NWMLS: Listings up, sales flat, prices fall in May

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The NWMLS published their May stats today, so let’s take a look at how the month shook out for the housing market. The King County median price of single-family homes was down year-over-year in May, the third month in a row of declines. Inventory was up from a year ago again, but the as we mentioned in the preview post earlier this week, the rate of increase is rapidly declining from the all-time high set in December. Pending and closed sales are increasing, but only modestly.

The NWMLS hasn’t published their press release yet, so let’s get straight into the 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):

May 2019 Number MOM YOY Buyers Sellers
Active Listings 4,511 +26.2% +54.9%
Closed Sales 2,642 +23.1% +6.8%
SAAS (?) 1.57 +5.0% -1.1%
Pending Sales 3,388 +8.3% +2.3%
Months of Supply 1.71 +2.5% +45.1%
Median Price* $700,000 +1.4% -3.6%

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

King County SFH Inventory

Inventory was up 26 percent from April to May, which is the second-largest May increase on record. May of last year saw a 37 percent month-over-month gain. This month’s inventory level is the highest we’ve seen at the end of May since 2012. Overall, the supply situation is still a good sign for buyers.

Here’s the chart of new listings:

King County SFH New Listings

New listings were up 29 percent from April to May, and were up six percent from a year ago. It’s the highest number of new listings in the month of May since 2012.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales rose 23 percent between April and May, and were up 7 percent from last year. Closed sales have been in a fairly tight range between 2,300 and 2,700 in May every year since 2013, and this year is no exception.

King County SFH Pending Sales

Pending sales rose 8 percent month-over-month and were basically flat year-over-year. At the same time last year, pending sales were up 24 percent month-over-month.

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

We knew the huge gains late last year wouldn’t last. Although the rate of increase is falling off fast, we’re still in basically record territory. Very few times have seen year-over-year gains in inventory that were this large.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

That’s three months in a row of falling prices compared to a year ago. Definitely interesting. Perhaps prices around here have finally hit a saturation point?

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

May 2019: $700,000
May 2018: $726,275
July 2007: $481,000 (previous cycle high)

So far there’s no story posted yet on the May data from the Seattle Times. I’ll update this post when their story goes up.

Side-note: In case you missed it, last month the Seattle Times real estate reporter Mike Rosenberg was suspended from his job for inappropriate behavior. His harassment detailed in that story is very disappointing and frankly, gross. Men should treat all women with respect, all the time. It is really not that hard. It’s especially disappointing to me because I have highly respected his work at the Times for years.

[Update]
Here’s Paul Roberts’ story for the Seattle Times: Seattle housing market stays cool, while Tacoma and suburbs keep up the heat

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

About The Tim

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

676 comments:

  1. 251
    Eastsider says:

    RE: BacktoBasics @ 249 – The risks are real in this market. There is no free lunch for normal people. If you were Buffett, your 10% claim would be more believable.

  2. 252
    Blake says:

    RE: David @ 231
    I think that I posted my recession call for 2019 in February or March on this blog after seeing the numbers for December and January sales and personal income. It does appear that economy peaked about that time and is turning down as David Rosenberg’s piece pointed out:
    https://www.businessinsider.com/next-recession-top-indicators-show-slowdown-has-started-david-rosenberg-2019-6
    1. The index of aggregate hours worked, which is total labor input, peaked in March.
    2. Real personal income excluding government transfers peaked in December.
    3. Industrial production peaked in December as well.
    4. Real business sales peaked in March.

    @Econguyrosie predicted the 2007/8 recession earlier than most and everyone here should be aware that the recession STARTED in 2007, but the market didn’t crash until late 2008 because the speculators kept pumping and dumping… as they always will.

    The Fed will not cut rates tomorrow, especially because the Trumpanzee is trying to bully them! He will go ballistic… Whaaaaaah! whaaaaa!

    Personally I think the people that own this country are sick of him and they will sit back and let a nasty recession flush him out of office!

    It’s deflation folks… it’s a bitch!
    The 10 year is going to 1.5%! Buy bonds now.

  3. 253
    OA says:

    RE: Eastsider @ 248

    Yes I agree on this one

  4. 254
    OA says:

    RE: Eastsider @ 250

    ok, so at which price point then will the home be worth buying? Let’s say prices correct (as some here expect that they will) in the short term and one was to time the market at the bottom. Obviously this is a theoretical and subjective exercise but I want to see what you guys think.

    @Justme – if someone was to come to you and say, “Hey I trust your real estate market forecasting ability, I really like this house but want to buy it at the absolute lowest price. I can afford it at the current price, but am willing to wait for prices to go down.” What price point would you give them here and when would be a good time to pull the trigger?

  5. 255
    whatsmyname says:

    Tuesday evening, and still no weekend update. Did someone not like the numbers?

  6. 256
    Eastsider says:

    By OA @ 254:

    ok, so at which price point then will the home be worth buying? Let’s say prices correct (as some here expect that they will) in the short term and one was to time the market at the bottom. Obviously this is a theoretical and subjective exercise but I want to see what you guys think.

    I don’t think you can trust anyone’s prediction, especially in today’s market. That said, I would be very comfortable buying a home if this was 2009-2013. My advice is if you really want to buy and can comfortably afford it, go for it because your current purchase price will not matter in 3 decades. But if I were to ‘time’ the market, I would not buy at today’s prices even at this ‘low’ interest rate. (The ‘low’ rate inflates what you pay for the asset.) 2015 prices are ‘fair’ but that’s my personal feeling. LOL.

  7. 257
    Erik says:

    RE: Blake @ 252
    You think we are heading for a deeper recession? The fed already did some quantitative easing and next they will need to lower the federal funds rate. My guess is that when we lower the federal funds rate, everyone goes out and buys a house and prices go up. Then we finalize a deal with China and the economy booms.

    Whether you like Trump or not, he’s great at making deals. He’s probably going to get a deal at some point.

  8. 258
    Erik says:

    RE: softwarengineer @ 186
    Trump is really helping all the swing states. Pretty good tactic. I highly doubt he won’t get a 2nd term.

  9. 259
    Ohd1122 says:

    RE: Erik @ 257

    The fed doesn’t need to lower the federal funds rate.

  10. 260
    Rentin’ says:

    RE: JustNoise @ 247RE: JustNoise @ 247 – I’m noticing more rentals in Bellevue in particular, but the Eastside in general. Places where I have looked at this time of year for the last few years have many more SFH rentals than I have noticed before. At prices comparable or lower than last year or the year before. And you can see several with price reductions. Also, some houses for sale I have looked at recently have been immediately turned into rentals that appear to just be sitting. I know the rental market is not the same as the for sale market, but it may take off more of the pressure to buy now.

  11. 261
    Nicole says:

    RE: Rentin’ @ 260
    NE Seattle tells same story- plenty of SFH rentals with prices dropping slightly as they sit. And recently sold homes that are now rentals sitting vacant unless well priced (which might not cover mortgage in some cases, I suspect.) Loads of new housing coming online near the UW has meant that crummy older homes are not so attractive to students anymore when they can live closer to UW with brand new everything.

  12. 262
    Eastsider says:

    By Rentin’ @ 260:

    Also, some houses for sale I have looked at recently have been immediately turned into rentals that appear to just be sitting.

    These ‘investors’ have turned housing into speculations and pushed up prices for essential shelters. We need regulations like those of Vancouver BC to moderate home price movements. The FED can also hike rates to make housing less attractive for speculators.

  13. 263

    RE: Erik @ 258
    That’s New News to Me Thanks Erik [Trump’s New QE]

    Yeah…his Florida Rally last night had 150,000 folks packed in a giant stadium. He raised $24M in small donations from common folk too in one day last night too….the MSM Polls showing Trump behind are rigged and meaningless…they hate the elected leader Trump nbecause they didn’t vote for him and can’t accept reality Erik.

    That puts a new curve ball in real estate Erik…Trump’s new QE could now get us “debt” funded [a good purpose for debt?] for re-skilling industrial production, etc… [we lack Seattle area manufacturing skills in cutting metal, etc], its gonna take 5-10 years to get it full-boiling again [Boeing Auburn Fabrication rebuilt] with new seasoned Manufacturing Engineers like Erik leading the parade with his BSME and MS degrees…the Open Border Party is horrified Erik. This is the last thing they want.

    I see the NWO Boeing getting probed by indictment Hearings today on MAX 8. This insane Japanese Engineering interface [the 737 engineering part dwgs are in Japanese now] with the FAA mess could go on and on once that happened…the once proud Boeing “brand-name” now sitting on the DOJ and IG Hot Seat….whoaa…

  14. 264

    Cheap Houses Masked as RVs Housing Folks for 1/4th the Costs

    I’m sure King County hates them too, but I saw one in a backyard in Covington. Single wide mobile homes converted to wood sided small homes….put it on your parent’s lot…its hidden in the trees. They must of hooked it to the sewage system too…

    https://news.yahoo.com/tiny-houses-entice-budget-conscious-americans-025529673.html

  15. 265
    N says:

    The softer rental market has been happening for over a year now. Certainly hasn’t fallen significantly but there are more options and more rent reductions now. Zumper’s latest report has 2 bedroom apartments down 5.6% YOY. Definitely creates less pressure to buy from the days of 10%+ increases that were so common a few years ago.

    https://www.zumper.com/blog/2019/06/zumper-national-rent-report-june-2019/

  16. 266
    BacktoBasics says:

    RE: Eastsider @ 251
    I did a very basic kitchen cost me $50k. All contract are very expensive and not available. Skilled labor shortage and material cost. Seattle land scarce and topological difficulties made Seattle housing very expensive than SF and NYC. I see many flat land in SF, not in Seattle. All these make it very expensive to new construction in Seattle. Please local employment market and low mortgage rate, all make Seattle housing very expensive. Not just for buying, even if your are a renter.

  17. 267

    RE: Ohd1122 @ 259
    I Can See Both Sides of the Argument Too

    Lower interest rates mean more debt and possibly propped up home prices in the Seattle area. A budget balance of debt to innovate and invest, rather than just “tax and spend” can be temporarily OK? I say this rational for debt makes more sense than just giving out free college and Medicare…we’ve been transitioning out of manufacturing for decades now, look at Detroit [Seattle too]. Its not gonna turn around back to normal without investment money and “Rosy the Riveter” Can Do. We must start now, or too much permanent damage will be done in Seattle IMO.

    Why do Boeing engineers drive Asian/European engineered automobiles? They hate their own profession? It certainly isn’t because they’re cheaper.

  18. 268
    richard says:

    RE: Eastsider @ 262 – FED most likely will reflate house price to create “wealth effect”. Sad! Just wonder how long this massive wealth transfer can last. Tired of this type wealth transfer from not-have to the wealthy. Tax payer dollar to subsidize rich Tesla fan boy, incoming student loan forgiveness, free give away money to first time home buyer and super low interest rate. basically savers will be coerced to choose to buy stock, gold , bitcoin and houses to hedge FED caused inflation.

  19. 269

    RE: Blake @ 252
    We Disagree On a Lot of Points

    But I like your contributions mostly Blake, you’re a good blogger. As far as Trump supporters sick of him? LOL….150,000 at his opening Rally with 45,000 camping out in line two days before Trump’s rally makes that assumption eat crow Blake. Joe Biden had his “dinky” opening rally and that guy in back of Biden looked like he was falling asleep listening to Sleepy Joe…I do think Lady GaGa and Trump are similar, they both put on great shows, like Super Bowl quality too…it may sound non-partisan and Trump slanted to you; but great politicians have to be skilled communicators and performers too, to get elected.

  20. 270
    Joe says:

    RE: Nicole @ 232

    You got that right. I’m renting a home that would require an extra payment of $2000 per month to own. Why pay $2000 more per month to live in the same property? You could argue I lose out on home price appreciation as a renter, but currently the price trend is clearly down. As a renter not only do I save the $2000 per month in payments, I avoid the price risk.

    I will buy some day, but I will buy a house that I actually like, at a reasonable price, most likely after the next recession. It may be near Seattle, or it may be elsewhere where there is less congestion. There surely is no reason to panic when house prices are moving down and the economy is on the verge of recession. Renters have the upper hand in this market.

    Plus, with all the nice new condos and apartments coming on line, rents will move down or stagnate.

  21. 271
    Justme says:

    FOMC statement today at 11:00: No rate cut for FFR, majority says no rate cuts in 2019, vocal minority says two cuts in 2019. Majority says cuts in 2020.

    No change to Quantitative Tightening, it is on 15B/20B per month reduction in USG/MBS bond holdings. On autopilot.

  22. 272
    Justme says:

    FOMC statement today at 11:00: No rate cut for FFR, majority says no rate cuts in 2019, vocal minority says two cuts in 2019. Majority says cuts in 2020.

    No change to Quantitative Tightening, it is on 15B/20B per month reduction in USG/MBS bond holdings. On autopilot.

  23. 273
    Lulu says:

    RE: Joe @ 270

    The owner bought it long time ago and refinanced @ 2.5% mortgage. So he/she still cash flow “+”. Can you get that price and interest rate?

  24. 274
    Justme says:

    By the way, the majority of FOMC is back to predicting higher FFR in 2021 again. Looks to me like FRB is trying to engineer a soft landing. I don’t think they will succeed.

    The 2021 projected increase is to tell asset markets (yeah, housing, too) not to get giddy about possible cuts in 2020 ,by projecting they will be undone again in 2021.

  25. 275
    Jeff says:

    RE: Lulu @ 272 – How do you know so much about Joe’s landlord’s financial situation? Does everyone on this blog hang out together at weekend barbecue’s except me? Surely folks here don’t assume these sort of details about each others’ situations, right? Or maybe I missed when Joe detailed all this information for us. I’m confused.

  26. 276
    uwp says:

    By softwarengineer @ 269:

    As far as Trump supporters sick of him? LOL….150,000 at his opening Rally with 45,000 camping out in line two days before Trump’s rally makes that assumption eat crow Blake.

    The Amway Center holds 20,000.

    From the local news station:
    “Eight Trump supporters started camping out Monday morning, with the first one showing up at 2:30 a.m. The rally is scheduled to begin at 8 p.m. Tuesday.”

    I think our good friend SWE has made the mistake of believing Trump when he talks about crowd size.

  27. 277
    OA says:

    RE: Eastsider @ 256

    I understand and overall agree. My question was less to do with trusting someone’s prediction but more about seeing what someone may think what a fair/affordable price for a particular property may be.

    It’s easy to say general statements that houses are overpriced right now and are bound to go down (ei. $100k-$600k figure that Justme used earlier). I thought that using a specific example would help show that it really depends on the house itself, location, etc.

  28. 278
    Coconut says:

    This site is dead…anyone have an alternative?

  29. 279
    Eastsider says:

    By Justme @ 271:

    No change to Quantitative Tightening, it is on 15B/20B per month reduction in USG/MBS bond holdings. On autopilot.

    I believe the drawdown of the central bank’s bond holdings will end in September. This has already been priced in the market.

  30. 280
    David says:

    By Erik @ 258:

    RE: softwarengineer @ 186
    Trump is really helping all the swing states. Pretty good tactic. I highly doubt he won’t get a 2nd term.

    If Bernie Sanders gets the Dem nomination and there is even a hint that Bernie is ahead in the polls, you can count on another Obama Depression WAAAY before the actual election.

    The stock market will drop a minimum of 30%. I think more like 35%-50%. Let’s see how the Millenials like that second trip around the doom moon. What a screwed generation.

  31. 281
    Eastsider says:

    RE: richard @ 268 – I don’t agree the FED’s actions were to increase the “wealth effect”. They were likely forced to put out fires. The housing market crash would have collapsed the banking system had they not intervened. I believe they would be okay if prices were to drop 20% because majority of mortgages have at least that amount in equity today.

  32. 282
    Eastsider says:

    By BacktoBasics @ 266:

    I did a very basic kitchen cost me $50k. All contract are very expensive and not available. Skilled labor shortage and material cost. Seattle land scarce and topological difficulties made Seattle housing very expensive than SF and NYC. I see many flat land in SF, not in Seattle. All these make it very expensive to new construction in Seattle. Please local employment market and low mortgage rate, all make Seattle housing very expensive. Not just for buying, even If your are a renter.

    People have been saying the same thing about Seattle housing market! Don’t you think factors such as land scarce and topological difficulties have already been priced in half a century ago? (Okay, climate change may make Seattle more livable and attractive LOL.)

    Yes, remodeling and construction costs have become exorbitant. They were also super expensive in 2005 but collapsed following the great recession. The next recession will ‘cure’ these excess. Just wait.

  33. 283
    Joe says:

    RE: Lulu @ 272

    The owner bought in 2011 when prices were half what they are today, so I have no doubt the owner has positive cash flow with the rent I pay, plus she benefited from significant price appreciation from 2011 to 2018.

    Anybody who bought the home at today’s price would, however, lose money if they rented it. If they bought today and lived in the home, they’d be paying $2000 more per month than necessary.

    The rent v. buy equation in Seattle is so much in favor of renting, it’s ridiculous. People buying today are making an emotionally-charged decision that could wind up costing them a lot of money. House prices are very inflated relative to rent potential of the properties. That’s a good sign that housing prices faces an uphill battle. A lot of people simply don’t understand markets and don’t have enough discipline or patience to make good financial decisions. I think we are running out of these buyers because most of them pulled the trigger already.

  34. 284
    Deerhawke says:

    RE: Nicole @ 261

    I have two rental houses that are coming up for renewal or re-lease. I don’t know what neighborhoods you are looking at, but the rental market in Wallingford and Greenlake looks tighter than last year at this time. Less available and rents are up.

    There are lots and lots of new rentals coming on the market in the University District, but it is all at $3.15 to $3.60/ SF. This might help young couples looking for a rental together, but is really expensive for singles and useless for small groups looking to room together.

    If the city council’s proposal to rezone SF neighborhoods goes through, you will see more rentals (and possible somewhat cheaper rents) but the price of single family homes will really go up. Every old hammered home is now a potential triplex rental.

  35. 285
    Lulu says:

    RE: Joe @ 281
    What if 30 year fix mortgage drop to 3.5%, 15 year fix to 3%? I think for a couple making decent wage in Seattle will be able to afford current price. Affordbility all depend on mortgage rate and local employment market.

  36. 286
    whatsmyname says:

    By Joe @ 270:

    You got that right. I’m renting a home that would require an extra payment of $2000 per month to own. Why pay $2000 more per month to live in the same property? You could argue I lose out on home price appreciation as a renter, but currently the price trend is clearly down. As a renter not only do I save the $2000 per month in payments, I avoid the price risk.

    Hey, I’ve got a weird parallel with you. I am owning a home that would require a $1,000 higher payment to rent. You make renting sound very attractive, and I will rent someday. But I don’t know if I’m ready to take that hit every month. Probably, I need to keep owning for a while, and save up.

  37. 287
    David says:

    By Deerhawke @ 282:

    RE: Nicole @ 261

    If the city council’s proposal to rezone SF neighborhoods goes through, you will see more rentals (and possible somewhat cheaper rents) but the price of single family homes will really go up. Every old hammered home is now a potential triplex rental.

    I like to turn mine into AirBnBs. The allure of getting a bad tenant out easily is nice, less wear and tear, and much higher ROA is nice.

  38. 288
    Deerhawke says:

    RE: Joe @ 281

    Joe, perhaps you are missing something?

    In 2011 when your landlord bought the place, the rent vs buy equation was terrible. Rents had cratered and it almost certainly had negative cash flow. The tenant there was no doubt laughing at the landlord because it was cheaper to rent than to own. The tenant was being subsidized to live there! Who would be stupid enough to buy when it is cheaper to rent!? Anybody who would buy when it is cheaper to rent must be a complete moron?

    Or wait…

    Somehow this stupid landlord now has monthly cash flow, depreciation, and other tax benefits. And they have probably refinanced their mortgage to pump up that cash flow. And they have seen a boatload of appreciation from 2011 to now. What do you think– up 60%? 70%? Doubled in value?

    Somehow that doesn’t seem fair, does it? They have you paying for the acquisition of their asset.

    But hey, you can take comfort in the fact that it is cheaper to rent than to own. Think about that and look on the bright side!

  39. 289
    Eastsider says:

    By Deerhawke @ 286:

    In 2011 when your landlord bought the place, the rent vs buy equation was terrible.

    This is untrue. In 2011, you could definitely find many SFH/condo properties with decent cap rate. But this is not possible today.

  40. 290
    Blurtman says:

    Treasury rates going down, mortgage rates going up. Possible?

    Sure. Fear of recession causes drive to safe UST’s, but increases risk of mortgage default.

  41. 291
    Deerhawke says:

    You are making my point. In 2011, rents had already dropped substantially from 2007 levels. There were in fact good deals to be had with decent (but not fabulous) cap rates. But people did not buy because of 1) the difficulty of financing and 2) the anticipation of further crumbling of rent rates (and with it a drop in cap rates).

    At the time, I was advising an East Coast investor who had 3 mid-rise zoned rentals in old-town Ballard under contract. He walked because he felt the risk was too great for the cap rate. The guy who did buy the properties sold them as mid-rise apartment building sites in late 2015 for more than double his money.

    My point is that you are always acting with current information in any deal. A 2011 deal was structured with 2011 information (and misinformation) informing the perception of risk and return.

  42. 292
    Lulu says:

    By Deerhawke @ 286:

    RE: Joe @ 281

    Joe, perhaps you are missing something?

    In 2011 when your landlord bought the place, the rent vs buy equation was terrible. Rents had cratered and it almost certainly had negative cash flow. The tenant there was no doubt laughing at the landlord because it was cheaper to rent than to own. The tenant was being subsidized to live there! Who would be stupid enough to buy when it is cheaper to rent!? Anybody who would buy when it is cheaper to rent must be a complete moron?

    Or wait…

    Somehow this stupid landlord now has monthly cash flow, depreciation, and other tax benefits. And they have probably refinanced their mortgage to pump up that cash flow. And they have seen a boatload of appreciation from 2011 to now. What do you think– up 60%? 70%? Doubled in value?

    Somehow that doesn’t seem fair, does it? They have you paying for the acquisition of their asset.

    But hey, you can take comfort in the fact that it is cheaper to rent than to own. Think about that and look on the bright side!

    The owner could live 2 out of 5 years in that property anb sell it cap gain tax free. Assume the original purchase is 400K in 2011 and now can fetch 800k. The 400k minus all fees (10%) would be pure profit.

  43. 293
    Eastsider says:

    RE: Deerhawke @ 289 – 2011 was a great time to buy. Not today. Btw, transaction cost (excise tax) is going up for property over $1.5m very soon.

  44. 294

    SALT Federal Tax Deduction Limits Now Causing Exodus from California to Red States, We’re Just Now calculating the new SALT Impacts and Losses in 2019 After Taxes Filed

    Seattle too eliminated the state sales tax deduction or the property tax deduction apparently….you choose between the two, which ever is larger apparently. $10K cap too…..the rich elite are horrified. Let ’em eat cake, the bottom 95% of us voters were handing them welfare.

  45. 295
    Nicole says:

    RE: Deerhawke @ 286
    I’m not sure I understand why this discussion has to turn into a “I’m smarter than you are” thing. You do you, and if buying is the right thing for you and other people, then great. But there’s not one answer. For our family, and obviously a few other people on this forum, renting is a better decision. My friends and I moved to Seattle from other places for great jobs, but then lost money on the homes we had where we started out. On the other hand, one friend moved here, lost money on their home in the city they started, then made money when they moved again and their house here was worth a lot more. Timing is important, but you can’t go back in time and change even logical, thoughtful decisions. Now we are reticent to buy again for a variety of reasons (already stated) I appreciate the concern over our investments, but despite not owning a home we’re good. I’m not unhappy or jealous about people who’ve done well in the housing market, but the timing of it hasn’t worked for us. When our rent was well below market, we knew it and saved a ton. We also knew it wouldn’t last forever, and now that rents have increased, we’re still saving but a bit less. But if renting our current house becomes too expensive, we can find another rental. But my kids are in the school zone we like, we’ve got jobs, it’s all good. I offered my renter’s perspective, but am not trying to sell anyone that it’s the best choice for them.

  46. 296
    Realistic says:

    Don’t you guys think delisting and relisting a property just to appear fresh is somewhat dishonest and aims to trick inexperienced buyers? For example, this house was originally listed on May 2, price increased on May 8, delisted on May 24 and relisted under a new MLS today:
    https://www.redfin.com/WA/Redmond/15827-NE-50th-Ct-98052/home/504200

  47. 297
    ohd1122 says:

    RE: Realistic @ 294

    Yes. But hopefully now that the market is softening no one will be hoodwinked by this BS or when an agent repeatedly drops the price by $1K.

  48. 298
    ohd1122 says:

    RE: Nicole @ 293

    Well said. Seattle Bubble has become an extension of reddit where everyone has trouble accepting that other people may have different perspectives, goals, and opinions which are equally valid.

  49. 299
    richard says:

    RE: Nicole @ 293 – I am in the same boat as you do . I admit losing rent money is painful even though in my case my rent is way below market rental price. My rental is in the good school district and so finding the next affordable place in the same school district is always my biggest concern. another key thing for renter not to lose in the long run is that you have to gain from the money you saved. I am able to put extra money into investment besides a reasonable house downpayment. One scenario I worried most is massive inflation which make renter a significant loser in the next few years. So my investment focus on hedging inflation by allocating significant good portion of my investment on gold/silver related stocks or ETF , some boring domestic stocks and some international stocks. I am a little pessimistic about housing market, I will be happy if current low housing appreciate rate can deter suckers into buying .

  50. 300
    Lulu says:

    RE: richard @ 297

    Owning a house is the best way to hedge against inflation. Rise labor cost, building materials, excessive money supply, cheap borrowing cost will inflate Seattle bubble even larger. Don’t blame other for this, when people asking for more wages , they are basically inflate this bubble by themself.

  51. 301
    Blake says:

    I think it’s funny that many here are excited interest rates are dropping so fast. Yup… the rates on 10 year bonds are pretty much in FREE FALL!
    In Germany they’ve dropped from +0.38% a year ago to -0.32% today
    France: +0.71% to 0.01%… Switzerland -0.10% to -0.56%

    In the US, they’ve dropped from 2.94% a year ago to 1.98% today!
    The 10 year has dropped 0.41% in ONE MONTH!

    Folks… this is not a good sign, but a bad sign! Years of attempting to get inflation over 2% has failed miserably and DEFLATION is the ongoing problem in the world economy! With deflation it is difficult for consumers and businesses to pay off debts because prices are not rising as fast as interest payments. And central bank monetary tools are pretty much useless against deflation… they’ve been trying!

    And you guys think that the Fed cutting the funds rate .25 or .5% is going to “goose” this economy? LMFAO! To put it in perspective: In 2000, the fed funds rates was over 6% and they cut it to 1% in a few years. In 2008, the rate was 5.25% and they cut it to 0% in about a year and a half! Today the rate is just over 2%… you really think a cut from 2% to 1% or even 0% is going to have a big effect on borrowing?

    Our 10 year rates are already below 2% and mortgage rates are already near historic lows. Sorry… their monetary tools are pretty much useless at those levels. Plus: Trump is already running $1 Trillion deficits WHILE THE ECONOMY IS GROWING!! So I can’t really see them providing much additional fiscal stimulus…

    That is why the big money is rushing into bonds. The insiders know that a recession is coming and there ain’t much that anyone can do about it!

    https://www.telegraph.co.uk/business/2019/06/06/deflation-alert-europe-markets-lose-faith-powerless-ecb/

  52. 302
    biliruben says:

    Dude. You have no idea what you are talking about. Our stable genius’s favorite economic genius Larry f’in Kudlow has been promising us run away inflation every day for last decade. He’s been on TeeVee!!! Have you? Inflation is coming, you will see.

    And why would Beck, Erickson and all my other faves be selling me 1200 gold coins for $1500 if it weren’t a good hedge against that very same inflation? Please explain that, will ya?

  53. 303
    Nicole says:

    RE: richard @ 297
    The one upside is that the longer you hold out, the less rental space you may need. And who knows, eventually we may all buy homes again, but we’ve even looked at renting side by side apartments when SFH rents were going up. When I lived in NYC, I had neighbors who did that for their large family! Hopefully opting for good school districts means kids head to college in a timely manner and we’ll be able to help them out some.

    We’re like you, maxing out retirement portfolios in a variety of safe-ish, boring investments. And my husband is a bit of a gold bug, so he’s put some money there too. I think it’s always easy to feel like you’re not doing as well as you should, but we reevaluate our financial situation every year or so to see where we can do better.

    When we’re thinking about the housing market, which is why I became interested in this blog, I think it’s interesting to see where everyone’s at. Understanding who is buying, renting, etc. and why helps make sense of people’s choices and goes a little way towards understanding the housing market.

  54. 304
    richard says:

    RE: Nicole @ 301 – yeah, for me, good school for kids, adequate living space and condition and a good deal on rent is something I can live with. buying a house is a little far fetched. there are so many people in this area holding multiple prosperities without intention to sell. My landlord is a typical mom-pop real estate investor and he own ten or so properties in this area. there are too many home owners like him who benefit a lot from this buying-renting dynamic.
    Recession is probably the only buying opportunity. As a renter, the best thing to do is to find a good rental bargain, increase income and invest, and buy a house(maybe two) later when time is right.

  55. 305
    Blake says:

    By biliruben @ 300:

    Dude. You have no idea what you are talking about. Our stable genius’s favorite economic genius Larry f’in Kudlow has been promising us run away inflation every day for last decade. He’s been on TeeVee!!! Have you? Inflation is coming, you will see.

    And why would Beck, Erickson and all my other faves be selling me 1200 gold coins for $1500 if it weren’t a good hedge against that very same inflation? Please explain that, will ya?

    Hah! Just the fact that Larry f’in Kudlow is Director of the National Economic Council is enough reason to run to the bunker! Problem is nowadays… all the world’s markets are interconnected and synchronized so there is no where to hide!
    https://www.amazon.com/Fearful-Rise-Markets-Synchronized-Meltdowns/dp/0137072996

  56. 306
    dariakus says:

    By whatsmyname @ 286:

    By Joe @ 270:

    You got that right. I’m renting a home that would require an extra payment of $2000 per month to own. Why pay $2000 more per month to live in the same property? You could argue I lose out on home price appreciation as a renter, but currently the price trend is clearly down. As a renter not only do I save the $2000 per month in payments, I avoid the price risk.

    Hey, I’ve got a weird parallel with you. I am owning a home that would require a $1,000 higher payment to rent. You make renting sound very attractive, and I will rent someday. But I don’t know if I’m ready to take that hit every month. Probably, I need to keep owning for a while, and save up.

    It’s almost like everyone’s situation is different and nobody should blindly follow a herd!

  57. 307
    Blurtman says:

    RE: Blake @ 305 – There is indeed considerable inflation: education healthcare, automobiles, RE, equities.

  58. 308
    Erik says:

    RE: Joe @ 283
    I just closed on a purchase yesterday and I’m not an emotionally charged person. In fact, I notice I lack a lot of emotion that others have. I have a masters degree in engineering and I study the market like a hawk. I’m a math nerd.

    My guess is that prices keep going up and crater in 2024 like I predicted years ago. Could be earlier or later, but I like 2024. You are just trying to validate yourself for being weak and scared. You and Luke need to quit being such little whimps. I’m looking for my next deal starting next week.

  59. 309
    whatsmyname says:

    By Eastsider @ 293:

    RE: Deerhawke @ 289 – 2011 was a great time to buy.

    That is true! How many did you buy? Ha ha, just kidding. I know you didn’t buy any. Not many people did. At the time it seemed very dangerous to most people. Go back and look at the comments on this blog….. next leg down… dead cat bounce ( I know, makes no sense in 2011)…. impending financial collapse… they’re all coming back (proto inventory tsunami).

    Some people here go on like there was a time when it was easy for those “lucky” people to buy. But the general buyer has always had to sacrifice, take risks, control their appetite for bigger/better. And almost always- it cost more to buy than to pay today’s rent – when they bought. Over time, that relationship almost always goes the other way. I think that was Deerehawke’s message.

    I’m not saying you should rush out and buy, but your argument shouldn’t ignore the long term. Nobody got from point A to point B without getting to point A first.

  60. 310
    Eastsider says:

    RE: whatsmyname @ 308 – You are such a troll. How do you know that I did not buy?

  61. 311

    RE: whatsmyname @ 308

    In 1985 I went to a priest to ask if not wanting a $100,000 mortgage on this house that my husband wanted was grounds for divorce. No. We paid $115,000 for it. Two of my three children were born there.

    https://www.zillow.com/homedetails/82-Partridge-Ln-Cherry-Hill-NJ-08003/38232550_zpid/?mmlb=g,5

    $100,000 mortgage sounded crazy to me at the time.

  62. 312
    S-Crow says:

    By Blake @ 301: regarding interest rates dropping as a bad sign not a good sign:

    Try arguing with anyone in real estate/lending that rates dropping is a bad sign. Why did interest rates drop this past Jan-Feb.?

    Waiting to hear from Deerhawke in particular.

    What happened to major markets on the West Coast from basically end of last Spring selling season that accelerated this past Fall of 2018?

  63. 313
    whatsmyname says:

    RE: Eastsider @ 309 – Your prolific posting library reflects a viewpoint lacking experience in many nuances of holding real estate, let alone having success with it. That’s how I know. Look how you use this distraction to avoid even addressing the issue of the post. Don’t worry my friend. No one can force you to learn.

  64. 314
    whatsmyname says:

    RE: Ardell DellaLoggia @ 310
    I like your former house. It’s funny what a few years can do to the price.

    Our first house was $75,000. Nothing fancy, but it came with extra building lots.

  65. 315
    Erik says:

    RE: whatsmyname @ 308
    Uh, I thought by 2011 you could kinda see the end in sight. I bought all I could in 2011 which amounted to one measly condo that almost tripled in value after 2 years with a pretty low cost remodel. I got all new windows for cheap because prices were way down. Hard scrabbled and got in the game. I paid for some work because labor prices were so low.

    The Tim bought a house in 2010 and said he still thinks the market will go lower but most decrease in value has happened. He was correct and I bought over a year later. Hopefully Tim keeps posting when the market gets more interesting.

  66. 316
    Eastsider says:

    RE: whatsmyname @ 312 – LOL. Get a life!

  67. 317

    RE: Nicole @ 295

    Even When High Income Management Moved to Seattle for Like 5 Years Around 2011

    Many high incomes rented homes in Bellevue.

  68. 318
    Joe says:

    RE: Deerhawke @ 288

    Deer Hawke I’m not missing anything. Renting the property costs $2000 less per month than ownership. That’s real cash going in my pocket. Then you try to tarnish that fact with what happened in the past or what you GUESS will happen in the future with prices. Im working off facts. You are guessing.

  69. 319

    RE: Erik @ 314
    Erik, You Missed Your Call

    We both could have made a fortune selling used cars to the gullible buyers.

    Me too…maybe that’s why we both chose engineering instead? LOL

    When I was in Civil Air Patrol we had a candy drive at Northgate shopping center….I sold like 100 boxes of 12 at $2 a piece in the mid 70s….they grabbed ’em up like hotcakes after hearing my persuasive “practiced” sell speech and “puppy dog” eyes….LOL..ya see why I go to Toastmasters?

  70. 320

    RE: whatsmyname @ 308
    Yes whatsmyname

    In 1980 it took an entire professional income to make the 15% home mortgage payment, and another professional income so you could eat.

    But that was also when apartments went for like $150-300/mo too, two bedrooms too. I kept renting.

    $50K condos were selling fast by the late 80s, but became worthless apartment rentals 10 years later too….interest rates dropped to like 8% by then, but still grabbed up for about 1/2 a single professional income for a $50K condo loss…

    Then the 75% divorce rate occurred in the 1990s…the “double income no kids” [DINKs] circus tents were all taken down by then…that’s when 1/2 price repos became popular. IOWs, its been a roller coaster in Seattle real estate history with no predictability either…

    Today, everything feels different and ‘completely” lacks comparison to the foggy past tracking that wasn’t…

  71. 321
    Erik says:

    RE: Joe @ 318
    Long term Seattle prices will go up. Short term prices will likely go up as interest rates go down. This is the final leg before the crash. I think this leg will last 4-5 years with government intervention. Buy and sell in 2 years and get a chunk of money.

  72. 322
    Justme says:

    Weekend Preview

    A big spike up in King County SFH inventory is in the works for the weekend. A new year-high has already been achieved this week, with current count at 4640 as of 11:00 today. In 2018, the 4640 level was not reached until Sep 13!

    It appears that the data glitch that occurred Thu morning, 8 days ago, has been corrected: It took about 3-4 days for the missing listings to appear again in the count. Glitches happen, I guess, but I am pleased to see that this particular one got corrected. I’ll speculate that warm summery weather as well big holidays (no matter the weather) are distractions that increase the probability of glitches occurring.

    Buyers: Don’t be tempted. Keep striking. Bust the bubble. Bubbles are bad for children.

  73. 323
    Joe says:

    RE: Erik @ 321

    I won’t argue with your economic outlook. The government can always give the economy a little more cocaine for a few years before it runs out of food. The Fed has already shown it knows how to blow bubbles that pop. That said, who would be surprised if Boeing and or Microsoft had big layoff announcements next quarter. Trying to time these things by buying and selling illiquid assets like housing makes no sense to me. People that want to time things should play in stocks, although I’ll add that now is the time to sell not buy. Housing is for long term investors that can hold it for 30 years or more, because the next down cycle could be a long one.

  74. 324
    Notme says:

    I bought at the bottom in 2011
    Therefore you, dear renter, should buy at 2018-2019 peak levels
    Isn’t it obvious?

    -a bubble-monger bubble poem

  75. 325
    BacktoBasics says:

    RE: Notme @ 324
    Dow has been tripled from 2009 bottom to 2019 peak. How is the Seattle housing, just doubled. But housing is a leveraged asset and also a shelter for you and family. So the return on downpay is 5×2=10. Very good.

  76. 326
    biliruben says:

    Leverage works both ways though. 5% FHA last spring =bank owns your house

  77. 327
    David says:

    Owning a house is like owning a long-term bond (that has functionality). There are not many places where the values have remained under water for 10 years.

    From what I see, even land prices are skyrocketing in value presently.

  78. 328
    Deerhawke says:

    RE: Ardell DellaLoggia @ 311

    This is a hilarious story. In 1985, paying $115K for a house was a big swing. But of course what I am really surprised by is that you can get still get a house like that in “Churri Hill” (I grew up across the Dull-a-wurr Riv-ah) for the cost of a 1 bedroom condo in Seattle.

    My wife was the one pushing us to buy in 1991. I would have been happy to keep on renting. I thought she was totally crazy but knew better than to even ask a priest. One way or another that was a battle I knew was going to lose.

  79. 329
    Ardell DellaLoggia says:

    RE: Deerhawke @ 328

    I’m “West Philadelphia born and raised…” as the song goes. Grew up in a Mafia neighborhood full of mooks. The Cherry Hill house was my 2nd house, 3rd home purchase.

    My first house I bought in my own name while I was engaged and before I was married, just in case. Paid $45,000 for it in late 1982. It was a “twin”.

    https://www.zillow.com/homedetails/3868-Kipling-Pl-Philadelphia-PA-19154/10582377_zpid/

    My favorite house was this one. We had it built. Planted that palm tree. Built that indoor-outdoor pool. 1995ish for about half that price. I have clients here who have doubled their money in 4 years vs 25 years.

    https://www.zillow.com/homedetails/1830-Valley-Wood-Way-Lake-Mary-FL-32746/47696994_zpid/

    I flew back to PA last year to stage my sister’s house, the one I helped her buy 26 years ago. Same. About doubled in all that time.

    https://www.redfin.com/PA/Lansdale/1750-Meadow-Glen-Dr-19446/home/38859667

    I’m still very in touch with the real world. :)

  80. 330
    Ardell DellaLoggia says:

    RE: Deerhawke @ 328

    I just answered that but it had a few links in it so it’s not showing. Now I remember why I don’t use links. :)

  81. 331
    Blurtman says:

    RE: Ardell DellaLoggia @ 311

    $115,000 kept in a hole in the ground in 1985 is worth $273,704.28 today.

    $115,000 invested in your former home in 1985 is worth about $399,471 today (Zestimate).

    $115,00 invested in VFINX in Jan 1985 is worth $1,489,879 today.

  82. 332

    RE: uwp @ 276
    You’re right

    I’m corrected, but they filled the 20,000 stadium to capacity. There were campers waiting to get in for 40 hours and if the stadium was bigger it would have had a bigger crowd. I’ll admit, I get fooled by MSM numbers too, thanks for the correction. I saw the “late” 20,000 figure too, two days after my blog….thanks for bringing real news out ;-)

    Why didn’t CNN pick up on it right away too? We all were wrong.

  83. 333

    RE: Notme @ 324
    That One Was Hilarious

    Another example I see hidden in the blog data are landlords that bought two decades ago likely and can’t understand why the new landlords can’t make a cent now or are losing money being a landlord.

    The real question is how much you paid for it and how much is the rent.

  84. 334
    Justme says:

    Weekend inventory update, graphical edition:

    Graphs are up, please check the link
    https://twitter.com/coqumragep279/status/1142467130949955584
    For more graphs, see https://imgur.com/gallery/TzgW4AI

    King County (Seattle+suburbs) SFH inventory rose to a new high for the year this week. Highest inventory value on this date since 2012, peaking at 4688 listings on Friday night.

    The buyer strike is continuing: Sales have been flat relative to 2018, per NWMLS end-May report, but the inventory keeps outpacing 2018 numbers by a considerable margin. Buyers know that the Case-Shiller Seattle house price index peaked over a year ago, with the peak centered mid-May 2018, and the value has been dropping each month since except for one small spring bump so far.

    More SFH stats, as of earlier this morning (Saturday):

    447 price reductions this week.
    444 closed sales this week
    759 new listings this week
    1350 pendings with < 1mo DOM

    Please follow and retweet. Data needs to be socialized with as many potential buyers and sellers as possible. The buyer strike is alive and well, and causing more price reductions. Keep striking. Let’s bust this bubble, and good!

    #housingbubble #buyerstrike #bustthebubble #sellingpanic #bubblesarebadforchildren

    PS: Last week's data glitch and resulting errant inventory data was corrected over time. The errant values started Thu morning 6am, 10days ago, It took about 3-4 days for the missing listings to appear again in the count. The errant values are visible as a size 290 abrupt spike down followed by a a roughly equal bot more gradual rise during the beginning of this week. This rise is obviously a data correction because Sun-Wed is the period when inventory normally rises as properties go from active to pending after the weekend and early-week buyer activity. It appears that some manual intervention was performed to restore the missing listings.

  85. 335
    Deerhawke says:

    RE: Blurtman @ 330

    Interesting point. And Vanguard’s S&P 500 Index Fund is a great fund that should be part of any portfolio.

    But it seems that Ardell put down $15k and borrowed $100k. What she and her husband had to invest, it seems, was $15k not $115k.

    Leverage is an important part of the ROI calculation.

    You also have to consider the fact that this investment was providing housing and so avoided the need to pay rent.

  86. 336
    Blurtman says:

    RE: Deerhawke @ 334 – Absolutely. Also doesn’t take into account mortgage tax shield, and house as shelter. Possibly the best analogy would be an all cash purchase of the home in 1985, or other all out ownership of home in 1985.

    Also, OTOH, one can invest in equities on margin. And the VFINX doesn’t require maintenance and upkeep.

    A more detailed analysis might prove interesting. But diversifying amongst asset classes a good thing.

  87. 337
    Ardell DellaLoggia says:

    RE: Deerhawke @ 334

    Sold it in 1992 for $175k if you want to complete that math. I switched from Trust and Investments portfolio manager to real estate agent in 1990, so I had no listing fee on the sale. Just the buyer agent fee.

    Where over the Delaware did you live?

    Some other details in a comment in moderation. The down money came from profit on my first house that I bought with $500 down.

  88. 338
    Joe says:

    RE: Justme @ 333

    That’s a huge inventory increase. Looks like inventory will be well over 6000 shortly. I fail to see how prices can go anywhere but down as this year continues. As the charts clearly show, these trends don’t reverse quickly. The more likely event is acceleration of the downward trend in prices as the economy slows. Corporate earnings are expected to be down this year.

  89. 339
    Deerhawke says:

    Wilmington Delaware. I was born in St. Francis parish downtown.

    My brother still owns the house my parents bought there when I was 3. $15,000 brand new in 1958. $100 down and a 4% VA loan. Seemed like a no-lose proposition but there were a lot of worried months on one working class income when we had to borrow to make the mortgage.

    Wilmington at one time was a thriving place that seemed to have a bright future. DuPont, Hercules/ICI and other chemical companies/suppliers were the backbone. Then banks started to incorporate there and every big company had its nominal headquarters there. But somehow in the late 90s, things slid sideways. The demographic movement back to the cities bypassed Wilmington. Philadelphia which seemed to really be on the skids in the 60s, 70s and 80s began to see all the growth in the area. Young people wanted to live in Philadelphia even if they worked in Wilmington. There is a tech sector in Philadelphia, happening night life, etc.

    My brother told me that since the banks sent all the jobs overseas and DuPont and Dow merged, real estate values in the area have dropped about 15%. His house has lost about $50,000 in value from about $320K to $270k.

    People complain about affordability here in Seattle– and that is a valid complaint. But the other side of the coin is increasingly affordable housing because the jobs have left the area.

  90. 340
    Ardell DellaLoggia says:

    RE: Deerhawke @ 338

    Out showing houses…but briefly, yes. We moved our credit card operation into Delaware because they didnt have Usury Laws and we could double the interest rate. Don’t rember what year that was. Early 80s I think.

  91. 341
    Erik says:

    RE: Joe @ 337
    I forecast prices going up next year as does Tim, the guy that created this website. Prices are not going up in Seattle because people cannot afford to pay more. When interest rates go down and people can afford more, prices should go up.

    You and justme are not looking at the right drivers. You look at open houses and justme looks at month to month changes. Your sample sizes are too small, so your conclusions are incorrect.

  92. 342
    Matt P says:

    By Blurtman @ 330:

    RE: Ardell DellaLoggia @ 311

    $115,000 kept in a hole in the ground in 1985 is worth $273,704.28 today.

    $115,000 invested in your former home in 1985 is worth about $399,471 today (Zestimate).

    $115,00 invested in VFINX in Jan 1985 is worth $1,489,879 today.

    Pretty sure 100k in a hole is worth 100k in terms of nominal dollars ie you still have 100k but in real dollars after inflation much less than 100k. Burying money doesn’t somehow magically make it worth more. You still have to invest it in something whether it be a cd or bond.

  93. 343
    Blurtman says:

    RE: Matt P @ 341 – Yes, you are quite correct. I made 2 errors – attempting to calculate the real value and doing it in reverse. The nominal value remains the same.

    $115,000 kept in a hole in the ground in 1985 is worth $115,000 today (nominal value).

    $115,000 invested in your former home in 1985 is worth about $399,471 today (Zestimate).

    $115,00 invested in VFINX in Jan 1985 is worth $1,489,879 today.

  94. 344
    Eastsider says:

    RE: Matt P @ 341 – $115k in a hole is probably gold. It is worth $$527,795 today ;)

  95. 345
    Eastsider says:

    By Erik @ 340:

    When interest rates go down and people can afford more, prices should go up.

    This is not necessarily true. In July 2006, at the CS HPI peak, 30yr mortgage rate was 6.76%. In Feb 2012, at the bottom, 30yr mortgage rate was 4.08%. CS HPI dropped from 184.651 to 133.999, a drop of 27.43%, even when mortgage rates were discounted a whopping 40%!

    Buyers need to be cautious when all RE professionals here are telling you to BUY BUY BUY. Many are dumping their holdings. Erik just sold one of his units.

  96. 346
    Erik says:

    RE: Eastsider @ 344
    I swapped a condo on alki point for a house on Camano Island. The alki condo sold for a lot more than what I bought my house for on Camano Island. I like to buy and sell, so me selling isn’t an indication that I think the market is about to tank. Maybe some uncertainty though? I may sell another one if my neighbor wants to give me the price I want for the unit I just moved out of. The neighbor popped by and indicated he may want to buy the condo I was living in that I have been slowly fixing over the past 2 years. If not, I’m happy renting it out a couple more years so I can get the profit I need to feel satisfied.

    I fully agree that it’s more dangerous to buy now than when inventory was very low and were obviously in expansion. I think we have a few more good years left in us. If Joe buys now, I don’t think prices will ever be cheaper than they are today in Seattle.

  97. 347
    Foobar says:

    RE: Realistic @ 296
    That’s interesting. They started out at 899, then next day bumped to 925. No one bought the overpriced junk. Couple weeks later priced at 925 to see if anyone takes the bait.
    Lots of rich softies in that area, so everything is fair I guess.

  98. 348
    Jeff says:

    RE: Erik @ 345 – Thanks to Erik for being the single best contra-indicator for RE on this site. Such young and irrational exuberance must feel nice. Enjoy the ride while it lasts brother.

  99. 349
    Erik says:

    RE: Jeff @ 346
    Look at my track record. I have probably done much better than you and you are jealous so you are trying to act like you are smart cause you are old. Try to quit acting like a jealous loser and go make money.

  100. 350
    Jeff says:

    RE: Erik @ 347 – I’m 45. I own a commercial building containing my business. I also own my own home. I have no home, auto or credit card loans, or loans of any kind for that matter. I sold my one rental property in February which I bought in 1993 at the age of 19. My investment account is just shy of $1M and invested primarily in short term bonds, with $100k of “funny money” currently gambled on shorting stocks I deem will do poorly in a downward Real Estate market. So far, I’m very pleased with the shorts I’ve layered into and am hoping I might double my investment account through this speculation of mine. Speaking of which, have you been in any Home Depots in your area lately? Every one I go into is stocked to the brim for months now, and I rarely see folks buying tools or high end items like I did before last Christmas season. Just wondering if you’ve noticed any interesting changes there or Lowes or another building related stores for that matter. You seem like an earnest, kind and sincere fellow even if you do take feedback personally sometimes.

  101. 351
    Eastsider says:

    By Erik @ 347:

    Look at my track record. I have probably done much better than you and you are jealous so you are trying to act like you are smart cause you are old. Try to quit acting like a jealous loser and go make money.

    You should always add an asterisk to such a claim. Your previous investment ended up in a short sale.

  102. 352
    Jeff says:

    RE: Eastsider @ 349
    I find it fascinating how much energy many folks on this site put into comparing their life and investment choices, and putting down others as evidence that their current market outlook is superior.

    Anyone else been in Home Depots lately and care to share an opinion about how that business has changed over the last nine months? Also it would be interesting to hear others’ takes on the state of HDs balance sheet.

  103. 353
    Randomseattledummie says:

    RE: Eastsider @ 289

    Ah stupid blanket statement. Gotta love em.

  104. 354
    Blurtman says:

    RE: Jeff @ 348 – Congratulations! You have done exceedingly well, and are not done yet. You realize you are an extreme outlier, I assume.

    “The average American is expected to run out of savings at some point during retirement, says a new report from the World Economic Forum. Most U.S. retirees will likely outlive their savings by around eight to 10 years, according to the study, but that’s assuming a life expectancy of age 85. Retirees who live longer than that could potentially spend even more time in retirement with no savings.

    If you run out of money with years (or even decades) still to spend in retirement, your golden years likely won’t be as enjoyable as you’d hoped. The key, then, is to do your research long before you retire to ensure your savings are on track to last the rest of your life.

    How much should you save for retirement?
    There’s no easy answer for how much you should have saved by the time you retire, since everyone’s retirement number will be different. Some people will only spend a decade or so in retirement, so they’ll need less in savings. Others could live until they’re 110 years old and may need a couple million dollars to last the rest of their life.

    To get a sense of how much you’ll need in savings, take an honest look at your life expectancy. Of course, nobody can predict exactly how long they’ll live. But if you have health issues or other reason to believe your retirement years won’t last long, that will help you better gauge how much you’ll need to save. On the other side of the coin, if everyone in your family has lived until age 100, it’s probably a good idea to prepare for a very long retirement.

    The type of lifestyle you expect to live in retirement also plays an important role. Someone who wants to spend their golden years traveling constantly or learning expensive new hobbies will likely spend more money than someone who prefers to enjoy most of their time relaxing around the house and catching up on their reading.

    Once you have an idea of how many years you expect retirement to last and how much you predict you’ll spend each year in retirement, you can plug your information into a retirement calculator to get an estimate of how much you should save. Because no calculator can be 100% accurate, it’s a good idea to try out a few different calculators to get a range of answers. When presented with several different retirement numbers, it’s smart to aim high and save more than you think you’ll need.

    How Social Security benefits factor into retirement
    If you run out of savings in retirement, you’ll still have Social Security benefits to fall back on. But Social Security isn’t the strongest safety net, and you may not be able to survive on your benefits alone. The average beneficiary receives around $1,400 per month from Social Security, which may not be enough to make ends meet even when you’re relatively young and healthy — and it could be even more problematic as you age.

    As you get older, you’ll inevitably face more health issues. Healthcare isn’t cheap, either, and the average retiree spends around $4,300 per year on out-of-pocket costs, according to the Center for Retirement Research at Boston College. That number also doesn’t include long-term care, which can be incredibly costly. The average semi-private room in a nursing home costs nearly $7,000 per month, according to the U.S. Department of Health and Human Services, and 70% of today’s 65-year-olds can expect to need long-term care at some point in their lives.

    If your savings run dry a decade or two into retirement and then you’re hit with steep healthcare costs, Social Security alone probably won’t cover all of your expenses. There are ways to increase your Social Security benefits to make it a little easier to squeeze every dollar out of your monthly checks, but it’s still smart to save as much as you can on your own so you’re not entirely dependent on your benefits to pay for all of your expenses.

    Saving for retirement is a big enough challenge on its own, but as Americans are living longer — needing their money to go further than ever before — it’s becoming even more difficult to save enough to last the rest of your life. If you can estimate how much you’ll need to save and create a retirement plan you can stick to, it will help ensure your money lasts as long as possible.”

    https://www.fool.com/retirement/2019/06/22/most-people-are-expected-to-outlive-their-savings.aspx

  105. 355

    Then the $10,000 Question No One Asks

    I found another error on the MSM raw data…that drone that Iran shot down was not $1.5B, it was a cheap $1.5M cardboard/plastic [composite, like the 787] unit.

    The data is flying all over the bubble lately and the more rich elite type boasting I hear, makes me believe less and less of it without seeing “the story” in legal document writing. I wish I could believe all the blogs, but there are many with clues or gaps in the logic [like past blog contradictions or data errors].

    Let’s put it this way, money gained without fulling describing money lost adequately is like saying my Honda lasts forever with no maintenance required, even scheduled maintenance. Or this one, my Subaru went 80,000 miles with no maintenance. My first question would be which car out there is your alleged Subaru, then I’ll avoid it in the used car lemon lot.

    Same with real estate gains and income with debt. Its not real without admitting the failures and setbacks along the way…we all have them. Erik did too.

    I also don’t trust those bloggers that boast of their wealth…its not a professional indicator of honesty also. I’d never tell anyone my true wealth, its none of their business and dangerous to put on blogs for security reasons.

  106. 356
    Jeff says:

    RE: Blurtman @ 352
    Thanks for the compliment, but what I really want to know is what you think about Home Depot’s stock outlook. Do you have any on the ground experience in their stores to share? Do you have an opinion about their balance sheet?

  107. 357

    RE: Blurtman @ 352
    Americans Are Living Much Shorter Lives According to the 2000 Census Data

    Its severely shorter lifespans too, like to 60s levels now.

    It was the CDC data that contradicted the Census Bureau survey data from people.

    I was reading a Motley Fool article on retirement and they always tell you to put off Social Security until you’re 70….one blogger wrote, my wife did that already and died at 73. Severely cheated out of her Social Security in my book. BTW, working women are getting heart disease like crazy lately, dying at young ages too [like avg 59]…ask the American Heart Association if you think SWE is nuts. Retiring at 62 makes you live longer too, it should too, its common sense not political Fake News.

    Unfortunately heart disease and working women hit my sister too, she got her heart pacer last year after decades teaching public school…

    Don’t let ’em fool ya…retire early and smile.

  108. 358

    RE: Jeff @ 354
    Home Depot Stock is On a Roller Coaster for 2018/2019

    Unpredictable as Hades….I’m neutral until this MASSIVE YOY up/down flux subsides…

    If I was a gambler and not an investor I’d buy Home Depot…

  109. 359
    Blurtman says:

    RE: Jeff @ 354 – Not really my area of expertise. RE for me serves a domicile purpose primarily, but I do try to buy wisely, have never lost money – broke even once, and made a tidy profit once. But I have read that companies are stocking up on inventory in advance of the tariffs on China. Not sure of that is relevant.

  110. 360
    Erik says:

    RE: Jeff @ 350
    We are angry because we are not successful

  111. 361
    Erik says:

    RE: Eastsider @ 349
    Put a star by my name for changing my course and getting paid during the last meltdown.

  112. 362
    Jeff says:

    RE: Erik @ 358

    Who’s we, and what are you unsuccessful at? Sorry that you’re angry. Any interesting experience with Home Depot shopping lately?

  113. 363
    Blurtman says:

    RE: softwarengineer @ 355 – If you like what you are doing, and remaining active and productive keeps you sharp, why would you want to retire? And yes, I agree, if you knew how long you’ll live, you might decide to enjoy the time you have. I guess one way is to look at what your genes can tell you, i.e., how long did your parents, aunts and uncles live.

  114. 364
    Deerhawke says:

    RE: Blurtman @ 352

    “The average American is expected to run out of savings at some point during retirement, says a new report from the World Economic Forum. Most U.S. retirees will likely outlive their savings by around eight to 10 years, according to the study, but that’s assuming a life expectancy of age 85. Retirees who live longer than that could potentially spend even more time in retirement with no savings.”

    I think that future is already here for many Boomers. I am seeing more and more people of retirement age working in Big Box stores– and not just as greeters. A couple of staff members at my Home Depot seem to be in their late 60s. There is a woman working at the deli at my local Safeway who is certainly 70. And there is a staffer who appears to be 80 at the QFC. I am glad to see the employers finding a place for them, but I have to feel really sorry for them.

    For those of you who are younger, my suggestion is that you not rely on Social Security. The last thing that the politicians in Washington want to discuss right now is how to save the system. So max out your IRA, Roth IRA and 401k/403b. If you are self-employed, set up a Solo 401K or Family 401K so you can really build your tax-free and tax deferred savings.

  115. 365
    Jeff says:

    RE: Deerhawke @ 362

    My dad made six figures at the height of his career selling mainframe computers to Boeings defense department in Seattle. He got laid off during the last recession, and now works in the plumbing isle of a Home Depot in Arizona for near minimum wage. He calls it his “retirement job” but he’s at 40 hours a week. I’m proud that he’s taking it like a champ, and honestly think all the walking up and down the isles is really good for his health, although the heavy lifting is getting hard on his back at 73. You could say I learned a lot from his mistakes.

  116. 366
    Deerhawke says:

    RE: Jeff @ 363

    Wow. Tough way to get a lesson.

    Parents somehow think it is wrong or crass to talk to their kids about money. And then they wonder why their kids have the entitled impression that money should just magically show up.

    My wife and I decided that we would raise our kids with multiple literacies.

    Beyond learning to read before they turned 4, we had them working with numbers— numerical literacy (numeracy).

    We tried to give them a solid moral and spiritual grounding to teach them right from wrong (moral/spiritual literacy).

    And then we taught them about the importance of work, savings, and the basics of investing for the long term (financial literacy).

    Remarkably, it all took hold. I wish I knew what they know at their ages.

  117. 367
    Jeff says:

    RE: Deerhawke @ 364

    Tough for my dad for sure. Life was pretty good growing up with a big spending father who liked lots of neat hobbies like RC airplanes and big boats. In fact, something about Erik’s posts reminds me a lot of my father, which might be why I’ve developed a bit of a soft spot for him, despite that we seem to be having some mis-understandings at the moment. The wisdom you shared with Erik about boat ownership was definitely spot on, even though I don’t see eye to eye with you regarding RE ownership at the moment! As a builder, do you have any insight into the “Pro” spending habits at Home Depot over the last nine months?

  118. 368
    David says:

    I’ve been watching this OOOOLD guy on the Internet who slaves away all year working to manage things for multiple companies. He comes home after work and plays cards on the Internet with ‘friends’ all over the country.

    He can only afford a $3 McDonald’s breakfast which he says he eats every day. Occasionally he eats ice cream at Dairy Queen.

    He calls himself ‘thrifty’ but everyone else thinks he should be different.

    He goes by the name Buffett. First name Warren. Age: 89.

    Retirement is boring. Stay active. Why let some young punk take your place.

  119. 369
    David says:

    By Blurtman @ 342:

    RE: Matt P @ 341 – Yes, you are quite correct. I made 2 errors – attempting to calculate the real value and doing it in reverse. The nominal value remains the same.

    $115,000 kept in a hole in the ground in 1985 is worth $115,000 today (nominal value).

    $115,000 invested in your former home in 1985 is worth about $399,471 today (Zestimate).

    $115,00 invested in VFINX in Jan 1985 is worth $1,489,879 today.

    Can you normalize for inflation?

  120. 370
    Voight-kampff says:

    RE: Jeff @ 365

    Shorting Home Depot, are we?
    I’m in Lowe’s or Home Depot about once a month. They seem less busy lately, and I find their employees to be increasingly uninformed and less helpful. This is completely anecdotal, as I don’t go very often, and I don’t often ask employees for help.
    I would think that they would be busier as small-time handyman seem to drum up more work when costs are up and when larger contractors are busy (as is currently). I’m just a small-time diy’er. Just my two cents.

  121. 371
    Nick says:

    Just my two cents. The world stage is changing and the biggest players are in town. Few companies in the history of time can say they have changed the game the way Amazon has. I’ve been in awe seeing how they innovate changes before my eyes. Multiple companies in Seattle continue to come up with market changing ideas yearly. This is the Mecca of innovation and housing prices are a reflection of the world stage recognizing this fact.

  122. 372
    pfft says:

    By David @ 366:

    I’ve been watching this OOOOLD guy on the Internet who slaves away all year working to manage things for multiple companies. He comes home after work and plays cards on the Internet with ‘friends’ all over the country.

    He can only afford a $3 McDonald’s breakfast which he says he eats every day. Occasionally he eats ice cream at Dairy Queen.

    He calls himself ‘thrifty’ but everyone else thinks he should be different.

    He goes by the name Buffett. First name Warren. Age: 89.

    Retirement is boring. Stay active. Why let some young punk take your place.

    Warren Buffet doesn’t manage multiple companies. He reads all day. He really does. Google it. He’s famously hands off. He buys companies that could almost run themselves. He even says he basically invests in managers and doesn’t run business he buys or thinks he can run the businesses better than the people already there.

    “Being homeless is not a matter of not having a house. It is a mental state.”

    Really? There are over 2.5 million homeless kids.

  123. 373
    pfft says:

    By Nick @ 369:

    Just my two cents. The world stage is changing and the biggest players are in town. Few companies in the history of time can say they have changed the game the way Amazon has. I’ve been in awe seeing how they innovate changes before my eyes.

    Yeah their workers pee in garbage cans. A real innovation there.

  124. 374
    Deerhawke says:

    RE: Jeff @ 365

    I spend about $20,000 per house at HD. It is mainly for four categories of items. Construction staple items— Tools, blades, nuts, bolts, sand, cement, plastic sheeting. Wood — for fill in items between lumber truck runs and for fencing. Appliances— mainly for ADUs and small kitchenettes, not for the higher end main appliances. Plants for landscaping.

    I view every trip to Home Depot for the first two kinds of items as a sign of a failure. We should be anticipating purchases better and getting those items delivered by our lumber supplier or Amazon or included in a sub’s bid. Buying appliances and plants there actually saves us time and money. Their plants are well priced. And they have a good selection. Their appliance sales offer really solid deals.

    When I go to Home Depot in my area, they are always busy and it is hard to find parking. This is anecdotal, but they seem like a healthy company and in general their inventory checks through pretty quickly.

    BTW, HD’s main competition over time is not Lowe’s so much as Costco and Amazon. Hope this helps.

  125. 375
    TheBenBernank says:

    RE: David @ 367 – What is the rate of inflation? Harder to ascertain than you might think…

  126. 376
    TheBenBernank says:

    Regarding the GFC 2008/2009, I wonder whether if other financial institutions (credit unions, thrifts, fraternal benefit societies, etc.) could have soaked up enough of the spillover from bank failures? Lending would certainly be more conservative, but I don’t think those banks were too big to fail, were they?

  127. 377

    RE: Blurtman @ 357
    LOL Blurtman

    Hoarding inventory and production parts is directly against the Toyota Demming Method the government and Boeing used to brag about….now both look like complete buffoons and are facing huge deficits and/or bankruptcy. I never did understand why paying a little in advance and having extra parts in inventory is a problem to serve your customer profit base better. Now this.

    Did ya hear about the HUGE class action lawsuit against the 737 MAX 8 today? Its like 100s of pilots suing Boeing for a MASSIVE “coverup” of the completely inadequate management and safety precautions…the lawsuit in dollars is estimated by me at like 500+ [2-5K “irate pilots” as more add on later?] pilots x approx $2,000,000 each? $10B using these estimated numbers IMO…that could destroy Seattle Boeing if my estimate is even close. Meanwhile, the Congress has replace the Mueller Witch Hunt with the hypothetical Boeing MAX 8 Lynching? I’m sure the FAA is running scared too…they were the problem too….

  128. 378

    RE: Blurtman @ 361
    Good Question Blurtman

    Scientists and theorists are forced into doing a lion’s share brainless administrative work and having inexperienced management dictating/limiting their brain development…I’ve cast this all away retired. I’ve never been this happy or smarter away from the false “look busy” at the job. 70% of what I do now for my private life I used to do at work, because it’s official duty. Period.

    Retire early Blurtman, you’ll agree with me…your IQ won’t go down, it will go up if you read more and throw that iPhone in the trash. I have more time to learn and influence and less time to just play brainless political work games…

    I went through a 6 month adjustment retirement period to settle in today. My manuscript is ready and I have letters to publishers and agents already…didn’t have time for that when I worked.

    Work was holding me back, you too probably. Great question Blurtman and yes, some can’t handle the adjustment period and die or quit…not me. I just learned new ropes and better methods. Toastmasters is my godsend too…

  129. 379

    RE: Nick @ 369
    AMZ Mostly Hires $14/hr Warehouse Workers Too

    They use a stopwatch to measure their bathroom time. They use robots [already developed decades ago] to replace this $14/hr slave labor too. They did build [or mostly buy?] that rocket that took off without a commercial aerospace Space-X fire ball explosion…so what. That’s all old 50 year old space science regurgitated.

    They cut no metal and employ no experienced industrial skilled. Period.

    The folks at Jack in the Box make about the same pay with health benefits and 40 hour weeks now too. Much better job than AMZ slave labor IMO. If you disagree with my blog, show me the working level pay charts at AMZ with numbers and salaries averaged in writing. Your allegations/assumptions hold no water without proof.

  130. 380

    RE: pfft @ 370
    Yes Pfft

    Excellent Blog. The smart billionaires don’t waste their time on brainless administrative tasks, they just direct their money. Profit and brains doesn’t come from administrative and/or “look busy with an iPhone” jobs at work…excessive iPhone use causes actual physiological horrifying “horns to sprout” too, depression too:

    https://www.foxnews.com/transcript/kids-are-growing-horns-from-too-much-phone-use

    Its not how much time you waste getting anything done….its how much money you make [with less work time] being smart.

  131. 381
    Jeff says:

    RE: Deerhawke @ 371

    Thanks for the first hand insights Deerhawk! Certainly sounds like good news for Amazon, but not too bad for HD either.

    I have to admit that along with Erik, you’re another of my favorites among the cast of characters I’ve been following on SB for the last 10 months. It’s refreshing seeing folks of different political persuasion regarding each other with general respect as you two mostly have. Maybe it’s just because you’re both “bubble heads”, but nice to see regardless.

    You also remind me of some aspects of my dad, in that he was a big time do-it-yourselves, and I had the good wherewithal and luck to absorb and expand upon that characteristic for myself. I recall you relating once here that your kids don’t know one end of a hammer from the other. That must be a bit frustrating, but it sounds like you did a lot right as a parent and have raised them to be fantastic young adults.

    I’m really happy I waited till I was in my 40s to have children, and just this morning my 3yo daughter helped me assemble a shelf, and plant veggies in our greenhouse. I figure that teaching her some farming skills may come in handy in a possible future of limited resources. Or maybe she’ll take what she learns on our 3 acre hobby farm here in Sedro-Woolley and figure out how to build robots that farm better than humans, scary as that sounds!

    https://m.youtube.com/watch?v=sUrPlpjFTFA

  132. 382
    TheBenBernank says:

    RE: softwarengineer @ 378 – You’re not a fan of iPhones are you lol

  133. 383
    TheBenBernank says:

    WSJ published an article stating 1/4 of FHA loans exceed a DTI of 50%. Roughly 1/4 of loans originated were FHA last year.

    Seems like a fairly non-trivial volume of loans in a precarious situation, no? Is that enough to tip an economy into another down spiral? Or is that within reasonable bounds? Seems sort of iffy…

  134. 384
    Joe says:

    RE: Erik @ 341

    Erik, it’s actually the opposite. I look at macro indicators and price trends in the overall market. I supplement that with talks with realtors and visits to open houses to watch acrivity on the ground. I’m bearish on Seattle real estate because prices have moved up at a fast pace for too long. There is no such thing as a plateau after an event like that. Plus, the economy is slowing fast. Job growth has stalled. China money is drying up. And price trend has been consistently down for 12 months. All this says only two things to me. Sell or don’t buy.

    It’s one thing to see price declines in a normal market. These price declines usually end quickly. It’s quite another thing to see price declines after an extended period of panic buying, combined with an everything bubble.

  135. 385
    Joe says:

    I vividly recall my neighbor in the last bubble. His family had purchased a beautiful upscale house. Prices had risen fast, so they had plenty of home equity, which was tapped via home equity loan. They both had well paying professional jobs. The Cadillac Escalade showed up in their driveway one day, followed by a new boat. Kids were attending an expensive private school. Living the dream.

    Fast forward four years. The house is on the block via short sale. Divorce occured, largely due to financial issues. Escalade traded in for a Neon. Boat sold. Kids in public school, having to work part time for money.

    I was reminded of these events last week when speaking with a old plumber. He said his son just bought a $30 Harley and an $80k truck. He said “he must be doing well”.

  136. 386
    David says:

    I dumped $20k into Apple over the weekend and it executed at market open this morning.

    I just visited the Apple store at U Village over the weekend and camped out for a while watching sales activity. People were buying non-stop. The Microsoft store directly across the walkway? Nothing sold.

    Apple has low debt and good revenue growth.

    If you look at companies like Home Depot & Lowes (and most companies) they have HUUUUGE debt loads. Remember, shareholder equity is also debt. They took money from shareholders to cover short and long-term debts. Then they have piled on even more humongous debt.

    There is huge corporate debt out there.

  137. 387
    N says:

    @ Erik 341 – Your probably more in touch than I am, but I didn’t see where Tim made any comments suggesting a price increase over the next 12 months. FWIW, Zillow has prices falling (in my area of West Seattle, 5% in the next 12 months).

    In this post his comments are more along the lines of the trend favoring buyers to interesting trend (3 months of YOY declining prices). I’m trying figure out when to buy in the near to medium term, I guess time will tell.

  138. 388
    Jeff says:

    RE: David @ 386

    Glad I’m not the only one who noticed HD’s debt burden. Corporate buybacks might very well be the catalyst that brings everything else down, but I may be on a fools errand trying to short some of these fools, as they may be able to pump up their stock prices through borrowing by purchasing more of their own shares for a time to come. At the moment, Home Depot appears to have less assets than liabilities, just like the average American!

    Interesting report out of Marketwatch today: Shares of Home Depot Inc. HD, -1.81% were exacting a roughly 25-point toll on the Dow, with the home-improvement retailer’s stock down 1.8% on the day.” No reason I could find behind this dip, so I wonder if me bringing it up here on Seattle Bubble may have cost the dow 25 points today?! Doubt it, but fun to imagine, and it would be neat if Seattle Bubble really had that kind of influence.

  139. 389
    David says:

    RE: Jeff @ 388 – I’ve never understood ‘shorting’ stocks. Why would I invest in market behavior instead of good companies?

    Some debt is ok. I’ve owned companies with ZERO debt that would be terrible stock investments. They were good for me as an owner, but not as a stockholder. I’ve also never started a company with debt.

    I probably do not have a good credit rating since I NEVER allow debt. Which means I do not let credit rating agencies monetize me and sell me as a product.

    Debt steals your power.

    That being said, buying a house on debt is ok as long as you concentrate on getting rid of that debt and pile into your 401k plan if the employer matches thereby beating the spread between house-loan interest rates and the expected return on stocks.

    Paying the house loan off might still be a better idea since you get tax-free capital gains on a house up to a high point.

  140. 390
    Matt P says:

    By David @ 386:

    I dumped $20k into Apple over the weekend and it executed at market open this morning.

    I just visited the Apple store at U Village over the weekend and camped out for a while watching sales activity. People were buying non-stop. The Microsoft store directly across the walkway? Nothing sold.

    Apple has low debt and good revenue growth.

    If you look at companies like Home Depot & Lowes (and most companies) they have HUUUUGE debt loads. Remember, shareholder equity is also debt. They took money from shareholders to cover short and long-term debts. Then they have piled on even more humongous debt.

    There is huge corporate debt out there.

    Shareholder equity debt is good debt actually because there are no terms. The worst debt is when companies take out loans to buy back shares which has been happening a lot lately.

  141. 391
    David says:

    RE: Matt P @ 390 – Borrowing money for buybacks? I hope I’m not invested in a company doing that.

    I research NO DEBT companies all the time and see if I like the business. Because no debt does not mean it is a good business. I owned two boat companies – I know what that means! Started both with NO debt. One with NO invested capital. I sold it for a 200,000,000% gain.

  142. 392
    Jeff says:

    RE: David @ 391

    I hate to break it to you, but Apple is definitely one of the corporations borrowing massive amounts to buy their own shares. In fact, they were one of the first ones doing this since buybacks increased over the last decade or more. They were even doing this under Steve Jobs and you could say they taught many other corporation how to do it by example. Also, didn’t you just buy $20k worth based on your observations of market behavior this weekend?

  143. 393
    Eastsider says:

    By David @ 386:

    I just visited the Apple store at U Village over the weekend and camped out for a while watching sales activity. People were buying non-stop.

    Maybe you missed this report. LOL.

    Samsung asks Apple for compensation on missed OLED order minimums
    https://appleinsider.com/articles/19/06/21/samsung-asks-apple-for-compensation-on-missed-oled-order-minimums
    Samsung Display is seeking a penalty fee for unfilled contracts, which has produced 50% less business than expected

  144. 394
    Blurtman says:

    RE: softwarengineer @ 378 – I recently had dinner with several retired gents who were significantly older than me. They all seemed happy. The one employed fellow at the table, not so much (not me).

    It was fun to talk with them. They all seemed quite alert and functional – age range 70’s to 80’s – and having a blast being retired. A few had pensions from existing, still solid companies.

    Quite an encouraging experience. Oh yeah, they all seemed to recognize the importance of exercise.

  145. 395
    don says:

    RE: Blurtman @ 394

    Excercise for sure.
    And buddy network. It’s hard to overestimate the benefit of that. The activity that brings you together is not nearly as important as the fact you do something together.

    @Jeff,
    I once thought I should short Krispy Kreme back at the end of the dot com bust. Sure glad I didn;t the pos stayed aloft for a couple years iirc. Hard to figure the outcomes sometimes.

  146. 396
    Sfrz says:

    RE: pfft @ 373 – +1!!

  147. 397
    David says:

    By Jeff @ 392:

    RE: David @ 391

    I hate to break it to you, but Apple is definitely one of the corporations borrowing massive amounts to buy their own shares. In fact, they were one of the first ones doing this since buybacks increased over the last decade or more. They were even doing this under Steve Jobs and you could say they taught many other corporation how to do it by example. Also, didn’t you just buy $20k worth based on your observations of market behavior this weekend?

    That may be, BUT the difference is that Apple has so much investable CASH to use that the spread between the loans and invested capital makes sense. Same goes for Berkshire Hathaway when it comes to cash, but Berkshire has just been sitting on it in short-term bonds mostly.

  148. 398
    David says:

    Home Depot debt:

    Apple debt:

  149. 399
    Any says:

    Apple is going to drop 20%+ if Trump enacts his last round of tariffs. Great company whose mountains of profit are tied way too much to China considering the political climate today.

  150. 400
    dw8928@outlook.com says:

    RE: Any @ 398 – Apple is already building out in India.

  151. 401
    Jeff says:

    RE: dw8928@outlook.com @ 399 –

    Apple is “considering” moving 15-30% of their production to India, which is estimated to take at least 18 months if they decide to do so. This is a good example of why a hot trade war with China could be challenging (to put it softly) to US businesses and economy. I wish Home Depot was as exposed to China as Apple! The following link is from Mac Rumors, which I recommend as essential reading for any Apple investor or product enthusiast.

    https://www.macrumors.com/2019/06/19/apple-15-30-pct-production-out-of-china-report/

  152. 402
    Erik says:

    RE: N @ 387
    I just bought, but prices could go down more. It does seem like the economy has been so good for so long that something has to give. I believe that Trump knows how to continue making the economy do well, so I’m not too worried about a big recession around the corner. From a purely economic standpoint, he seems to be making all the right moves. The guy understands economics.

    2024 was my original guess of when the next major crash will happen based on the 18 year cycle. That happens to be the end of Trump’s 2nd term on 2024. It could end like it did for George W. Bush when he left office. Walking out of his 2nd term while the economy was crashing all around him. I remember watching him on tv just acknowledging all of the problems with the economy. Right as the recession began to gain speed he left office.

  153. 403
    David says:

    By Jeff @ 400:

    RE: dw8928@outlook.com @ 399 –

    Apple is “considering” moving 15-30% of their production to India, which is estimated to take at least 18 months if they decide to do so. This is a good example of why a hot trade war with China could be challenging (to put it softly) to US businesses and economy. I wish Home Depot was as exposed to China as Apple! The following link is from Mac Rumors, which I recommend as essential reading for any Apple investor or product enthusiast.

    https://www.macrumors.com/2019/06/19/apple-15-30-pct-production-out-of-china-report/

    Hot? It is a hot trade war. There are 25% duties on imported boats right now. The Chinese boat market is dead. I sold to the Chinese at a good time. But I was reading the papers in China and you could tell the Chinese were up to no good. It isn’t Trump’s fault.

    I advised those I knew with business interests in China to get out while they could.

    Then China began harassing and kicking foreigners (this means Caucasian people) out of the country. There has been a mass exodus from China of foreigners over the past 18 months. I really laugh when I hear Asian people describe themselves as Minority. Native Chinese even try to pull that Bullsh!t on me here in the USA.

    Basically, I tell them to go f#ck a monkey – right to their face. The world is predominantly Asian which a single trip to the mono-ethnic Chinese interior will permanently convince one of. Fortunately, actual Chinese visitors tend to not suffer the identity politics ruse.

  154. 404
    Eastsider says:

    S&P Case-Shiller Home Price Index for April is out. Seattle has a net gain of 0% YOY. The April index is based on a three month moving average from February-April. I expect next month’s release will show negative gain in March through May.

    ANNUAL HOME PRICE GAINS CONTINUE TO FALL ACCORDING TO S&P CORELOGIC CASE-SHILLER INDEX
    https://my.spindices.com/documents/indexnews/announcements/20190625-948971/948971_cshomeprice-release-0625.pdf
    Seattle is a notable exception, where the YOY change has decreased from 13.1% in April 2018 to 0.0% in April 2019.

  155. 405

    RE: TheBenBernank @ 382
    I’d Certainly Own One If I was a Contractor or Realtor

    They’re the lifeline to customers then….but retired in my own home office with a working landline…LOL…its useless junk. I do have an $8/mo AT&T 3G [$19.99 ea at Walmart] Go Phone for travel and walkie talkie, but use it infrequently. I store phone numbers in it for parties and meetings too…LOL….even my Dodge Charger has two batteries for WIFI and Bluetooth that I never use….but I know you folks salivate over those options so I buy for resell value.

  156. 406

    RE: Blurtman @ 394
    LOL….I Lost All My Friends That Still Work

    They gotta work and I don’t…a lion’s share hate me now [jealous?]. I made new retired friends and the Milenials get along with me too, we’re fighting the same establishment inflation dragon.

    I’m mowing the lawn and weeding today; tomorrow is bathroom cleaning and vacuuming for my Kansas City kids Seattle vacation through the 4th….we all like Casino Buffets and local restaurants that aren’t chains…I hear too much aerobics for men reduces Testosterone [muscle mass and libido folks]…so just lift weights or become a “bony stick man with a female high voice” riding bikes too much [they go bald faster too with too much aerobics?]…LOL. Women’s hearts thrive on aerobics, so ignore my advice if you’re a women. BTW, I still have 16″ arms “nd can easily lift 180 lbs with my calf muscles [3 cycles of 15].

    Willie Nelson is like 84 and is bright as ever [knows 1000s of songs and all the lyrics]…he has a black belt in karate too.

  157. 407

    RE: Erik @ 401
    New Homes Sales Dropping Fast Erik

    Higher interest rates and higher down payments, especially west coast..

    https://www.apnews.com/debc52b5c76d49a783ad253049574e37

    There’s lots of over-sized big ones up here in Kent for sale, in the $600s…grab ’em up Erik…LOL. Get out of that dinky condo. Actually, your Camino Island plan sounds good.

  158. 408
  159. 409
    N says:

    https://www.seattletimes.com/business/real-estate/seattle-is-a-notable-exception-for-stalled-home-prices/

    “Year-over-year price gains remain positive in most cities, though at diminishing rates of change. Seattle is a notable exception, where the year-over-year change has decreased from 13.1% in April 2018 to 0.0% in April 2019,” said Philip Murphy, managing director at S & P Dow Jones Indices, in a statement.

    In March, Seattle’s 12-month change had been 1.6%.

  160. 410
    kenmorem says:

    By David @ 389:

    RE: Jeff @ 388 – Paying the house loan off might still be a better idea since you get tax-free capital gains on a house up to a high point.

    i don’t think you understand how capital gains work when selling a home.

  161. 411
    David says:

    RE: kenmorem @ 408 – When you sell your home, the capital gains on the sale are exempt from capital gains tax. Based on the Taxpayer Relief Act of 1997, if you are single, you will pay no capital gains tax on the first $250,000 you make when you sell your home. Married couples enjoy a $500,000 exemption. There are, however, some restrictions on this exemption to include that the residence must be your primary residence and you have not sold another home within two years.

  162. 412
    Happily homeless says:

    RE: kenmorem @ 408

    I’m really glad someone else pointed this out. Real Estate people have some interesting accounting terms/ideas that you don’t hear in other areas.

    Of course the capital gain (for tax purposes) would be the selling price minus purchase price plus capital improvements. If you financed the property with a zero down, interest only loan or paid cash in full at purchase it wouldn’t make a bit of difference.

    Can someone please explain to me the significance of “building equity” by paying down a loan? If the price of the asset goes up, I get it. But if I add $1,000 extra principle payment onto my mortgage payment I built “equity” but didn’t I just take it from the “equity” in my checkbook?

    Is real estate equity worth more than “equity” in cash, bonds, stocks, commondities? (I’m not asking what will perform better in the future, but rather on a snap shot point in time balance sheet basis)

  163. 413
    Ardell DellaLoggia says:

    RE: David @ 409

    I think he means that has nothing to do with your mortgage balance at time of sale. Gain or loss has nothing to do with paying off your mortgage or not.

  164. 414
    kenmorem says:

    By Ardell DellaLoggia @ 410:

    RE: David @ 409

    I think he means that has nothing to do with your mortgage balance at time of sale. Gain or loss has nothing to do with paying off your mortgage or not.

    DING DING DING.

  165. 415
    David says:

    RE: Ardell DellaLoggia @ 410 – No kidding. If you don’t have enough money to pay off the original mortgage taken out, there is NO capital gain. A purchase money interest generally is superior to all other interests – sans tax liens.

  166. 416
    Steve says:

    RE: Jeff @ 392 – One important item to keep into consideration is that Apple has $246B in cash. They can easily pay back all of their debt. I believe I read is they do it for tax purposes since most of that cash is offshore. They take a loan to buy back, then pay it back with offshore cash. This way they don’t have to bring the cash to the US and get taxed. But to the original point, there are a lot of companies that are taking these loans but don’t have the cash to pay off the debt.

  167. 417
    BacktoBasics says:

    https://www.cnn.com/2019/06/25/tech/apple-seattle-jobs/index.html

    Apple is add 2000 more positions in Seattle south lake union area. These are high paying jobs. This is another boost to Seattle housing market. Good for Seattle and surround areas.

  168. 418
    Blurtman says:

    RE: David @ 369
    $115,000 in 1985 is equivalent in purchasing power to about $273,704.28 in 2019.

    $115,000 kept in a hole in the ground in 1985 is worth $115,000 today (nominal value), or $48,318.57 in 1985 dollars.

    $115,000 invested in your former home in 1985 is worth about $399,471 today (Zestimate).

    So you’ve beaten inflation by $399,471-$273,704 = $125,767, that is, you are that much farther ahead than if you invested in an inflation matching investment. The home is worth $167,842.34 in 1985 dollars.

    $115,00 invested in VFINX in Jan 1985 is worth $1,489,879 today.

    So you’ve crushed inflation by $1,489,879-$273,704=$1,216,175. Your VFINX investment is worth $625,989.80 in 1985 dollars.

    You can do the percentages and calculate the return.

  169. 419
    kenmorem says:

    By David @ 412:

    RE: Ardell DellaLoggia @ 410 – No kidding. If you don’t have enough money to pay off the original mortgage taken out, there is NO capital gain. A purchase money interest generally is superior to all other interests – sans tax liens.

    again, you’re missing the point:
    gain = sales price – basis price
    mortgage = irrelevant

    if you bought for $200k, and sold for $500k, your gain is $300k (tax free)
    if you sold for $900k, your gain is $700k and $200k is taxable (married, filed jointly)

    if you have $0 on your mortgage, sale example 1 is that you walk away with $300k
    if you have $300k on your mortgage, sale example 1 is that you walk away with $0
    if you have $600k on your mortgage, sale example 1 is that you walk away with -$300k and you’re SOL.

    mortgage does not matter as it pertains to IRS and determination of capital gains.

  170. 420
    David says:

    RE: kenmorem @ 415 – Are you borrowing more money than the house is worth? Are banks doing negative equity loans again?

    If you think in terms of negative equity then what you are saying makes sense. I do not think of assets that way.

    Bottom line regardless of the varying circumstances, you get capital gains of $250k on a house free of cap gains tax.

  171. 421
    David says:

    RE: kenmorem @ 415RE: kenmorem @ 415 – Also exclude it from income in general.

  172. 422
    whatsmyname says:

    By David @ 412:

    RE: Ardell DellaLoggia @ 410 – No kidding. If you don’t have enough money to pay off the original mortgage taken out, there is NO capital gain. A purchase money interest generally is superior to all other interests – sans tax liens.

    It was cute of you to introduce “original” to the mortgage, thereby turning this into the unspoken argument that if you sell it for less than you bought it, there is no gain. But that is the inferred argument, and the priority of the purchase mortgage has nothing to do with how the IRS will consider this a gain or loss.

  173. 423
    whatsmyname says:

    By kenmorem @ 415:

    if you bought for $200k, and sold for $500k, your gain is $300k (tax free)

    if you have $0 on your mortgage, sale example 1 is that you walk away with $300k
    if you have $300k on your mortgage, sale example 1 is that you walk away with $0
    if you have $600k on your mortgage, sale example 1 is that you walk away with -$300k and you’re SOL.

    mortgage does not matter as it pertains to IRS and determination of capital gains.

    You are making the right point, and I know you are looking at “what did I make on my $200K”. I think it is also important to consider the totality of the cash flow, so I want to show this alternate view.

    If you have $0 mortgage, you have a $300k gain, but you walk away with $500K
    If you have $300K mortgage, you have a $300K gain, but you walk away with $200K
    If you have $600K mortgage, you have a $300K gain, but to get the deal done you also have to bring $100K or possibly get $100K debt forgiveness, which can be taxable, (or some combination of the 2).

  174. 424
    S-Crow says:

    Speaking of the IRS:

    The IRS can thank housing prices for getting paid. My signature is on several checks to the IRS from refi proceeds. Seems like the last two months in particular have been good to auto finance companies getting paid off. Oh, and Sallie Mae/Navient.

    From an escrow perspective, I cannot emphasize this more, the .Gov cannot allow prices to get hammered. There is WAY too much housing leverage sloshing around and consumer debt loads at all time highs.

    The problem is that too many people are brainwashed into thinking consolidating debt and putting it all on the house is getting rid of it. Nope you just moved it. Might as well put on the vanity plates: REFI2019 on said toys/cars/Tonka Toy Trucks needing a ladder to open the door/boats/5th wheels sitting in the driveway. (P.S for all you folks living in Ballard come on up to Snohomish County where you have actual driveways to view the driveway bling.

    I’m not the only escrow office seeing this. And I’m a small fry. Think about this: it’s going on in every Title & Escrow office in every County in every State across the USA. Now do people have an idea?

  175. 425
    Eastsider says:

    By kenmorem @ 408:

    By David @ 389:

    RE: Jeff @ 388 – Paying the house loan off might still be a better idea since you get tax-free capital gains on a house up to a high point.

    i don’t think you understand how capital gains work when selling a home.

    David’s point about paying the house loan off is still valid. The payment gives you the highest tax free interests than you can get elsewhere.

  176. 426
    Jeff says:

    RE: Eastsider @ 421

    I don’t know why this quote of David’s recommending I pay off my mortgage keeps coming up. Have you all forgotten that I have no debt of any kind? That means credit card, auto, business, etc. And even mortgage debt, which a lot of folks don’t seem to think of as debt. That’s why $100,000 of my investment account is “funny money” which I get to play around with silly ideas like shorting Home Depot and so forth, without suffering panic attacks.

  177. 427
    Eastsider says:

    RE: Jeff @ 422 – I was referring to his general recommendation about paying off the house loan, not your specific situation.

  178. 428
    David says:

    RE: Jeff @ 422 – I bought Southwest Airlines (LUV) today. Apple yesterday. I’m selling a house soon and have to dispose of the $200k in even more cash. So maybe even more LUV stock. I have too much cash. I have no debt also.

    And I will be either buying or building a house in Florida later this year.

  179. 429
    Jeff says:

    RE: David @ 424

    Do you have any government bonds in your portfolio?

  180. 430

    AMZ Movies are more Cable Channel Crud

    Unknown cheap actors, grade school scripts and “B” movie sets….its tough when Game of Thrones is the best thing out there….even Shameless and Weeds looks good now….LOL

    https://www.hollywoodreporter.com/news/amazon-studios-film-division-tumult-string-box-office-flops-1220968

  181. 431

    RE: N @ 406
    Even Medina Where Gates and Bezos Live Needs More HORRIFYING Taxes Added In To Keep Out of Bankruptcy

    https://www.cnbc.com/2019/06/25/medina-wash-home-to-jeff-bezos-and-bill-gates-running-out-of-money.html

    Imagine that, taxes must go up even on $100B rich elite….LOL

  182. 432

    RE: S-Crow @ 420
    Great Blog From Your Periscope

    My mouth is shaped in an “O” just reading it.

    Folks love 3.99% 30 year loan refinancing and extending debt another 15-20 years…the fun goes on and on. And speaking from a debt free retiree’s perspective who paid off his home mortgage principle in 2009, I can attest….the last long-term retirement goal ya want is any 2nd mortgage adding to the loan length….especially with 1% CDs, etc. ,etc…make your retirement plans at 0% saving interest. Now, any 2nd mortgage turns into a retiree’s nightmare…

    The establishment hates financial talk like this. But money in the mattress or in a locked box 401K…about the same thing now….the real interest rate is the 0% interest cash stuffed in the mattress every month…think about it. That’s how I planned my retirement and gave plenty of “elbow room” for COLA gobbling [Property Tax food, insurance, Cable, iPhone, etc,etc…]…your bank is a 0% mattress….LOL

  183. 433
    Lulu says:

    RE: David @ 424

    Equity is as bubblish as housing.

  184. 434
    Lulu says:

    RE: softwarengineer @ 427

    Local government over spending is the problem.

  185. 435
    Justme says:

    RE: S-Crow @ 420

    420? What are these serial-refinancers smoking, I wonder?

  186. 436
    kenmorem says:

    By Justme @ 431:

    RE: S-Crow @ 420

    420? What are these serial-refinancers smoking, I wonder?

    many very financial savvy folks will carry a mortgage indefinitely at low rates as they believe their investment into low cost index funds, over the long term, will more than offset the debt carried by holding the mortgage.

  187. 437
    biliruben says:

    The hundreds of billions of dollars in tax-breaks we lavish on homeowners and professional RE investors, as well as the implicit federal guarantee supporting the GSE’s, keeping mortgage rates low, makes it a no-brainer to use debt financing to your advantage. If you own RE without using debt financing, you are burning cash in a bonfire. There are reasons to own a home without a mortgage, if you are conservative, fundamentally risk averse and/or retired or near-retired. But if you are at all savvy and can stand even the most minuscule amount of risk, the system is basically built to give you all the perks and advantages, and you should take advantage of them. Renters are getting absolutely jobbed, as a class, in our country.

  188. 438
    biliruben says:

    That is not to say that you should be taking out so much debt that the only way to pay the mortgage or the 2nd is with another 2nd. Gotta be able to service the debt, or that’s a huge blunder.

  189. 439
    Justme says:

    RE: kenmorem @ 432

    >>many very financial savvy folks will carry a mortgage indefinitely at low rates as they believe their investment into low cost index funds, over the long term, will more than offset the debt carried by holding the mortgage.

    That would have worked in 2009. Not in 2019. Price is everything. Both in the stock market and in housing.

  190. 440
    David says:

    By biliruben @ 433:

    The hundreds of billions of dollars in tax-breaks we lavish on homeowners and professional RE investors, as well as the implicit federal guarantee supporting the GSE’s, keeping mortgage rates low, makes it a no-brainer to use debt financing to your advantage. If you own RE without using debt financing, you are burning cash in a bonfire. There are reasons to own a home without a mortgage, if you are conservative, fundamentally risk averse and/or retired or near-retired. But if you are at all savvy and can stand even the most minuscule amount of risk, the system is basically built to give you all the perks and advantages, and you should take advantage of them. Renters are getting absolutely jobbed, as a class, in our country.

    I just received notice from Ally bank that they are lowering interest DOWN to 2.1% from 2.2%. Marcus.com pays me 2.25% – I’m curious to see what happens.

    Rates are going down. Assuming the Fed lowers rates in July, it will be interesting to see what the housing market does.

    I don’t think in Seattle it is unwise to pay cash for houses if you can still earn ~7% on the investment. You get the gains tax free if you can hold out for 2 years and offset the 1.78% excise theft, and property taxes.

  191. 441
    Justme says:

    RE: David @ 424

    Note what David is telling y’all here: He is selling in Seattle and getting the hell out. Another bubble-monger getting out of the game, after years if preaching to the renters that they should buy Buy BUY!

  192. 442
    David says:

    By Justme @ 437:

    RE: David @ 424

    Note what David is telling y’all here: He is selling in Seattle and getting the hell out. Another bubble-monger getting out of the game, after years if preaching to the renters that they should buy Buy BUY!

    No, I am moving to Florida primarily. I do NOT expect Florida reals estate to have the same reliably upward dynamic as Seattle. Florida is flat with much more buildable land and therefore it is easier to suddenly expand supply.

    As for Seattle, to quote Charlie Munger: “I fear two things; architects and hills.” Seattle’s history is one of fighting hills.

    Course, the new hill in Seattle is the terrible mindset of the ‘progressives’ who live here.

  193. 443
    biliruben says:

    Yeah, that progressive cancer that chooses to blow off the homeless problem to instead suck Bezos’ tiny kazoo.

    Or to fight upzoning single family zones tooth and nail in order to prop up their home values.

    Doesn’t sound very progressive to me.

  194. 444

    RE: David @ 436

    I believe the Governor signed a change to the 1.78% excise tax about a month ago, effective January of 2020.

    I think it’s $500k or less going down to 1.6%, $500k to $1.5M staying at 1.78% , 3.25% on that portion over $1.5M up to 3M and 3% for amounts over 3M. That includes the .50 that is currently in the 1.78.

    It’s SB 5998 if you want to look it up.

  195. 445
    David says:

    RE: Ardell DellaLoggia @ 440 – That is nice, but I would prefer 0% because the State has done nothing to deserve that much of my savings.

    My house was paid from many years of saving. They want to reach back in time and steal that money. What has WA done to deserve that? Answer: Nothing.

  196. 446
    biliruben says:

    They will bulldozing the road to your house, ripping down the power lines and closing your local schools tomorrow. And the cops all just got fired, so don’t bother calling.

  197. 447
    David says:

    RE: biliruben @ 442 – This is called property tax. More basic education tomorrow.

  198. 448
    David says:

    RE: biliruben @ 442 – Seattle also charges home owners for a train system that I cannot use. So property owners are forced to pay in perpetuity for a product that the vast majority of them cannot use. Meanwhile, the people who use that system don’t have to pay that tax.

    It is con.

  199. 449
    Blake says:

    Must read from economist Stephen Roach, formerly with Morgan Stanley. Read the whole piece to understand ALL the policy failures leading to the sh!tstorm ahead!
    https://www.project-syndicate.org/commentary/trump-art-of-the-spin-by-stephen-s-roach-2019-06
    …There is nothing remarkable about a US president’s penchant for political spin. What is glaringly different this time is the lack of any pushback from those who know better. The National Economic Council, established in the early 1990s as an “honest broker” in the executive branch to convene and coordinate debate on key policy issues, is now basically dysfunctional. The NEC’s current head, Larry Kudlow, a long-standing advocate of free trade, is squirming to defend Trump’s tariffs and Fed bashing. The Republican Party, long a champion of trade liberalization, is equally complicit.

    Trump’s vindictive bluster has steamrolled economic-policy deliberations – ignoring the lessons of history, rejecting the analytics of modern economics, and undermining the institutional integrity of the policymaking process. Policy blunders of epic proportion have become the rule, not the exception. It won’t be nearly as easy to spin the looming consequences.

  200. 450
    Eastsider says:

    Housing news from our neighbor to the north –

    As sales stall, Metro Vancouver caught between a buyer’s and seller’s market
    https://globalnews.ca/news/5418388/as-sales-stall-metro-vancouver-caught-between-a-buyers-and-sellers-market/

    Back in 2016, Vancouver’s white-hot real estate market looked as if it would never cool down.

    Three years later, industry experts say times have changed.

    “Prices now are back to where they were around, say, mid-2015,” Brendon Ogmundson of the B.C. Real Estate Association said.

  201. 451
    David says:

    RE: Blake @ 445 – If China was a person in the USA, they would be prosecuted. Think of a bank robber – they have a lot of money they can spend theoretically, but that doesn’t mean you reward them instead of sending them to prison.

    You also take the money they stole and make them pay restitution.

  202. 452
    Justme says:

    Jay Inslee did a good job, but Tulsi Gabbard is the best candidate.

  203. 453
    Justme says:

    RE: Justme @ 448

    With the exception of Bernie Sanders , of course. Bernie and Tulsi 2020!

    (I’m talking democratic party candidate debates)

  204. 454
    David says:

    RE: Justme @ 449 – Reading what the Dems said has convinced me more than ever that other countries need nuclear weapons to protect themselves from American culture.

    Stock market drops 40% if Bernie wins. Maybe more. And stays down.

  205. 455
  206. 456
    Justme says:

    Midweek update

    It’s Wednesday night, and this week, it looks like the amount of King County (Seattle and suburbs) Single-Family Home (SFH) active listings are not having the usual after-weekend-dip (as caused by offers being made and accepted). The dip is VERY small this week, indicating that sales are slow.

    SFH stats, as of the last hour or so (wednesday night):

    4648 active listings
    518 price reductions last 7 days
    566 closed sales last 7 days
    679 new listings last 7 days
    1404 pendings with < 1mo DOM

    #housingbubble #buyerstrike #bustthebubble #sellingpanic #bubblesarebadforchildren

  207. 457
    whatsmyname says:

    RE: Justme @ 452 – Cool. I thought you were using the redfin inventory that Tim carries on the main page. But you must have found a better source because that one only has 4606. What are you using these days?

  208. 458
    QA Observer says:

    Welp, sounds like a rogue Amazonian got fired from HR today. It happens right? Except right after this happened he/she posted on the dark web “blind” that he/she was going to kill everyone in HR.
    Umm, not good! So Blind moderators called Amazon and the resultant threat ended with a complete lockdown. Said psycho is now in jail.

    Real estate price should go up now. Buy now or be priced out forever.

  209. 459
    biliruben says:

    By David @ 443:

    RE: biliruben @ 442 – This is called property tax. More basic education tomorrow.

    RE: David @ 443

    Most of the money currently collected via the state REET goes to the State General fund, with bits and pieces going to other accounts: A little over 1 percent of the money collected goes to cover counties’ administrative costs, 2 percent goes to the public works assistance account, and a little over 4 percent goes to the education legacy account.

    The bill slightly increases the contributions to the aforementioned accounts and directs 16.7 percent of the contributions to the motor vehicle fund. The motor vehicle fund, which backs highway-related projects like culvert removal, isn’t currently a destination for REET revenue.

  210. 460
  211. 461
    David says:

    RE: biliruben @ 455 – I’ll be voting FOR Tim Eyman’s bill to make car tabs $35 too.

    https://twitter.com/realDonaldTrump/status/1144177713869017089

  212. 462

    RE: biliruben @ 439
    Yes billruben Our Seattle Government is Tax and Waste IMO

    Especially if you compare it too other common sense areas…Medina going bankrupt with Gates and Bezos mansions included. We are in trouble, Medina spends way too much on local government and manufacturing is a dinosaur now.

    Its a hideous cycle and its out of control IMO too.

  213. 463

    RE: David @ 438
    My Daughter From Kansas City Pays $2.40/gal for Gas

    And $492 every six month for property tax payments creating public schools better than we have for like four times the Property Tax. She liked seeing Mt Ranier again, but is glad she got the “Hades out of Seattle area”…especially when I told her the homelessness crisis includes folks with full time jobs but can’t afford the Seattle apartment rent. Her best friend in Renton illegally sublets her $1500-2000/mo apartment, but her illegal sublet bunk buddies all leave anyway sticking her with the whole rent bill…
    They did have a Kansas City tornado red zone warning and had to get to a public waiting shelter for a couple hours in safety until the funnels went through….the floods didn’t affect Kansas City either.

  214. 464
    N says:

    Justme – My redfin app has been blowing up with pendings But also a lot of new listings for early in the week. Lot of properties that weren’t moving going pending…school’s out this week in Seattle.

  215. 465
    Joe says:

    RE: Justme @ 452

    We are headed to inventory over 6,000. A simple extrapolation of the long term trend tells you that. Some of the inventory holders have to sell, and they will be dropping prices for those who are just testing the market. That’s the thing about housing prices. Your house value declines whether you want to sell or not. Your neighbors have more say in your home value than you do.

  216. 466
    Joe says:

    RE: N @ 459

    Are you suggesting we are seeing the beginning of a seller panic? If you say pendings are blowing out, you are also saying listings are growing even quicker, because inventory is rising. The downtrend may be accelerating now.

  217. 467
    Justme says:

    RE: N @ 459

    King County SFH listings peaked at 4688 last Friday night, but was still at 4648 last night (wed), and was still at 4600 this (thu) morning. It looks to me that there was quite a bit of simultaneous activity in pendings and new listings last night, and that the posting of new listings has started early this particular week.

    It is remarkable that new listings have been keeping up and how small the dip has been from 4688 to 4600 from Fri(17:00) peak to Wed(22:00), with Sun-Wed typically being days when many offers are accepted and listing counts dip. Must be a considerably amount of new product hitting the market so far this week.

    Yeah, school year ending probably has been a factor. A bit late in the year. Catching up on snow days, apparently.

  218. 468
    Justme says:

    RE: Joe @ 461
    RE: Joe @ 460

    The 6000-level for SFH was last seen in late 2011. That would be something. All those bubble-mongers who were always prattling about Duh Inventory Shortage would have to be quiet then, would they not? Of course, there really never was a shortage, as we can see now. There was only a seller strike and a buyer panic. Buyers should never panic, they should strike instead. Much better for them, and it prevents bubbles.

  219. 469
    kenmorem says:

    PSA: website glitch here. it shows that i could delete/edit Joe’s two recent posts.

    anyway, purely anecdotal, but in my neighborhood (kenmore), the 3 houses nearest me were all listed for around 600k and sold for 640k+

  220. 470
    N says:

    @Joe 461 – Certainly not. If anything I am saying that demand picked up substantially…if you like to read into a few days or 1 week of activity that is.

    The post I responded to was alluding to the fact inventory didn’t drop as is often the case early week and I was simply stating unscientifically I had not seen so many pendings since very early in the spring season as I am seeing now. You could, as you have read into it that means inventory is increasing but it’s June, isn’t that normal? I’m hoping the market continues the declining price trend but the last few weeks to me seem to point the other direction, could likely just be seasonality…time will tell.

  221. 471
    JustNoise says:

    Also another week where my inbox is flooded with price decrease emails from redfin and zillow…

  222. 472
    David says:

    Marcus.com dropped their saving rates today as well to 2.15%. Interest rates are going down. Housing sales should tick up. Especially if the Fed drops in July which begins in 3 days.

  223. 473
    Erik says:

    RE: Joe @ 460
    Never extrapolate, only interpolate. That’s like the #1 rule.

  224. 474
    Blurtman says:

    RE: David @ 467 – I have a one year CD from marcus at 2.45%. I’m rich! I’m rich, I tell ya.

  225. 475
    QA Observer says:

    Someone at Yahoo thinks the US housing market is going to tank.

    Beware Bagholders!

    https://finance.yahoo.com/news/real-estate-investor-grant-cardone-us-housing-done-and-isnt-coming-back-215847668.html

  226. 476
    David says:

    By QA Observer @ 470:

    Someone at Yahoo thinks the US housing market is going to tank.

    Beware Bagholders!

    https://finance.yahoo.com/news/real-estate-investor-grant-cardone-us-housing-done-and-isnt-coming-back-215847668.html

    Sophistry in action:

    “Still, Cardone insisted to Yahoo Finance that “real estate is the only place” he’d invest money in right now.”

  227. 477
    David says:

    RE: Blurtman @ 469 – 1 year!! Too long for me. If interest rates go down, stocks should accelerate.

  228. 478
    whatsmyname says:

    By Justme @ 462:

    King County SFH listings peaked at 4688 last Friday night, but was still at 4648 last night (wed), and was still at 4600 this (thu) morning…..

    It is remarkable that new listings have been keeping up and how small the dip has been from 4688 to 4600 from Fri(17:00) peak to Wed(22:00), .

    Don’t people tend to measure a dip from peak to trough? Per Redfin, the low point was 4528 on Tuesday.

    In fact the Redfin history numbers show inventory in the 4500’s all day Monday and Tuesday, and most of Wednesday. Your repeated use of the word “still” might cause some poor fool to think that inventory had never decreased below 4600 instead of being there over two and a half days. I know you wouldn’t want that.

    Also, they don’t show inventory hitting 4648 until today at 11:00. The highest number they show for Wednesday was 4608. Where do you get your numbers? Wouldn’t we all benefit from such access?

  229. 479

    RE: David @ 447
    I Lean Your Way on China David

    Defending a military foe may sound cute to Anarchist High Tech companies that rake in 100s of billions from trade deficits and steal all our manufacturing jobs and while destroying our military “Buy American Parts Only” contract requirement …then we give China college enrollment slots to also steal our laser technology, etc, etc….

  230. 480

    Here’s some RE news. Effective July 1 the statewide forms are being revised, with the most significant change being made to Form 35–the Inspection Contingency. Per Annie Fitzsimmons of the “Legal Hotline:”

    “The Inspection Addendum (and the Pre-Inspection Addendum, Form 35P) now prohibit buyer from delivering a copy of buyer’s inspection report to seller unless seller requests. Any seller request should be in writing so that buyer broker can prove, later, that seller made the request. If buyer’s inspection report is provided to seller without seller requesting it, buyer will be in breach and subject to a potential damages claim from seller.”

    This is an important protection for sellers, who previously could be seriously damaged by receipt of an erroneous or inaccurate inspection report.

    Note: Being in breach presumably means a loss of the buyer’s earnest money, and/or damages, if the sale does not close.

  231. 481

    Investors are now warning

    Real estate is officially dead now…

    https://www.yahoo.com/finance/news/real-estate-investor-grant-cardone-us-housing-done-and-isnt-coming-back-215847668.html

    IMO this article has a point when you look at the ominous graphs. The real estate canary is now dead in the mine cage, 3.7% mortgage interest rates simply don’t matter anymore..

  232. 482
    PerryMason says:

    Why-oh-why does Kary always explain things so incredibly badly?

    Kary is missing the main point, as usual. The point being that a seller that receives an inspection report from one buyer must then provide the report to all other buyers. And seller presumably cannot claim ignorance about faults with the property that have been revealed by said report. THAT is why sellers, and their agents, now will try to prevent, by contractual clause, buyers from sending them a copy of an inspection report.

    Now, if agents/NWMLS get their way with this new clause in the new form, it means figuratively that sellers can put their fingers in their ears and sing la-la-la-la-la i-did-not-hear-that like little petulant children when a potential buyer delivers bad news about the condition of the property.

    I just play a TV lawyer, but it seems I can explain things better than ex-lawyer Kary. By the way, I don’t think Kary does not know what the main point is. He just is incapable of explaining it properly. Maybe this phenomenon is a leftover from his lawyer days, when each bad explanation always leads to one more billable hour when the client comes back to get a proper explanation to the half-assed illogic they were told.

    Here’s a loophole I’d look into: After buyer cancels the contract due to the bad condition of the property, THEN send the inspection report to the seller. Also, maybe start a website where people can post their inspection reports by address.

  233. 483
    Patrick Weber says:

    Speaking of high yield online savings: Wealthfront up to 2.57% APY from 2.51%

    They are a robo-investor, but started offering a cash account this winter.

  234. 484
    David says:

    RE: Kary L. Krismer @ 475 – Can you extrapolate on the underlying motive for this change?

  235. 485

    By David @ 477:

    RE: Kary L. Krismer @ 475 – Can you extrapolate on the underlying motive for this change?

    Receipt of an inspection report requires the seller to figure out what they need to disclose to future buyers if the deal falls through. They need to either fix the items mentioned, determine if they are material and if so disclose them, or somehow prove the inspector was wrong. Given most inspections find between 10 and 30 things wrong with most houses, that puts quite a burden on sellers. Given that the seller generally has no say in who the inspector is, and that inspectors tend to be “jacks of all trades but masters of none” that puts quite a burden on the seller. Also, the buyer’s agent could have sent the inspection report for no other reason than to harm the bargaining position of the seller. The point of allowing the inspection is to allow the buyer to learn of the defects in the house and to then negotiate if necessary, not to harm the interests of the seller.

    Bottom line there is no reason a seller needs to see any portion of an inspection report unless the buyer is requesting time for an additional inspection or the seller requests it.

    Note that the same language is added to Form 35P regarding pre-inspections, but there the inspection is done before a contract is in place, so there are no earnest money provisions and no liquidated damages.

  236. 486
    Jeff says:

    RE: Kary L. Krismer @ 478

    Thanks for providing this detailed example of how lawyers and real estate agents suck so much transparency and honesty out of the process of purchasing real estate in this country. It must be getting hard to be a seller based on your concern for their plight. Buyers pay attention to this.

  237. 487
    David says:

    RE: Kary L. Krismer @ 478 – This was what I suspected. Thank you.

  238. 488
    David says:

    RE: Jeff @ 479 – Buyers play a lot of games that seem somewhat unique to WA. The biggest change I think they need to make is that Buyers must submit the earnest money prior to the inspection.

  239. 489
    David says:

    RE: Jeff @ 479 – Buyers should also be required to pay:

    1) the Excise Tax ( when I buy a car, I pay the tax, not the dealership).
    2) their Agents commission.

  240. 490
    Jeff says:

    RE: David @ 482

    I don’t have an opinion about those two items. We sold a home two and a half years ago, and after the first offer and inspection, some serious rot issues were discovered under the stucco. Even though we had to choose between chopping our price by at least $100k or doing the remediation ourselves, I was happy to have this important information about the house to pass on to the eventual buyer. I’ve been the victim of enough “gotcha” situations in buying property of various kinds with undisclosed defects, I just don’t want to be part of the problem, and I’d rather not go to hell.

  241. 491
  242. 492
    David says:

    If you are looking for something to ‘give’ away in your next house sale, consider giving away the large screen TV.

    Reason: ATSC 3.0 was passed as the new defacto standard for TVs to replace existing ATSC 1.0 (they skipped over ATSC 2.0). ALL (as in every existing TV) will be defunct within 5 years absent a converter box.

    On the upside, you will get tremendous over-the-air transmission quality making it easier to rid yourself of cable TV bills.

  243. 493
    Deerhawke says:

    RE: Kary L. Krismer @ 475

    Thanks for letting us know about this Kary. Interesting change.

    I have mixed feelings about this.

    On the one hand, in the past when I was purchasing a property, I felt that the seller needed to officially be made aware of problems at the property so they could address the issues or change the Form 17 (and the price if necessary). You should not have multiple buyers paying for multiple inspection reports that point out the same problems over and over again.

    On the other hand unscrupulous buyers have been known to use really negative inspections to try to knock down the price with the threat that the information had to be included in an amended Form 17 if the deal fell through.

  244. 494

    By Deerhawke @ 486:

    RE: Kary L. Krismer @ 475

    Thanks for letting us know about this Kary. Interesting change.

    I have mixed feelings about this.

    On the one hand, in the past when I was purchasing a property, I felt that the seller needed to officially be made aware of problems at the property so they could address the issues or change the Form 17 (and the price if necessary). You should not have multiple buyers paying for multiple inspection reports that point out the same problems over and over again. .

    This isn’t about keeping buyers from pointing out problems with the house, or requesting items. And anything pointed out or requested by a buyer would need to be disclosed to future buyers and added to the Form 17 (if material) if the first transaction fell through.

    What it’s about is subjecting the seller to a list of 10 to 30 items written up by someone who has unknown (or lousy) qualifications and may not have a clue what they’re talking about (and/or just adds items as CYA boilerplate). From such an inspection the typical buyer would probably ask for less than 5 items. They can still do that, or they can ask for 20.

  245. 495

    By David @ 481:

    RE: Jeff @ 479 – Buyers play a lot of games that seem somewhat unique to WA. The biggest change I think they need to make is that Buyers must submit the earnest money prior to the inspection.

    Huh? Deposit of the earnest money before inspection probably happens in over 90% of the transactions. It’s been a long time since a buyer could routinely delay the deposit of earnest money,.
    And back then the procedures for getting it back were not as robust as they are today, so there was a bit more reason to withhold the deposit until after the inspection. But either way, that’s hardly the biggest concern or either party today.

  246. 496

    By David @ 482:

    RE: Jeff @ 479 – Buyers should also be required to pay:

    1) the Excise Tax ( when I buy a car, I pay the tax, not the dealership).

    You could require that. The stupidest banks in Washington do, so that gives you an idea how good of an idea that is. Seriously, think about it a bit.

    Is a buyer willing to pay $500,000 for a house going to be willing to pay $508,900 because the seller wants the buyer to pay the excise tax? Not bloody likely.

    Is every seller who has 20% (or 10, or 5, or 3.5) down going to have 21.78% (or 11.78%, or 6.78%, etc.) down? Not necessarily, and if not, you’ve knocked some buyers out of competition, and that means you’ve likely reduced your sales price.

    But hey, if you want to get the same kind of prices the stupidest banks do, you’re free to go that route.

  247. 497
    Eastsider says:

    By Kary L. Krismer @ 487:

    This isn’t about keeping buyers from pointing out problems with the house, or requesting items. And anything pointed out or requested by a buyer would need to be disclosed to future buyers and added to the Form 17 (if material) if the first transaction fell through.

    What it’s about is subjecting the seller to a list of 10 to 30 items written up by someone who has unknown (or lousy) qualifications and may not have a clue what they’re talking about (and/or just adds items as CYA boilerplate). From such an inspection the typical buyer would probably ask for less than 5 items. They can still do that, or they can ask for 20.

    So the new requirement still does not stop unscrupulous buyers from asking 20-30 inspection items to force disclosure to future buyers.

  248. 498

    By Eastsider @ 490:

    So the new requirement still does not stop unscrupulous buyers from asking 20-30 inspection items to force disclosure to future buyers.

    Correct, but that’s not a big problem. And it also doesn’t stop the buyer from sending the report if the seller ask for it. That happens with some frequency.

    BTW, under the current forms if the buyer’s agent sends the report to the listing agent it’s basically game over–the seller is charged with knowing the contents of the report even if the listing agent never opens it and never sends it to the seller. They are basically screwed. Now that happening will have consequences for the buyer too.

    It will be interesting to see how this plays out. I suspect sellers will be even more reluctant to accept offers with delayed deposit of the earnest money, and might even be more prone to negotiating the earnest money amount higher.

    Then there will be the unfortunate buyers who lose their earnest money because of an ignorant agent. It’s not often the forms are changed in a manner that makes an agent more likely to be subjected to a malpractice claim. Actually it’s not that often that a buyer loses an earnest money. I think that’s about to change unless some agents really up their game.

  249. 499
    Deerhawke says:

    RE: Kary L. Krismer @ 491

    In the new construction sale transactions I am involved in, receiving the inspection reports is routine so I suppose we will need to get in the habit of requesting them. I think a lot of agents will need training on this.

    I personally find it delightful or infuriating to read the reports. If the inspector is an experienced builder, his/her comments focus on explaining to the client the advantages of the advanced systems in their new house. If the inspector is the graduate of one of the new online academies and has no building experience, you can get all kinds of alarmed oddball comments complete with exclamation points. Dealing with that is always fun.

  250. 500
    Justme says:

    Weekend update, King County active inventory, graphical edition

    Graphs are up, please check the link
    https://twitter.com/coqumragep279/status/1145024661119369216
    For more graphs, see
    https://imgur.com/gallery/dwlC2yl

    King County (Seattle+suburbs) housing inventory update: Single-Family Home (SFH) inventory count hit a new peak of 4712 on Friday night, up from 4688 last week. This is the highest inventory for the date since 2012. But sales have been flat relative to 2018, per NWMLS end-May report. Absorption continues to be low, the buyer strike is continuing.

    Last week was the end of school in much of King County (one notable exception was Seattle, which was using this week to catch up on some lost “snow days”). Overall it appears that end-of-school caused quite a lot of new listings to appear earlier in the week than what is typical. It is also high season for housing, so at the same time there was a relatively high level of offers being accepted and therefore houses going pending (dropping from the active inventory count). Overall, these effects resulted in a unusually flat inventory curve from Fri-Fri, with a smaller bump down early, and a smaller bump up by Fri night.

    More SFH stats, around noon today (Saturday):

    4672 active listings
    467 price reductions last 7 days
    547 closed sales last 7 days
    665 new listings last 7 days
    1320 pendings with < 1mo DOM

    Please follow and retweet. Data needs to be socialized with as many potential buyers and sellers as possible. The buyer strike is alive and well, and causing more price reductions. Keep striking. Let’s bust this bubble, and good!

    #housingbubble #buyerstrike #bustthebubble #sellingpanic #bubblesarebadforchildren

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