no accounting for accumulated wealth when applying the 30% rule. Thus a person who applies 50% of their gross income to their housing costs are considered “severely cost burdened” but they may have ten million dollars of assets including but not limited to their home, vacation home, art collection, coins and stamp collections, stocks in companies that don’t generate dividends, and other assets.

    So who cares if government applies the 30% rules when advocating for “affordable housing”. Well, you should.

    A couple of truisms about government housing and government programs to provide affordable housing. Governments over time tends to provide solutions that aren’t very effective, and cost the taxpayers a tremendous amount of money. The history of subsidized and affordable housing government programs is littered with failures – easily reviewed on line. And by using the “30%” marker -government can often overemphasis the problem, even in very rich communities. Thus we must do something – anything – which also coincidentally concentrates power in the hands of politicians and creates almost a lifetime employment scenario for a grateful government bureaucracy that will be able to work on these problems for the next twenty years.

    But the real concern is that the typical home owner or renter pays for these programs, but gets no benefit. The number of people that actually benefit from “affordable housing” programs is miniscule, and those people often get those benefits because of insider knowledge or connections that they have. Meanwhile, the vast majority of individuals – including many with real financial concerns, have to pay for these programs that benefit a few select individuals through increased property taxes and rents -because these programs usually are funded through increased property taxes. So those who are really residentially “cost burdened” move to a cheaper location – either by renting elsewhere or selling and moving on.

  94. 94

    RE: QA Observer @ 91

    Most of the work days are before there is an escrow. For a seller most of my work days are before there is a listing. I’ve never had a client think I was overpaid and many who feel badly that I didn’t get paid enough, so I think I’m doing it right. :)

    The issue of this lawsuit and the previous DOJ efforts has more to do with two different issues than what you are bringing up.

    1) The DOJ tackled the potential boycotting of discount brokers with a complicated 10 year agreement that expired in November of 2018. There were meetings on that back then but I don’t think there’s been a new agreement yet. That has more to do with the seller side.

    2) This current case and something the DOJ couldn’t quite get a handle on is what is called the listing “co-op” fee. When a seller agrees to pay x total commission to the listing broker, they rarely decrease the amount offered to buyers’ agents to show their house. This part of the equation is the part this lawsuit is hoping to tackle. If a seller wants their house shown, they usually can’t reduce that back end offering that is included in the total price without fear that no one will come to show their house.

    I have seen some mls’s try a $1 offering leaving the payment of the buyer agent to the buyer to arrange, but that’s a tough call for a seller who wants their house shown and sold. It would only work if lenders would allow the buyer agent fee to be included in the price and financed the same as they do with the seller offering of the buyer agent’s fee.

    But in any case, your 3 weeks of work example doesn’t apply. A buyer can look at houses for 6 months to a year and make several offers before escrow opens on a given house. The payment is for all of that work, not just the escrow time frame. On the seller side the agent fee often includes the cost of staging and professional photographer and some house fix up. Redfin started that recently with a concierge option for double the commission and many agents have been doing that for many years.

    Those 25 pretty pictures don’t just happen. The work to get it photo ready is a large part of the work on the seller side.

    Not justifying any particular % number as price of house usually impacts whether or not there is a discount and that discount is often applied at the end when the time it took to get into escrow and the work of getting there is known. But 3 weeks of work, 21 days of work, almost never.

    The lawsuit is trying to figure out how not to have a buyer agent fee included in the price so that it can be better negotiated by the buyer vs the seller. It is that side that they are saying is price fixing since sellers have always been able to negotiate their half, but fear reducing the buyer agent half.

  95. 95

    RE: ess @ 85

    Usually it’s a combo of the 30% rule with an income cap, thus the $12,000 a month family wouldn’t be eligible. In most cases the price is set by the cap income vs the 30% rule.

    Also I’ve never seen a subsidy program that didn’t consider household size. Example:

    http://www.archhousing.org/renters/income-guidelines.html

    A single person can usually only get a subsidy for a 1 bedroom so they can’t claim the 4 bedroom is too much of their gross income.

    I don’t have a ton of experience with this, but the link above should help with the pieces you are missing.

  96. 96
    Justme says:

    RE: Whitechoco @ 56

    Here we go again with a new and completely unknown poster that wants to hear arguments why he should not have bought last week. The gist of it is “Gee whiz, I just bought a house in a great area. Can someone please tell me why I made a mistake?”. Does this sound like a real person at all? “Please tell me why I am wrong”, and “Hearing opposing arguments.” Yah, sure.

    The post is replete with REIC and bubble-monger talking points up to the hilt. In two weeks we now have new users JWoods and Whitechoco fitting the profile of a sock-puppet bubble-monger trying to create churn on the blog.

    Whitecoco, if you are real and not just the monger-troll-child of some propagandist, you should go back and read several months or years of this blog. You want arguments against your purported purchase? You can start by reading every post I ever wrote. Then you can read everyone else that presents data and arguments against buying into a bubble and especially buying at the peak. I don’t want to name names because I will forget somebody significant off the top of my head.

    If you are real, and I very much doubt so, there’s still nothing special about you and your purchase that requires a whole new analysis of the housing market. If you want to post a link to the house you bought and how much you paid, maybe some people would pipe in, but otherwise you are just a generic buyer that most likely will lose money.

  97. 97
    Justme says:

    RE: Whitechoco @ 56
    RE: Justme @ 96

    Let’s have a sound-alike contest: Which one of the regular bubble-mongers does Whitechoco sound the most like? Extra credit: Do the same for JWoods.

  98. 98
    JWoods says:

    RE: Matt P @ 77
    RE: Ardell DellaLoggia @ 87

    Great information, thanks!

    I usually keep enough liquid fund to cover 2 years of expenses, hope I never have to go through the actual non recourse vs recourse experience. :-)

  99. 99
    ess says:

    RE: Ardell DellaLoggia @ 95

    RE: ess @ 85 –
    Usually it’s a combo of the 30% rule with an income cap, thus the $12,000 a month family wouldn’t be eligible. In most cases the price is set by the cap income vs the 30% rule.

    _________________________________________________________________________________________________________________

    Agreed – but the point is – that the 30% rule is used to panic people into agreeing to subsidized housing programs. The end result is that it hurts more people than it helps – because in most communities – there are more people on the financial edge of ruin that don’t get into these housing programs, but they are impacted by higher real estate taxes and rents in order to pay for the program for a lucky connected few.

    Furthermore – there is so much corruption that most public housing sites have section to report scams. I saw quite a bit from my former professional vantage, and I am sure there are just as many problems amongst those who build and administer these programs

  100. 100
    IssaquahResident says:

    For those questioning if right now is a good time to buy, take a look at the case-shiller history https://fred.stlouisfed.org/series/SEXRNSA/

    One can observe price stabilization and even growth in March 2008-2012, even though the market was falling YOY. This spring we may expect minor MOM growth, yet YOY decline.

    After May, prices likely will continue to fall MOM as well.

  101. 101
    Brian says:

    By Justme @ 97:

    RE: Whitechoco @ 56
    RE: Justme @ 96

    Let’s have a sound-alike contest: Which one of the regular bubble-mongers does Whitechoco sound the most like? Extra credit: Do the same for JWoods.

    Usually I’m on your side, but I think JWoods and Whitechoco are real individuals. Who would really go to the effort to create made-up personas and stories on a niche local real estate website? That would be someone that needs to reconsider what they’re doing with their life.

  102. 102
    Justme says:

    By Brian @ 101:

    Who would really go to the effort to create made-up personas and stories on a niche local real estate website? That would be someone that needs to reconsider what they’re doing with their life.

    I agree with this part ;-) ;-). But it is too late for the bubble-mongers. It’s what they do. They will not change.

  103. 103
    BacktoBasics says:

    30% is going to violated in east and west coast real estate. 50% is probably the real situation. That put a lot stress to home buyers. Like it or not, it is just a matter of fact.

  104. 104
    Eastsider says:

    RE: Ardell DellaLoggia @ 94 – We had this discussion long time ago. The fundamental question is why RE transactions cost so much in the US compared to the rest of developed world. It there is market competition, there is no way it costs 6% commissions just to sell a house.

  105. 105
    kenmorem says:

    By Eastsider @ 104:

    RE: Ardell DellaLoggia @ 94 – We had this discussion long time ago. The fundamental question is why RE transactions cost so much in the US compared to the rest of developed world. It there is market competition, there is no way it costs 6% commissions just to sell a house.

    said the hospitals to the patients.

  106. 106

    RE: Eastsider @ 104

    You have to get rid of buyers being represented separately from the seller as it is in other Countries to do that. That is part of the lawsuit really. No prepaid (by the seller) representation for the buyer. That potentially cuts it in half as it is in other Countries. Buyers can do that now, represent themselves, but not easily because the system doesn’t make it easy. The system still makes the seller pay for the buyer to NOT be represented when they have no agent. The lawsuit is hoping to rectify that, among other objectives.

    So the question is will buyers then go buy the house directly from the seller and seller’s agent without having an agent represent them or will they hire an agent?

    Basically the suit is to open the door for Zillow (and others who will follow) to sell houses with no agents at all. I have a friend in South Africa who tried to push for half of their smaller fee to go for buyer representation. He’s lucky to still be alive. :)

    There have been attempts to dismantle the system for a very, very long time. Maybe this time. Maybe not. Sellers don’t like the idea of no one coming to see their house. So far they are willing to pay double to make that happen. There will always be some who can make other arrangements, but the majority are still buying into the full package even though other options exist.

    Redfin tried to do this when they started. No agents to show houses. It didn’t work. Craig Blackmon is trying no mls needed. Haven’t heard much about that recently and I can’t check…because…he’s not in the mls. :)

    The question isn’t can you do it for less and even for 0 dollars (FSBO on Zillow)…yes, yes you can. The question is will the majority ever get to that point? Some day I expect.

    But for those complaining…it’s easy. Just put your home on Zillow for sale or Call one of the $1,000 flat fee in the mls companies and offer almost nothing to the buyer agents.

    It’s an option and has been an option for well over a decade. Why aren’t people doing it? Because they want the best agents for less and next to nothing. Sorry. Doesn’t work that way. It can be much cheaper though, right now, no waiting needed. Just do it.

  107. 107
    uwp says:

    By Brian @ 101 referring to Justme:

    Usually I’m on your side, but I think JWoods and Whitechoco are real individuals. Who would really go to the effort to create made-up personas and stories on a niche local real estate website? That would be someone that needs to reconsider what they’re doing with their life.

    It is strange, isn’t it? That Justme would think other people are creating sock-puppet accounts to spout disingenuous information. I wonder why Justme would go straight to that thought. I wonder why…

  108. 108
    Eastsider says:

    By Ardell DellaLoggia @ 106:

    So the question is will buyers then go buy the house directly from the seller and seller’s agent without having an agent represent them or will they hire an agent?

    I have the answer right now ;) Many buyers will op to buy without agent representation. 3% of $800k is $24k. Will you feel good about spending $24k to have someone ‘help’ with the purchase (process)? The people doing the heavy liftings are escrow and title officers, and sometimes attorneys. Yes, many have asked about this savings but it simply can’t be done today.

  109. 109
  110. 110
    Blurtman says:

    RE: softwarengineer @ 67 – Well, I think the local economy is more diversified than Detroit’s was. There is still a vibrant Costco and Starbucks, as but two examples. And Boeing is not down for the count, but that dimwit Elaine Chao must go, but won’t.

    Doncha think rising home prices cause rising rents causing the displacement of the less fortunate is the problem? The despicable Fed, in order to try to get the economy on track after its member banks looted it, is causing asset price inflation, and therefore the homeless problem. Why is it illegal to kill the bankers?

  111. 111
    Voight-kampff says:

    RE: Justme @ 96

    Do you and software engineer watch ancient aliens together?

  112. 112
    Erik says:

    RE: IssaquahResident @ 100
    Huh? This is why I don’t waste my time clicking on links. You just wasted my time.

  113. 113
    Justme says:

    RE: Voight-kampff @ 111

    What is this, if you don’t have a point, instead be lame and blame SWE for what I write?

  114. 114
    Voight-kampff says:

    RE: Justme @ 113
    I am definitely being lame, but I’m also pointing out that you and SE have a penchant for conspiracy theories. Not that there’s anything wrong with that.

  115. 115
    Whitechoco says:

    RE: Justme @ 96 – haha, sorry to get you so worked up. I was bringing a fresh perspective on what seems to be the feds updated Target on inflation. Recent comments have suggested they are rethinking their 2% inflation Target to allow slightly higher inflation in the market. I agree it’s the fed who has fueled such a runup in prices, if they are saying we are not taking away the punch bowl, my question is what will future prices look like?

  116. 116
    Justme says:

    By Ardell DellaLoggia @ 94:

    If a seller wants their house shown, they usually can’t reduce that back end offering that is included in the total price without fear that no one will come to show their house.

    Does a buyer’s agent not have a fiduciary duty to show their client the best listings, without regard for the size (percentage) commission offered?

  117. 117
    Justme says:

    RE: Voight-kampff @ 114

    Maybe you should go back to dreaming about electric sheep? And not think about aliens so much?

    Blade Runner – Voight-Kampff Test (HQ)
    https://www.youtube.com/watch?v=Umc9ezAyJv0

    The iconic scene in Blade Runner where we get a first glimpse of the psychotic nature of the “Nexus-6” replicants. Leon doesn’t take kindly to the bizarre questions posed to him by an interviewer working for the Tyrell Corporation to screen their workers…

  118. 118
    justsomedude12 says:

    RE: Whitechoco @ 115 – The run up in prices was caused by adding more and more punch to the bowl over many years. To juice prices even further, they’d need to actually add more punch to the existing level. Merely maintaining the same level of punch will do nothing to increase prices from where they are right now.

    Dang it, now I’m thirsty.

  119. 119
    Justme says:

    RE: justsomedude12 @ 118

    Fed Chairman Jerome Powell will speak about the punch bowl tomorrow 11:30 PDT. Many pundits will debate whether the punch bowl is half full or half empty. My position is that the punch bowl is always empty, because Wall St and housing speculators will always drink everything in sight as soon as a refill is made. No punch for you.

  120. 120
    justsomedude12 says:

    By Justme @ 117:

    RE: Voight-kampff @ 114

    Maybe you should go back to dreaming about electric sheep? And not think about aliens so much?

    Blade Runner – Voight-Kampff Test (HQ)
    https://www.youtube.com/watch?v=Umc9ezAyJv0

    The iconic scene in Blade Runner where we get a first glimpse of the psychotic nature of the “Nexus-6” replicants. Leon doesn’t take kindly to the bizarre questions posed to him by an interviewer working for the Tyrell Corporation to screen their workers…

    And I believe Voight-kampff bought a condo in the new “Nexus” building. Coincidence?

    ;)

  121. 121

    RE: Justme @ 116

    If your boss says you still have a job but he can’t pay you, are you obligated to go to work?

    The answer is no. In WA we have statutory duties and not Fiduciary duties and an agent doesn’t have to show a For Sale by Owner who is not offering to pay any agents. The buyer has to go alone or work out some way to pay the agent.

    Even in States with Fiduciary duties where they are allowed to show $1.00 for the Buyer Agent, the Buyer Agent doesn’t have to accept the dollar. The buyer can call the listing agent to see it or pay his agent.

    Even Redfin had and has a minimum fee. I just looked up a low priced Philly house (where they do have fiduciary duties) offering the full 3% commission and this message comes up on Redfin. “Sorry, tour not available. Redfin is currently unable to show this property due to our minimum price limit. We still recommend that you get a buyer’s agent to represent you.”

    Even the newer, alternative models have a minimum fee or no show policy.

    Did you think agents had to show property? Always? No matter what?

    Why did you think that?

  122. 122
    Voight-kampff says:

    RE: justsomedude12 @ 120

    You’re all finally starting to understand me!
    but how do you know I’m not a replicant?
    ;-)

  123. 123
    Whitechoco says:

    RE: justsomedude12 @ 118 – I understand what you are saying in the sense that quantitative easing has ended, however by allowing low interest rates to prevail in an inflationary environment pressure will continue to be seen through a demand in higher wages , as has been the case the past 12 months. With rising income comes a rise in asset prices as debt levels lower and buying power increases relative to an average income. Maintaining lower rates is in effect adding punch to the bowl.

  124. 124

    RE: Eastsider @ 108

    Seriously? It can’t be done? I’ve done it many times. Any seller’s agent will do it the day before their listing is expiring if the seller isn’t going to re-hire them. Why wouldn’t they? Agents will do it if they have a PITA seller. It’s clearly not unheard of. Ray Pepper did it for $500 bucks even when it wasn’t his listing. They still do I think. I can think of a couple of companies that do it.

    It’s not the norm or common but “can’t be done”? Not with the agent of your choice maybe. But clearly can be done. Pretty much anything can be done. Why do people think if they don’t see it advertised it doesn’t happen ever? Seriously naive.

    It wasn’t happening during multiple offers, but it was clearly happening in 2009. You won’t see it advertised, but it’s a great way to get rid of a dog of a listing.

    Happens more in a weak market and a property that is on market for awhile and getting stale with no offers. Just take your offer price and drop it by and additional $24,000. Let the seller and agent decide who takes the hit. But a popular house on market one day…not likely. Easier to grab a cheap buyer’s agent. They are out there.

  125. 125
    sfrz says:

    RE: Eastsider @ 108 – Agreed. I can say I have sold several homes and never had a problem. I saved THOUSANDS by not using an agent.

  126. 126
    sfrz says:

    RE: Ardell DellaLoggia @ 121RE: Voight-kampff @ 114 – I think it’s called blackmail.

  127. 127
    northender says:

    I typically look at a zone of N Seattle from roughly the ship canal to 90th St between 35th Ave NE and 24th Ave NW. Right now redfin shows 116 active single family houses in that area and 97 pending so of the total listings 45% are pending. I haven’t looked at that ration before so I don’t know how this relates to historic levels but to me it seems like there is plenty of demand and people ready to buy – and it’s only March.

  128. 128
    Justme says:

    RE: Ardell DellaLoggia @ 121

    C’mon Ardell, ZERO commission is of course excluded from that consideration. You wrote a long post to cover an unusual case. Maybe you could be a lawyer (inside joke alert)?

    But it does brings up an interesting point: Should a buyer’s agent disclose up front what is their lower limit ($ or percent or both) on commission, and that apart from that lower limit, the agent should give all properties equal treatment? I think they should be required to.

  129. 129
    Justme says:

    RE: northender @ 127

    Post a redfin link that defines that specific area so that people can see for themselves what is going on!

  130. 130
    pfft says:

    By Whitechoco @ 123:

    RE: justsomedude12 @ 118 – I understand what you are saying in the sense that quantitative easing has ended, however by allowing low interest rates to prevail in an inflationary environment pressure will continue to be seen through a demand in higher wages , as has been the case the past 12 months. With rising income comes a rise in asset prices as debt levels lower and buying power increases relative to an average income. Maintaining lower rates is in effect adding punch to the bowl.

    Rates aren’t low. Inflation is in check.

  131. 131

    RE: Justme @ 128

    Required to by whom? You want the government to price fix it?

  132. 132
    Ardell says:

    RE: sfrz @ 125

    See. No one’s stopping anyone from doing whatever they want.

  133. 133
    randomseattledummie says:

    RE: Justme @ 13

    Whoops, I replied yesterday in the last thread without seeing the new one. Comment 1091.

  134. 134
    OA says:

    By S-Crow @ 81:

    RE: dariakus @ 68 – You mentioned: “And have carried zero debt my entire life (buy only used cars with cash, never carry a credit card balance, no student loans—paid those off within two years after college while eating only rice and beans).”

    Blog post of the year.

    Love it! That’s the way to do it! Might not seem like a sexy idea (maxing out a 401k at an early age, living with no debt, etc) to most but it’s the most proven method to long term wealth. I applaud people like you.

  135. 135
    Erik says:

    RE: randomseattledummie @ 133
    Hence your name, randomseattledummie.

  136. 136
    Blurtman says:

    Rates aren’t low. Inflation is in check.

    Except for RE, college, healthcare, autos, ….

  137. 137
  138. 138
    Eastsider says:

    By Ardell DellaLoggia @ 124:

    Seriously? It can’t be done? I’ve done it many times. Any seller’s agent will do it the day before their listing is expiring if the seller isn’t going to re-hire them. Why wouldn’t they? Agents will do it if they have a PITA seller. It’s clearly not unheard of. Ray Pepper did it for $500 bucks even when it wasn’t his listing. They still do I think. I can think of a couple of companies that do it.

    You just showed that there is no way for buyers to save the 3% ‘commission’ if they need no representation.

    You have done it many times?!!! If a buyer shows up at your open house and ask about saving the 3%, you will never agree to it. And I bet the language to keep both sides of commissions in this case (okay, maybe 5% instead of 6%) is in your listing contracts with sellers.

    It’s not the norm or common but “can’t be done”? Not with the agent of your choice maybe. But clearly can be done. Pretty much anything can be done. Why do people think if they don’t see it advertised it doesn’t happen ever? Seriously naive.

    It wasn’t happening during multiple offers, but it was clearly happening in 2009. You won’t see it advertised, but it’s a great way to get rid of a dog of a listing.

    Happens more in a weak market and a property that is on market for awhile and getting stale with no offers. Just take your offer price and drop it by and additional $24,000. Let the seller and agent decide who takes the hit. But a popular house on market one day…not likely. Easier to grab a cheap buyer’s agent. They are out there.

    You just reiterate that such savings is impossible in normal market. Yeah, ‘possible’ in 2009, once in a few generations, when nobody is buying homes.

    Buyers do not want the $24k to go to the listing agent, at all. If a buyer offers $776k ($800k-$24k commission), you are saying that the seller may, if his agent is willing, be able to get $776k instead $753k ($776k-$23k)? Who is naïve here?

    If I am a buyer, I would offer $800k and ask the 3% commission be credited at closing. But that will never fly. And you know it.

    This is the worst comment you have made so far.

  139. 139

    RE: Matt P @ 17
    The Flat Roofs Will Work on Commercial Buildings, They All Have Them

    But they don’t use normal roofing either…they use like aluminum sheet on a 2X 4 wood frame…big difference in durability, but HOAs and contractors hate metal sheet roofs? They’re too cheap and effective…LOL

  140. 140

    RE: Eastsider @ 138

    I didn’t say it was impossible in a normal market. I absolutely do it if someone walks into the Open House and wants to represent themselves and take the 3% off the offer price. I will not take a commission to NOT represent someone. You are dead wrong on that.

    I said I won’t do it if there are “multiple” offers. You can’t put the other buyers who have agents in an unequal position. When there are multiple offers there has to be a level playing field. The buyer can go hire a cheap buyer’s agent. Not our business. But the buyer can’t insist that I write a competing offer as the person who represents the seller and can see all of the offers.

    In any case, an agent can’t act as a dual agent or a quasi-dual agent without the consent of the seller. It can be done for the right buyer who wants zero advice, asks no questions, fills out the offer blanks without prompting as to what to put in the offer. Someone who really does not need an agent. But the other buyers can’t be put at a disadvantage by using part of the seller’s money to beat the other buyers.

    Every time a buyer calls me to write on my own listing in multiple offers they do it to “win” because I can see how to beat everyone. I won’t do that. Yes, I require that they have their own agent and not use me to have the inside track.

    If you were a buyer working with an agent, you would appreciate that stance.

  141. 141

    RE: Blurtman @ 110
    Maybe the Ancient Aliens Will Abduct All the Banksters Hostage in Their UFOs

    take ’em to another universe where they belong…LOL

    What gets me Blurtman…is the Open Border Party (OBP) uses Soros and his ilk, tech company billionaire thugs for campaign $CASH$ and NWO MSM bribes, to keep all the manufacturing in China with cheap prison labor wages, Trillions in Obama Quantitative Easing welfare to the banksters, etc, etc …then call themselves folks for the little guy….LOL

    They do live in another universe all ready?

    I’m reading “The Damnation Game” (1984) by Clive Barker [BTW he’s about the same age as SWE], a great bankster novel and he connects them with monsters and Hell…LOL

  142. 142
    Eastsider says:

    By Ardell DellaLoggia @ 140:

    I didn’t say it was impossible in a normal market. I absolutely do it if someone walks into the Open House and wants to represent themselves and take the 3% off the offer price. I will not take a commission to NOT represent someone. You are dead wrong on that.

    Okay, I apologize for making the wrong assumption about you. But your claim about this being possible is still wrong. Try this in 100 open houses, 99 will turn you away. The other one is you :)

  143. 143
    Justme says:

    RE: Brian @ 137

    Another clear sign that the market will continue downward, when builder-as-investor houses are being put on the market. Rent not paying the expenses, clearly.

    QUOTE from listing: Excellent opportunity for a newer home in Bothell with Northshore schools!! Built by Pacific Ridge in 2009 and retained in their investment portfolio this home in Highland Court is now offered for sale. Home includes warm wood cabinets in the huge kitchen, elegant gas fireplace and stainless steel appliances. Close to shopping, recreation, and commuter friendly location make this a terrific buy!

    Oh yeah, real terrific.

  144. 144

    RE: Ardell DellaLoggia @ 140
    Its a Tough Season for Empathy Out There Ardell

    But when they really need a good realtor, they forget that fact.

    Hey my HOA had its first open house listing by a realtor in about a year….I guess the banks figured out how to finance used modulars. Most of the modulars in my neighborhood had 10s of thousands [or more] poured into them and to move this remodeled home would be at horrendous cost to redo the crawl space, plumbing and yard landscaping…ya just can’t wheel a modular [with its metal wheel frame removed] without like $50-150K costs….the banks probably finely got that straight. I tried explaining this to Foremost insurance of modulars and they kept calling modulars similar to used RVs….but they aren’t.

  145. 145

    RE: Justme @ 143
    LOL Justme

    It reminds me of Obamacare, ya don’t need to read it or understand it, just pay for it anyway…roll the dice and hope ya don’t get snake eyes…

  146. 146
    Justme says:

    RE: softwarengineer @ 144

    I’m curious, would you care to post this listing? I totally understand if you want privacy.

  147. 147

    RE: Blurtman @ 136
    They Eliminate Food from the COLA Calculation Too

    It reminds me of today’s safety engineering nightmare automobiles and now commercial jets too…if we just block all the “bad news” it miraculously transforms into a wonderful NWO pleasant dream…

    Just go into denial and the bad stuff disappears….LOL

    I had my Damnation Game book with me at the Dodge dealer replacing my 20 YO “Japanese Engineered” shrapnel bomb Takata air bag [it literally blows a big hole through your dash board into your face] with the same dam_ part for any make/model 2014 car anyway….LOL….I love Japanese Engineering…I feel so safe now….LOL…when is your “useless” Japanese designed Takata replacement appointment for your car Blurtman? I had the Dodge service personnel rolling on the ground in laughter too [they fixed it quick too, about an hour, they liked me]…they were really laughing on the floor when I pointed out a simple fact on the FCA’s latest safety recall: 2007 [with about 200,000 miles on them by now] FCA Patriots [they price at about 10K new BTW with FCA incentives] needing to replace their catalytic converters. Hades, how about recalling the $35K 2007 Toyota Camry for that too? FCA is the runt dog for Open Border Party (OBP) attacks because they use American engineering low cost innovation?

  148. 148
    Notme says:

    If a house is affordable, then it is not overpriced. In fact, the affordability makes the location desirable, even when it isn’t! Everyone knows that.

  149. 149
    Justme says:

    RE: Ardell DellaLoggia @ 131

    A requirement by law or regulation that buyer’s agents must disclose their minimal acceptable commission in percent and $…only in bizarro-world is that price fixing. And separately from that, it seems one heck of a lot better than agents simply steering you away from properties that provide less commission, and without telling you.

  150. 150
    Don says:

    RE: Notme @ 148

    If a house was affordable to anyone who walked up to it, there would be houses that cost $37.50 in the morning, and variable prices to infinity after that.

  151. 151
    northender says:

    RE: Justme @ 143
    I worked on that project when the lots were being developed. Pacific Ridge is a quality homebuilder run by smart people and did very well back then. These houses were listed in ’08 and again in ’13 but didn’t sell.

    Four years ago the Pacific Ridge homebuilding operation was purchased by DR Horton for $72M. I doubt these houses were included in that purchase.

  152. 152
    Matt P says:

    Fed just announced no rate hikes in 2019 and the 10 year promptly dropped 5 basis points to 2.54. Very close to inverting with the 6 month at 2.48.

    QE taper supposedly ending in September, but I don’t think that includes MBS, so rates should hold steady with downward force of no rate more rate hikes but upward pressure of the fed not buying more MBS.

  153. 153
    Justme says:

    Fed Chairman Powell effectively announced that the economy is teetering at the brink of recession, or to put it more plainly, is about to go down the crapper. The usual thing will happen with jobs and asset prices.

  154. 154
    richard says:

    RE: Matt P @ 152 – let me ask a serious question: if FED cut down rates to zero again. will it inflate the house price this time?
    Or as Justme indicated, FED holds rate steady because of seeing recession, which come first, recession or a new surge in housing price due to lower rate?

  155. 155
    Matt P says:

    By richard @ 154:

    RE: Matt P @ 152 – let me ask a serious question: if FED cut down rates to zero again. will it inflate the house price this time?
    Or as Justme indicated, FED holds rate steady because of seeing recession, which come first, recession or a new surge in housing price due to lower rate?

    I wish I knew; I wouldn’t be so anxious about my upcoming housing decision if I did.

  156. 156
    richard says:

    RE: Matt P @ 155
    understood. it is very unsettling knowing FED has all the cards. Just don’t know this time it is that FED will defy gravity again or gravity will win over FED.

  157. 157
    SeaMillie says:

    The Fed just signaled the end of the cycle, traders are pricing almost 50% chance of a rate cut in Jan 2020. With pressure on rising rates out the door you’d need to look at a job killing recession for a serious slowdown in housing. The macro data seems to be trending that way, but you’d need to watch for growth in initial jobless claims to make a definitive case, and we aren’t there yet. A recession isn’t necessarily going to end up resulting in a large drop in Seattle housing prices. It would take tech employment slowdown/workforce reduction in Seattle to have that flow through. That has been the #1 catalyst for price growth from ~2011-2018. DINK tech couples @ $150K-$400k / year still have plenty of horsepower to buy at current levels. The supply side has been laughably small outside of luxury condos/apartments, so that’s a non factor.

  158. 158
  159. 159
    Justsomedude12 says:

    By Voight-kampff @ 122:

    RE: justsomedude12 @ 120

    You’re all finally starting to understand me!
    but how do you know I’m not a replicant?
    ;-)

    How do YOU know you’re not a replicant?

  160. 160
    S-Crow says:

    An Appraisers response/view of the market and answering the question of why Appraisers always seem to hit the number (from Ben’s Housing Bubble Blog). This folks is the no BS take on the state of affairs.

    The Money quote: ” What’s the difference between 2007 and now? 12 yrs.”

    It’s worth your time to read it every word.

    ““I have been an appraiser for over 45 years. Both commercial side and residential side. The residential appraiser is doomed as of Dodd Frank. They basically stated no one but certified appraisers could do work. At this point the number of appraisers has dropped to ridiculously low levels. You cannot build a firm nor make sense of an office environ. The government in an effort to keep the banks from pressuring the appraiser made Appraisal Management Companies act in between. The fees are no through the roof. $500-$600 per house. Pre Dodd Frank they were about $300. The AMC’s put their snoots in the trough and sucked out all they could. At this point the appraiser gets $225-$275 and is told to hit a 2-3 day turn around. Then the lender dictates all these stupid stipulations they want answered to cover their azzes. Most are foolish and are regurgitating the data which is obviously in the report if one can read them. The reports go through several levels of review and then the dat in them is fed to the government for stockpiling. They are building a database from the appraiser’s work product which by the way is a violation of confidentiality and a couple of other things in our code of Conduct. But the rules are different aren’t they. Now the best part. Let’s say that based upon years of practice you raise an issue or fifty with the lenders request, through the AMC you are blacklisted for being a problem child. In other words for good sense and practice you are cut-off. The bank says, not us, the AMC uses who they want to use. All the while the Bank is calling the shots hiding behind the AMC’s. To that I had a job wherein I told them the value was not there and I would not waste my time nor the borrowers money. The AMC rep. said, “no worries we’ll find someone who will do it.” He meant hit the number. They did just that as he called me to let me know. I no longer work for them and I am glad to have fired them. The question was raised as to how the appraisals all come in so close to contract price. Some appraisers are lazy and others are good. The government makes the agents supply the appraiser with the contract. I never run that into a PDF until I finish my report. At times I nail it. In fact most of the time I am within 5 % of the purchase price. Sometimes I am way off the contract price and I call it as I see it. I double work these to see if I missed something but usually it is a situation wherein there was a bidding contest. This is a bad thing to allow. Once a contract selling price is set at listing it should be the first to hit the number gets the house but the Realtors like to set up a damn casino and they keep letting the price rise while dumbazz buyers compete. This is a huge red flag and one of the reasons we get into boom cycles. Prequalification is another issue as far as I am concerned. It is like the house gives you so many chips and you keep bidding till you run out of chips. And there is a problem too as the Realtors drive up the prices. I am worn out with the whole process and with the evident lack of dedication on the part of lenders and government. I will say it as most people are loathe to come right out with it. The difference between now and 2007 is 12 years. Every other aspect is right back where we started. In fact banks claim that appraisers are so in demand they can’t get timely appraisals and they should get a pass of a true appraisal. The government is giving blanket relief to them and no appraisal is required. By the way most sales have dried up and all we are seeing is refi’s. Another great sign. If I were a sheep dog I would eat the sheep and save them the pain of waiting.”

  161. 161
    Blurtman says:

    RE: richard @ 154 – If they lower rates, and mortgage rates drop, then the all important monthly payment will drop. But as more and more people are out of work, the buyer pool will drop as well.

  162. 162
    Erik says:

    RE: Brian @ 137
    Your link sent me to a list of houses for sale in Bellevue. I got tricked again!

  163. 163
    richard says:

    RE: Blurtman @ 160
    Let’s see, QE started in Jan09 and ended in Jan15(in the meantime FED keep interest rate at zero). The Seattle housing price took off roughly in 2012. QE/zero interest rate plus Chinese money caused this round of housing boom. Very likely FED is going to do QE/zero interest rate all over again(what else can it do?).
    But seems there is a three year delay (2012-2009=3 years between QE and its effect on real estate. I guess you are probably right, before new round of QE have an effect, we will be in recession already. Overall, housing market prospect is negative in short term, just don’t know how fast it can deteriorate.

  164. 164
    richard says:

    RE: richard @ 162 – my delay estimation maybe inaccurate.
    When QE started, the dose is not strong. So I guess QE4 dose will be bigger than the sum of all three. So the delay maybe shorter.

  165. 165
    Brian says:

    RE: Erik @ 161

    Appears my link doesn’t work with the redfin app, but does work if you open it in a browser. Took me 2 seconds to figure out why it didn’t work for you and how to get around it.

  166. 166
    Erik says:

    RE: Brian @ 164
    You did it quickly because you knew the result you were looking for. I clicked it and saw another bum link.

  167. 167
    Erik says:

    Check these out. I got them $10 cheaper each for my current Remodel. Still a good deal at $30 each. They are really heavy and look and work great.

    If anyone has any good Remodel stuff from amazon, please share. I plan to use these on future projects as they are high quality and great price.

    Shaco Commercial Stainless Steel Vanity Single Handle Bathroom Faucet,Brushed Nick…

    https://www.amazon.com/dp/B016UFGCL4/ref=cm_sw_r_sms_c_api_i_cjVKCbF75GQ6Q

  168. 168
    randomseattledummie says:

    RE: Erik @ 135

    Such a dummie

  169. 169
    JWoods says:

    It seems everyone in construction is so busy these days. If you have any recommendation for architect and contractors for residential remodeling, please PM me. Much appreciated!

  170. 170
    Blake says:

    John Authers just posted this piece about the Fed’s decision today. I HIGHLY recommend you all read it! “Winter is coming!”
    https://www.bloomberg.com/opinion/articles/2019-03-21/federal-reserve-bends-to-economic-reality-jti3zccy?srnd=opinion

    I’m shorting this market now…

  171. 171
    Blake says:

    By richard @ 163:

    RE: richard @ 162 – my delay estimation maybe inaccurate.
    When QE started, the dose is not strong. So I guess QE4 dose will be bigger than the sum of all three. So the delay maybe shorter.

    QE4? There’s $9 trillion already invested in bonds “paying” negative interest rates! Last year the central banks tried to raise rates so they might have some room to maneuver, but the markets tanked and the yield curves are almost inverted. They are “pushing on a string” and up against the limits of monetary policy! Plus… Trump and the Repugs already plundered the US Treasury driving the deficit over $1 trillion DURING AN EXPANSION!! So US fiscal policy may be limited as well… I doubt we’ll see Congress voting for policies that might drive the deficit over $2 trillion. We’re pretty much f*cked and this downturn could be nasty.

    Note: Since Clinton and the neos (neolibs and neocons) deregulated Wall Street in the late 1990s each subsequent financial crisis has been worse than the previous crisis…. 1997… 2000… 2008… … 2019????

  172. 172

    RE: Justme @ 149

    Sorry. I read that wrong. I thought you said they should require that they charge everyone only the minimum (equal treatment).

    Most agents and companies don’t have a minimum. That is why the Redfin quote says they won’t do it, but recommend that the buyer get a buyer’s agent that isn’t them. They know that others don’t have a minimum.

    I recently did a $1M for nothing because it was a short sale and the only way it could close. I could have demanded payment which would have caused the property to fail and go into foreclosure. But then my client wouldn’t get the house. I worked for free. I have no minimum. Luckily I don’t have to work for free often. But I have a long standing policy that if the only thing standing between my client’s success or failure is my commission, I will guarantee their success.

    It was an odd situation. The 2nd lienholder wouldn’t walk away with what the first lienholder would let them have from the sale price. The only way for it to close was for me to fund the payoff of the 2nd lienholder. It worked. The seller wasn’t making anything either way. The seller’s agent would have had the sale cancelled by the lienholder vs not get paid. So that’s how it went. My buyers got the house.

    What you think all agents do or don’t do is often not true because we don’t advertise it. We don’t advertise any of it. It’s all confidential between us and our clients. We don’t steer them away. But if the offering is $1 or nothing (and yes that does happen) then we have to tell them how to go about buying it without us.

    The lawsuit is about reducing all of the commission on the buy side to $1 or nothing. It has something to do with iBuyers. I’m not sure what an iBuyer is. It could happen. It’s definitely a suit to watch.

  173. 173

    RE: softwarengineer @ 144

    Send me a link. People confuse modulars with manufactured homes when talking about them. It’s been awhile since I’ve seen a modular.

  174. 174
    pfft says:

    By Blurtman @ 136:

    Rates aren’t low. Inflation is in check.

    Except for RE, college, healthcare, autos, ….
    By Blurtman @ 136:

    Rates aren’t low. Inflation is in check.

    Except for RE, college, healthcare, autos, ….I would sound pretty smart if I listed all the prices that had gone down..

    You really think you can raise rates just to lower college tuition? Not going to happen. The best way to measure whether rates are too low or too high is to look at the inflation rate. You can always pick and choose what it up or down. Colleges are bursting at the seems. More buyers than sellers.

  175. 175
    Justme says:

    RE: Ardell DellaLoggia @ 171

    Good we got that cleared up, thanks.

    If you’re in the mood, I have another MLS-related issue: I recall you saying that there is an MLS or NAR rule that an agent shall not publicly comment on some other agents listing (I paraphrase but I think I caught the gist of it). But on Redfin, there is the “Tour Insights” feature, where redfin agents comment on listings they have toured. Usually the comments are fairly polite but they can also be to the point and mention negative factors albeit in a neutral language. How does that rhyme with (my understanding of) the MLS/NAR rule you have mentioned? I downloaded the NAR MLS handbook but was not able to find anything there, any references?

  176. 176
    Matt P says:

    RE: Justme @ 174 – I don’t think the ones that are showing are licensed agents, just the ones that open the doors. Also, some of them are quite negative when the place has real issues like a sloped foundation.

  177. 177
    Blurtman says:

    RE: pfft @ 173 – If everyone could qualify for a mortgage guaranteed by the USG, demand for houses, as well as home prices, would rise substantially.

  178. 178
    Saffy The Pook says:

    RE: Ardell DellaLoggia @ 171
    If I were spending $1M on a piece of property and the only thing standing between success and failure was a $20-$30K commission, I’d arrange to pay the commission some other way that doesn’t involve the seller. Doing otherwise would just be taking advantage of my broker.

    Your loyalty is admirable, Ardell, but if that client failed to come up with at least a partial commission on their own initiative I’d decline any future business with them.

  179. 179
    Brian says:

    RE: Saffy The Pook @ 177
    Yeah, that seems pretty pathetic to me. Paying $1mil for a shack and you won’t even offer to give your agent $1000 for their time.

  180. 180
    formerSeattleite says:

    By Justme @ 153:

    Fed Chairman Powell effectively announced that the economy is teetering at the brink of recession, or to put it more plainly, is about to go down the crapper. The usual thing will happen with jobs and asset prices.

    Honest question then, do you think we’ll be in a recession by the end of 2019 then? (let me define recession in this context: two consecutive quarters of negative GDP)

  181. 181
    Eastsider says:

    RE: formerSeattleite @ 179 – Honest answer – google “recession odds” and take your pick. LOL.

  182. 182
    Joe says:

    Recession coming up? As we all know, when recession fears arise, companies layoff first and ask questions later. They have to make those quarterly earnings, and the sure fire way to do that is to cut costs. With .3% GDP growth this quarter, which likely will be revised down to zero, the companies already know revenues won’t be growing. Need to cut out all expense growth as well.

    Not good for housing prices.

  183. 183

    RE: Erik @ 166
    I Just Fixed My 20 Year Old Fence

    I finally had a post rot…I thought of replacing the whole thing for like a few grand, or even had the post repaired for about $200 [replacing the whole fence within a decade anyway]…but went to Home Depot instead. I grabbed up a 30 lb steel point hard pan digging rod, new shovel and 4″ post for like $60 instead…a couple hours later it was done. Now I can dig post holes in hard pan. A skill all landlords with old fences should know….LOL

    Now I can repair the fence “free” myself, the tools are in my storage shed. I mowed the lawn too…I could pay for maintenance, but I’d lose the exercise and strength it gives me. My Japanese Lithium Battery was good to me too…it held charge all Winter to mow the lawn yesterday. I immediately yanked the Lithium out of the charger [before I mowed] when I saw 30% power left….when its 0% power left, then you recharge [American electrical engineers already know Lithium batteries lose capacity when you top ’em off]…BTW, that precaution is not in the Japanese Engineering user manual either, of course it isn’t, they want to sell ya more toxic Lithium batteries from China after you destroy your new one in no time [cell phones too]….LOL

    Ohhhh…the Japanese Engineers are so clever, they gave me the lawn mower TOTALLY jammed up with dry bearings from the factory…I had to oil it after I bought it new…LOL, such wonderful quality ;-)

    My 65 YO body felt the exercise too…it was great! Keep my electric lawn mower hints in mind if you ever buy one of these Frankenstein devises…Once you have it fully assembled, I wouldn’t fold it up again either, the Japanese engineered flexible joints have locks that don’t work easily and will tear apart [cheap plastic] if you do….just store it fully retracted and keep it that way…LOL

  184. 184

    RE: Blake @ 170
    Much Blame to Share I’d Say

    But in America, its OK to complain about something both parties are stuck with if we do nothing it gets worse too…a great example is eVerify for duplicate Social Security Number (SSN) surveillance before ya get a job….Hades, the Social Security Agency, banksters and Credit bureaus allow illegal duplicate SSN use [identity fraud]….LOL…imagine all the bad Seattle home loans if we did?

    Ya can’t fix it if its rigged illegally anyway…when did organized crime take control of America? Time to lay off all the American immigration attorneys that mucked it all up and start all over again?

  185. 185
    Coconut says:

    RE: Brian @ 178

    Buyers agents should not be paid 3%!. They do not warrant this universally. The model should be based what is negotiated and should vary based on your ability. The commission model is a horrible model for both real estate and the economy…it only benefits the agents and let’s be honest – 80% of what the agent does I could literally do myself, but am paying for the convenience. I hope this changes soon as it would only make the market more liquid. And, it isn’t a bad thing per se…some agents may only get 1% effectively…but some agents may get >3%…it would be based on what you can demand from a agent skills perspective…not based on some outdated entitlement rule

  186. 186
    Blurtman says:

    RE: Saffy The Pook @ 177 – Well, you aren’t immediately forking over $1 million if you take out a mortgage. Maybe $200,000. And as the agents will tell you, you are financing their commissions as well.

  187. 187
    Matt P says:

    Buyers agents should be paid a la carte and there should be specialists say $100 for someone to show me a house and then if I want help finding a house, a set fee for that. I really only need help with contract though: negotiations, searching, finding an inspector – I do all that myself.

  188. 188
    Brian says:

    RE: Coconut @ 184

    I only said $1000, not 3%, which would be $30000

  189. 189
    patrick says:

    That the buyer agent’s commission attached to the price of the home and “paid” by the seller incentives the buyer-agent to get the buyer to buy the most expensive house they can/will buy.

    All agents then benefit by raising the price of the market as high as possible. By having the seller pay all commission it hides this from the half of the market that does not benefit from an inflated market (at the very least not until years after they’ve crossed over).

    car·tel
    noun
    an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

    If someone is going to get paid to help me purchase something I’d like to be the paying party and to negotiate that payment in terms that reward that agent for acting in my best interest, not the amount of money I end up spending.

  190. 190
    Blake says:

    This was posted just 3 hours ago…
    “A data point seen as the bellweather for global trade just tanked”
    https://www.businessinsider.com/korean-export-trade-data-dropped-5-2019-3
    South Korean exports, widely viewed as a “canary in the coal mine” for the world economy, slumped 4.9% year-on-year to $28 billion in the first 20 days of March.

    “These data bode ill for [the first quarter],” said Freya Beamish, chief Asia economist at Pantheon Macroeconomics. She says the decline suggests an annualized plunge of 27.6% for the full month, a far sharper contraction than the 9.7% fall in the fourth quarter of 2018.

    The nation’s 20-day exports shrunk 11.7% in February, and there could be worse to come. “Leading indicators suggest the floor is not yet in sight,” Beamish said.
    (end quote)

    Blake sez: The US economy is just limping along with minimal growth, but the rest of the world is WORSE!! No one wants the party to end… but it will.

  191. 191
    richard says:

    RE: Blake @ 190 – thanks for the update. I am afraid we don’t feel it yet in Seattle. There is a lagging factor.

  192. 192

    RE: Justme @ 175

    First as to Redfin. I had to test my answer on someone else’s computer. If Mr. Random goes to Redfin and searches homes, he can’t see the tour insights you are referring to.

    All agents can share their thoughts on any property with their clients and prospective future clients (prospects). They just can’t talk about the pros and cons of homes publicly. But they can always share the good, the bad and the ugly with their own clients, customers and (I hate to say this next word) leads.

    The workaround of Redfin is that only people who register with their site can see their comments on listings. A registered user becomes at least a “lead” and so they can “privately” share with that person those tour insights. Anyone who is not a registered, signed in, user cannot see those. A loose distinction, but one that worked legally. This is one of the reasons Redfin is “an Alternative Business Model”. They are and have always been funded through Venture Capital to test and change the system, including hiring lawyers to fight the mls structure if and when necessary. They lost the battle on Blogging about property, which is another part of your answer, and maybe best explained by Glenn as he did when they had to cancel that blog.

    https://www.redfin.com/blog/changes_on_sweet_digs

    Even though they hired non-REIC people as freelance writers to visit Open Houses and write on that blog, it still got the kibosh and also massive fines.

    Those insights are only seen by the one user who is signed in. That same Redfin agent cannot take that same tour insight that they wrote on their website and post it here on Seattle Bubble.

    Real Estate Agent “stuff” is not just about the MLS “handbook” you say you have (there isn’t anything called a handbook that I know of) or the secret handshake. :) It’s a ton of State Agency Laws, License Laws, State Real Estate Commission oversight, mls rules, National and Local Association stuff IF the agent is a member of NAR and WAR…AND LAST BUT NOT LEAST…stuff in the boilerplate of every seller’s listing contract whose home is listed for sale in the mls. Basically the seller gives us permission to advertise their house…not to throw stones at it. That’s not in “the handbook”. :) But think about it. It’s common sense.

    If an agent puts a link to an Active Listing on SB, that rule broken is advertising another Agent’s Listing without their written permission to do so. Even if someone else posts an Active Listing, if an agent talks about how great it is, that is considered advertising another agent’s listing. To help you understand that better, it would be the same as if I took out an ad in Homes and Land advertising that house and talking about that house.

    If an agent puts a link to a Pending Listing and says anything about it, good or bad, that could prompt other people to also comment on that listing. If the agent is the owner of the blog, they could delete comments if needed and agents have the responsibility to control what is said about even their own listing. So since The Tim owns this blog and agents have no control over comments once they post the link…boom. Not only a violation of mls rules, NAR rules but also Tort Law. If the buyer in escrow sees something said that makes him change his mind about buying the house, or the seller sees something like it was priced too low said by some random, anonymous commenter and decides to cancel the sale either overtly or more surreptitiously….Tortiary Interference.

    I have a key to get in most any house for sale in a very large portion of this State. Do people really think this is a $10 an hour responsibility? If you had your Million Dollar house for sale, would you think your agent was just some dufus who can’t tie his own shoes. Are you giving the key to your home to an idiot? NO. This is serious stuff. I’ve heard all of the “it should cost $500” for over thirty years. But honestly, it only shows the ignorance of the person saying it. Sure there are people you shouldn’t pay $1.00. But why is anyone hiring them. People give me the keys to their home and leave the State or they give me the keys to their home and go to sleep at night. If this were a $1,000 service, people would NOT be doing that. They are trusting us with much…a lot, their success and in large part their safety and well being.

    You really can’t tell a buyer agent what to do for minimum wage…they have a lot more going on than what you think they are doing. Seller’s agents as well. It has very little to do with what you tell them you want them to do. It’s like an inspector. If you shut up he doesn’t do nothing.

    But like I said…I’ve seen and heard it all before. That NO ONE who has worked with me ever said it about me is all I care about. :) Carry on.

    I will say you are all likely right. The day of iBuyer is coming. Agents like me are dying out. But after 100 years+ of same old, same old…it’s about time. It won’t work at first but someone will figure it out. That someone will also find a way to grab the billions currently paid in real estate commissions. You really think that’s going to be handed back to the average Joe buyer and seller. haha!

  193. 193
    steven says:

    RE: Ardell DellaLoggia @ 192

    i have no doubt that ur one of the more competent agents; nonetheless, just because they didn’t say it to your face doesn’t mean that they don’t think you’re over compensated. 21,000 per transaction is overly inflated and the only reason buyers/sellers pay this is because 3% has been imposed as the “customary” or “normal” charge.

    Another reason i think it’s excessive is because median home price has more than tripled over the last 20 years and yet only the agent’s commission has done very well compared to inflation while everyone else’s wage has been going down. If you don’t think so, go to any other city where housing costs are closer to nation median around 2-300,000. The transaction cost will be 1/3 to 1/2 and agents are doing just fine.

    Plus, just because it’s a million dollars doesn’t justify spending so much on transaction cost. Does hiring an agent insure the property at all? no, it just helps to look for details that you wouldn’t normally as an inexperienced home buyer. there are tons of auto mechanics that do that for 50-100 per hour for tens of thousands of dollar vehicle. Now that agents are dealing with 20x more expensive items, they need to be compensated 20x more?

  194. 194
    steven says:

    RE: Ardell DellaLoggia @ 192

    also, it’s really not that hard to become an agent. I’ve seen plenty of “dufus” agents and most agents often don’t know much better about homes they’re selling than the sellers (same goes for buying buyers). Your over glamourizing yourself. it’s like that psychology where sales rep from a high end department store thinking he’s in the major league just because he’s dealing with expensive brands and thinking he should make lots of money.

  195. 195
    sfrz says:

    RE: Ardell DellaLoggia @ 192 – That’s a chunk of change for a house sitter. They give you their keys while they’re out of town. So do a million other home owners. Housekeepers, house sitters, neighbors, family and friends to watch pets.
    Get off the throne and take that tiara off. You ain’t that special. Not 60K special. PUH-LEEZE.

  196. 196
    Eastsider says:

    RE: Ardell DellaLoggia @ 192

    1. Other developed countries have much lower transaction costs.
    2. If buyer agent’s service is so essential, let buyers pay for the service. At present, a buyer does not have the ability to refuse/reduce commission even if no/minimal service is needed. No listing agent I know (*) will give up the other side of commission willingly in a typical transaction.

  197. 197
    sfrz says:

    What’s that smell? It’s in the air. Yes… I remember that distinct rotting odor. It’s that 2007 stank.

    “Very few regions escaped a significant deceleration with some prominent regions like San Jose and San Francisco even getting crushed on a year-over-year absolute basis.

    The only thing that even comes close to this sharp of deceleration was circa-2007.

    It was data like these I have been tracking that led to my call last year that there was no way the Fed could continue to hike in 2019.

    For certain housing and related names, this is a killer unless prices re-accelerate quickly.”
    https://mhanson.com/3-21-hanson-massive-house-price-growth-deceleration-a-brick-wall/

  198. 198

    RE: Eastsider @ 196

    There was no buyer agency when I started. The seller paid both agents to represent him. Adding buyer agency added nothing to the cost. I was around through the whole change to buyer’s having representation. I agree it is a failed experiment. It just doesn’t work well for a variety of reasons.

    The big question is I’ve seen cheaper tried and tried again for almost 30 years and it never seems to work out. The companies that charge less now, that have been trying it for over 10 years, are failing the same as in the past. The only difference is they are being funded by Venture Capitalists to stay afloat.

    No one has proven that cheaper is doable, and honestly I don’t know why.

    I think it’s the same problem as governments who are also profiting by higher taxes, more and bigger and pricier houses with high taxes. But they also seem to need more and more money than this bigger chunk of change is bringing them.

    Maybe this new lawsuit will bring some change…maybe it won’t.

    Redfin is the best example and they have had to almost double the amount they originally charged. They truly believed that less was possible and they don’t even have to subsidize the low end, because they won’t help people in the low end at all. They still need to be funded from outside sources to stay in business. I had to google that in case it changed when I wasn’t looking ” Even with this extra revenue, Redfin has yet to turn a yearly profit. ” That quote was from 2017 but I think it’s still true.

    This discussion never gets anywhere, and it won’t, until at least one Company takes a big marketshare and charges less and makes a profit. It just can’t seem to be done no matter how much it seems like it should.

    It doesn’t matter that commissions don’t make sense. Someone has to make lower commission make sense and be able to run a business on that less. Many have tried and failed. That tells us something.
    Many companies have been started by people who think just like you all…and they end up charging the more or going under. Why is that?

  199. 199
    Cap”n says:

    RE: Ardell DellaLoggia @ 198
    “It just can’t seem to be done no matter how much it seems like it should.“

    Precisely why the plaintiffs’ claims have merit.

  200. 200
    Blurtman says:

    RE: sfrz @ 197 – Not sure anyone can predict, and it does become a self-fulfilling prophecy f enough folks believe it. Remember the worst-president-of-all-time’s advice to Americans after 9/11 – keep shopping!

    The Fed needed to raise rates in order to lower them during the next recession. Imagine if a recession occurred at ZIRP. Out of bullets.

    Don’t count out some sort of trade deal announcement with China to goose the market. Before it is too late.

  201. 201
    SeaMillie says:

    RE: Blurtman @ 200

    This is Trump’s last card he can play, and it isn’t even a good one. China was slowing before the trade tensions began, and any deal he cuts now won’t address the structural IP theft/protection issues as there has been massive push-back from the Chinese, especially on enforcement (Chinese understand Trump has no leverage with the coming election). The trade imbalance with China isn’t even that correlated to China, it’s directly related to the fact that China is the last “value add” in the supply chain before goods are shipped to the US (ex. electronics goods are sourced from all over Asia, but the assembly is in China, therefore China shows up as the trading partner).
    Effects from the tax cuts are fading, 3M-10Y is inverted (the only yield curve the Fed watches), German PMI data looks horrific, South Korea data looks just as bad. We likely are looking at a recession before the coming November election.

  202. 202
    Blake says:

    This just in…
    U.S. Treasury Yield Curve Inverts for First Time Since 2007
    March 22, 2019, 7:05 AM PDT
    https://www.bloomberg.com/news/articles/2019-03-22/u-s-treasury-yield-curve-inverts-for-first-time-since-2007

    But…. NOW IS A GREAT TIME TO INVEST IN HOUSING!!!
    No worries… SEATTLE IS DIFFERENT!!

  203. 203
    Eastsider says:

    RE: Ardell DellaLoggia @ 198

    Zillow still does not have access to NWMLS. All MLS brokers/agents are banned in some ways to use Zillow as a low-cost platform for transactions. Redfin was forced to become a MLS member to be a player. The current MLS rules are anti-competitive. Again, other developed countries have much lower transaction costs because they don’t allow such monopolistic behavior.

  204. 204

    RE: Ardell DellaLoggia @ 173
    We’ll blame the Brainless Pesky Attorneys For Mucking Up the Definition of Manufactured Versus Modular, but here’s the link that mixes them together:

    https://www.modulartoday.com/modularhomesvsmanufacturedhomes.html

    Mine is a modular, its on its own landscaped land with permanent base and crawl space. Attorneys have a way of making everything the same seem different anyway….LOL

    Good question ;-)

  205. 205

    RE: S-Crow @ 160
    The Appraisers Sound Like Circus Barkers

    Directing the herd of people in when the times are ripe…

  206. 206
    Matt P says:

    That didn’t take long. Yesterday everything was calm and then today, dollar is up, yield curve is inverted and stocks are tanking.

  207. 207
    QA Observer says:

    RE: Blake @ 202

    👍

  208. 208

    RE: Blake @ 202
    I Hear Ya Blurtman

    Trouble is the economic gurus are like batting horribly on these predictions without QE and lower income tax base generation instead. I’m sure there’s partisan conflict with Bloomberg MSM [pro OBP], so its not the most reliable news source either and is likely overly negative.

    Here’s an antithesis URL, AP is a bit more neutral partisan:

    https://www.yahoo.com/finance/news/us-existing-home-sales-jumped-140409945.html

    Albeit what good is this article to Seattle area, referencing like $250K homes…

    “Location, location, location” may have changed to “price, price, price” for sales to go up?

    The Red States are prospering now as Trump moves all the money to his electoral state bases?

  209. 209

    The Inverted Curve Means What?

    https://www.cnbc.com/2019/03/21/a-key-recession-indicator-just-did-something-that-hasnt-happened-in-12-years.html

    I’d be a follower of this economic prediction cult [mathematically anyway] if the interest rates were higher, too much “mindless” hedge and retirement funds sloshing around brainlessly IMO and the charts don’t mention the totals invested going up or down…blame the greedy immigration attorneys for lack of transparency? They mucked it all up…LOL

    Today stocks equity declined a few 100 points, so what?

  210. 210

    RE: randomseattledummie @ 45
    Yeah Climate Change is Real

    But is a measly 2 degree F shift in the Earth’s temperature climate change course or the error window for stable? Hey, I’m not arguing with raw data, just its interpretation, I’ll be a good little Open Border Party (OBP) Mr Science and not ask for math windows of error on data predictions? What do I need my math and engineering for, they’re useless witch craft myths anyway? LOL

  211. 211

    RE: softwarengineer @ 210
    That’s a 2 degree F shift in the Earth’s temperature the last 100 years…

  212. 212

    RE: Whitechoco @ 123
    Yes…Red States Like Kansas are Seeing Used Homes in Hot Demand Lately

    Kansas offers free college debt money [like $15K folks] if you move to Kansas too. My daughter’s household income there has gone up 100% the last couple years….stable employment IOWs with FAR higher wages. The average Kansas per capita wage is the same as Seattle or NYC now, about $20/hr too. Homes list under $100K and rents are like 1/3 Seattle too…there is a small state income tax in KS though, so what?

    I love having picnics in the large Kansas “private” park like “steel fenced” backyard with a green belt in back instead of leering housing developments…and I grabbed it up for like $30K with code improvements…

    A great place to make your retirement income stretch…or an affordable” low Milenial household income play ground” to trade in your Seattle depressions? And yes, they had Polar Vortex [colder than Mars BTW] just touch them this year and flooding due to the recent ice age winter meltdown flooding the Missouri River lately in NE, but Kansas City has better river levees and is not flooded. The cold temperature swing did not affect flooding there and NO Tornados…LOL

    Seattle has mud slides, river flooding and earthquakes with monsoons and smoke pollution to worry about, so we’re not a perfect either. You’ll need central air in KS in the Summer, but central air comes in all homes automatically anyway in Kansas. The KS electricity is higher priced, but the gas is much lower priced than Seattle…

  213. 213
    Justme says:

    Weekend preview

    It is still early, but KC SFH is at 3350, as of earlier this morning, up from 3175 last week same time. It looks like there is another substantial jump in active for-sale inventory this week. Y’all know I do not favor catching a falling knife, but those who are hell-bent on buying at least should look carefully and negotiate hard. Sellers need to price aggressively to have a chance.

  214. 214
    Justme says:

    RE: Ardell DellaLoggia @ 198

    >>Many companies have been started by people who think just like you all…and they end up charging the more or going under. Why is that?

    Because NAR/MLS and the REIC in general are a very powerful monopoly, and they do everything they can, both at the lobbying/law/regulatory level, as well as in the trenches, with hordes of existing agents doing their own best to avoid feeding the competition.

  215. 215
    Joe says:

    This is working out just as I had been predicting six months ago, when interest rates were rising fast. I said if interest rates rise, it’s bad for housing prices. If interest rates fall, it means we are heading into a recession and it’s bad for housing prices. No matter what you think interest rates are going to do, housing is going down.

    Now the 3-10 yield has inverted, which has been an accurate indicator of oncoming recessions. There will be some bagholders buying over the next month or two because of the lower rates, but they’ll soon that price matters more than monthly payment. People who bought $1M houses last summer are already down about $180,000. People who buy today will likely see their wealth evaporate even quicker as we enter recession. Don’t be the impatient fool.

  216. 216
    N says:

    @Joe 215 – Given prices have fallen ~15% already and you feel there is more to come, how far do you think they will fall?

  217. 217
    Eastsider says:

    By Joe @ 215:

    People who bought $1M houses last summer are already down about $180,000. People who buy today will likely see their wealth evaporate even quicker as we enter recession. Don’t be the impatient fool.

    $180k is 90% of (20%) down payment. The bank has not lost money, yet.

  218. 218
    Blurtman says:

    RE: Joe @ 215 – OK, Joe. I should warn you that this WILL BE on the final.

    It is clear that the economy is enterring a recession. Job losses are feared. A good number of folks may not be able to pay their mortgage. The Fed lowers interest rates, to goose the economy.

    You are the president of the Hookem and Cheatem bank. Do you:

    1.) Lower mortgage rates, as the Fed is lowering rates?

    2.) Raise mortgage rates, as the risk of a borrower paying the mortgae is increasing?

    3.) Take an old woman behind the bank and beat her senseless with a baseball bat, because you can and because bankers never go to jail?

  219. 219
    uwp says:

    Since I know folks love to post links to a negative articles, here are two positive ones:

    “All Signs Point to a Housing Boom Ahead”
    Just as many millennials enter their home-buying years, the labor market is strong and interest rates are low.

    “Scared of Stocks? Buy a House Instead”
    New research shows that real estate is both a better and safer investment than previously believed.

    The REIC is out in full force folks!

  220. 220
    Justme says:

    RE: uwp @ 219

    >>The REIC is out in full force folks!

    Yes, indeed, the REIC and their proxies writing dumbass propaganda “opinon” articles in Bloomberg.

    I think a lot of that “imputed pleasure” from the “imputed rent” will be lost rather quickly now that prices are dropping. Especially if you bought anywhere near the peak.

  221. 221
    Joe says:

    RE: N @ 216

    It’s more a factor of time. RE busts need about three years of price reductions to clear out the excesses. I’d begin looking for bargains in two years. The fact that many people are impatient and cant wait to buy right now tells me many more people have to get burned before this peocess is done. This has just gotten started.

  222. 222
  223. 223
    BacktoBasics says:

    Every Seattle housing cycle will push housing price even higher. AS we see from past few cycles. In 2008, we have credit dry out and almost. Until Fed QE and lower the short term interest to zero. Now, we still have very relaxed fiscal policy and low interest. Employment is at all high. We will have another recession but could be a mild. Fed will still QE and lower interest rate. Seattle will experience another bubble cycle. If you own your house as primary place to live. There is no reason to watch the price unless you are a house flipper or want to lock the gain and live in a homeless tent.

  224. 224
    Blake says:

    Ouch… BIG money running for cover in bonds all around the world!
    https://www.bloomberg.com/news/articles/2019-03-22/bond-charts-show-rally-pulling-yields-down-to-eye-popping-lows
    … New Yorkers were still wrapping up the previous day’s business when the first of Friday’s milestones was reached, as yields on New Zealand’s bonds tumbled to a record. Japanese markets swiftly followed, with the 10-year yield sinking to a two-year low of minus 0.08%. Another wretched batch of European data drove German rates below zero for the first time since 2016 before disappointing U.S. PMIs delivered the sucker punch, pushing the yield on 10-year Treasuries below the three-month bill rate.

    “This will be the year that we say: ‘Really, bond yields have plunged this much!?’” said Akira Takei, a global fixed-income fund manager in Tokyo at Asset Management One, which oversees more than $500 billion. Central banks in the U.S., Australia and New Zealand will probably all cut interest rates this year, he said.

    “I didn’t think we would see this day again,” said Orlando Green, an interest-rate strategist at Credit Agricole SA, referring to the slide in bund yields. “At these levels the market is no longer looking at bond being held to maturity, but rather an insurance against a political earthquake coming with a significant economic slowdown.”

    Here are some charts showing how fast global yields are falling:
    (end quote… check out the charts though…)

    “I didn’t think we would see this day again,”
    Really? … Really?? Hah ha!

  225. 225
    Joe says:

    RE: BacktoBasics @ 223

    Why buy now when things are dropping fast? Why no wait and buy a much better house later for same money?

    What do you really have to lose by renting and waiting out the down market? The recession hasn’t even started yet.

  226. 226
    sfrz says:

    RE: BacktoBasics @ 223 – What makes you think this game will continue? It didn’t right after the Roaring 20s. It took millions of lives and WWII to bring the economy out of the Great Depression. It may take that again. We are in an artificial, stimulus-fueled bubble, TRILLIONS of dollars in debt. Global debt up $75 trillion since the 2008 crisis alone. There is no safety net this time.

  227. 227
    sfrz says:

    Boeing, the biggest employer in the area, is in serious trouble.
    “Years ago, aviation experts say, Boeing should have developed a brand new aircraft design for such intermediate distances. But Boeing dug in and compliant FAA officials dropped the ball. And President Trump has failed to fill three top slots at the FAA since January 2017.

    That is why, after flight 302 crashed outside Addis Ababa, both Boeing and the FAA kept issuing statements filled with gibberish saying that the 737 Max 8 was safe, safe, safe—the malfunction-prone software time bomb to the contrary. A brand new plane, crashing twice and taking hundreds of lives, can’t be blamed on pilot error.”
    https://www.counterpunch.org/2019/03/22/greedy-boeings-avoidable-design-and-software-time-bombs/
    “Garuda Indonesia, said that its passengers had lost confidence in the model after the crashes. It said that it sent a letter to Boeing on March 14 seeking to cancel its order of 49 more planes; it had ordered 50, just one of which has been delivered. The deal is estimated to be worth $4.9 billion.”
    https://www.nytimes.com/2019/03/22/world/asia/indonesia-boeing-737.html

  228. 228
    Blake says:

    If you haven’t read “Jesse’s Cafe Americain” (aka Arthur Cutten’s site) I highly recommend it during times such as these: https://jessescrossroadscafe.blogspot.com/
    … “Timing a big event like this is brutal, since there are so many exogenous variables. And forecasting a notoriously low probability event is rather difficult, even when the probability becomes relatively more probable.”
    He’s a smart guy and follows many factors. I love the “cafe”and have been going there for many years. (check out his daily links on left under: “Matières à Réflexion”)

    It’s kind of fun in a sick way…if you like watching crash videos. ;-))

  229. 229
    Blake says:

    Meanwhile, this also happened today:
    “The U.S. posted its biggest monthly budget deficit on record last month, amid a 20 percent drop in corporate tax revenue and a boost in spending so far this fiscal year. The budget gap widened to $234 billion in February, compared with a fiscal gap of $215.2 billion a year earlier. That gap surpassed the previous monthly record of $231.7 billion set seven years ago, according to data compiled by Bloomberg.”
    https://www.bloomberg.com/news/articles/2019-03-22/u-s-posts-largest-monthly-budget-deficit-on-record-in-february
    We are so f*cked…

  230. 230
    whatsmyname says:

    By Joe @ 215:

    People who bought $1M houses last summer are already down about $180,000. People who buy today will likely see their wealth evaporate even quicker as we enter recession. Don’t be the impatient fool.

    1. A change in the median price sold reflects many things, and does not equal a percentage price change in houses across the board – as our permabears discovered within about 5 minutes of the $45,000 median increase from January to February, (a $74,000 increase on a $1million house).

    2. Even if that were the case, your numbers are stale. It would look more like a little over half that decrease with the February numbers in – something that could be corrected in a month or two based on previous spring month changes..

    I will agree that prices anecdotally appear to be down, and MAY continue to decrease. But half of all King County houses sold in February were sold for more than $655,000. That’s never happened in a February before. Stocks and bonds are certainly not looking very attractive right now. Dow was down 1.77% today, (that’s almost $18,000 on a $1 million portfolio in one day; what will the recession bring?) It’s really hard to say where your money is best held right now.

  231. 231
    Eastsider says:

    RE: whatsmyname @ 230 – Today’s mortgage rate is .42% lower than a year ago (source: MND 4.15% vs 4.57%, 52wk high 5.05%). If you account for lower interest rate, the loss is amplified. Put it another way, the drop in monthly payment today is far more than the drop in prices percentage wise.

  232. 232
    Justme says:

    RE: Eastsider @ 231

    Double mistake.

  233. 233
    Blake says:

    John Authers (@johnauthers) tweeted:
    For those asking if 3month-10year inversion is a good recession indicator – yes it is. In the post-Bretton Woods era, no false negatives, and the only possible false positive came briefly in the extreme conditions of the 1998 LTCM crisis: https://t.co/z4jMJm5X7q
    (https://twitter.com/johnauthers/status/1109108956142682114?s=03)

  234. 234

    RE: Erik @ 167
    I Switch From AMZ, eBay and other H/W stores to find the best construction stuff prices….I use the “Goop” adhesive product [for the last 20 years] because it sticks on anything forever, it cures dry flexible to prevent cracking and fixes broke plastic hinges “better than new”….great tile adhesive too…works on everything. It takes 24-48 hours to completely dry, but that’s a small inconvenience for quality and durability or having to buy new material…BTW, Fred Meyers sells Goop for like $6/tube….AMZ and Walmart prices it at $15/tube with postage, ya can’t get it at Home Depot or most stores, it works too good? LOL

    The glue tube adhesives are good too, but that dam_ glue gun requires a one day training class to learn how to use it right…its like the battery Japanese lawn mowers…LOL….I’m good with the glue gun now, I took the 8 hr in home training class…LOL

    Fred Meyers is usually out of Goop too, so stock up when they stock up…

  235. 235

    RE: sfrz @ 227
    Last I Heard it Was the Democrats Obstructing His Staff Appointments

    Blame Trump, I don’t care, he gets blamed for anything…even his enemies’ attacks…

  236. 236
    Justme says:

    Weekend update, King County active inventory, graphical edition.

    The graphs compare 2019,2018,2017 inventory on an hourly basis. 2017 was the year inventory was at a multi-year low for most of the year. Click the link and scroll to see tyhe graphs. Click on each graph for an enlarged view. Use back-button to navigate.

    https://imgur.com/gallery/I1MqEVK

    2019-03-23 King County SFH active for-sale inventory 2017,2018,2019
    2019-03-23 King County Condo active for-sale inventory 2017,2018,2019
    2019-03-23 King County SFH active for-sale inventory ratio YYYY/2017
    2019-03-23 King County Condo active for-sale inventory ratio YYYY/2017

    Editorial: There was another spike in active for-sale inventory this week, although not quite as big as last week. Inventory is up because the uptake of product (new pendings) is not keeping up with with the new listings. New listings are outpacing new pendings by a considerable margin. Last year, March (2018) was the month when active for-sale inventory started pulling away from the year-before (2017) levels, indicating the start of the bubble bust that is now in full swing.

    Let’s have a more detailed look at the uptake of product, first looking at 1-week rolling values (as of ~8am today). For three types of conventional listings (SFH+condo+townhouse), there were 910 (641+182+087) new and still-active listings, 404 (271+86+47) new solds/closings (from ~4wk old pendings), and 83 (83+0+0) new pendings (pending within a week of listing). Also there were 511 (389+71+51) pending from <2-week old listings.

    With 2 weeks to get 511 pendings, from 2425 units (910+1004(last week)+511) worth of <2wk old inventory, buyers are not absorbing much new product, with a 21% rolling <2-week absorption rate. The absorption rate for older inventory is even lower, as the remaining and older inventory is generally also the most overpriced.

    Overall<2wk on market: 511 pendings, from 2425 (910+1004(last week)+511) inventory, rolling 21% absorption rate.
    Condos <2wk on market: 071 pendings, from 0400 (182+147(last week)+071)) inventory, rolling 18% absorption rate.

    SFH and overall absorption is low, condo absorption is even lower. Basically, buyers are on strike against overpriced product. There are signs that more price cuts are coming, including a small chunk of late condo pendings this Friday night, indicating that price negotiations went on late into Friday before agreement was reached. With buyers holding back, and a very iffy macroeconomic environment, it is hard to imagine anything but continuing falling prices on apples-to-apples comparable product. The buyer strike is working, and continues to roll on.

  237. 237
    Joe says:

    RE: Justme @ 236

    Agree. There is near zero change that housing prices are going to launch appreciably higher anytime soon with inventory rising fast and a recession headed our way. The risks for housing prices are clearly to the downside. There is no penalty for waiting this out. Buy now, however, and it could cost you a couple hundred grand in six months, as the buyers last summer recently learned.

    This price drops are only 8 months old with a lot of runway ahead. The drops move steady and slow, and will take 3 to 4 years to complete, like the previous recession. This time, the Federal Reserve is out of ammunition, so it could be longer. A good plan for potential buyers is to rent and enjoy life for two years without the worry of losing a ton of money. See what the market looks like two years from now. My bet is it will be a lot lower, and you’ll be glad you waited. Even if prices aren’t at bottom by then, prices will be lower, or at least the downside risk will have subsided. This market can’t get away from you now. There are just too many short-term and medium-term headwinds.

  238. 238
    Justme says:

    RE: Joe @ 237

    And the other lesson to be learned from the ongoing house price bust is that BUYERS HAVE POWER. All they have to do is to band together and NOT BUY, and prices will fall. As we have seen this time, it does not take a great financial bust or even a garden-variety recession for house prices to be pushed down. The recession is coming, but the price bust already got started 11 months ago, In April 2018.

    All it takes is buyers knowing and understanding that they don’t have to overpay. The greatest factor in giving the buyers that understanding is to debunk the relentless REIC propaganda that is designed to create the impression that there is an existing or impending shortage of housing product. Some of the favorite tools they use are fake population statistics, fake migration estimates, fake job statistics, fake vacancy numbers, fake migration inflows of cash-rich Californians, as well as fake criteria as to what inventory level constitutes a “sellers market”. Once potential buyers realize all the statistical swindles being perpetrated upon them, they have the knowledge to decide that buying at bubble prices makes zero sense. Just say no.

  239. 239
    ess says:

    https://snohomishcountywa.gov/DocumentCenter/View/41352/Growth-Trends-in-Puget-Sound-Region—SC-72716?bidId=

    The facts – from government agency.
    Within this document, one can observe the growth in King and Snohomish County, where it is located, and who from both the US and abroad is migrating to this area.

  240. 240

    RE: Eastsider @ 203

    You lost me on the first part. Of course to have access to “the mls” you have to be a member OF “the mls”.

    As to other Countries, they only charge the listing side. It appears the buyer needs an attorney and the attorney fees don’t show as they are not paid to the Brokerage. They only do “single” agency which they call “sole” agency and they don’t offer that to buyers, only sellers. Buyers have to get an attorney.

    https://www.foxtons.co.uk/help/fees/

  241. 241
    Justme says:

    RE: ess @ 239

    That 2016 presentation is a pack of lies. Fake statistics that counts empty housing units as population. Fake migration number that counts people moving in from outside but not people moving out. Only ONE reference to a data source in 25 pages of drivel. Absolutely atrocious propaganda.

    Here is the truth: In 2016 the net migration to King County 5932 persons. Repeat, 5932 persons.

    Source: https://fred.stlouisfed.org/series/NETMIGNACS053033

  242. 242
    Justme says:

    RE: ess @ 239

    It is almost amusing that immediately after I warn against fake population statistics and jobs statistics, REIC member ess weighs in with an absolute drivel piece of propaganda that is massively wrong about population and jobs.

    For completeness, here are the 4 Puget Sound counties net migration stats together all in oneplace for reference.

    King County, WA had 5,932 net migration in 2016
    https://fred.stlouisfed.org/series/NETMIGNACS053033

    Pierce County, WA had 3,899 net migration in 2016
    https://fred.stlouisfed.org/series/NETMIGNACS053053

    Snohomish County, WA had 3,715 net migration in 2016
    https://fred.stlouisfed.org/series/NETMIGNACS053061

    Kitsap County, WA had 2,359 net migration in 2016
    https://fred.stlouisfed.org/series/NETMIGNACS053035

    The big lie from the propaganda presentation that Ess posted: “The region grew by 86,000 people last year (2015-2016)”

    Do the math. I get 13,546. It takes some serious propaganda skills to make 15,905 into the number 86,000, which is over 5.4X larger.

  243. 243
    Justme says:

    RE: ess @ 239

    (too many links landed me in moderation, so here is a version with links lightly camouflaged)

    It is almost amusing that immediately after I warn against fake population statistics and jobs statistics, REIC member ess weighs in with an absolute drivel piece of propaganda that is massively wrong about population and jobs.

    For completeness, here are the 4 Puget Sound counties net migration stats together all in oneplace for reference.

    King County, WA had 5,932 net migration in 2016
    https://fred.stlouisfed.org/series/NETMIGNACS053033

    Pierce County, WA had 3,899 net migration in 2016
    tack on NETMIGNACS053053

    Snohomish County, WA had 3,715 net migration in 2016
    tack on NETMIGNACS053061

    Kitsap County, WA had 2,359 net migration in 2016
    tack on NETMIGNACS053035

    The big lie from the propaganda presentation that Ess posted: “The region grew by 86,000 people last year (2015-2016)”

    Do the math. I get 13,546. It takes some serious propaganda skills to make 15,905 into the number 86,000, which is over 5.4X larger.

  244. 244
    whatsmyname says:

    RE: Justme @ 242
    You are very critical of the methodologies of most statistical sources, but the one you cite relies on survey results from a survey I have never been exposed to, or even heard of, in many decades of living here. Are there any readers here who have ever participated? I have to wonder if this is perhaps the most unreliable statistical source of the bunch. Also, net migration is only part of population growth. One would think you would also need to include births over deaths.

  245. 245
    Harrison Lee says:

    RE: kenmorem @ 23 – I agree.. I try to ignore it but it’s hard when it comes almost everyday.

  246. 246
    N says:

    Anyone else notice “Offer Review Dates” are back on many of the new listings? Seems realtors are pretty confident about this spring market, and for good reason if they price right. The question may be will this uptick continue beyond the spring season

  247. 247

    RE: N @ 244

    King County On market 0-3 days, 684 listings $200k+

    157 of the 684 have an offer review date. 23%

    I ran the areas where I work where Offer Review dates were running at 66% or more to see if that subsection was acting differently. Bellevue, Redmond, Kirkland, Issaquah, Sammamish, Mercer Island, Median, Clyde Hill, Beaux Arts, Newcastle, Newport Hills. I would have added North Seattle but I’d have to do that separately with a polygon map.

    Anyway, still no. 189 listings 0-3 days on market of which only 34 have an offer review date. 18%

    I never did a search this way before, but I think the result is pretty clear. Less…not Maybe more than December. But clearly less than normal for the last few years.

    Required Disclosure: Stats in this post are not Published, Verified or Compiled by The Northwest Multiple Listing Service but rather hand calculated in Real Time by Ardell.

  248. 248
    N says:

    @Ardell 247 – Thank you. I toured a home and the realtor mentioned they were back and in high numbers. He also was suggesting the lull was over and it was up up up from here… :) Afterwards I looked at a few new listings in West Seattle, most of which had them. Nice to know in totality it’s still a minority of listings.

  249. 249
    richard says:

    RE: N @ 248 – it is quite insulting to see review date in the listing. Don’t bother to see any of the listing with review date.

  250. 250
    Matt P says:

    By richard @ 249:

    RE: N @ 248 – it is quite insulting to see review date in the listing. Don’t bother to see any of the listing with review date.

    Had a realtor mention their review date at an open house today. I almost laughed because no one is going to buy at the price it was listed at after I actually went to see it.

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