Around the Sound: King County alone in price drops and big inventory gains

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I promised an updated look at June data for the outlying counties, so let’s have a look at that. Here’s the latest update to our “Around the Sound” statistics for King, Snohomish, Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

First up, a summary table:

June 2019 King Snohomish Pierce Kitsap Thurston Island Skagit Whatcom
Median Price $695,000 $515,000 $376,500 $391,657 $344,000 $402,500 $380,000 $417,750
Price YOY (2.8%) 0.7% 7.3% 10.6% 5.8% 5.1% 11.8% 7.1%
New Listings 3,487 1,480 1,751 491 618 207 273 397
New Listings YOY (10.7%) (12.2%) (10.4%) (17.8%) (2.2%) (12.7%) 7.1% (6.6%)
Active Inventory 4,625 1,841 1,945 611 569 350 449 654
Inventory YOY 24.4% 14.4% (7.9%) 3.7% (14.4%) 2.6% 6.1% 7.2%
Closed Sales 2,718 1,215 1,521 432 553 186 213 326
Sales YOY (1.5%) (1.7%) (8.6%) (5.5%) (0.5%) (11.0%) 0.9% (4.4%)
Months of Supply 1.7 1.5 1.3 1.4 1.0 1.9 2.1 2.0

King County is the only place where prices are declining, and it also has the largest increase in active listings compared to a year ago. On the flip side, pending sales were up the most in King County, and it had one of the smallest declines in closed sales (sales rose in Skagit though). In most of the other Puget Sound counties, sales are declining, and listings are either falling or not increasing by much, and prices are rising.

Here’s a look at new listings across the region:

New Listings of Single-Family Homes

New listings fell everywhere but Skagit County in June. Bad news for buyers hoping to find more selection as we head into the summer.

Next up: Active inventory.

Active Listings of Single-Family Homes

Inventory fell in Thurston and Pierce counties, but increased everywhere else. King and Snohomish saw the biggest gains, but both of those were far smaller than the gains we saw late last year and earlier this year.

Here’s the chart of median prices compared to a year ago.

Median Sale Price Single-Family Homes

The biggest increase in home prices in June was Skagit, where prices rose 12 percent. Kitsap was close behind with an 11 percent increase. Every other county was in the single digits.

Closed Sales of Single-Family Homes

Closed sales were down in every county but Skagit, where they managed an increase of less than one percent.

Months of Supply Single Family Homes

This graph is the most telling—every county is still a very strong sellers’ market. Most counties are slightly better for buyers than they were a year ago, but we’ve still got a long ways to go before we get even close to what most people would call a “balanced” market (4-6 months of supply).

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

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About The Tim

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

737 comments:

  1. 251

    By Sfrz @ 245:

    RE: – but they DO track EB-5s. Various news sources have reported on the new millionaires and billionaires throwing their money around north America. There is even a movie and reality show about “crazy rich asians.” Why do you yell racism each time anyone mentions Chinese money? Gawd.

    Did I even mention racism? Why do you accuse me of doing things I haven’t done? Have you stopped beating your wife yet? My point is the data is bad, no matter what the topic. NAR could ask its members whether they are left or right handed, and it would still be meaningless data. Two sources to ignore on real estate news are NAR and Zillow. The former is because they relay on surveys, the latter because they don’t have a clue about real estate.

    As to your point, do EB-5s have anything to do with residential real estate (exclusive of investing as a landlord)?

  2. 252

    By Sfrz @ 245:

    RE: There is even a movie and reality show about “crazy rich asians.”

    Now there’s a credible source! A comedy movie. I’m not even sure any part of it was set in the United States. Not sure why you would bring it up.

  3. 253
    biliruben says:

    https://www.redfin.com/WA/Seattle/8415-16th-Ave-SW-98106/home/474024

    Does this flipper have brain damage, or am I misjudging the current market?

  4. 254
    sfrz says:

    RE: Kary L. Krismer @ 247 – deflecting and minimizing.

  5. 255

    By sfrz @ 249:

    RE: Kary L. Krismer @ 247 – deflecting and minimizing.

    Hardly. But you are non-responsive. And that’s a fact. You’ve lost this argument, notwithstanding the compelling Crazy Rich Asians citation. ;-)

    And let me make the point again. NAR could survey their members on whether they are left or right handed, and it would still be bad data. When I wrote that I meant to right “on whether their clients are left or right handed.” I went back to edit, but then I realized the original statement made the point better. Surveys are bad sources of information. But surveys of people who probably don’t know the answers to the questions asked, as is the case with this survey, those are really bad.

  6. 256

    RE: Deerhawke @ 222

    Another part of the equation is more cancelled and expired listings early on. I am usually alerted when an agent calls me because I just showed a listing, not long on market, and the agent tells me the seller is going to pull it off market if they don’t have an offer in the next week. Had a couple of those calls recently. Seller disgruntled that they didn’t get a full price or over full price multiple offer going and decides not to sell. I double checked that this morning when I saw your question as to fewer listings coming and or more sales. I do think there are more sales in July than normal, but there are also double the amount of cancelled and expired listings this year over 2017. That’s a couple of thousand more YTD than 2017. I would say that’s at least part of the equation.

    I said before that this year is running a bit late due to the snow and later end of school year. Usually I have the most closings in June but this year I had one on Friday one on Wednesday and one near last day of July. Will be interesting to see where the July sales fall and the relationship between June and July numbers compared to the historical norm. Some may misread that into the market picking up, but it’s really just a very short term anomaly .

    In the more robust years people stopped talking about Cancelled and Expired listings much except those that stayed on market after the status change. But in a “normal” market and a “buyer’s” market, cancelled and expired listings that give up, and many very early in the listing at the moment, need to be considered when determining the health of a market.

    Lower inventory not just about fewer listings coming on or more sold..some just gave up without trying too hard.

  7. 257
    Erik says:

    RE: The Tim @ 16
    It seems like when the inventory goes up and hits 8 months, prices go down.

  8. 258
    Justme says:

    RE: don @ 240

    Similarly, just because some house down the block sold for X, a seller up the block cannot assume that their different house will sell for the same amount . It works both ways.

  9. 259

    By Justme @ 253:

    RE: don @ 240

    Similarly, just because some house down the block sold for X, a seller up the block cannot assume that their different house will sell for the same amount . It works both ways.

    I don’t see how that is at all similar to the fact that a given buyer would only be interested in a tiny tiny percentage of the inventory at any given time–something on the order of .1 or .2% in many cases. One is whether the price is seen as reasonable to buyers and the other is whether a listed property is suitable to a buyer.

    But as I’ve mentioned in the past, maybe a year ago, part of the reason for the increase in inventory back then was sellers/agents not digging down into the history of a comp, and thinking that because a comp sold for X that their list price should be X. Failing to notice (or in the case of sellers–care) that the comp was bid up over list was leading to bad pricing and bad results. I think we’re largely past that, but the situation can still occur.

  10. 260

    Here’s some interesting data prepared by King County on the local economy. Note some of it mixes YTD data with prior whole year data, which is somewhat bizarre. One thing I was surprised by is the REET collections data. I’m surprised it isn’t more volatile than it is.

    https://www.kingcounty.gov/~/media/business/Forecasting/documents/July2019_Presentation_pdf.ashx?la=en

  11. 261

    RE: Kary L. Krismer @ 255 – One other thing about that King County data. Surprising the difference between permits and completions of new houses, but I’m not sure the completion data is accurate. The NWMLS data (not compiled by or guaranteed by the NWMLS) would suggest a higher number of completions, unless somehow there is a significant percentage of new houses resold in the same year as built. Or maybe that data is only for the unincorporated areas.

  12. 262

    RE: Erik @ 252
    Yes Erik

    Most landlords are not $CASH$ rich in Seattle and 8 months with no rent on a cheap home $400-500K investment will suck ’em dry [many end up repossessed by then, even the cheap rentals in Kansas City with a past due $26K principle see this, I bought one of those straight from the bank/owner as a short sell repo BTW] ….if it was a $100K a unit city the equation changes for the better….but whose recent Seattle rental investment costs $100K in Seattle? The Tooth Fairy’s? It is what it is and we can dream up phony wages for Seattle, but my recent per capita documented Seattle avg wages is $20/hr clearly document the opposite….IOWs, chicken feed pay in this HIGH RENT area. It is what it is.

  13. 263
    Justme says:

    Let me put it this way: Buyers are also not fungible, just like people argue that houses are not. Just because some dummy overpaid for a nearby house does not mean there is another dummy ready to overpay for your McMosspit.

    Price cures any shortcoming.

  14. 264

    This reminded me of Seattle Bubble. ;-) (The only setup necessary is it’s a very small town in Saskatchewan.)

    http://www.criticalcommons.org/Members/aboyle/clips/riot-in-dog-river/view

  15. 265
    ronp says:

    RE: Deerhawke @ 241 – You have a point, I just think the quasi Triplex scenario is just not economic given construction costs. I live in a single family home in a SF5000 zone and am perfectly happy to have it convert to Minneapolis triplex everywhere zoning — https://www.citylab.com/equity/2018/12/mayor-minneapolis-2040-affordable-housing-single-family-zoning/577657/ My neighbors on the otherhand…

  16. 266
    Deerhawke says:

    RE: ronp @ 260

    Your neighbors on the other hand:

    Will immediately regret the loss of parking
    Will be especially angry that “their”space is no longer reserved by custom for them
    Will be shocked that young renters have parties that start (not end) at 10 pm
    Will generally bemoan the passing of the good old days…

  17. 267
    Deerhawke says:

    RE: Ardell DellaLoggia @ 256

    Ardell thanks for bringing this to my attention. Prematurely canceled or expired listings is not something I ever was aware of. Or as my kids like to say, “I didn’t know that was a thing.”

    A lot of what you are describing is a kind of preemptive sellers’s remorse. Evidently if they can’t get the price and ease of sale of 2017, then forget about it. Honestly, they sound kind of spoiled.

    I am not going to say that this the beginning of a sellers’ strike (for the same reason there cannot possibly be a buyer’s strike— lack of a means of coordination.). But it does point in the direction of a perceived renewal of seller market power over 2018.

  18. 268
    Jeff says:

    RE: Kary L. Krismer @ 264RE: Kary L. Krismer @ 264

    Since the 250 post page reset you’re at 7 posts out of 14. That’s 50% for the statistically challenged. Was that last one really adding to the conversation or just more blather?

  19. 269
    Brian says:

    On the front page SFH inventory data, which column is the best to use? I see the left column is almost the same number as last year this time. Has the inventory growth really slowed down that much?

  20. 270
    formerSeattleite says:

    By Jeff @ 268:

    RE: Kary L. Krismer @ 264RE: Kary L. Krismer @ 264

    Since the 250 post page reset you’re at 7 posts out of 14. That’s 50% for the statistically challenged. Was that last one really adding to the conversation or just more blather?

    I enjoy a lot of what Kary writes. He has a legal perspective that many of us don’t. And I, as well as many others, enjoy reading his posts. If you don’t like it, just scroll down. The stuff that Kary writes that doesn’t interest me, I just scroll past. Try it :)

  21. 271
    Blurtman says:

    NAR to institute regional agent dress codes. Seattle choices include logger, homeless bum, and for those who prefer the slimming look of black, antifa member.

    https://www.redfin.com/FL/St-Augustine/211-Alcazar-St-32080/home/139824889

  22. 272

    By Jeff @ 268:

    RE: Kary L. Krismer @ 264RE: Kary L. Krismer @ 264

    Since the 250 post page reset you’re at 7 posts out of 14. That’s 50% for the statistically challenged. Was that last one really adding to the conversation or just more blather?

    Apparently you cannot comprehend simple English if you think what I post is just blather. I’d comment on your posts, but you’ve added zero to the discussion here. There’s a reason for that–lack of intelligence and education. Think about your mental abilities a while before you post again, and then do the right thing and quit posting as a troll.

  23. 273

    By formerSeattleite @ 270:

    By Jeff @ 268:

    RE: Kary L. Krismer @ 264RE: Kary L. Krismer @ 264

    Since the 250 post page reset you’re at 7 posts out of 14. That’s 50% for the statistically challenged. Was that last one really adding to the conversation or just more blather?

    I enjoy a lot of what Kary writes. He has a legal perspective that many of us don’t. And I, as well as many others, enjoy reading his posts. If you don’t like it, just scroll down. The stuff that Kary writes that doesn’t interest me, I just scroll past. Try it :)

    Thank you, but he’s too stupid to do the obvious. That is way above his skill set.

  24. 274

    RE: Deerhawke @ 267

    Historically valuations always used Active, Pending, Sold, Expired and Cancelled. You need to look at what didn’t sell and why just as much as what did sell. People just haven’t talked about that since good houses priced well and not selling was somewhat non-existent for awhile. It’s fairly obvious there are a lot of people and agents who don’t really know what a Balanced Market or Buyer’s Market looks like. :) In both of those Expireds and Cancelleds tell you more than Solds or Pendings in many cases.

    What didn’t sell is just as important as what did sell…and they don’t show in Current Inventory but are clearly part of the Supply and Demand equation when valuing a house or calling a market trend.

    We went into a full buyer’s market after the crash, but for the most part only people who had to sell sold and the analysis was muddied with tons of foreclosures and short sales. The normal method of evaluating the market was somewhat ignored because there was too much “blood in the streets” to see those that were merely cut and bruised and whimpering back into their safe houses.

    You have to look closely at those who elected not to stick around. What price did they try? Did they quit before the first price reduction or after four of them? All of these things are as important to being a student of the market as the obvious stats.

  25. 275
    Justme says:

    RE: Deerhawke @ 267

    >> (for the same reason there cannot possibly be a buyer’s strike— lack of a means of coordination.).

    Whaddaya mean. I’m coordinating the buyer strike around here. Join the strike, it has been working its magic for over 12 months. More to come.

  26. 276
    Justme says:

    RE: Brian @ 269

    The right column got started because the left column went bad on 2018-12-23. KC SFH inventory the highest since 2012, still.

  27. 277
    DavidE says:

    I know this is anecdotal, but my neighbor’s house in a fantastic area in Kent sold last year in 5 days with 3 offers (sold in July, 2018). The new owners now have to move due to unforeseen circumstances. They put the same house on the market at about the same price in early July of 2019–no takers.

    I have not seen one house in this area for the past several months receiving multiple bids. Everything has sold at asking or below asking price with much longer days on the market despite lower mortgage rates.

    The fed may cut next week, but the long end of the curve is moving higher due to inflation expectations which will push up mortgage rates. I am seeing a lot of white middle-aged employees getting laid off at major technology companies, and it seems that people have added a lot of debt recently and are really struggling. Even families making 120K or so are becoming working poor.

  28. 278
    Deerhawke says:

    RE: Ardell DellaLoggia @ 273

    Great post. This helps me to at least know that there is additional information that might me helpful in studying this market.

    It is certainly true that it is important to pay attention to expireds and cancelleds as the rest of what we see once a month.

    It would be so helpful to have access to it.

  29. 279
    QA Observer says:

    Any underwriters out there?
    I think this has been asked before, but I forget what the answer was…
    If I am considering purchasing a primary residence with the opportunity of basement or mother-n-law rental income, will I be allowed to consider this income potential as part of my loan approval?

  30. 280

    RE: QA Observer @ 278 – Contact Rhonda Porter–she’s a loan originator. She used to advertise here, but if she no longer does you can find her on Facebook.

    https://www.facebook.com/WashingtonMortgagePro/

  31. 281

    RE: Deerhawke @ 277

    You probably don’t look there often because it doesn’t really apply to new construction much. Though after the crash some spec builders moved into their spec house, usually new construction doesn’t retreat. At one time almost every house for sale in a small area I follow belonged to a builder. Some builders sold off their land-lots to a more well heeled builder who could afford to hold it and not build until the market improved. Some builders of spec houses just left the houses 50% to 90% finished.

    I can’t put pictures and graphs here, but for decades we used a chart showing green, blue and red. Green were the relevant comps that indicated the price you should list at. Blue was the “test the market” price, and often we do want to allow for one price reduction to test that we are not pricing too low. Red was the price others tried and failed…the expired and cancelled listings. They tell you what you can’t try. I initiated the blue method since the market faltered last year and even a bit before that if it was off season. Either one price reduction or one offer at less than asking is the norm once we are out of a strong sellers’ market. We are still in a sellers’ market at times…reportedly 12% of the time vs 85% of the time.

    What people don”t understand is we are really on a scale of 1 to 10 and not 3. People not in the industry will recognize only 3. Sellers’ Market, Balanced Market, Buyer’s Market. But we actually have at least 9 levels, that being 3 in each segment. We went from a 9 Seller’s Market to a 7 Seller’s Market pretty quickly. Another way to say that is we went from 8 (66% bid ups) to 9 (85% bid ups) to 6-7, some high Balanced Market (66%), some low Sellers’ Market (12% to 15% bid ups)

    The ones you mentioned that really aren’t what we call “positioned to sell” are not counted as such while still Active. They will eventually fall into the Expired or Cancelled category and counted there. You would apply the % to Actives. If 10% of an area’s listings currently fall into Expired or Cancelled without coming back on market within 3.5 months, then you would assume that 10% of Actives are likely to end up there. But for the purpose of Supply and Demand or for lack of a better description “Just Me’s Purposes”…you would count all Actives.

    In a real analysis that an agent does we would exclude the “mom” houses I described before as well as the divorce house where the occupant is having all of their bills paid by the non-occupant spouse until it sells. The occupant does not want it to sell. :) There are a fair amount of those as well. Fun to show. Occupant does everything they can to discourage a sale. For some reason these days I run into more men in those houses than women. Used to be they were always women.

    Of my three closings between 7/19 and end of July, one was multiple offers, one we jumped in front of the train because they had lost 4 times in that many weeks to multiple offers. Since the house was better than the last one nearby that had multiple offers we offered more than asking to shut it down before the review date and before the weekend. The last one was not a mainstream house. High end, awkward access and somewhat problematic floor plan. Listed and closed within 60 days total. So more of a high balanced then a low sellers on that one.

    The one thing that I notice in Just Me’s comments is the “moss pit”, which tells us he is not really being a student of the market when doing his analysis. He’s also complaining about what he can buy and not just price. There’s a difference between not being able to buy and not being able to buy the house of your dreams. I remember my son-in-law saying “Mom, if that’s what I can afford…I’ll rent”. That is a valid position and one I fully support. Renting in a better and best neighborhood is better than buying in a high crime area, as example. That doesn’t mean something is wrong with the market. Just a personal and valid choice.

    It’s why we need flippers who take the moss pits and turn them into something people can buy for less than the cost of new. Flip should be 2 x lot and they are an important part of the affordability issue.

    The Seattle Area is one of them most interesting markets I have studied and worked in…and I’ve worked in many. For the most part you can still find almost everything somewhere. Tons of options. This is not true of most Major City areas.

  32. 282

    By Deerhawke @ 277:

    It is certainly true that it is important to pay attention to expireds and cancelleds as the rest of what we see once a month.

    It would be so helpful to have access to it.

    I agree with Ardell’s main point (edit: prior to post 280), and most my saved searches and all my searches for BPOs include cancelled and expired. I’m not sure though that the number of cancelled means much at the county level, in part because you really need to dig into them. Some are the two week tries that Ardell mentioned, where others are cancelled after two failed inspections. Some are just cancelled to change the price in a (mistaken?) belief that will attract more attention to the property than a price reduction. And as Ardell mentioned, what a property doesn’t sell for can be just as important if not more important than what another property sells for, but that means zero at the county level.

    Expired listings as a general rule need less digging into, because it’s just the passage of time that took them to that status. But even with those you need to look at the price history. So again I’m not sure it means much at the county level.

    But just to give you some idea of the scope, for the past 7 days (King County SFR) there have been 632 new listings, 556 price reductions, 30 price increases, 1,036 pendings, 639 solds compared with only 40 expired and 104 cancelled. (Numbers from NWMLS sources but not guaranteed). So the cancelled are a part of the market, but not necessarily a big part. Again I think they are more informative for pricing than getting much of a larger market overview.

  33. 283

    The NWMLS is revising their rules, effective the end of October. The SOC (“Buyer’s agent commission”) will then be publicly displayed.

    It will be interesting how this plays out. I’d say more, but I wouldn’t want to blather. Seriously, I like the change, but I can see some positives and negatives. Overall I think it’s good, so it will just be a matter of seeing the extent of any unintended consequences. We’ll have to see how it plays out.

  34. 284
    Sfrz says:

    RE: Kary L. Krismer @ 272 – Troll. Kary’s favorite slam. Dumb, dense, lack education,. He is such a role model for used house salesmen and lawyers in the area.

  35. 285

    By DavidE @ 276:

    I have not seen one house in this area for the past several months receiving multiple bids.

    How would you possibly know that? That information isn’t even available to agents. What I’ve seen is a reduction in the number of offers, but multiple offers are still quite common.

    As to Kent SFR in June, approximately 3/7ths of the listings between 400k and 800k went for above list (ignoring those that bumped a xxx,950 price up $50 to a round number.)

  36. 286

    By Sfrz @ 283:

    RE: Kary L. Krismer @ 272 – Troll. Kary’s favorite slam. Dumb, dense, lack education,. He is such a role model for used house salesmen and lawyers in the area.

    Well when someone calls me out specifically, and they haven’t posted anything of substance, what would you call that?

    The lack of intelligence, education, etc. comes from the fact that they cannot engage (and aren’t smart enough to scroll down the screen). That’s pretty easy, and pointing it out to people like Jeff and Long Time Listener undoubtedly hurts them because in their hearts they know it’s true. Living their pathetic little lives as stupid ignorant trolls cannot be fun. I just like to rub it in.

  37. 287
    DavidE says:

    By Kary L. Krismer @ 284:

    By DavidE @ 276:

    I have not seen one house in this area for the past several months receiving multiple bids.

    How would you possibly know that? That information isn’t even available to agents. What I’ve seen is a reduction in the number of offers, but multiple offers are still quite common.

    As to Kent SFR in June, approximately 3/7ths of the listings between 400k and 800k went for above list (ignoring those that bumped a xxx,950 price up $50.)

    Kerry,

    I save all the new the listings in the area to my favorites in Redfin. If a house goes above the original listed price, then I know it was sold more than the list price (a hint of multiple bids). For example, the same house I mentioned had been listed last year at 485K, and then it sold for 511K.

    Do you have a better way to track these?

  38. 288

    RE: Kary L. Krismer @ 281

    As the market weakens…which is what we are watching for, the change in that number is significant. As I said earlier the number YTD rose from just over 2,000 in 2017 to just over 4,000. Possibly not a large % of the market, but the fact that it doubled means something. Those of us who look for clues like this will value that more than someone who doesn’t ever want to make a prediction past today. Though I think you do make predictions, as every agent must in order to give client advise. You just don’t like to publicly state them. I respect that. But to say you never answer a question as to what and when a client should do based on your read of the market…I’m sure that’s not true and that is a form of “prediction”.

  39. 289

    RE: Ardell DellaLoggia @ 287

    I remember reading they were strengthening the penalty for cancel and relist for no good reason, I think as of July 1. More and more the mls is trying to crack down on that manipulation of the data. The data should be true and meaningful and always mean something.

    Since we don’t do enough with the data, we really should let at least a small group of out of the industry experts have access to our data for better Public Service. A non-biased group of statisticians. We do what we as agents need, but we have so much valuable information, we really should share it with some responsible people. Maybe a group over at The University of Washington. I vote yes. :)

  40. 290
    N says:

    QA Observer 278 – I am interested in the same type of property as you. The answer I have got from lenders is yes IF there is a tenant/lease in place, BUT I have yet to see a MIL or ADU with the tenant still living there. You’d likely have to get a more expensive market rent appraisal too.

    BTW, this was the same 15 years ago, if a property had a tenant in place the bank would give you credit for 75% of the rent when factoring your debt to income (the 25% is assumed to be vacancy, upkeep etc).

  41. 291
    Jeff says:

    RE: Kary L. Krismer @ 272

    Honestly Kary, I appreciate many of your posts and can see for myself that you are an extremely intelligent person in many ways that has many good thoughts to add to this forum. I’m sorry that you have reached a conclusion in regards to my intelligence based simply on the fact that I have not posted posted much of what you would consider substantive.

    My purpose for trolling you is so that you can be made aware that dominating a forum, even if you have lots of intelligent things to say, is not really helping yourself or the forum. Take a breath or two before posting. Go on a walk. I’m here to learn and I’d like to hear from a better balance of the several dozen characters I’ve followed interacting with one another here.

    You mentioned a few times that you stopped following Seattle Bubble which I always find amusing that you post this in a Seattle Bubble comment section. For someone who talks a lot, I suggest you follow the conversation and listen a bit more. You can let a thought or two rest and the world will still turn.

  42. 292
    Jeff says:

    RE: Kary L. Krismer @ 272

    Mind you, I was trolling you in response to your taser video share. Not exactly quality commentary even by your voluminous standards.

  43. 293
    Jeff says:

    RE: Kary L. Krismer @ 272

    Oh yeah and I just had another good thought: Does anyone else find it a tell when three or more posts in a row are by one person? Just a thought for those that are trying to figure out if they’re a blatherer.

  44. 294
    Jeff says:

    RE: Kary L. Krismer @ 272RE: Jeff @ 292RE: Jeff @ 292

    I just tried to edit the my last post but it didn’t show up right away. I meant to say “thought” instead of “though”. Hope you don’t hold the misspelling against my intelligent in cast the edit didn’t show up within a few seconds of when you read it.

  45. 295
    Voight-kampff says:

    Jeff just posted 4 times to tell Kary he posts to much.
    ;-)

  46. 296
    Market Psychologist says:

    RE: Kary L. Krismer @ 285 – I think it’s interesting that you ghosted this forum the second the market slumped and returned the second it moderated. My prediction: the market will tank after this BS moderation and you will disappear again, as the entire REIC will do.

  47. 297
    S-Crow says:

    By Kary L. Krismer @ 282:

    The NWMLS is revising their rules, effective the end of October. The SOC (“Buyer’s agent commission”) will then be publicly displayed.

    It will be interesting how this plays out. I’d say more, but I wouldn’t want to blather. Seriously, I like the change, but I can see some positives and negatives. Overall I think it’s good, so it will just be a matter of seeing the extent of any unintended consequences. We’ll have to see how it plays out.

    This is interesting. I’ve heard of this from a couple people. Will it show net SOC to the Selling Agent or just gross SOC? Those are two different issues. “Net” being that agents today are commonly using commissions to credit either their buyer for closing cost contributions or even a credit back to the seller/reducing the overall commission for whatever reason. In today’s market that revelation wouldn’t be helpful I suppose. My curious self thinks maybe it’s also being used to reflect that SOC’s are not always 3% in light of the NAR, Realogy, Re/Max and Keller-Williams being sued for anti-trust.

    In other news: we are really getting close to 3.5 % 30 yr fixed with very little points. Very close. I’m seeing 3.75% fixed for investment property. Insane.

  48. 298
    Justme says:

    RE: Kary L. Krismer @ 282

    >>The NWMLS is revising their rules, effective the end of October. The SOC (“Buyer’s agent commission”) will then be publicly displayed.

    According to Puget Sound Business Journal (not a favorite of mine but this time they got it right):

    https://www.bizjournals.com/seattle/news/2019/07/22/northwest-multiple-listing-service-changes-rule-on.html

    QUOTE: Among other things, the changes mean real estate agencies will be able to publish the amount of commission on their websites.

    There is a significant difference between “will be displayed” and “can be displayed” (meaning: “is allowed to be displayed”). One would hope that Redfin and others will respond to competitive pressures and always display commissions on their web sites.

    And for those who wondered: SOC = Selling Office Commission.

  49. 299
    Justme says:

    Oh noes, even the low end of the market is dropping in San Jose and Orange County, Calif. Perhaps Seattle soon to follow? Seattle usually is a bit slow to respond, is it not. High end already dropped, low end is the only “affordable” segment so has been benefiting from those priced out elsewhere/otherwise.

    https://www.redfin.com/blog/affordable-home-price-drop-san-jose-orange-county/

    In California, the high end has been stagnant or dropping for a while ( Wall St Journal via http://housingbubble.blog/?p=2111 ).

    A report from the Wall Street Journal. “U.S. home sales slumped in June as home prices for major West Coast cities declined for the first time since 2012, ending the spring selling season with a thud. ‘Prices have dropped in Silicon Valley and sellers just aren’t used to the concept that [prices] can go down,’ said Ken DeLeon, founder of DeLeon Realty in Palo Alto, Calif. ‘There’s just this malaise buyers had of, ‘I feel like it’s gonna drop further.’”

    “A deepening slump in expensive coastal markets also shows little sign of reversing. The median price of a home fell in San Jose, Seattle and Los Angeles in June compared with a year earlier, according to Redfin. For San Jose, that was the seventh month of annual price declines. The slowdown in the West Coast markets now spans all price points, including starter homes, which had been the tightest segment of the market. In San Jose, inventory for homes in the bottom-third price tier nearly doubled in June compared with a year earlier, while prices dropped 3.8%, according to Redfin.”

  50. 300
    Ardell says:

    RE: S-Crow @ 296

    I have a 3.5% 30 year fixed closing end of month. Locked in just before 4th of July. We’re already there. No points. Small charge of $600 or so on a $560k loan amount.

  51. 301
    Justme says:

    RE: Ardell @ 299

    Size of down payment is a factor, can you illuminate?

  52. 302
    Ardell DellaLoggia says:

    RE: Justme @ 300

    20%

  53. 303

    By DavidE @ 286:

    Kerry,

    I save all the new the listings in the area to my favorites in Redfin. If a house goes above the original listed price, then I know it was sold more than the list price (a hint of multiple bids). For example, the same house I mentioned had been listed last year at 485K, and then it sold for 511K.

    Do you have a better way to track these?

    It’s possible to have a house go above list with only one offer. Sellers and agents have almost complete latitude in what they disclose, and there are different strategies to get the best results. No one system is perfect from the seller’s side.

    If you give out little or no information on offers received then you can get an offer above list with no other offers received. But if you have multiple offers and don’t give out much information than it’s possible a buyer would have been willing to bid more than the winning offer. In that system you’d be unlikely to get an offer over list with no other offers.

    Banks tend to ask for highest and best after receiving multiple offers, but the issue in doing that is buyers may go away.

    From the buyer side (or just viewing) there’d be little to know for certainty about how many offers there were, except that if you made an offer and it then went pending to some other buyer you would know there was at least one other offer.

  54. 304

    By Market Psychologist @ 295:

    RE: Kary L. Krismer @ 285 – I think it’s interesting that you ghosted this forum the second the market slumped and returned the second it moderated. My prediction: the market will tank after this BS moderation and you will disappear again, as the entire REIC will do.

    Beyond the discussion getting boring (e.g. like most the discussion in this thread between posts 109 and 233 where I only responded to S-Crows posts and made fun of the topic of other posts), I had other things going on. Also, like Tim I was getting bored by the data–I wasn’t really following it much.

    It had nothing to do with the market “slumping,” which is something I don’t even believe has happened. It’s certainly not as crazy strong as it was, but as I’ve mentioned repeatedly the bidding wars drove some sales above FMV and that affected the median and mean numbers. The extent of which cannot be determined, but quite frankly I was expecting more of a downturn in the median numbers when the market started to balance out some. Markets tend to overreact.

  55. 305

    By S-Crow @ 296:

    Will it show net SOC to the Selling Agent or just gross SOC? Those are two different issues. “Net” being that agents today are commonly using commissions to credit either their buyer for closing cost contributions or even a credit back to the seller/reducing the overall commission for whatever reason.

    I doubt there will be any requirement to update the number after closing to reflect what the buyers’ agents do with their commission.

  56. 306

    By Jeff @ 293:

    I just tried to edit the my last post but it didn’t show up right away. I meant to say “thought” instead of “though”. Hope you don’t hold the misspelling against my intelligent in cast the edit didn’t show up within a few seconds of when you read it.

    Spelling is not my strength, so no. It was the substance and timing of your post. It came right after I:

    1. Refuted the NAR data on foreign purchases.
    2. Discussed inventory numbers from the buyer’s side.
    3. Posted a link with information on King County economic data.
    4. Commented about an odd discrepancy in that county building permit data and NWMLS sales data.

    About the only thing non-substantive was my post of this link, making fun of the abilities of some posters here to understand statistics. http://www.criticalcommons.org/Members/aboyle/clips/riot-in-dog-river/view

    That you considered all that blathering made me believe it was over your head.

  57. 307

    RE: Jeff @ 268
    We Don’t Need a Secretary

    We need inputs, both Bull and Bear to figure a path forward for both buyers and sellers. Please contribute like Kary and SWE will shutup.

  58. 308

    By softwarengineer @ 306:

    RE: Jeff @ 268
    We Don’t Need a Secretary

    We need inputs, both Bull and Bear to figure a path forward for both buyers and sellers. Please contribute like Kary and SWE will shutup.

    Or at least learn how to scroll down the page.

  59. 309

    RE: Ardell DellaLoggia @ 301
    Sounds Like $125K $CASH$ Down

    On a $625K home. Those are loans with lower risk and yes, if I were a bank I’d want 20% down too. I’m wondering how the Hades some of these TV show loan sharks companies can offer 100% of the home’s value on a 2nd mortgage and I don’t care if its a veteran only offer, its RISKY. Period. If you can possibly read the tiny print on the TV screen, states like Washington won’t contract these lax requirements on like JUMBO LOANS. If I was a bank I’d put a crucifix to that RISK vampire too.

    Reverse mortgages are different animals in my book, they can pay out 100% of the homes value and have you sign an inspection contract to fix anything they dream up and if you don’t its contract default and the owner loses the house…again the small print is impossible to read.

  60. 310

    By softwarengineer @ 308:

    I’m wondering how the Hades some of these TV show loan sharks companies can offer 100% of the home’s value on a 2nd mortgage and I don’t care if its a veteran only offer, its RISKY.

    VA loans don’t tend to be seconds (I don’t think they even offer second position loans). They would make a single loan of up to 100% of the value.

    Note though there is an issue as to whether the anti-deficiency provisions of Washington non-judicial foreclosure laws apply to the VA (and even the FHA). For a time they did, but the last time I looked at the issue they seemingly did not. If they don’t apply, then VA loans are more risky to the veteran borrower because they could get foreclosed out and still owe the balance of the debt. And that could be a higher amount than what someone with an 80/20 loan package would be left with if the first foreclosed.

  61. 311
    steven says:

    Kary and SWE,

    you guys talk too much to a point my middle finger hurts scrolling down… and jeff has a point.. Kary you talk as if you are contributing and you are but less than 50% of your talks are contributory and SWE less than 20%… i believe Tim also suggested you guys talk less. how many people will it take? or who will it take?

  62. 312
    Deerhawke says:

    RE: Kary L. Krismer @ 303
    RE: Ardell DellaLoggia @ 287

    Ardell, you mention that:

    ___
    As the market weakens…which is what we are watching for, the change in that number is significant. As I said earlier the number YTD rose from just over 2,000 in 2017 to just over 4,000. Possibly not a large % of the market, but the fact that it doubled means something.
    ___

    Kary takes issue with this assessment that the market is weakening and says:

    ___
    It had nothing to do with the market “slumping,” which is something I don’t even believe has happened. It’s certainly not as crazy strong as it was, but as I’ve mentioned repeatedly the bidding wars drove some sales above FMV and that affected the median and mean numbers. The extent of which cannot be determined, but quite frankly I was expecting more of a downturn in the median numbers when the market started to balance out some. Markets tend to overreact.
    ___

    This question whether the market is stable or weakening is of more than passing interest to me, given the risks I take in my business as a developer/builder.

    On the supply side at a county level, we have seen new listings drop off and active inventory going sideways prematurely with a downward bias. We have seen more expireds and cancelleds which would seem to indicate people are more hesitant to take lower prices. Maybe they are unrealistic and spoiled, but it is still an indicator of supply side market power.

    On the demand side, sales have been about normal and pendings are looking fairly healthy.

    Prices show being down a tad YOY, but have recovered YTD. It looks like prices are mainly going sideways. We seem to be establishing a new ceiling and a new floor at around $700K.

    It is not the go-go days of 2017 for sure, but I am not seeing the market weakening but firming. In my local area of 705/710 everything that is in decent shape and well priced (‘positioned to sell”) is checking through. Maybe there is some sluggishness because it is summer and a lot of people are off on vacation (I am). We tend to have this happen every summer. Perhaps what we are seeing is that there is a renewed strength of the core central areas at the expense of more distant areas?

    Ardell, could you amplify on your thoughts here?

  63. 313

    By steven @ 310:

    Kary and SWE,

    you guys talk too much to a point my middle finger hurts scrolling down… and jeff has a point.. Kary you talk as if you are contributing and you are but less than 50% of your talks are contributory

    Says the guy who apparently doesn’t even know how to scroll down the screen. Are you hitting the arrow buttons or arrow keys? That’s not how you do it.

    Based on your problems doing something as simple as scrolling I’ll assume you have a problem understanding 50% of my posts. Amazing it’s even 20%.

  64. 314
    ronp says:

    RE: Deerhawke @ 266 – I am actually OK with Tokyo style residential zoning, it even includes small retail shops and workshops. Would make our cities more interesting to live in, possibly more walkable. https://devonzuegel.com/post/north-american-vs-japanese-zoning?

    “zones allow a “maximum use” rather than an exclusive use for each zone
    the Japanese principle is to include all uses up to a maximum “nuisance level”
    every use considered less of a nuisance than the set zone is allowed, so low-nuisance uses are allowed everywhere
    as a result, almost all Japanese zones allow mixed use developments”

  65. 315
    Pedro Falcon says:

    This site needs a rolling 4 week poll that attempts to predict the market.

  66. 316
    Jeff says:

    RE: Kary L. Krismer @ 311

    I think the point Steven was trying to make along with me is that roughly 50% of what you post is interesting and relevant, and that several folks here have made an effort in their own way to point this out to you and others who’ve developed a habit of over posting here.

    Lots of people suggest just scrolling through yours or SWE’s posts, but then we’d mis the 20-50% of the good stuff that we actually want to here from you, so it takes lots of mental effort for us to filter the blather to get to the gold. We’re just asking for a little help with the self filtering and condensing of thoughts here among friends of Seattle Bubble.

  67. 317
    Ohd1122 says:

    By Jeff @ 290:

    RE: Kary L. Krismer @ 272

    My purpose for trolling you is…

    RE: Jeff @ 291

    Stopped reading right here.

  68. 318
    Cap”n says:

    RE: Deerhawke @ 312

    “ We seem to be establishing a new ceiling and a new floor at around $700K.”

    Just to toot my own horn, if I recall correctly this is precisely what I said would happen in a comment here a long time ago (years?). The prediction was we hit 700k median and bounce around that number. I didn’t run hard numbers to get there, just thought generally about what an affordability ceiling might be using instinct and fuzzy logic at best. But hey! Might have been right.

  69. 319

    RE: steven @ 311
    Hey Steven

    And % use contribution wild allegations you use are concise and accurate to all the Bubble readers beside you?

    Keep to the point and stop using your middle finger at SWE. Its rude and makes you look incompetent.

    MAX 8 fallout gaining steam and is the main downward component to the DOW lately….Boeing has already lost billions because of the MAX 8 lack of Safety Engineering and yes, a massive production cutback at Boeing Seattle because of the MAX 8 is in the wind now….stay tuned, if this isn’t anymore concise i don’t know what is. This is worse than “the last one leaving Seattle turn off the lights” super sonic cancellation of the 70s. Historically its the worse thing to hit Boeing in its lifetime.

  70. 320

    RE: Cap”n @ 318
    Great Guess Cap’n

    My hats off to you.

    I was right on the MAX 8 months before it was news…it was educated guess and I was praying I was wrong, but now its a $5 Billion Boeing loss and counting….

    The Bubble readers need predictions obviously to see through the fog, maybe. Or at least know why they failed if they ignore it.

  71. 321
  72. 322
    Deerhawke says:

    Interesting piece in the Seattle Times on rising rents in Seattle and the greater Puget Sound area.

    I can’t say I saw this coming this soon.

    Long story short: Rent incentives going away. Absorption rates up. Vacancy rates down. Seattle rents up, but even bigger increases outside Seattle. Prospect for future rent spikes possible/likely.

    Combined with lower interest rates, there is bound to be additional pressure on the for-sale market from tenants looking to buy.

    https://www.seattletimes.com/business/real-estate/brace-yourselves-renters-after-a-brief-pause-seattle-area-rents-headed-back-up/

  73. 323
    Blake says:

    RE: Deerhawke @ 312
    Again, looking at the big picture for the US and world economy…
    From @econguyRosie (yesterday):
    Richmond Fed Manufacturing survey order backlog index collapses to its lowest level since April 2009 and has contracted now for eight months in a row for the first time in five years. Still think this is just going to be one single “insurance” Fed rate cut?

    https://www.richmondfed.org/research/regional_economy/surveys_of_business_conditions/manufacturing/2019/mfg_07_23_19#2

    @EconguyRosie (2 hours ago):
    My back-of-the envelope calcs have profits at -5% SAAR in Q2 and we know that real avg weekly income came in at -1%. The recession on an “income” basis may have started. As usual, the bond market was early in figuring it out.

    Blake sez: The Fed will cuts rates this month for the first time in over a decade, but, as I wrote last week, that is not a bullish sign for the economy. Over the last 30 years each time the Fed STARTED cutting rates was just before a recession!

    You guys want predictions?
    . In Feb/March I predicted a recession this year.
    . Now I am predicting the Fed will cut the Fed Funds rate to ZERO over the next year and a half. But it will only soften the recession. The last three cycles the Fed cuts rates 5%, 6%, and 7%! This time they can only cut rates 2.5%…

  74. 324

    By Deerhawke @ 322:

    Interesting piece in the Seattle Times on rising rents in Seattle and the greater Puget Sound area.

    I don’t follow rents, but I think this was largely due to the supply coming on at the time, and the article seems to suggest that. It’s really the only thing that makes sense given that people might hold off buying do to something like HQ2 or some personal matter, but it’s much harder to hold off having a place to live.

  75. 325
    Justme says:

    RE: Deerhawke @ 322

    I bet this rental industry propaganda story, planted just in time to gear up for back to college and new grad job season, has some holes in it.

    Anyone care to do a little homework?

  76. 326

    By Ohd1122 @ 317:

    Stopped reading right there.

    When someone says a name and then their only comment is the number of posts by someone of that name the person posting is a troll. It doesn’t take an admission to determine that.

    When the troll also hasn’t contributed anything to the thread, then they are even worse than a troll. None of the adjectives that would fit would be particularly flattering, and many would be filtered out on this site.

    Stopped reading right here.

  77. 327
    uwp says:

    By Justme @ 325:

    I bet this rental industry propaganda story, planted just in time to gear up for back to college and new grad job season, has some holes in it.

    Anyone care to do a little homework?

    I was wondering how Justme would spin this.
    I love it!

    I will get right on that homework. Let me just adjust my tinfoil hat…

  78. 328
    Eastsider says:

    RE: Deerhawke @ 322 – Much higher rents and home prices ain’t going to happen. People are already maxed out. King County is losing people to other areas according to most recent census data. The final two paragraphs of the Times article tells you why –

    Taylor Condrin said rents across the region are now so high that he and Ally are considering moving to Texas, where Ally has relatives, in the hopes of finding a real-estate market where they can afford to buy instead of rent.

    Though they would miss the Pacific Northwest — both grew up on the Sammamish Plateau — the allure of affordable housing is powerful. As Taylor puts it, “if you can get a 3,500-square-foot house with a pool for $400,000, I think you certainly have to take a look.”

  79. 329
    N says:

    @Deerhawke 322 – Interesting. I’m not able to read the article but I did look at the Zumper reporting – Seattle city rents are down 5% YOY for 2 bedrooms and 7% for 1 bedrooms. Ditto for Kirkland and Bellevue. Many other areas of the metro are up with Everett leading the way with a 12% YOY increase.

    https://www.zumper.com/blog/2019/07/seattle-metro-report-july-2019/

  80. 330

    By Justme @ 325:

    RE: Deerhawke @ 322

    I bet this rental industry propaganda story, planted just in time to gear up for back to college and new grad job season, has some holes in it.

    Anyone care to do a little homework?

    Well it is Zillow, so it is suspect.

    It also has the same “survey” issue I raised on the foreign buyers. But here the issue is slightly different, although you still have the same sampling error concerns. In the foreign buyer situation the real estate agent might not know the correct answer, but answers anyway. In this situation the property manager answering the survey presumably knows the rent, but they may be answering for a 2 bedroom apartment with different attributes than the one they answered about a prior survey. The survey taker would not necessarily know that (and the property manager might even be different).

    Also, I suspect the story at the beginning of that article was about a new building, where they were offering a promotion to fill it up, without compromising the monthly rental amount. Again I don’t follow rents, but I sort of doubt that free month rent was a common promotion in established buildings at that point in time.

  81. 331

    RE: Kary L. Krismer @ 326
    Yes Kary

    And its dangerous to the incompetent blogger too, defamation of character lawsuits are off the Richtor Scale for Conservative voices in America now….everyone enjoys Freedom of Speech in America, everyone.

    You know the law and I know safety engineering, a great team Kary.

    A concise way to gain predictions in the local Seattle economy, possibly cutting through the fog.

  82. 332

    RE: N @ 329
    URL Contradictions

    Are the norm now. Ya see why I try to hunt carefully before I use any URL? The worst thing to predict from is Fake News. BTW, I’m not perfect at finding good URLs either [who is?]….but given the mixture contaminating everything, its gonna take research to identify the fraud. Keep hunting Bubbleheads!

  83. 333
    Blake says:

    This is kinda funny… just for the absurdity of it all.
    We should all just party like it’s 1999!!
    https://wolfstreet.com/2019/07/24/i-got-it-nothing-matters-tesla-boeing-stocks-like-the-whole-market-has-gone-nuts/
    Story stocks, momentum stocks, hyperventilation stocks, consensual hallucination stocks, financial engineering stocks: anything but reality.

    You see, Tesla is different. It just reported another doozie, a loss of $408 million in the second quarter, after its $702 million loss in the first quarter, for a total loss in the first half of $1.1 billion. In its 14-year history, it has never generated an annual profit… Tesla lacks a viable business model in the classic sense. Its business model is a new business model of just burning investor cash that it raises via debt and equity offerings…

    Boeing
    Blowing these $43 billion on share buybacks has caused Boeing to have a “total equity” of a negative $5 billion. In other words, it has $5 billion more in liabilities than in assets. This company is out of wriggle room. If it can’t borrow enough money to make payroll, it’s over.

    But nothing matters.

    From 2013 through Q1 2019, Boeing has blown a mind-boggling $43 billion on share buybacks. If Boeing had invested some of this money that it blew on share buybacks to design a new modern plane from ground up to replace the ancient 737 airframe, these tragedies could have been prevented, and Boeing wouldn’t have this nightmare on its hands. But the corporate cost-cutters and financial engineers, rather than real engineers, had the final word.

    Markets don’t care about any of this. They don’t care about real engineers either. They love corporate cost-cutters and financial engineers. They want share buybacks, and if something bad happens, they’ll overlook the $5 billion to pay for the fallout because it’s just a “one-time item.”

    Beyond Meat
    A tiny maker of fake-meat hamburgers and hot dogs with just $40 million in sales in the last quarter, its best quarter ever, generating $6.6 million in losses, after 10 years in business, Beyond Meat [BYND] has a stock price that values the company at $12 BILLION because it will change the way the universe operates, or whatever.
    (end quote)

  84. 334

    RE: Blake @ 333 – Boeing stock is crazy. They are building 42 expensive planes a month that they cannot deliver until an unknown time. Despite that, the stock price has not really changed that much. It’s roughly where it was a year ago. Now if it is merely a software fix, that could be justified (if you ignore the liability from all the deaths). But it could be more than that. If they have to start tearing into planes to complete the fix then deliveries and production could be further delayed.

  85. 335
    Brianna says:

    Totally anecdotal — but we just (days ago) renewed the lease on our Eastside rental, and this is the first year in 3 that they didn’t raise our rent at all.

  86. 336
    Blake says:

    By Kary L. Krismer @ 334:

    RE: Blake @ 333 – Boeing stock is crazy. They are building 42 expensive planes a month that they cannot deliver until an unknown time. Despite that, the stock price has not really changed that much. It’s roughly where it was a year ago. Now if it is merely a software fix, that could be justified (if you ignore the liability from all the deaths). But it could be more than that. If they have to start tearing into planes to complete the fix then deliveries and production could be further delayed.

    Kary, I think investors are pricing in a “Boeing bailout.” Boeing is a systemically important US company and the Gov will keep it afloat. (And it helps that a bunch of Boeing people are in key Govt jobs now!)
    https://mattstoller.substack.com/p/the-coming-boeing-bailout

  87. 337
  88. 338
    Jeff says:

    By Ohd1122 @ 317:

    By Jeff @ 290:

    RE: Kary L. Krismer @ 272

    My purpose for trolling you is…

    RE: Jeff @ 291

    Stopped reading…

    “Stopped reading right there”: That’s one of the cheapest troll replies in the book. When you reply to a troll’s post to say you didn’t read it, it increases my confidence you’ve probably read all my posts and they finally got to you.

    My purpose here is to troll the trolls, especially the bigoted and blathering ones. Yours apparently is to troll the trolls that troll the trolls. Kary’s is to show us how intelligent he is, even though he would seem a lot more so if he posted roughly half as much. The cycles of the human psyche that play out right here on Seattle Bubble is astounding and even more entertaining than the Zuckerborg!

  89. 339

    RE: Deerhawke @ 312

    I’m closing out my July stuff and heading on vacation for a bit in August. August has typically been the agent go on vacation month.

    It’s a bit silly to say you aren’t seeing the market weaken but rather seeing it move sideways…at the crescendo of high season. There will be a downtrend July to August. There will be a brief spurt of optimism mid September. Weakness comes in 4th Quarter. Then you check median price YOY October, November and December to find the answer.

    You don’t find that answer until you are out of high season, though you can pretty much guess what it’s going to be. 10% down from peak of 2019 and even with 4th Quarter last year would be sideways. Could be above that because of interest rates if they hold.

    The handwriting on the wall that we can see from today’s vantage point is that 4th Quarter will be lower than 2nd and 3rd, but higher than 4th Quarter last year. Let’s see what happens.

  90. 340
    Deerhawke says:

    RE: Kary L. Krismer @ 330

    I just assumed that the source was Dupre & Scott, but alas they ceased operations last year.

    You are right. Hard to trust anything from Zillow. But I guess they are our source now

  91. 341
    JustNoise says:

    RE: Deerhawke @ 339 – What’s the beef with Zillow? Why are they hard to trust?

  92. 342

    RE: Kary L. Krismer @ 337

    Seems the fact that the SOC can be zero is more significant of an issue than that it will be published on some websites. Could get interesting. A seller can now be in the mls for a small fee to one of the FSBO Companies AND offer no commission to agents who will show the home. Bold move. Though I’m not sure how much of a change that is as I’m not sure there is currently a minimum. There used to be when I first moved here in early 2004, but seems to me I’ve seen a few offer $1.

    I wonder how Redfin would reinvent themselves if sellers all offered nothing which would essentially negate the rebate model.

  93. 343
    biliruben says:

    We sold our house with 1% to our seller’s agent and $1000 flat to the buyer’s agent 3 years ago through a lawyer. Sold over list with 3 bids. Easier to do in a seller’s market.

  94. 344
    Blurtman says:

    By Blake @ 336:

    By Kary L. Krismer @ 334:

    RE: Blake @ 333 – Boeing stock is crazy. They are building 42 expensive planes a month that they cannot deliver until an unknown time. Despite that, the stock price has not really changed that much. It’s roughly where it was a year ago. Now if it is merely a software fix, that could be justified (if you ignore the liability from all the deaths). But it could be more than that. If they have to start tearing into planes to complete the fix then deliveries and production could be further delayed.

    Kary, I think investors are pricing in a “Boeing bailout.” Boeing is a systemically important US company and the Gov will keep it afloat. (And it helps that a bunch of Boeing people are in key Govt jobs now!)
    https://mattstoller.substack.com/p/the-coming-boeing-bailout

    I wonder what could gear up demand?

  95. 345
    steven says:

    Kary and SWE,

    Are you guys retarded? I merely say you guys talk to much and impact the visibility of contents of this website you say all that shit to me? first of all there’s no “Right” way to scroll. If I choose to scroll with my middle finger using the scroller on my mouse like it was designed to, that’s my prerogative. If you choose to do it however retarded way you wish to, that’s on you. I can see that you have your own way coming from the 50s but computer friendly people tend to use tools the way its designed to.

    On another note, I have a lot to say about 90% of the undereducated, aka “not-smart enough to get into a decent law school but I still wanted to be called a lawyer” (yes that is you Kary), but I won’t. I’ll save you the misery.

  96. 346
    formerSeattleite says:

    By biliruben @ 342:

    We sold our house with 1% to our seller’s agent and $1000 flat to the buyer’s agent 3 years ago through a lawyer. Sold over list with 3 bids. Easier to do in a seller’s market.

    Wow.. why aren’t more sellers doing this? I guess I never thought about it from a seller’s perspective too: if it’s a sellers market, then the seller should be able to find a better deal as far as the agent and the fees they pay them.. What was the fee to the lawyer like? Was this ‘hard to do?’ I’m guessing this was cheaper or much cheaper than going down the traditional seller agent route?

  97. 347

    RE: steven @ 343It’s because you by definition are trolling. You can either not feed the troll or stomp all over them with material that accurate describes the troll. I prefer the latter.

  98. 348
    steven says:

    RE: formerSeattleite @ 344

    they do. that’s why redfin has been widely popular with their 1% seller commission. Buyer’s commission isn’t as easy because some buyer’s agents demand it and may not show such listings to their customers. Also, it works better in sellers’ markets due to comparably low listings but not so buyers’ markets where buyer’s agents can choose which listing to show. Moreover, some buyer’s negotiate a kickback with their agents themselves so it gets a bit more tricky. Just because seller pays lower commissions it doesn’t necessarily mean that the costs go down and it’s cheaper for buyers

  99. 349
    steven says:

    RE: Kary L. Krismer @ 345

    “stomp all over them with material that accurate describes the troll. I”, and yet you have not done so. Or maybe you think you have, but you tragically failed to do so due to your lack of intelligence.

    On the topic of trolling, how many people have you ended up quarreling with? You may be delusional as having “discussed” with other people here, but to most people you’re just starting fights over small details–arguing for just the sake of arguing.

  100. 350

    By formerSeattleite @ 344:

    By biliruben @ 342:

    We sold our house with 1% to our seller’s agent and $1000 flat to the buyer’s agent 3 years ago through a lawyer. Sold over list with 3 bids. Easier to do in a seller’s market.

    Wow.. why aren’t more sellers doing this? I guess I never thought about it from a seller’s perspective too: if it’s a sellers market, then the seller should be able to find a better deal as far as the agent and the fees they pay them.. What was the fee to the lawyer like? Was this ‘hard to do?’ I’m guessing this was cheaper or much cheaper than going down the traditional seller agent route?

    Biliruben is right it’s easy to do in a seller’s market, but the “savings” is not necessarily what it appears. It’s possible, if not likely, that there would have been more and higher bids if listed (particularly three years ago if Seattle). Conversely though I’ve also seen buyers pay too much through a FSBO, thinking they are getting some sort of a secret deal with a good price. There the seller can really make out well.

    Sometimes I’m contacted by a seller and during the course of meeting with them they disclose that they have a buyer who is willing to pay X. If that happens I’ll let them know whether or not X is a good price. Nine times out of ten those deals never come together, but occasionally they do and I’ll refer the seller to an attorney. In the last case that happened my estimate to the seller was that it was rather unlikely that we would get a bidding situation that would net him more.

    And contrary to some NAR studies, there’s no way you can really determine which does better on average, and it really doesn’t matter because you only care about how one transaction turns out. Even listing the same property with the same agent can lead to different results if listed on week X instead of week Y.

  101. 351
    steven says:

    RE: steven @ 346

    Let me correct myself. when the commissions go down “costs” do go down but doesn’t necessarily mean seller’s overall revenue from the sale is going to be higher or the cost of the house is going to be lower for the buyer.

  102. 352

    RE: steven @ 347 – I took it rather easy on you, only referring to your inability to set up your computer to scroll. You either don’t know how to set your scroll wheel properly on your mouse (assuming middle finger comment was benign), or you don’t know where to click with the mouse. Either way, not impressive.

    I’m glad to see that you’re actually trying to contribute to the site with your prior Redfin comment, rather than just proving that you can count posts and not do anything else. Not sure I would describe Redfin’s program as widely successful, but that’s just based on counting signs–not something I’ve looked at with real data. I suspect though that’s connected to having a buy side transaction too, but again I haven’t looked into it. I don’t really follow what other firms do, unless it’s something bizarre and/or not well thought out, and I wouldn’t describe the Redfin program that way.

  103. 353

    By JustNoise @ 340:

    RE: Deerhawke @ 339 – What’s the beef with Zillow? Why are they hard to trust?

    Zillow isn’t a real estate company, they are a lead generation (advertising) company for real estate agents. They make money charging agents fees, so they need to draw eyeballs to their site to justify the fees charged. That mean quantity over quality.

    Take for example this piece on global warming, and scroll down to the map of Seattle. https://www.zillow.com/research/climate-change-underwater-homes-12890/ According to the map there are places on Lake Washington and Lake Union at risk, even though those lakes are about 15′ above sea level.

    Then there’s also the somewhat underhanded things they’ve done, like their Coming Soon feature. That violates NWMLS rules, and the NWMLS is the only MLS in Seattle. Despite that their demonstration of Coming Soon showed Seattle in the materials, and they sold this feature to Seattle area NWMLS agents resulting in thousands of dollars of fines to those agents (their customers).

    Then there’s also the issue of the listings they show. I believe they’ve cleaned that up a bit, no longer having the stale and mispriced listings that used to clutter their site, but unless something has changed that I don’t know about they still don’t have all the listings. Feeding Zillow I believe is still done at the firm level, and for some reason not all firms do that. So Zillow is probably still a bad place to look for listings, unless you’re looking for FSBOs (one thing they are good at).

    Finally, a lot of people don’t like them due to the Zestimates not being all that accurate. Personally I think that’s just the nature of the automated valuation beast. And I’ve never had a buyer come into an open house and say: “But this is only valued at $X on Zillow.” I don’t think it affects actual sales, as some claim.

  104. 354
    steven says:

    kary… you’re old as shit.. don’t make computer comments to other people, you look stupider than usual. Didn’t even know that was possible.

    and yes I said it was widely popular. not widely successful. if you can’t tell the difference, end of discussion. 6 lines worth of shit. Sorry. bye.

  105. 355

    By Ardell DellaLoggia @ 341:

    RE: Kary L. Krismer @ 337

    Seems the fact that the SOC can be zero is more significant of an issue than that it will be published on some websites. Could get interesting. A seller can now be in the mls for a small fee to one of the FSBO Companies AND offer no commission to agents who will show the home. Bold move. Though I’m not sure how much of a change that is as I’m not sure there is currently a minimum. There used to be when I first moved here in early 2004, but seems to me I’ve seen a few offer $1.

    When I read about it my thought on that was Craig Blackmon could come back!

    The zero percent I believe opens the door to negotiating (as did the policies of at least one firm with a low offered SOC as well as having a Buyer’s Agency Agreement).

    BTW, years ago there was a brokerage that had a zero percent LOC, and from what I recall they didn’t offer services on the buyer’s side. Not surprisingly they are no longer in business. Over their life they apparently had 104 listings, 90 of which were cancelled. Oddly, none expired, so I’m guessing it was some sort of a bait and switch, but that’s just a guess. Clearly they had unhappy clients.

  106. 356

    By steven @ 352:

    kary… you’re old as shit.. don’t make computer comments to other people, you look stupider than usual. Didn’t even know that was possible. .

    Wow, you think computer skills have to do with age. How ignorant. But good to know you are biased. That’s a wonderful quality in people. /sarc

    And sorry I confused your use of the term popular with successful. I didn’t know you ran a public opinion polling company. /sarc (But nice try backtracking.)

    Here’s a clue. If you want to be something less than a troll, try actually refuting something I say. Otherwise STFU with your ignorant nonsense.

  107. 357
    steen says:

    RE: Kary L. Krismer @ 354

    if you work or worked in IT in the recent years, i’ll apologize. but wait, you don’t. Hence, it’s not called ignorance but observance. wait do you not know the difference between those two either?

  108. 358
    biliruben says:

    RE: formerSeattleite @ 344

    The negotations were… uncomfortable. A lot of back and forth, and playing the buyers off eachother. In the end we forced the buyers agent to either take less, or lose the house for his client and get nothing. The buyer did sweeten it a bit themelves, which is what point of the process was. The buyer should pay their agent. Discomfort when selling your biggest asset is how it should be. If it’s easy, you did something wrong. Saved us 30K, and got a waived inspection, but Kary’s right that we don’t know whether other agents steered them clear of our property. It was listed on the MLS though, so all a buyer needed to do was look at redfin and insist on going to see it if they were interested. That’s how buyers generally behave these days anyway. A buyer’s agent is generally just a doorman in many circumstances.

  109. 359

    By biliruben @ 355:

    and got a waived inspection,

    You mean the buyers got an increased right to sue you for defects in the house. Fortunately probably most of those claims are about to expire at the three year anniversary, but the waived inspection is not a good thing. It increases seller liability.

    And that relates to one of the bizarre offerings of a firm I mentioned earlier. One was offering free inspections to sellers, which is about the last thing any seller should want. Not only would they be put on notice of anything in the inspection, but they would also be indirectly responsible for picking the inspector if the buyer did not also do their own inspection, which is also not a good thing, IMHO.

    And here’s a more current bizarre offering by the Realogy group of companies. The author of this piece thinks even less of it than I do. As a general rule I’m not really a fan of builders adding smart tech to homes, and this is just a variation on that (with other things too). Personally I think owners should pick their own smarthome system, assuming they even want such a system. https://gizmodo.com/amazon-heres-5-000-worth-of-crap-to-turn-your-new-hom-1836674631

  110. 360
    formerSeattleite says:

    RE: biliruben @ 355

    Interesting, thanks for the follow up. $30k is a ton of money. Big congrats – the hard work paid off! And I think you’re spot on how many, if not most, buyers behave today.

  111. 361

    RE: steven @ 347
    I’ve Read Kary’s Blogs for Years

    He, like Ardelle and Erik, Blake, others are old timers on this website. You, I have no idea what good you are….blog something [I don’t even have to agree with it] useful on topic for once instead of childish character attacking behavior, middle finger scrolling and “wild allegations” about Kary’s law education are not on topic.. troll behavior in my book too.

    https://www.quadranthomes.com/washington/aurea/?utm_source=paid_advertising&utm_medium=yahoo&utm_campaign=quadrant_consideration_dma_yahoo&medium=tsa

    The dinky 1200 SF Condos [with stair cases wasting SF space?] start at $700K principle without HOA fees [$2000/mo?] and property tax [$600/mo?] tacked on. No back yard. Parking in Sammamish is an unknown too.

    Its a new construction URL…try renting this baby for like $3000/mo and lose money?

  112. 362
    formerSeattleite says:

    By Kary L. Krismer @ 351:

    By JustNoise @ 340:

    RE: Deerhawke @ 339 – What’s the beef with Zillow? Why are they hard to trust?

    Then there’s also the somewhat underhanded things they’ve done, like their Coming Soon feature. That violates NWMLS rules, and the NWMLS is the only MLS in Seattle. Despite that their demonstration of Coming Soon showed Seattle in the materials, and they sold this feature to Seattle area NWMLS agents resulting in thousands of dollars of fines to those agents (their customers).

    FYI, I just noticed a “Coming Soon” listing on redfin. It wasn’t for a home in the pacific northwest so I’m not sure if it’s regional or if this ‘coming soon’ feature is nationwide. It looks to be a Redfin listing though.

  113. 363

    RE: Blake @ 336
    The US Government is Now Imposing Tariffs if a Company Receives Subsidies From the Government Like Airbus

    I’m sure the US government will contradict this policy by subsidizing Boeing anyway? Its fog Blake.

  114. 364

    RE: formerSeattleite @ 359 – Coming Soon is nationwide, but if you see one in Western Washington it’s probably a violation unless down by Vancouver, where there’s another MLS entity.

    For a while I was warning agents when I saw them, but I haven’t looked for quite a while–years probably.

    https://seattlebubble.com/blog/2014/10/06/nwmls-levys-big-fine-for-using-zillows-coming-soon/

  115. 365
    Brian says:

    There was a question about rental inventory above. I’ve tracked craiglist rental inventory off and on for the past few years. Here are the numbers.

    This is everything for rent, no filters other than location.

    For 20mi radius from 98005 (Bellevue):
    7/27/2017: 11489
    7/31/2018: 14690
    7/26/2019: 13950

    For 5 miles radius from downtown Seattle:
    7/27/2017: 4649
    7/31/2018: 6116
    7/26/2019: 5412

    So inventories are higher than 2017 but lower than 2019.

  116. 366
    Brian says:

    RE: Brian @ 362

    Woops, meant to say inventories are lower than 2018.

  117. 367
    Blurtman says:

    RE: softwarengineer @ 358 – Nausea is one of those intimate, park-centric communities that inspire homeowners to fire one up and think all-is-right-with-the-world thoughts. Spectacularly inconvenient to shopping, dining and regularly scheduled runs to Trader Joe’s, Nausea’s collection of 41 townhomes is a rare place that faithfully delivers on unending HOA fees, cookie cutter styling, and traffic.

    So yes, one minute you could be putting miles on your new hiking boots in Target, and the next you might be asking your assistant to renew your opioid prescription. Whatever your life, Nausea is the style.

  118. 368
    northender says:

    RE: Brian @ 362
    Interesting numbers Brian.
    Some thoughts about craigslist rental listings though –
    I frequently see several posts for the same available space. Do you think the amount of duplicate listings is pretty constant over time?
    Just now I found an ad offering to ensure that a property is legitimate, for $75. And several ads for movers and some for mailbox places. Those shouldn’t be considered rental inventory.
    Right now within 5 miles of 98104 craigslist shows 5,502 for rent ads – pretty close to your recent Seattle figure. That drops to 3,448 when I select “bundle duplicates.” But it doesn’t take a lot of looking to find quite a few duplicates that sneak through the filter. When I choose a minimum price of $100 the listings drops further to 3,209. A year ago would the number of listings have dropped at the same proportion when those filters were selected? Seems hard to know.
    For large buildings with multiple vacancies, especially brand new buildings, I expect one ad gets posted for each different type of unit (and often some duplicate ads) but there wouldn’t necessarily be one ad for each available unit.
    When I list rental units on craigslist and zillow the vast majority of the response is through zillow. Two years ago I was only using craigslist and getting good response. For some reason zillow is getting more attention lately and it’s not hard to imagine that impacting the number of craigslist ads.
    It’s admirable you are tracking data yourself! I am not saying there is no meaning in your numbers, I just don’t know how much you can rely on craigslist ad data.

  119. 369
    Blurtman says:

    If the PTB crack down on H-1B’s, hello Sammamish lakeside home.

    Chinese buyers pullback dramatically in buying U.S. real estate: foreign purchases drop by 36% and the results will be magnified in prime areas of California.

    pparently there is a limit to how many houses Chinese investors can purchase in the U.S. Foreign real estate purchases largely driven by Chinese investors plunged by 36% as internal controls in China made it harder to move money out of the country and trade war talks are having an impact in this sector. While some might say this is small relative to the overall U.S. real estate market you need to realize that money from China was hyper focused on certain areas. At one point there were new developments in Irvine that were seeing 80% purchases from Chinese investors. This has a lot of potential to hit markets where volume and inventory is low and prices are valued at ridiculous levels inflated by outlier buyers. There are many areas in California like that. This also applies to areas like New York, Boston, San Francisco, and Seattle to name a few. So what does this mean for these inflated markets?
    Looking at the numbers – This is a clear pullback in foreign purchases in the U.S. real estate market. The value of homes bought by foreign investors is at multi-year lows but more telling is the actual number of buyers is at a decade low:

    This is significant and we’ve seen a drop across all areas. No surprise that the largest buyer in dollar amount is China. This is the group that has pulled back the most significantly and when it comes to prime California areas will likely have an impact. This issue has many layers but many of these prime areas have top schools within their area and this is valued by many investors who utilize homes as investment properties after their kids go to school in these areas (e.g., NY, Boston, San Francisco, SoCal, etc.).

    “(CNBC) The Chinese were the leading buyers for the seventh consecutive year, purchasing an estimated $13.4 billion worth of residential property. Yet that was a 56% decline from the previous 12 months and comparatively the biggest percentage drop of all foreign buyers. Chinese economic growth slowed to 6.3% in 2019 compared with 6.9% in 2017, when the previous buyer survey began. The Chinese government also tightened its grip on the outflow of cash to purchase foreign property.

    The Chinese may also be souring on U.S. real estate due to the current political climate. Anecdotally, real estate agents in California have seen a pullback in Chinese buyer demand. Southern California had been particularly popular with Chinese parents hoping to send their children to American colleges.”

    http://www.doctorhousingbubble.com/china-investors-pullback-california-us-buying-china-investors/

  120. 370

    RE: Blurtman @ 366 – You really need to keep up. We already discussed this topic starting at post 246.

    But your link does have some interesting information about the NAR surveys. Apparently in 2017 NAR claims almost half the money put into buying houses was from foreign nationals! http://www.doctorhousingbubble.com/china-investors-pullback-california-us-buying-china-investors/

    Basically what you have is NAR publishing one inaccurate number after another on an annual basis. And without corresponding sales numbers by foreign nationals, I’m not seeing the number would be useful in any event.

    And if you click through enough times, you get another piece of data which is slightly different than the other secondary source of data used in these articles. Typically the secondary source of data is quotes from agents. This time it’s a quote from a developer. Sellers are even more removed from knowing the nationality of the seller because all they see is the paperwork, and there is nothing in the paperwork that would give them the nationality of the seller. But OMG, the buyer knows how to read a foreign language! They must be a foreign national! /sarc

  121. 371
    biliruben says:

    Woudn’t this match with the 2018 domestic out-migration data, net `5000 leaving King County, offset by the net international in-migration of 40-50K that the times published? Or do you just think all data is shit? It my line of work, I recognize most data has problems, but if I see the same story from multiple analyses and datasets, I start to believe it.

  122. 372

    By biliruben @ 368:

    It my line of work, I recognize most data has problems, but if I see the same story from multiple analyses and datasets, I start to believe it.

    You don’t see the same story from multiple analyses and datasets. You see multiple stories from the same dataset (NAR), throwing in a quote from an agent or seller now and then.

    Note I’m not denying that foreigners are buying property in the U.S. It’s the quantification of that foreign buying I have a problem with.

    And this isn’t a problem like say with NWMLS data including late reported sales from prior months. That you can quantify (if you’re an agent), it’s a relatively small amount of the data, and it doesn’t necessarily vary from month to month all that much. This NAR data that is just on its face unreliable.

    I’ll repeat what I said before. I posted above that NAR could do a survey on whether it’s agents were left or right handed, and that would be inaccurate. I meant to say they could post a survey on whether agents’ buyers were left of right handed, but didn’t go back to edit because the mistake made the point even better.

  123. 373

    RE: biliruben @ 368 – I forget if I posted this here before–it might have occurred when I wasn’t posting here.

    Someone on some user site (Facebook, Twitter, etc.) posted what they claimed was a security hole in Amazon Exclusive Android phones. I saw it and within minutes determined that the behavior the person was seeing was merely due to a setting on the phone. Basically an optional delay in locking the phone if you turned off the screen via a certain method.

    Anyway, at least 12 tech sites picked up this story even though it was obviously false. So you had at least 12 stories resulting from the same analysis. As an aside, only one or two of these tech sites ever bothered to retract their story, but the point is the story spread widely even though it was based on the flimsiest of information–a social media post by a user. And why? Clicks. The stories about the NAR survey also spread due to a desire for clicks.

  124. 374

    RE: Blurtman @ 366
    Yes Blurtman, Excellent Blog

    I’d add too, assuming foreign real estate buyer history repeats itself….we sold MASS real estate to the “village idiot” Japanese and they grabbed the units up way over resale value later….they got burned in America and so will the lemming Chinese…

    https://seekingalpha.com/article/3988366-will-chinese-succeed-japanese-failed-investing-u-s-real-estate

  125. 375

    RE: softwarengineer @ 371 – That’s an interesting article in that it’s difficult/impossible to know the data sources–if I missed something let me know. Most of the graphs are from something called “Asia Society” but one is based on NAR data (Estimated Sales to International Buyers). They strip that attribution information out though–I only found it going to the Chinese language site they linked.

  126. 376
    MD says:

    I will never understand why non-US citizens are allowed to own residential real estate in this country at all.

  127. 377

    By MD @ 376:

    I will never understand why non-US citizens are allowed to own residential real estate in this country at all.

    Because we’re a free country that doesn’t discriminate against people based on their national origin?

    I’ve never understood why NAR takes the time to compile their worthless data. Does it somehow promote real estate? I get that Zillow does data for clicks, but what benefit does NAR get?

  128. 378
    Blurtman says:

    RE: MD @ 376 – To keep prices going up.

  129. 379
    Blurtman says:

    RE: MD @ 376 – To keep prices going up.

  130. 380
    Blurtman says:

    RE: Kary L. Krismer @ 377 – You have an ignorant understanding of discrimnation. All countries maintain separate policies for citizens versus non-citizens.

  131. 381

    By Blurtman @ 379:

    RE: Kary L. Krismer @ 377 – You have an ignorant understanding of discrimnation. All countries maintain separate policies for citizens versus non-citizens.

    I’m not saying that there aren’t areas where it matters. My statement would probably be more correct if I said we don’t discriminate against people with money based on national origin. As someone noted above, if you invest enough money in a business you can live here, possible exceptions for people from N. Korea, Syria, etc. But the right to buy and rent property is established by statute.

    https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview

  132. 382
    MD says:

    RE: Kary L. Krismer @ 380 – I fully understand that the right of non-citizens to buy housing is protected by statute. What I’m arguing is, that should not be the case.

    I’d also like to note that discrimination based on national origin is NOT the same thing as discrimination based on citizenship status.

    Under my proposal, it would be entirely legal for someone to immigrate to America, become a citizen, and only then would they be eligible to buy real estate. That would NOT be discrimination on the basis of national origin, because we’re allowing someone who originated in another country to buy land here. It WOULD, however, be discrimination based on citizenship status.

    And I think that’s fine. Discrimination based on national origin is based in clear racial animus, whereas discrimination based on citizenship status is based in a genuine desire to protect the stock of affordable housing for Americans of all races.

    My point is, don’t get all self righteous and social justice-y simply because I am tired of the middle class getting fleeced.

  133. 383

    By MD @ 381:

    My point is, don’t get all self righteous and social justice-y simply because I am tired of the middle class getting fleeced.

    That I could agree with, but it goes both directions. Part of the reason I object to the NAR data, beyond primarily that it is inaccurate, is it doesn’t exactly bring out the best in people. But yes the other extreme happens too with regularity.

    But as to your other point, you would need to at a minimum distinguish between renting and buying for non-citizens, otherwise resident aliens could have difficulty finding a place to actually live.

  134. 384
    MD says:

    RE: Kary L. Krismer @ 382 – fair point, maybe green card holders should get to buy real estate, too. In this alternative universe where I make all the rules, that is.

  135. 385
    Dustin says:

    RE: MD @ 381 – Do you think wealthy Americans should be allowed to buy property outside the United States? That villa in France or Italy, the vacation home in Mexico or the Caribbean, are those permissible? In other words, would you agree with the rules you’re advocating if they were enforced against you? Wealthy people who buy in foreign countries can help the economy of the areas they buy in: they hire professionals to maintain their property, they spend money on goods and services that benefit the local economy. It’s kind of like the gentrification of a neighborhood, where some are hurt and some are helped, but in general the net result is positive growth and change in the area. So you’re not necessarily “protecting Americans” if you are also closing their communities off from outside investment. Foreign buyers are also obligated to pay property taxes, which further benefit the community, and comply with local government regulations like any U.S. buyer.

  136. 386
    MD says:

    RE: Dustin @ 384 – if you’re trying to maximize “fairness,” I’d favor a policy of real estate reciprocity: if Americans can’t buy land in country X, citizens of country X can’t buy land in America.

    Sure, foreign buyers contribute to the real estate industry, but so do Americans who are looking for housing.

  137. 387
    biliruben says:

    By Kary L. Krismer @ 372:

    By biliruben @ 368:

    It my line of work, I recognize most data has problems, but if I see the same story from multiple analyses and datasets, I start to believe it.

    You don’t see the same story from multiple analyses and datasets. You see multiple stories from the same dataset (NAR), throwing in a quote from an agent or seller now and then.

    Note I’m not denying that foreigners are buying property in the U.S. It’s the quantification of that foreign buying I have a problem with.

    And this isn’t a problem like say with NWMLS data including late reported sales from prior months. That you can quantify (if you’re an agent), it’s a relatively small amount of the data, and it doesn’t necessarily vary from month to month all that much. This NAR data that is just on its face unreliable.

    I’ll repeat what I said before. I posted above that NAR could do a survey on whether it’s agents were left or right handed, and that would be inaccurate. I meant to say they could post a survey on whether agents’ buyers were left of right handed, but didn’t go back to edit because the mistake made the point even better.

    Actually, it was census data, probably ACS, corroborated with drivers licence data.

    So 3 sources, all I’m sure with their own peculiar flaws, but all indicating similar trends. At that point, you gotta start giving the data at least some credence.

  138. 388
    DavidE says:

    Some interesting observations about Boeing, and how it could affect the Seattle area housing,

    “Then there is Boeing [BA]. It just reported the largest quarterly loss in its history of $2.9 billion due to a nearly $5-billion charge related to its newest bestselling all-important 737 Max, two of which crashed, killing 346 people, due to the way the plane is designed. The flight-control software that is supposed to mitigate this design issue is not working properly. And a software fix that is acceptable to regulators remains elusive.

    Blowing these $43 billion on share buybacks has caused Boeing to have a “total equity” of a negative $5 billion. In other words, it has $5 billion more in liabilities than in assets. This company is out of wriggle room. If it can’t borrow enough money to make payroll, it’s over.”

    https://wolfstreet.com/2019/07/24/i-got-it-nothing-matters-tesla-boeing-stocks-like-the-whole-market-has-gone-nuts/

  139. 389

    By biliruben @ 386:

    Actually, it was census data, probably ACS, corroborated with drivers licence data.

    So 3 sources, all I’m sure with their own peculiar flaws, but all indicating similar trends. At that point, you gotta start giving the data at least some credence.

    Do any of those track home purchases? And seriously, census data shows high end homes being sold to foreigners?

  140. 390

    By DavidE @ 387:

    Some interesting observations about Boeing, and how it could affect the Seattle area housing,

    “Then there is Boeing [BA]. It just reported the largest quarterly loss in its history of $2.9 billion due to a nearly $5-billion charge related to its newest bestselling all-important 737 Max, two of which crashed, killing 346 people, due to the way the plane is designed.

    So basically, prior to the charge they took so future quarters wouldn’t look so bad, they made money? I find that a bit hard to believe–I wonder how they are accounting for the production of the 737’s that are just sitting around?

  141. 391
    Stan Banks says:

    RE: Ardell DellaLoggia @ 281
    Could you please expand on the Rules of Thumb you tossed in at the end of your post. IE: “Flip should be 2x Lot”. Do you mean the Flippers cost should be Lot Value x 2 at acquisition? and how does anybody know the value of a Lot in a developed area?

  142. 392
    DavidE says:

    By Kary L. Krismer @ 389:

    By DavidE @ 387:

    Some interesting observations about Boeing, and how it could affect the Seattle area housing,

    “Then there is Boeing [BA]. It just reported the largest quarterly loss in its history of $2.9 billion due to a nearly $5-billion charge related to its newest bestselling all-important 737 Max, two of which crashed, killing 346 people, due to the way the plane is designed.

    So basically, prior to the charge they took so future quarters wouldn’t look so bad, they made money? I find that a bit hard to believe–I wonder how they are accounting for the production of the 737’s that are just sitting around?

    Boeing may not go bankrupt, but it might become irrelevant if their planes are deemed unfit to fly and airlines switch to Airbus, especially in light of the fact that 60% of passengers surveyed have said that they will go out of their way to fly other models even if 737 MAX is certified.

    This is what the bailout and Don’t Fight the Fed crowd simply don’t understand. China has now more Fortune 500 companies than then U.S. does. Keep buying those overpriced homes thinking the Fed can bailout everyone, and nothing bad will ever happen because we can continue printing forever. The Boeing situation is truly a symptom of this very disease.

  143. 393
    Cap”n says:

    RE: DavidE @ 390

    “Keep buying those overpriced homes thinking the Fed can bailout everyone, and nothing bad will ever happen because we can continue printing forever. “

    There is a large slice of the population that lived through, and still feels the lingering effects of, the Great Recession. Not quite the perpetual thrift and wariness that plagued those that experienced the Great Depression, but a sense of skepticism about markets, house prices, and volatility of the economy is still fresh for many. I would argue that the scale of those who actually believe that nothing bad will ever happen and that Fed/printing will solve all problems is extremely small. My view is that while current home values in the Seattle metro are still high and stretching the bounds of what can be supported by the fundamentals, long term (7-10 + years) purchasing a house now is not a high risk move. Buying a home to reside in might not make you rich over that time frame, but it’s unlikely to make you worse off than renting over the same period. And I put my money where my mouth is. Just recently went under contract at 1 mil +. Will be happy to report back on the outcome here years from now.

  144. 394
    DavidE says:

    By Cap”n @ 391:

    RE: DavidE @ 390

    Buying a home to reside in might not make you rich over that time frame, but it’s unlikely to make you worse off than renting over the same period. And I put my money where my mouth is. Just recently went under contract at 1 mil +. Will be happy to report back on the outcome here years from now.

    Yes, since you are buying a house to reside in, then that makes all the difference. I hope you will make many happy memories there and it won’t matter one bit if home prices collapse as they did before.
    Just remember that most people live paycheck-to-paycheck now without any reserves, so even a garden variety recession can really push us over the edge. With China’s Investment Infrastructure Bank, Shanghai Oil Exchange traded in Yuan, and the European alternative (INSTEX) to dollar-based SWIFT now active, I would give the dollar 5 more years. Watch out for mortgage rates after that when we will have failed bond auctions. That will be around the time when interest on debt and Social Security and Medicare will consume the entire federal budget.

  145. 395

    RE: MD @ 381
    Yes MD,the Last Heard

    Mexican government will not let an American [or any foreigner] own prime real estate in Mexico per the 1973 investment Law:

    If its 220 miles from international borders or 120 miles from the coast….welcome to Mexico City with OVERPOPULATION, desert and lack of water. The good property is not for sale, like the Seattle area coastal land.

    Mexico is right in my book.

  146. 396

    RE: DavidE @ 392
    Yes Its Safe If You’re $CASH$ Rich

    I’d hate to be retired and budget planning around a $1 Home property tax [$1000/mo?] and maintenance insurance, HOA fees, let alone thousands a month in mortgage principle debt too…etc, etc….if its giant sized, ya got heating and air conditioning bills eating yo alive too, if the home is big enough you’ll need maids too…etc, etc…

    Most retirees I knew wanted back in the workforce after a couple years of this harsh reality with less “fixed” pay and more unknown inflation….many retired with a large mortgage noose around their necks too…

    But it depends on if you are a multi-millionaire or not. Sounds like top 1% household income to me. Certainly a long way from a $20/hr per capita average pay in Seattle, the real incomes in the area.

    Even the Seattle high rent is out of whack for the average Joe now, ask the homeless that have full time jobs in the area.

  147. 397

    RE: Kary L. Krismer @ 389
    Lay-offs in the horizon at Boeing?

    The 737 is also the cheap VW of the Boeing line….its become their bread and butter. They “basically” stopped selling the big expensive planes a long tome ago. This means they need twice the production rate to gain the same profit rate compared to its hey days…the Dreamliner became a nightmare too.

  148. 398
    LessonIsNeverTry says:

    Inventory curve this summer is more like 2015 than 2018. Curve shows the odd flattening of inventory in mid-summer (odd compared to previous two summers).

    https://pbs.twimg.com/media/EAk4A6jU4AEh5ju?format=jpg&name=medium

    This Spring I was saying that unless a spike in inventory occurred after early Spring buying frenzy, the overall housing market would be solid. Not much higher, not much lower. This is mostly the case, with MoM price increases catching backing up to last fall’s drop.

    Everything still feels like it is waiting… for the recession, for the boom, for the bailouts, for the mortgage rate collapse below 3%, etc. No one knows what to expect and so we are in this stasis. Until we get more direction in the economy I expect mostly flat curve with drift higher in inventory into early fall.

  149. 399
    uwp says:

    By LessonIsNeverTry @ 396:

    Inventory curve this summer is more like 2015 than 2018. Curve shows the odd flattening of inventory in mid-summer (odd compared to previous two summers).

    https://pbs.twimg.com/media/EAk4A6jU4AEh5ju?format=jpg&name=medium

    No one knows what to expect and so we are in this stasis. Until we get more direction in the economy I expect mostly flat curve with drift higher in inventory into early fall.

    It’s going to be hilarious if inventory starts trending down YOY in a couple months.

    Justme will trade in his tinfoil hat for a full-body suit.

  150. 400
    Ardell DellaLoggia says:

    RE: LessonIsNeverTry @ 396

    Agree. My July is like a normal June and August like a normal July, so give it an extra 30 days this year due to the late and record fall snow period.

  151. 401
    Justme says:

    RE: LessonIsNeverTry @ 396

    You haven’t defined what you are plotting, but it looks like each line is inventory for one summer self- referred to May 1 of the same year.

    Why is this a good measure of anything? Also, have you considered the noise coming from (a) start of month (b) variable weekdays each year.

    Why not just plot the inventory, as I do?

  152. 402
    Justme says:

    RE: uwp @ 397

    LOL, You are prognosticating or is it speculating about the nature of my clothing IF some event X occurs in the future? Perhaps it would be advisable to consider keeping your own pants on for the time being?

  153. 403

    By LessonIsNeverTry @ 396:

    Inventory curve this summer is more like 2015 than 2018. Curve shows the odd flattening of inventory in mid-summer (odd compared to previous two summers).

    I don’t think it looks like any other year, and even if it did that wouldn’t mean anything. It has been flat though.

    From what I’m seeing the median is a bit weak this month, but that will need to wait for the full data to be released and then the time (and interest) to look at it. As we saw a couple of years ago that’s sometimes due to more (or less) sales in less (or more) expensive NWMLS areas.

    Vague reference to the median from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

  154. 404
    LessonIsNeverTry says:

    By Justme @ 399:

    RE: LessonIsNeverTry @ 396

    Why not just plot the inventory, as I do?

    Because you already do that. We know inventory is higher this year than recent years.

    I showed relative change across three months of “summer”. It is quick and dirty because it is tied to May 1st and not the weekly cycle (but that averages out quickly as the charts show). I found it interesting that this year follows a seasonal cycle much different than 17 or 18, so I decided to share it. I don’t care whether you consider it a good measure of anything or not.

  155. 405
    LessonIsNeverTry says:

    By Kary L. Krismer @ 401:

    By LessonIsNeverTry @ 396:

    Inventory curve this summer is more like 2015 than 2018. Curve shows the odd flattening of inventory in mid-summer (odd compared to previous two summers).

    I don’t think it looks like any other year, and even if it did that wouldn’t mean anything.

    The shape of the 2015 and 2019 relative inventory curves, ignoring out of sync weekly wiggles (“Out of sync weekly wiggles” is my new band name) look almost identical to me. I’m surprised you don’t see it.

    I tend to agree that the similarity means nothing… except that it confirms 2019 is nothing like 2018 (or 2017 for that matter).

  156. 406

    Apparently government entities fight each other over the ability to offer first-time homebuyer assistance.

    http://www.courts.wa.gov/opinions/pdf/960631.pdf

    The case is pretty much limited to the issue of standing, so we’ll have to wait for the exciting conclusion in future decision(s).

  157. 407

    By LessonIsNeverTry @ 403:

    The shape of the 2015 and 2019 relative inventory curves, ignoring out of sync weekly wiggles (“Out of sync weekly wiggles” is my new band name) look almost identical to me. I’m surprised you don’t see it.

    I was using this.

    https://seattlebubble.com/blog/wp-content/uploads/2019/07/KingCoSFHInventory_2019-06.png

    2015 started a lot lower and stayed flat. Maybe if you’re just looking at a couple of months, but if you look at each year Jan to June they don’t look that similar.

  158. 408
    Macro Investor says:

    Ever notice how people who comment non stop are the ones with nothing to say? The people who rarely talk usually are thoughtful and intelligent.

    Nobody respects people who talk too much.

  159. 409

    By Macro Investor @ 406:

    Ever notice how people who comment non stop are the ones with nothing to say? The people who rarely talk usually are thoughtful and intelligent.

    Nobody respects people who talk too much.

    Yawn. Another pointless comment.

    Newsflash, I don’t like it when you post either. I do though always think about how ironic your name is.

  160. 410
    Justme says:

    RE: LessonIsNeverTry @ 402

    Now, now. I was simply asking why this type of statistic was a meaningful measure and had some concern about noise factors.

    Also, it is incorrect that the effect of the noisy weekday-dependent value of May 1 “averages out”. There is no averaging. What you are trying to say is that the noise factor affects the subsequent points of each curve equally. But the noise factor is different for each curve, which means comparing slopes between years is not reliable.

    The bottom line is that the derived stat contains less information than the original data, in a mathematical sense.

    Good effort and nice charting work, but overall illustrates some dangers of derived statistics.

  161. 411
    DavidE says:

    By softwarengineer @ 394:

    RE: DavidE @ 392
    Yes Its Safe If You’re $CASH$ Rich

    I’d hate to be retired and budget planning around a $1 Home property tax [$1000/mo?] and maintenance insurance, HOA fees, let alone thousands a month in mortgage principle debt too…etc, etc….if its giant sized, ya got heating and air conditioning bills eating yo alive too, if the home is big enough you’ll need maids too…etc, etc…

    Most retirees I knew wanted back in the workforce after a couple years of this harsh reality with less “fixed” pay and more unknown inflation….many retired with a large mortgage noose around their necks too…

    But it depends on if you are a multi-millionaire or not. Sounds like top 1% household income to me. Certainly a long way from a $20/hr per capita average pay in Seattle, the real incomes in the area.

    Even the Seattle high rent is out of whack for the average Joe now, ask the homeless that have full time jobs in the area.

    I am afraid after 10 years of binging on debt people in Seattle don’t realize how precarious the situation has become with Boeing. U.S. companies have lost touch with customers and are only preoccupied with stock buybacks. Examples of total corporate debt due to buybacks:
    Microsoft: 75 billion
    Amazon: 58 billion
    Boeing has negative equity (5 billion)
    https://wolfstreet.com/2019/07/26/the-most-indebted-companies-in-america/

    Airbus brilliantly killed any hope for the Boeing New Midsize Airplane by introducing the A321XLR. (https://en.wikipedia.org/wiki/Boeing_New_Midsize_Airplane) . The new Airbus airplane is as large as the 757 with longer range. China’s C919 will be long flying before a replacement to 737 can be made. Airbus is also working on A350 XWB 1100, which will seriously hurt the 777-9.

    Seattle’s big companies are in humongous amounts of debt (even Microsoft), and only the market manipulations of the Fed has kept them afloat. The debt load has become far bigger and more complex than the banks that failed in 2008.

  162. 412

    The Horrifying sharp Toothed
    Tunnel Toll Monster to Take a Bite Out of Your Pay

    At a theater near you, in 3-D…

    “…Highway 99 tunnel tolls: The state has lost confidence in its contractor’s ability to start tolling on schedule. The company, ETAN, will have to fork over nearly $1 million for the delay as it prepares to manage five toll roads. But the delay doesn’t mean drivers will get off the hook this fall…”

    from today’s Seattle Times email edition to SWE….the URL is pay per view BTW, so its useless.

    Dig deep….the mystery inflation hits in all directions.

  163. 413

    BRE: DavidE @ 411 – Comparing their 1Q and 2Q balance sheets the negative equity situation is primarily the result of the $5B charge for the 737 grounding (although obviously the numbers would be different but for buybacks before the 1Q).

    Also, while I didn’t find the specific information I was looking for on my question above, this did give me the opportunity to look for myself. It appears that the grounding is significantly increasing the inventory position, and reducing revenue. Apparently they do still have operating income notwithstanding, but it’s possible I missed some accounting trickery.

    Getting back to the stock buybacks, there is nothing wrong with a buyback. If a company has more cash than they need over the long term for the operation of their business they can: (1) Sit on it; (2) Declare a larger dividend; and/or (3) Buy back stock. The first is unproductive and the second might set up unrealistic expectations for future dividends. The second also subjects their shareholders to involuntary tax consequences, where the third increases the value of the remaining individual stockholders’ holdings (due to market action, not accounting changes) without a tax consequence. But hey, articles (and politicians) complaining about stock buybacks make great clickbait.

  164. 414

    RE: DavidE @ 411 – I forgot a fourth option: Pay down debt. They could do that, but seemingly believe stock buybacks are more in their shareholders’ and the company’s interest.

    Here’s a list of MSFT debt. Seemingly they can handle it since it is well spread out.

    https://www.microsoft.com/en-us/Investor/earnings/FY-2019-Q3/IRFinancialStatementsPopups?tag=us-gaap:DebtDisclosureTextBlock&title=Long-term%20debt

  165. 415
    DavidE says:

    RE: Kary L. Krismer @ 413

    “Getting back to the stock buybacks, there is nothing wrong with a buyback. If a company has more cash than they need…”

    And therein lies the problem: the buybacks have been financed mostly by debt and at the expense of hiring and innovating (Capital Expenditure). Since you asked for numbers, here is a good ratio. Since 2009, they have spent a combined 5.7 trillion dollars on stock buybacks and only one trillion on hiring people and inventing new products. This chart really speaks for itself.

    https://static.seekingalpha.com/uploads/2018/2/23/295940-15194237238400679.png
    https://seekingalpha.com/article/4156578-buyback-bubble-will-end-badly

  166. 416

    RE: Blake @ 333
    Yes Blake

    What worries me is not just the haughtiness and blindness to truth is contaminating homing in on the Boeing impacts, its more simple than that…how about Seattle real estate owners on Boeing Pensions? How many units does that amount to in inventory? Is their any data out there on how Seattle Real Estate is propped up with a Boeing retirement pension system that could bankrupt down the toilet….at a theater near you soon? I know if Social Security is eliminated so will the Seattle Real estate market…too many senior Boomers propping it up with broken Boeing sticks now?

    I recall speaking to a $50K/yr janitor at Boeing close to retirement who was bragging to me about the thousands/mo he’ll rake in with his union pensions and such…haughty and blind to the coming destruction of his Boeing pension and such incomes? Thank God there’s lots of burger flipper jobs now, let’s hope their old age health allows them to work in worst case scenario.

  167. 417

    By DavidE @ 415:

    Since 2009, they have spent a combined 5.7 trillion dollars in stock buybacks and only one trillion in hiring people and inventing new products.

    These are mainly established companies. Their ability to invest in themselves to create additional income streams is probably limited.

    That was an interesting opinion piece though. Two things it mentioned were: (1) Companies holding cash offshore; and (2) Tax law changes. As to the former, to the extent buybacks bring cash back into this country (which is uncertain), that would be a good thing. I mentioned timing issues in my prior response, but there are also rate differences, and on the ordinary income side those can vary a lot from shareholder to shareholder. Some probably pay low tax rates and some high tax rates (particularly if AMT is at play). Stock buybacks at least give the shareholder a choice to do what fits their situation.

    I really wonder though, if Congress outlawed stock buybacks would there be a lot of articles claiming that the higher dividends subsequently being issued were somehow bad for the companies because they were distributing profits?

  168. 418
    formerSeattleite says:

    https://www.cnn.com/2019/07/29/business/deutsche-bank-ecb-negative-rates/index.html

    “Legal restrictions limit the ability of banks to pass on negative interest rates to retail clients, although they have passed on some of the cost through fees. […] Although banks rarely charge negative interest rates to clients, Deutsche Bank signaled that may have to change. ”

    Could the banking situation in Europe/Germany be what triggers the next recession/depression?

    Can you imagine if everyone pulls their money out of the banks to avoid negative interest rates? (although one could argue they’ve already passed this on through their fees) I feel like that would be a disaster of epic proportions.. sure to affect real estate across the Globe.

  169. 419

    RE: DavidE @ 415
    Yes DavidE

    Great charts. I saw similar trending on the income groups actually buying in the American stock market…its the top 10% household incomes that own most of the stock and your article indicates there’s likely skewing in that estimate too, top 1% buy back skewing that is…

    Guys like Buffet are grabbing up stocks to puff up their own investments…

    Slightly unrelated, indirectly related are Kushner’s Baltimore rat infested slumlord investments, I’m wondering if Trump’s son-in-law made bad real estate purchases and his apartment house remodeling money into the Baltimore units was all wasted as the rats poured back in anyway…LOL…I visited Baltimore on a week long business trip, the locals recommend there “don’t leave the hotel” its a dangerous crime infested dump out there….I walked to the local mall for hotel groceries anyway and came back a paranoid mess. I came back safe after being bumped hard in a store by an apparent gang member and stared at by vicious looking gangs like fresh meat…

  170. 420

    RE: formerSeattleite @ 418
    Yes, Great Blog

    When a simple checking account costs like 10-100$ a month,its like negative interest. You got nothing from the bank on your money and the bank did…I never thought of that way, great point.

  171. 421

    RE: DavidE @ 415 – One more thought on this. If you were a large corporation with billions of dollars of outstanding debt charging a relatively low interest rate and you had excess funds being generated from operations, wouldn’t you wait to buy it back until interest rates rose significantly?

    I’m thinking back to the day when Southwest Airlines was reportedly earning more money as a result of its futures on jet fuel than it was flying airplanes.

  172. 422
    JWoods says:

    RE: DavidE @ 411
    Your statement is a very flawed one. The companies you listed do a lot of share buyback and raise debt because it makes financial sense.

    Let’s take MSFT as an example, it had $125 Billion in revenue and earned $39 Billion in profit for 2019 fiscal year, with total cash of $133 Billion and total debt of $85 Billion, which leave them net cash of 48 Billion. Assuming things stay about the same with revenue and profit, they will get $48+$39=$85B net cash in 2020, $124B in 2021….

    What do you do with all that cash? 10 year bond is yielding at 2.2%, while MSFT own return on total assets is 9.85%. When your company is earning 4 times more than alternatives out there, with the huge cash pile, it makes sense to invest in yourself, aka, buying back your own shares. And when you can borrow money at 3.3% (MSFT bond yield), it makes sense to borrow money and invest in yourself.

    Of course you want to ensure you have a solid balance sheet and your business continues to bring in cash, there have been companies who have over extended and got burned, but the companies you have named are the wrong ones to bark at.

  173. 423
    sfrz says:

    RE: JWoods @ 422 – Stock buybacks WERE illegal and SHOULD be illegal.

    “The SEC, operating under the Reagan Republicans, passed rule 10b-18, which made stock buybacks legal. Up until the passing of this rule, the Securities Exchange Act of 1934 considered large-scale share repurchases a form of stock manipulation.”
    https://investorplace.com/2019/06/7-reasons-stock-buybacks-should-be-illegal/

  174. 424

    RE: sfrz @ 423 – Wow, that’s one of the most ignorant articles I’ve ever read. None of those seven reasons is valid. This is probably the worst part of it.

    In 2019, America’s bill for the interest on that debt is $383 billion; by 2025 it’s projected to hit $928 billion or about the same amount as corporate stock buybacks in 2018. Imagine if the dollars directed to share repurchases were redirected to paying down the national debt. At the current pace of stock buybacks, the debt problem could be eliminated in 22 years.

    So basically if the companies did something that had nothing to do with their business or their shareholders, the national debt would be eliminated. Some logic there. That’s almost as bad as the people who think that tax cuts automatically lead to increased wages rather than the effect being at best long term and indirect.

    Or this:

    The legalization of stock buybacks in 1982 gave CEOs a massive incentive for repurchasing their company’s shares. Their pay packages went through the roof while the rank-and-file employees saw their wages barely budge.

    A rational person would see the causal link when it comes to income inequality.

    Apparently the author doesn’t know that correlation does not mean causation.

    The bottom line is that none of those reasons is valid and it’s not a valid argument for you to say that something once was illegal so it should be illegal. That is mere blathering nonsense.

  175. 425
    Matt P says:

    RE: Kary L. Krismer @ 424 – Stock buybacks are to manipulate stock prices and put more money into the pockets of executives at the company plain and simple. There was nothing before that couldn’t be done with a dividend except manipulating prices. Stock buybacks hurt the economy because they enrich people who already have more than they could ever spend in their lifetimes at a time when we’re cutting taxes for no reason.

  176. 426
    Lulu says:

    Interest is so low that buying back share is a wise move. If you own a house at 4% mortgage rate and you have cash in the bank earning 0.1% checking rate or 2.0% CD before tax, of course I will pay off my mortgage (same as buy back my house from bank) or buy equity paying 2.0% or above dividend. Interest is too low to put cash into saving account. As far as MSFT and BA, they generate huge net cash flow that must be used efficiently. Seattle has well diversified economy that support the inflated real estate: Amazon, MSFT, BA, T-Mobile/Sprint, *Bucks, Costco, you name it, all located in this narrow valley.

  177. 427
    Lulu says:

    Stock buy back is to eliminate the existing outstanding shares off the market to increase share holder value with no tax impact to share holders. Of course, executives have the incentive because they have options to increase stock price short term. As for MSFT, they generate too much cash that is useless laying around, either pay dividend or buying back shares. As for Boeing, they have to fix the 737 problem and regain the footing. The next decade will be a boom (more indian and Chinese will flying, many times more population will become mid-class) for air travel and airplane demand is huge. Costco is expending store footprint every where, Amazon prime minibus are now running 24/7 (want a mid-nite delivery? sure they can).

  178. 428
    Blake says:

    By Kary L. Krismer @ 413:

    BRE: DavidE @ 411

    Getting back to the stock buybacks, there is nothing wrong with a buyback. If a company has more cash than they need over the long term for the operation of their business they can: (1) Sit on it; (2) Declare a larger dividend; and/or (3) Buy back stock.

    Kind of interesting what you left off Kary…
    (4) Invest in plants and equipment (5) Invest in Research and Development… (6) Give raises to the people who actually build stuff! You know… the rank and file employees!

  179. 429
    Blake says:

    By Kary L. Krismer @ 424:

    RE: sfrz @ 423 – Wow, that’s one of the most ignorant articles I’ve ever read. None of those seven reasons is valid. This is probably the worst part of it.

    In 2019, America’s bill for the interest on that debt is $383 billion; by 2025 it’s projected to hit $928 billion or about the same amount as corporate stock buybacks in 2018. Imagine if the dollars directed to share repurchases were redirected to paying down the national debt. At the current pace of stock buybacks, the debt problem could be eliminated in 22 years.

    So basically if the companies did something that had nothing to do with their business or their shareholders, the national debt would be eliminated. Some logic there.

    I think you missed the point Kary. IF we had kept corporate taxes higher the companies would not have all the “useless” excess money AND the national debt would be lower! This begs the whole question about why the Repugs and right-wingers justify cutting corporate taxes: To give businesses more money to invest in R&D and plants and equipment! (The actually reason is to drive up deficits so they can then cite the deficits as reasons that we cannot afford any new programs and must cut existing programs!)

  180. 430
    DavidE says:

    By JWoods @ 422:

    RE: DavidE @ 411
    Your statement is a very flawed one. The companies you listed do a lot of share buyback and raise debt because it makes financial sense.

    Let’s take MSFT as an example, it had $125 Billion in revenue and earned $39 Billion in profit for 2019 fiscal year, with total cash of $133 Billion and total debt of $85 Billion, which leave them net cash of 48 Billion. Assuming things stay about the same with revenue and profit, they will get $48+$39=$85B net cash in 2020, $124B in 2021….

    What do you do with all that cash? 10 year bond is yielding at 2.2%, while MSFT own return on total assets is 9.85%. When your company is earning 4 times more than alternatives out there, with the huge cash pile, it makes sense to invest in yourself, aka, buying back your own shares. And when you can borrow money at 3.3% (MSFT bond yield), it makes sense to borrow money and invest in yourself.

    Of course you want to ensure you have a solid balance sheet and your business continues to bring in cash, there have been companies who have over extended and got burned, but the companies you have named are the wrong ones to bark at.

    Sold to you.

  181. 431

    By Blake @ 428:

    By Kary L. Krismer @ 413:

    BRE:

    Getting back to the stock buybacks, there is nothing wrong with a buyback. If a company has more cash than they need over the long term for the operation of their business they can: (1) Sit on it; (2) Declare a larger dividend; and/or (3) Buy back stock.

    Kind of interesting what you left off Kary…
    (4) Invest in plants and equipment (5) Invest in Research and Development… (6) Give raises to the people who actually build stuff! You know… the rank and file employees!

    Re-read what I wrote. I highlighted it to make it easier.

  182. 432

    By Blake @ 429:

    By Kary L. Krismer @ 424:

    RE: – Wow, that’s one of the most ignorant articles I’ve ever read. None of those seven reasons is valid. This is probably the worst part of it.

    In 2019, America’s bill for the interest on that debt is $383 billion; by 2025 it’s projected to hit $928 billion or about the same amount as corporate stock buybacks in 2018. Imagine if the dollars directed to share repurchases were redirected to paying down the national debt. At the current pace of stock buybacks, the debt problem could be eliminated in 22 years.

    So basically if the companies did something that had nothing to do with their business or their shareholders, the national debt would be eliminated. Some logic there.

    I think you missed the point Kary. IF we had kept corporate taxes higher the companies would not have all the “useless” excess money AND the national debt would be lower! This begs the whole question about why the Repugs and right-wingers justify cutting corporate taxes: To give businesses more money to invest in R&D and plants and equipment! (The actually reason is to drive up deficits so they can then cite the deficits as reasons that we cannot afford any new programs and must cut existing programs!)

    To reach that conclusion you’d also have to assume dividends are also okay, because that’s the other way to distribute profit to shareholders. The focus of the article quoted through was buybacks.

    Note above I said something to the effect that tax cuts would “at best” lead to higher wages indirectly and over the long term. I wasn’t trying to get into arguing over whether they work. Obviously over the short term if you raise the taxes for everyone (individuals and corporations) the deficit would be paid down. Over the long term that too would be an “at best” situation

  183. 433

    By Lulu @ 427:

    Stock buy back is to eliminate the existing outstanding shares off the market to increase share holder value with no tax impact to share holders).

    No impact to shareholders who remain shareholders. That’s the main difference between a buyback and a dividend–the group receiving money and taxed. The ones who accept the buy back pay taxes and then a good portion of them presumably reinvest in another corporation that can use the money, because they presumably had a good experience investing in the original company (or just because investing in corporations is what they do.

    BTW (not related to your post), as far as I know you could manipulate stock price by issuing irregular dividends too, and I know you could do it by raising your regular dividend. Yes stock buybacks affect the stock price, but so do a lot of things management does. That’s why there are rules against insider trading.

  184. 434
    JWoods says:

    RE: Kary L. Krismer @ 433
    Kari, I pretty much agree with everything you said in the last several posts, except stock buyback is almost always better than distributing dividends from tax point of view. Dividend is bad because of double taxation. Shareholder can choose to either hold onto stock, in which case they don’t have to pay any tax, and keep compounding their money; or they can choose to sell the same amount as the dividend rate, they get the income they need and pay the same tax rate as dividend.

  185. 435
    JWoods says:

    RE: DavidE @ 430
    Please enlighten me. Perhaps you can make a logical case?

  186. 436
    DavidE says:

    By JWoods @ 435:

    RE: DavidE @ 430
    Please enlighten me. Perhaps you can make a logical case?

    I will do my best to “enlighten” you. We are at the end of this business cycle–the longest expansion in history (and driven mostly by debt I might add). Only a fool would buy at the top and at these insane prices, including your darling Microsoft. It is a terrible waste of shareholder money and company resources.

    Case in point, the last $11 billion Boeing spent to push the stock price past the magical $400 resistance is all gone, dust in the wind. Boeing CEO made same arguments as you do, but if it had been up to me, I would have spent that money to keep my best engineers and invest in a new airplane rather than give their jobs to $9/hour developers in India.

    P.S. Even though we are here to discuss real estate, the effects of what I have just stated will arrive to a city near you and its housing prices.

  187. 437
    Voight-kampff says:

    Could this expansion continue for another 5 years? Another 10 years? I’m genuinely curious.
    I often hear it stated here that times have changed. Yield curve doesn’t mean as much now. Disruptive companies shares go up regardless of profit. The Fed does its thing. I’m not a bull or bear. I’m just trying to position myself to be ok either way, but it’s really hard, right? These are interesting times, but that might be because I am only just now really paying attention. Any and all blathering appreciated, I sincerely like reading opposing viewpoints… always plenty of that on SB!!!
    ;-)

  188. 438
    JWoods says:

    RE: DavidE @ 436
    You are making a different claim than your post No. 411. I did not say whether it’s a good idea to buy MSFT/BA stock right now, that’s a different subject. I’m simply making a case MSFT doesn’t have a debt issue as you claimed, and it makes financial sense for MSFT to buy back shares.

    Your post No. 411 said
    “Seattle’s big companies are in humongous amounts of debt (even Microsoft), and only the market manipulations of the Fed has kept them afloat. The debt load has become far bigger and more complex than the banks that failed in 2008.”

  189. 439
    DavidE says:

    By JWoods @ 438:

    RE: DavidE @ 436
    You are making a different claim than your post No. 411. I did not say whether it’s a good idea to buy MSFT/BA stock right now, that’s a different subject. I’m simply making a case MSFT doesn’t have a debt issue as you claimed, and it makes financial sense for MSFT to buy back shares.

    Your post No. 411 said
    “Seattle’s big companies are in humongous amounts of debt (even Microsoft), and only the market manipulations of the Fed has kept them afloat. The debt load has become far bigger and more complex than the banks that failed in 2008.”

    Can you honestly believe that being $75 billions dollars in debt is not a “debt issue ” for a company, even one the size of Microsoft? And that debt carries interest, which can be spent on more productive purposes. This is just like claiming that the $350 billion in interest that our Federal Government pays annually is not an issue, and it is better to pay that interest than to build roads, bridges, and to help our own population.

  190. 440
    DavidE says:

    By Voight-kampff @ 437:

    Could this expansion continue for another 5 years? Another 10 years? I’m genuinely curious.
    I often hear it stated here that times have changed. Yield curve doesn’t mean as much now. Disruptive companies shares go up regardless of profit. The Fed does its thing. I’m not a bull or bear. I’m just trying to position myself to be ok either way, but it’s really hard, right? These are interesting times, but that might be because I am only just now really paying attention. Any and all blathering appreciated, I sincerely like reading opposing viewpoints… always plenty of that on SB!!!
    ;-)

    Of course the illusion of economic expansion can continue for a few more years when they keep manipulating the statistics, which is basically what has been happening since 2008. You can get a positive GDP print by lying about inflation (that there is none), and by borrowing over one trillion dollars a year which shows up in GDP since all GDP is a measure of total spending. Inflation has a Price Deflator in GDP calculations, and by claiming there is no inflation you can always get a positive number (in other words, 25% tariffs on consumer products do not count, rent increases do not count, housing increases do not count, food and fuel increases do not count, and neither do healthcare premium increases and cost of education, etc.).

    P.S. GDP equals Government Spending (borrowing in our case), Consumer Spending, Exports (Trade Surplus) , and Capital Expenditure by companies. Trade surplus is non-existent as we all know due to our $600 billion dollar trade deficit, and CAPEX has been plummeting due to stock buybacks. So the illusion of positive GDP is simply trillion dollar deficit spending and consumer borrowing.

  191. 441

    By JWoods @ 434:

    RE: Kary L. Krismer @ 433
    Kari, I pretty much agree with everything you said in the last several posts, except stock buyback is almost always better than distributing dividends from tax point of view. Dividend is bad because of double taxation. Shareholder can choose to either hold onto stock, in which case they don’t have to pay any tax, and keep compounding their money; or they can choose to sell the same amount as the dividend rate, they get the income they need and pay the same tax rate as dividend.

    I would agree with that, but there are some people with very low income where the tax on a dividend would be very low. For others selling at a cap gain rate would be much preferable. Stockholders don’t have a choice for a dividend (other than to rid themselves of the stock), but do in most buyback situations.

    But yes, double taxation is a real problem, and one totally ignored by most politicians and the press.

    One other issue to throw out. I suspect a stock buyback costs the corporation a lot less money than issuing dividends of the same amount.

  192. 442

    By DavidE @ 439:

    Can you honestly believe that being $75 billions dollars in debt is not a “debt issue ” for a company, even one the size of Microsoft? And that debt carries interest, which can be spent on more productive purposes. This is just like claiming that the $350 billion in interest that our Federal Government pays annually is not an issue, and it is better to pay that interest than to build roads, bridges, and to help our own population.

    When you look at the complete picture, it’s not an issue for them unless you assume their revenues are going to dry up. They are accumulating funds, so that money cannot be “spent on more productive purposes,” or at least they are choosing not to for reasons other than a lack of funds. And no it’s not the same as the federal government situation. The federal government operates with nearly continuous deficits.

    If Microsoft was borrowing money at 12% it would be a different, matter, but the link I posted above shows the debt is at relatively low levels (although some in the 4% range).

  193. 443

    Returning to local real estate, Case-Shiller is apparently out, and the Seattle Times still lacks a real estate reporter. This article starts out rather sensationalist, but then actually gets to a few points mixing in some median data in a coherent way (something lacking a month ago).

    https://www.seattletimes.com/business/real-estate/dip-in-seattle-home-prices-leads-nationwide-slowdown/

  194. 444

    And this: https://www.foxbusiness.com/economy/states-highest-levels-of-mortgage-debt

    We apparently have the 4th highest average mortgage debt, although the drop from third place is considerable. This is apparently credit reporting agency data, so likely fairly accurate.

  195. 445

    RE: biliruben @ 371
    Where’s the URL Supporting Your 40-50K Foreign Nationals Coming to the Seattle Area?

    My search came up with this instead:

    https://www.themainewire.com/2018/05/young-people-fleeing-seattle/

    IOWs my daughter isn’t alone when she packed up and got the Hades out of Seattle….I also hear 50% of the Milenials need financial help to survive and get it from their parents….this is nationwide data, so Seattle is far worse.

    Even my HOA recently lacks kids and families now, I just look out the window. They’ve mostly been replaced by retirees at Glenbrook.

  196. 446

    RE: Voight-kampff @ 437
    I Skim Read Through Blather

    I can read fast too…its like almost all training at work, almost all of it is worthless. But listen carefully to it anyway, there’s “GOLD NUGGETS” mixed in too and the training needs to mix it all up or the nuggets wouldn’t be there to discover.

  197. 447

    RE: Lulu @ 426
    Yes LuLu

    My repo purchase was free if you consider I paid back the 1999 6% principle on my loan in 2009. Be your own bank IOWs. Even lower interest 2nd mortgages are a joke, extending the noose rope another 20-30 years to pay less/mo…wealth is not debt. Investment 101.

  198. 448
    Deerhawke says:

    RE: Kary L. Krismer @ 443

    It is a bit of a sensationalist approach to the data. Case Shiller is always useful for comparing Seattle to other cities, but the data always comes out a week before the current data. People who can’t rationalize the differences end up confused.

    Gene Balk’s column today in the Seattle Times is interesting. The headline tells the story. “Seattle Now Most Expensive City for Renters Outside California, Census Data Shows.”

    https://www.seattletimes.com/seattle-news/data/seattle-now-most-expensive-city-for-renters-outside-california-census-data-shows/

  199. 449

    RE: Deerhawke @ 448 – Interesting from that article:

    The Census Bureau also produces data that compares median rents and utilities with income, and it illustrates how the two have kept pace with each other. In 2017, the median rent in Seattle ate up 29% of household income. That’s basically unchanged from where it was in 2010.

    As an aside, I use Internet Explorer to view this site, because it’s easier to fill in the name/email/webpage information than Chrome. But I don’t have AdBlock installed. It’s always rather jarring to see the Seattle Times webpage without adblocking. It’s so annoying I’m surprised they get any views.

  200. 450

    RE: DavidE @ 436
    Foreign Engineering Degrees are a Joke in India Too

    I went to the U of W with a foreign “degreed” Mechanical Engineer from Mexico….he had no idea what Calculus was and I tutored him as a friend. He graduated too.

    We call these folks technicals, not degreed American engineers. That’s high school diploma level, if even that. I got to learn the Mexican culture from him though and he was a great college pal.

  201. 451

    RE: Kary L. Krismer @ 449
    A Mix of “Rich Elite” Skewed Data With High Incomes [qualified home owners rather than renters] Mixed in Data?

    It may likely be just like the avg household income bears very little resemblance to the avg Joe pay [$20/hr] times the avg 1.2 worker per household, because “rich elite” households like Gate’s skews the averages…

    Do you have the avg pay of just renters [tenants?], excluding home owners…that would help a lot. That’s the “fog” I’d like cleared up.

  202. 452
    Blake says:

    RE: softwarengineer @ 451
    SWE… The article cited MEDIAN rents and incomes not average. Median is a better measure to use for these purposes as it is not skewed by the distribution.

    RE: Deerhawke @ 448 – Interesting from that article:
    “The Census Bureau also produces data that compares median rents and utilities with income, and it illustrates how the two have kept pace with each other. In 2017, the median rent in Seattle ate up 29% of household income. That’s basically unchanged from where it was in 2010.”

    Kary: “As an aside, I use Internet Explorer to view this site, because it’s easier to fill in the name/email/webpage information than Chrome. But I don’t have AdBlock installed. It’s always rather jarring to see the Seattle Times webpage without adblocking. It’s so annoying I’m surprised they get any views.”

    Many commercial/news sites are almost unusable due to the pop up ads and videos. I have sent a great deal of feedback telling the editors and site managers this, but they don’t seem to care about the user experience. They just sell more ads! It’s all about the Benjamins!

  203. 453

    RE: DavidE @ 430
    The Rich Elite Do Almost Nothing About Seattle Homelessness Too

    And I don’t care if Bill Gates gives a lion’s share of his “extra” wealth to fight Africa malaria. Seattle gave MSFT scarce local freeway space to prosper and they assume its unimportant compared to foreign charities….what are these guys smoking IMO?

  204. 454
    Blake says:

    By DavidE @ 440:

    By Voight-kampff @ 437:

    Could this expansion continue for another 5 years? Another 10 years? I’m genuinely curious.
    I often hear it stated here that times have changed. Yield curve doesn’t mean as much now. Disruptive companies shares go up regardless of profit. The Fed does its thing. I’m not a bull or bear. I’m just trying to position myself to be ok either way, but it’s really hard, right? These are interesting times, but that might be because I am only just now really paying attention. Any and all blathering appreciated, I sincerely like reading opposing viewpoints… always plenty of that on SB!!!
    ;-)

    Of course the illusion of economic expansion can continue for a few more years when they keep manipulating the statistics, which is basically what has been happening since 2008. You can get a positive GDP print by lying about inflation (that there is none), and by borrowing over one trillion dollars a year which shows up in GDP since all GDP is a measure of total spending. Inflation has a Price Deflator in GDP calculations, and by claiming there is no inflation you can always get a positive number (in other words, 25% tariffs on consumer products do not count, rent increases do not count, housing increases do not count, food and fuel increases do not count, and neither do healthcare premium increases and cost of education, etc.).

    P.S. GDP equals Government Spending (borrowing in our case), Consumer Spending, Exports (Trade Surplus) , and Capital Expenditure by companies. Trade surplus is non-existent as we all know due to our $600 billion dollar trade deficit, and CAPEX has been plummeting due to stock buybacks. So the illusion of positive GDP is simply trillion dollar deficit spending and consumer borrowing.

    Case in point… 2Q2019 US GDP “growth”: Strip out the effects of the sharpest government spending run-up since the Great Recession and the drop in consumer savings rates, and real GDP growth was FLAT in Q2!

    Firing on all cylinders!

    Across the waters, the Euro zone is in really bad shape and the ECB is considering another round of “quantitative easing”… but they are running out of bonds to buy!! Incredible.
    Eurozone manufacturing activity worst in almost seven years
    https://www.ft.com/content/7b7c5140-ade2-11e9-8030-530adfa879c2

    German 10 year bonds are at -0.4%, Swiss at -0.78% … and the ECB deposit rate sits at -0.4%!!

  205. 455
    Blake says:

    I’ve got a print subscription to the Financial Times to read about the looming sh!t show in real time. They are pretty much panicking in Europe (and many other places). Out of bullets…

    Michael Hudson had this excellent (short) summary in Naked Capitalism yesterday:
    https://www.nakedcapitalism.com/2019/07/michael-hudson-the-coming-savings-writedowns.html
    Debts that can’t be paid, won’t be. That point inevitably arrives on the liabilities side of the economy’s balance sheet.

    But what of the asset side? One person’s debt is a creditor’s claim for payment. This is defined as “savings,” even though banks simply create credit endogenously on their own computers without needing any prior savings. When debts can’t be paid and debtors default, what happens to these creditors?

    As President Obama showed, banks and bondholders can be bailed out by new Federal Reserve money creation. That is what the $4.6 trillion in Quantitative Easing since 2008 was all about. The Fed has spent the last few years supporting stock market prices (and holding down gold prices) by manipulating the forward option markets.

    But this artificial life support to keep the debt overhead afloat is nearing the reality of the debt wall. The European Central Bank has almost run out of available euro-bonds to buy. The new fallback position to keep the increasingly zombified U.S. and Eurozone financial markets afloat is to experiment with negative interest rates.

    By driving down interest rates, the Fed’s policy of Quantitative Easing has subsidized an enormous debt buildup without increasing the interest burden proportionally. This has enabled corporations to carry much higher debt and even indulge in leveraged buyouts and stock buyback programs.

    This QE policy has made financial engineering much more enriching than industrial engineering. But it has painted the U.S. and European economies into a corner. At some points interest rates will inevitably begin to rise back up. Some countries will have to increase rates in order to borrow to stabilize their exchange rates when their balance of trade and payments falls into deficit. Other countries will simply see that the game is over and will give up the pretense that the personal, corporate and public-sector debt overhead can be paid.

    It is to prepare for this inevitable eventuality that Europe is experimenting with its trial run of negative interest rates. Once the technique is established, it will prepare the way for the inevitable step of writing down national savings in line with the economy’s ability to pay.
    (end quote)
    Blake sez: All the economies have been in the ICU on artificial life support since 2008. They have slowly tried to remove the Central Bank stimulus, but the patient started to flat line again. They got the Fed funds rate up to 2.5%, but they are about to cut it and it’ll go to 0… again. But it will not be enough.
    Stay tuned… Watch the EU!

  206. 456
    JWoods says:

    RE: Blake @ 455
    So what would you do as an investor?

  207. 457

    RE: Kary L. Krismer @ 449
    I’m With You Kary

    Every time a website asks to disconnect ad blocker its a “convoluted” 15-30 min of wasted time. I use stamps to save money instead of wasting time on laptop/iPhone administration or hour long waits on the phone for a “real person”. Pay per view URLs are rude to use and should be free. The ads they bombard us with anyway [with ad blocker or not] should more than compensate them anyway…

    Typical brainless computer nerds don’t add up time as money…..I do and it ain’t $1/hr either, try $50-100/hr or I use a stamp or phone call instead. Companies do a poor job in this area too. I guess they lost all their older savvy and experience…LOL

  208. 458

    RE: Blake @ 455
    The Enoch Times is a Great Source of Real News Too

    Its a SF publication and makes the Seattle Times look like a Fairy Tale Book in comparison IMO. Check it out, it likely speaks your language Blake…

    There’s gonna be a tug of war over the new revolution of Populism in America, so yes, industrial engineering can’t be replaced with debt forever. Its gonna take 5-10 years to retrain Americans in real industrial work skills….and Democrats, its gonna take male workers galore, especially OSHA limits on lifting weight by gender. Manufacturing pay is double/triple burger flipper pay and we need it ASAP.

  209. 459
    JWoods says:

    RE: DavidE @ 439
    “Can you honestly believe that being $75 billions dollars in debt is not a “debt issue ” for a company, even one the size of Microsoft?”

    You seem to be able to defy the gravity of logic, let’s see whether you can understand this:

    A guy has $133 cash in his pocket, including $85 he borrowed which he pays $2.8 interest per year, 0.77 cents per day.

    But wait, this guy also makes $125 per year, 34 cents per day, after he spends all expenses, he still has additional 10.7 cents left per day.

    The guy can pay off $85 he owes anytime he wants, or he can choose to keep the current arrangement and use <7% of additional money he gets every day to pay for interests.

    You can call the guy a jerk, greedy, lazy… but do you really think he has a debt problem?

    Changing the numbers above to $billion that's MSFT.

  210. 460
  211. 461
    steven says:

    btw swe, if you the four of u matter so much, kary, ardelle, swe and erik cuzz uve been here for so long, why dont just the four of you make a chat room for yourselves. i think this is for discussion from all people not just the 4 of u. at least tim thinks so and asked u to talk less.

    btw i mean no disrespect to erik or ardelle they have their own exp and knowledge theyve shared here so far.

  212. 462
    S-Crow says:

    Scenario: $500K sales price. Listed at $490K

    The NWMLS reflects the home as sold over list, naturally.

    This home had $10,000 in seller concessions which they offset by jacking up the sales price by $10K to cover it. This sales price is then marketed as “sold over list” implying a hot home or even multiple offers and is then tossed into the sales price stats bucket with a list to sales price ratio over 100% which his flat out “misleading.”

    In the meantime, the homeowners across the street have the magic of newfound equity because it sold for $10K over list or they get the idea that they can list their house for at least $500K. So they do list their home for $500K! And here comes along a couple who is looking under any pillow for remaining money to make their dual income cover the low or no down payment and closing costs so they offer over ask at $508K with the seller contributing $8K in closing costs. This now sets the new bar for a comp. This is the artificial appreciation caused by this scenario or the low to nothing down programs. Nevermind the idea that buyers are ok with amortizing their loan at the newly inflated price because that’s where the loan amount is or darn near it.

    This is playing out in this market and reminds me of the go-go days where people were buying homes and offering over list because they had 80/20’s loans (100% nothing down) to finance the transaction and they had the seller pay closing costs so they increased the sales price to cover that. Of course it would appraise! Again and again and again.

  213. 463
    QA Observer says:

    More national news of the affordability issues.
    This is 3 year old news around here.

    https://www.bloomberg.com/news/articles/2019-07-30/america-s-housing-affordability-crisis-spreads-to-the-heartland

  214. 464
    QA Observer says:

    Also, whatever happened to all the prosperous propaganda people used to sound bite to this site from the chipper John L Scott?

  215. 465

    By S-Crow @ 462:

    Scenario: $500K sales price. Listed at $490K

    The NWMLS reflects the home as sold over list, naturally.

    This home had $10,000 in seller concessions which they offset by jacking up the sales price by $10K to cover it. This sales price is then marketed as “sold over list” implying a hot home or even multiple offers and is then tossed into the sales price stats bucket with a list to sales price ratio over 100% which his flat out “misleading.”

    In the meantime, the homeowners across the street have the magic of newfound equity because it sold for $10K over list or they get the idea that they can list their house for at least $500K. So they do list their home for $500K! And here comes along a couple who is looking under any pillow for remaining money to make their dual income cover the low or no down payment and closing costs so they offer over ask at $508K with the seller contributing $8K in closing costs. This now sets the new bar for a comp. This is the artificial appreciation caused by this scenario or the low to nothing down programs. Nevermind the idea that buyers are ok with amortizing their loan at the newly inflated price because that’s where the loan amount is or darn near it. .

    Steven, you can quit reading at this point because you’re too unintelligent and have too little real world experience to understand the following:

    S-Crow, a few comments. This is part of what I’m talking about when sellers (and buyers) use comps without looking beyond the sales price. In the past I’ve focused on the difference between list and sold, but seller concessions is also a factor. If those concessions are related to conditions found during an inspection I have less of an issue with them, but they should be looked into.

    But this happens in other areas too. A story I’ve told before is two sellers were very unrealistic in the price of their condos. Over $220k for something worth maybe 190k. We negotiated with both and got one down close to $190k, but while our offer was pending a cash buyer came in and scooped up the other one for maybe $215k, thinking he had a good deal. Turns out our appraisal was about $2k below our contract price, a small difference that our buyer didn’t even bother asking the seller to eat.

    The point is in that case the cash buyer just looked at a pending list price and thought that was a fair value even though the contract price was far lower.

    Details matter!

  216. 466

    RE: S-Crow @ 462Steven, also don’t bother with this–it’s over your head, as evidenced by the commenters you think offer insight.

    S-Crow, the seller concessions is an (optional?) field that the listing agent can complete when taking the listing sold. Doing so eliminates a lot of calls from appraisers and a few agents asking about whether there were any such concessions. It’s well worth the effort to fill in, and there’s little downside, IMHO. But it’s not a public field.

  217. 467
    Sfrz says:

    RE: Kary L. Krismer @ 466 – hold karys beer. He’s going in for another round of insults and arguments. Throw em a troll! Hit em with ignorant! Bop! Pow! Puke on em with the foamy blather! Kary. It’s like a blowhard, pulling up a chair to sit at your table. How many requests do you need to give the blog a rest? Enjoy without the constant rebuttal. Your poor wife.

  218. 468

    By QA Observer @ 464:

    Also, whatever happened to all the prosperous propaganda people used to sound bite to this site from the chipper John L Scott?

    Okay, I often don’t explain what I’m thinking, e.g. post 406 above on the government entities suing each other, but here you’re doing the same. What are you talking about and was this something happening when I wasn’t posting here?

  219. 469

    By Sfrz @ 467:

    RE: Kary L. Krismer @ 466 – hold karys beer. He’s going in for another round of insults and arguments.

    I’m sorry, I guess we should just listen to your wisdom, with stuff like this.

    By sfrz @ 423:

    RE: JWoods @ 422 – Stock buybacks WERE illegal and SHOULD be illegal.

    I can only assume you’re also in favor of homosexual acts again being illegal, because they once were illegal. And inter-racial marriage. Segregated schools, etc.

    You failed to even attempt to respond to any of the arguments I made in post 424 about the pathetic article you linked on stock buybacks, which was almost as good as your reference to the movie Crazy Rich Asians. Apparently you only know how to cut and paste?

    Seriously, you really should at least try to respond to my arguments against your position rather than point out how I choose to deal with ignorant trolls. But since your positions have so little merit, I can see why you don’t.

  220. 470
    Bumble says:

    By Sfrz @ 467:

    RE: Kary L. Krismer @ 466 – hold karys beer. He’s going in for another round of insults and arguments. Throw em a troll! Hit em with ignorant! Bop! Pow! Puke on em with the foamy blather! Kary. It’s like a blowhard, pulling up a chair to sit at your table. How many requests do you need to give the blog a rest? Enjoy without the constant rebuttal. Your poor wife.

    +1, emphatically.

  221. 471
    steven says:

    haha kary it appears u mistake intelligence with wordiness and tangency.. i guess thats what they teach u at third tier law schools. talk until the opponent gives up. thanks. i just saved 200k.

  222. 472
    steven says:

    in terms of ppl i think offer insight. i totally disagree with erik. but he walks the talk like i did. i was a bull in 2015 and bought and i turned a bear in 2018 and sold with 40 percent appreciation. erik buys cuzz hes a perma bull. he sold once to not jeopardize his position but thats a respectable move. i dont fault him for that. he explained his sitaution and shared his exp. i believe this is a discussion board for that. if u dun think thats respectable, u dont belong here

    ardelle, like i said previously is a little bit more bull than what i think is reality due to her career as a realtor but anybody in this blog would agreee that shes a much better realtor than ull ever be.

  223. 473
    steven says:

    btw is it dementia or just senility? best check it out. alzheimers rates are rapidly increasing. i said i was bothered by you writing and me scrolling too much. u boldening those letters dont matter cuzz i scroll down when i see ur face anyway.

  224. 474
    Blake says:

    By JWoods @ 456:

    RE: Blake @ 455
    So what would you do as an investor?

    Well with asset prices inflated across the board for a variety of reasons (as stated above) it is hard to find a “place to hide” these days. I moved a lot of my liquid investments into CDs and bonds starting last November and those are up about 4-6% since then, but I was lucky with my timing. My main advice to friends and relatives is to avoid any investments with expense ratios above 0.5%, which can really eat away your holdings especially in the low return environment we may face in the years ahead (more on that below). I’m holding defensive positions such as the Vanguard Utility ETF (VPU, 0.1% expense ratio) and stocks like CostCo (which people will patronize during rough times). My wife and I own 4 properties (here, Tacoma, Arizona and central Massachusetts) and “real” estate is a pretty good place to hide if you don’t buy at the top and don’t have HOA fees and such. We’re keeping powder dry to invest in more properties in the next downturn as well. We’re just a few years from retirement… we hope!

    In sum: It’s pretty clear that we are near the end of huge run up in asset prioces and overdue for a “correction.” How severe it is depends on too many factors to list here, but it could be bad. Be satisfied in the years ahead with modest gains and avoid risky investments. I find most stock valuations to be insane and see a lot of risk there. It is hard to time the market and predict short term movements, but pulling back and looking at the big picture can be… sobering. This article is worth thinking about in particular.
    https://www.marketwatch.com/story/how-low-will-the-sp-500-go-buffett-and-shiller-know-2019-01-23
    Well, good luck trying to predict next year’s return—or even just tomorrow’s. But surprisingly, there are several recognized methods for projecting the S&P 500’s return in the next 7 to 15 years, and they’re pretty good…

    • Shiller’s P/E10 predicts a 2.6% annualized real total return. Take today’s S&P 500 price and divide it by its companies’ average inflation-adjusted earnings over the past 10 years. This gives you a ratio that suggests whether the market is overpriced or underpriced. If you could buy one “share” of the S&P 500 index, your account would be worth around $2,700. After 10 years of 2.6% gains, you’d have $3,490. (Controversy alert: Various economists have proposed a number of improvements in the way Shiller’s ratio should be calculated.)

    • Buffett’s MV/GDP says minus 2.0%. Divide the S&P 500’s market value by the U.S. gross domestic product. Buffett wasn’t the first person to suggest this metric, but he’s said on the record that it’s “probably the best single measure of where valuations stand.” If the index fell 2.0% annualized, your $2,700 would turn into $2,206. Not so great.

    • Tobin’s “q” ratio indicates minus 0.5%. This metric divides the market value of all U.S. equities (not just the ones in the S&P 500) by the cost to replace all of the companies’ assets. It’s based on academic papers by economists James Tobin, a 1981 Nobel laureate, and William Brainard. This formula predicts that your S&P 500 account will drift slightly lower in real terms, not quite keeping up with inflation.

    • Jones’s Composite says minus 4.1%. Jones uses Buffett’s formula but adjusts for demographic changes. For example, as America’s population ages, this reduces economic demand. The resulting Demographically and Market-Adjusted (DAMA) Composite has predicted the S&P 500’s 10-year returns more closely than any of the other formulas since 1964. Let’s hope he’s wrong. A 4.1% annualized loss would drive your $2,700 account down to $1,776 after 10 years. That would be a 34% decline, almost as bad as the “lost decade” of 2000 through 2009.

  225. 475
    DavidE says:

    By JWoods @ 459:

    RE: DavidE @ 439
    “Can you honestly believe that being $75 billions dollars in debt is not a “debt issue ” for a company, even one the size of Microsoft?”

    You seem to be able to defy the gravity of logic, let’s see whether you can understand this:

    A guy has $133 cash in his pocket, including $85 he borrowed which he pays $2.8 interest per year, 0.77 cents per day.

    But wait, this guy also makes $125 per year, 34 cents per day, after he spends all expenses, he still has additional 10.7 cents left per day.

    The guy can pay off $85 he owes anytime he wants, or he can choose to keep the current arrangement and use <7% of additional money he gets every day to pay for interests.

    You can call the guy a jerk, greedy, lazy… but do you really think he has a debt problem?

    Changing the numbers above to $billion that's MSFT.

    I give up on people like you with so little financial sense. You have no clue how debt loads like this can affect companies’ debt by rating agencies. We heard the same BS in 2008.

    That’s why the Fed is cutting rates because they know far better than you the gravity of the situation (never mind your simplistic and bogus mathematical assumptions stated in your reply). Besides, they spent $75 billion on stock buybacks instead of innovating and lost the so much to Google, Facebook, and Apple, a fact that Bill Gates recently admitted to. Go figure this out (if you can).

    Mark Twain had some wise words for people like you: you go bankrupt slowly and then suddenly.

  226. 476
    Erik says:

    RE: steven @ 470
    People that hold as much Seattle real estate as they can will likely end up very wealthy. I haven’t reinvested to buy more rentals yet, just a single family home I’m slowly updating. When I find a great deal, I’ll jump on it.

  227. 477
    JWoods says:

    RE: DavidE @ 473

    You are still missing one thing: logic.

    Simple is beautiful, prove the numbers bogus using logic and numbers instead of empty, scary statements.

    *** I don’t know why I’m still responding to your posts, this would be the last. Apologies to fellow readers who had to put up with this senseless debate.

  228. 478
    JWoods says:

    RE: Blake @ 472
    So you invest in following assets:
    1) CD and bonds
    2) real estate
    3) defensive stocks

    The investments make sense given your views, do you mind sharing the allocation percentage for the above asset classes?

  229. 479

    RE: steven @ 461
    You never answered our questions…

    What real estate blog material are you contributing?

    The Top 40 Cities in Real Estate Bankruptcy:

    https://www.gobankingrates.com/investing/real-estate/cities-in-danger-of-housing-crisis/#3

    Seattle didn’t make the top 40, but the “under-water” mortgages are back now…

  230. 480
    ohd1122 says:

    RE: DavidE @ 473

    I took a look at Microsoft’s annual report for the latest figures. Selected data points below. You can find the full list on Microsoft’s website.

    Cash and cash equivalents: $134B

    Short and long term debt: $73B (current portion $5.5B)

    Latest fiscal year operating cash flow: $52B

    Total liabilities: $184B ($69B current)

    Total assets: $287B ($176B current)

    What ratio or other analysis have you computed that implies financial stress? Or did you just see a big number and react? The current portion of Microsoft’s long term debt (what is due within a year) is ~10% of the total cash flow from operations. Receivables are 3X payables. Current ratio ~2.4.

    Looks like Microsoft began growing debt gradually from June 2009 until debt peaked at $82B in September 2017 and now it’s slowly tapering off. So basically, when it was dirt cheap Microsoft chose to use debt financing for investments and buybacks and stopped when the Fed started raising interest rates. As I’m sure you know, interest on debt is tax-deductible so this allowed MSFT to create a tax shield as well. This all seems pretty straightforward to me, but maybe I’m missing something.

    I get your meta point that companies can and have overextended and this will catch up with them, but I am not sure you picked the best example.

  231. 481
    Deerhawke says:

    Tim, we recognize you are busy but any chance of a monthly stats preview?

  232. 482

    By ohd1122 @ 478:

    I get your meta point that companies can and have overextended and this will catch up with them, but I am not sure you picked the best example.

    Here’s the cue for Steven to scroll down.

    Beyond the fact MSFT can easily handle the debt, there’s yet to be a coherent reason to not allow stock buybacks vs. doing other things with the money. It’s an option for management, but so far the only risk asserted against buybacks has been stock price manipulation.

    One thing not covered so far, on the topic of excess funds the other thing corporations do with excess funds is buy other corporations. I consider the risk from that type of activity to be far greater than the risk of company X’s price being supported during periods of weakness. Microsoft, Facebook, Amazon, etc. are powerful enough without them using their power and resources to take over new areas. But if you restrict what they can do with their excess funds, buying up other companies will be something they do more frequently. And as we all know, the anti-trust review does little or nothing to prevent real harm.

  233. 483

    RE: Deerhawke @ 481

    Not thinking that’s going to happen, so just a quick snapshot. King County median price, as you have said, is staying relatively flat until the season ends in 4th Quarter. April, May, June, July: $712k,$696k,$701k, 701k. I didn’t go back to January as volume sold was half then and not a fair comparison.

    There are likely 100 to 300 more sales to report for July…but that’s an as of now picture for houses, not condos, not townhomes, not houseboats, not double-wides…etc.

    Required Disclosure: Stats in this post are hand calculated in real-time by Ardell and not compiled, verified or published by The Northwest Multiple Listing Service.

  234. 484

    0% Saving Interest Rates and Retirement Planning

    Interest rates on mortgages going down….so why are financial planners using 5-10% return on investments? I’d use 0% and unplanned inflation like house maintenance and property taxes, etc have elbow room decades from now,….plan now or work until they lower you in the grave hole…

    Another SWE trick for accumulation of retirement $CASH$ during retirement, get your money out of locked box 401Ks/annuities at like 0–3% interest….pay the taxes and put it in a $CASH$ Money Market account and accumulate this excess income to enlarge your retirement period as needed…I do hope you live to be 100, but without $CASH$ in the future you won’t have enough, likely. You need to plan for “worst case” scenario now, later its too late.

    Getting interest on your investments is old school thinking and obsolete. Think out of the box.

  235. 485

    Have You Observed a Change in Seattle Livability Since Warehouse Labor Became King/Queen, i.e., AMZ

    Dating now sucks in Seattle. How many couples in love, hand in hand, do you see lately? I can’t find ’em anymore, can you Bubbleheads?

    https://www.thrillist.com/entertainment/seattle/why-dating-in-seattle-is-different-than-anywhere-else

    Perhaps I’m a romantic hippy from the 70s and out of touch with the new paradigm? But I see what I see….

    The URL above is a good one, because it highlights the fact that we just aren’t that sociable in Seattle anymore…I agree. Why you ask? Dating costs too much and males aren’t asking women out anymore, apparently. The 28 YO lady across the street from me hasn’t had a date to my knowledge all her life and I knew this old MSFT family before MSFT laid off dad about 5 years ago…she was friends with my daughter BTW, but home schooled [I’m sure that made it even worse]. My daughter was smart, she found a Kansas City man…LOL

    This is hard to admit, but I allege its true, we’ve become dateless in Seattle recently/generally…opposing blogs to mine? I want your opinion too. Livability means socialization too in my book. The dating sites like Match and eHarmony are a joke too in Seattle….they like to email forever now and never meet face to face…in the early 2000s those sites were hot, not anymore. Parents Without Partners was a hot BYOB dance club until about 15 years ago….they closed all the PWP dances. Why? No one can afford baby sitters anymore?

  236. 486
    David says:

    Boeing is NEVER going to be allowed to go under. Being is the only company producing commercial aircraft. So I consider Boeing a good investment currently. Subject to change because a company can be a good business but a lousy investment.

    FYI, I sent a letter to the King County Prosecutor refusing to cooperate in a murder trial here in King County until such time as King County publicly reverses its refusal to aid ICE.

    The people of King County deserve the people they get – including serial killers.

  237. 487
    S-Crow says:

    When an agent has to interject to a Title Officer or Escrow Company Owner: “I’ve been a Broker for 44 yrs and….” other some such bull$hit to make yourself look like a big shot when you don’t know what you’re talking about is sorta like…..

    …… telling a veteran Major League Baseball player that you’ve been playing baseball for 44 yrs. Um ok. Might be time to leave the game because you making yourself look like a fool.

    I couldn’t give a rats ass if you represent “celebrity/people in the entertainment biz.” Nobody cares.

  238. 488

    By S-Crow @ 487:

    When an agent has to interject to a Title Officer or Escrow Company Owner: “I’ve been a Broker for 44 yrs and….” .

    As I’ve said in the past, whenever someone says something like that (and I would add attorney to the list), the next thing out of their mouth will be nonsense.

  239. 489
    Coconut says:

    So…is this site still about real estate? Seems like a pot luck of topics. Honestly, what happened here? This site used to be interesting and informative. Now I have to wade through personal tiffs to get any real data. Is there a better site that is updated maybe weekly that shows King county trends for the non-real estate professional? Thanks

  240. 490
    uwp says:

    By Coconut @ 489:

    Is there a better site that is updated maybe weekly that shows King county trends for the non-real estate professional? Thanks

    Nope.
    SeattleBubble is the best!

  241. 491
    sfrz says:

    RE: Coconut @ 489 – HousingBubbleBlog (real estate news at home and abroad) Seattle pops up fairly often.

  242. 492
    Erik says:

    RE: Coconut @ 489
    We kinda ran into a bunch of internet people that don’t really care much about real estate. It’s bad now, but it was worse with wreckingbull and the goon squad. Wreckingbull and the goon squad were a group of low life computer programmers completely out of touch with reality.

    As far as real estate, I think the fed will lower rates more and get us out of this funk and prices will continue going up. It will be interesting to see what happens if/when the fed rate goes to zero. That will be the end of the line for interest rates. At that point, we’ll need more government interference to keep this train moving. I’m hoping we open up all the NINJA loans again and this thing catapults really high and explodes like 2008. Then I buy buy buy and retire early. I will then close my seattle bubble account and ride off into the sunset with bags of sweaty renter cash strapped around my waist.

  243. 493
    Erik says:

    RE: Coconut @ 489
    We kinda ran into a bunch of internet people that don’t really care much about real estate. It’s bad now, but it was worse with wreckingbull and the goon squad. Wreckingbull and the goon squad were a group of low life computer programmers completely out of touch with reality.

    As far as real estate, I think the fed will lower rates more and get us out of this funk and prices will continue going up. It will be interesting to see what happens if/when the fed rate goes to zero. That will be the end of the line for interest rates. At that point, we’ll need more government interference to keep this train moving. I’m hoping we open up all the NINJA loans again and this thing catapults really high and explodes like 2008. Then I buy buy buy and retire early. I will then close my seattle bubble account and ride off into the sunset with bags of sweaty renter cash strapped around my waist.

  244. 494

    RE: Coconut @ 489 – Nope, and the person who posts the most about local real estate issues gets attacked by stupid trolls the most. But that’s the nature of the Internet.

    On the topic of local news, I don’t know if the NWMLS cuts off their data at midnight, but at 6:35 a.m. the active King County SFR listings were down about 300 units from last month. Note though the prior 1st was a Monday. If you for some reason wanted to draw a trendline, it would probably be better to use a number from some point between Saturday and Monday morning (the latter being the best but any of those acceptable.

    The sales seemed okay but the median is down slightly (but only by an amount I would consider noise), and late reported sales can affect both numbers, as well as the fact that there are still sales from August that have not been input.

    Data references from NWMLS sources but not compiled by or guaranteed by the NWMLS.

  245. 495
    steven says:

    swe,

    many ppl would agree that me telling u and kary to shut up is a contribution in itself.

    also ive basically shared my thoughts on seattle realestate already multiple times esp on topic of downtown seattle. i just dont say it 10x a day like u and kary. its either ur too dumb to infer from my statements or too haughty to read other peoples statements. in any case, ur problem not mine.

    kary.. im sorry i hurt ur feelings. u can stop crying and calling out my name now.

  246. 496

    By steven @ 494:

    also ive basically shared my thoughts on seattle realestate already multiple times esp on topic of downtown seattle.

    BS. All you do is troll, because a stupid troll is all you are. In this thread the only comment you’ve made of substance was an inaccurate claim about Redfin. Other than that, 100% trolling.

    But have you learned how to scroll yet or do I need to keep reminding you to not read my posts if you don’t want to read something that is over your head?

  247. 497
    steven says:

    dude i told u to shut up so i contributed quite a bit in many readers mind.

    do u possibly have picks disease? i believe i went over the topic on scrolling already. if u dont remember scroll up and go see a neurologist and geriatrics.

    i said redfin was gaining popularity, and u mistook it for success. its not my fault you have medical issues.

    also erik, lets agree to disagree. i personally actually believe in the 18 yrs cycle too but there has heen couple instances in which the cycles did not follow through due to big economical/global issues. i think the combination of complex and intricate mix of domestic and international issues as well as technology are speeding up the process.

    honestly, i dont think the market will be sustainable even with the lowering of interest at this point and i think small part of u also agree hence the sale. a big driver of bull market and bear market is psychological and i believe theres a smell of fear in king county real estate esp in the downtown area.

    with hoa as high as it is in the down town area and property tax at 1 percent, most ppl are losing money even if the real estate market flattens. [500k condo with 600 dollar hoa with 20 percent down and mortgage at 3.5 percent coste 26k a year not accounting for opportunity cost of 100k, other maintenance costs or transaction cost.

    of course, buying is different from renting and it has its pros cons but vast majority of ppl see houses as investments, nest egg, savings, tax haven . i dun think enough ppl will buy when they think that they will most likely lose money. a lot of ppl alrrady think were overdue for a recession. theres a chance that we may nor but its unlikely.

    this is just downtown area condos which is different from sfr market, but math in sfr for buying vs rent isnt much off either. at least i dont think they will behave different enough to yield opposite results.

  248. 498

    RE: Erik @ 476
    Don’t Feed the Troll Erik

    I feel sorry for them.

  249. 499
    Deerhawke says:

    RE: Kary L. Krismer @ 493
    ———-

    On the topic of local news, I don’t know if the NWMLS cuts off their data at midnight, but at 6:35 a.m. the active King County SFR listings were down about 300 units from last month. Note though the prior 1st was a Monday. If you for some reason wanted to draw a trendline, it would probably be better to use a number from some point between Saturday and Monday morning (the latter being the best but any of those acceptable.

    ———-

    Thanks for this information Kary.

    I have posted about noticing the weakness in inventory over the past month. At a time of year when inventory normally keeps building toward an annual peak in September or October, inventory seemed to have flatlined.

    Now, in fact, we can see that inventory has dropped by, say, 7 or 8 percent.

    My guess is that this was caused by a continued drop in new listings that we saw last month. Hard to say if all this is the beginning of a trend or a blip in the data.

    (If we had a Justme on this site for real estate bulls, he would be trumpeting the Return of the Seller’s Strike!!!!.)

    But more realistically, what we may be seeing is the return of more “normal” inventory patterns. I would argue that in the 2012-2017 period, you got a certain amount of repressed supply. Why sell when the house would be worth more in 6 months? Or 3 months? Or 1 month? But people can only hold their breath for so long. With the rise in interest rates and a drop in buyer interest in early 2018, sellers looked for their long awaited payday. In 2018 we saw inventory rise to levels we had not seen since 2012.

    2019 has been all about hitting the reset button after 3 weak quarters in 2018. Prices have recovered. Sales and pendings have been healthy. So perhaps what we seeing now is a return to equilibrium levels of supply. My guess is that this might look like 2014/2015 levels.

  250. 500
    uwp says:

    I’m glad Kary is back from his self-imposed hiatus. While he was gone, the power had shifted to Ardell, but now the universe is back in order. Perfectly balanced. (Also, he seems to know what he’s talking about with RE, although he can be a stickler about some random stuff).

    The only one I wish would stop commenting is SWE. Even Justme, who I think is wrong on many things, makes contributions and knows how to post (for the most part).

    SWE will post 8 times in row about nothing useful (posts 1-5 about how great Kansas is, 6-8 will be indecipherable nonsense).

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