NWMLS: New listings dry up as home prices plateau

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The NWMLS published their August stats yesterday, so let’s take a look at how the month shook out for the housing market.

As we mentioned in yesterday’s preview post, the biggest story is a sudden, renewed shortage of inventory.

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

Home Buyers Seeking Affordability Are Expanding Search Outside Greater Seattle Job Centers

Depleted inventory continues to frustrate would-be buyers in Western Washington. Many of these potential homeowners are expanding their search beyond the major job centers in King County, according to market watchers who commented on the latest statistics from Northwest Multiple Listing Service.

“While August is always a slower time for listings and sales, what is really surprising this year is the decrease in new listings taken, while pending sales increased,” observed Mike Grady, president and COO of Coldwell Banker Bain.

Multiple offers are still commonplace with many buyers walking away disappointed, according to Wilson. “Traffic is strong at open houses and our average market time is still very low for correctly priced homes,” he added.

“The August numbers offered a few interesting nuggets,” stated OB Jacobi, president of Windermere Real Estate. “The Seattle area housing market is still coming off the ‘sugar high’ that we saw last summer, but homes sales and prices are stabilizing, which is reassuring to both buyers and sellers.”

Quick note: According to data from Redfin, multiple offers are far from “commonplace” now. In August fewer than 10 percent of offers in the Seattle area faced competition. (Disclosure: Tim works for Redfin.)

However, new listings are indeed way down. Let’s get into the data to quantify the drop.

CAUTION

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

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

August 2019 Number MOM YOY Buyers Sellers
Active Listings 4,194 -4.7% -10.1%
Closed Sales 2,531 -3.9% +6.1%
SAAS (?) 1.11 -4.8% -22.9%
Pending Sales 2,623 -10.1% +7.9%
Months of Supply 1.66 -0.7% -15.3%
Median Price* $670,000 -1.5% +0.1%

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

King County SFH Inventory

Inventory fell five percent from July to August. During the same period a year ago, inventory rose 12 percent. The 10 percent year-over-year drop in inventory is the biggest decline we’ve seen since January 2018.

Here’s the chart of new listings:

King County SFH New Listings

New listings were down 10 percent from July to August, and were down 18 percent from a year ago. Only 2011 and 2012 saw fewer new listings in August than we had in 2019.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales fell four percent between July and August, and were up six percent from last year. Closed sales have been in a fairly tight range between about 2,400 and 2,800 in August every year since 2013, and this year fell right in the middle of that range at 2,531.

King County SFH Pending Sales

Pending sales fell 10 percent month-over-month but were up eight percent year-over-year.

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

King County Supply vs Demand % Change YOY

The good news for buyers with respect to housing supply was short-lived. Supply is back in the red.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Home prices dipped a bit last month, but not by as much as they did this time last year, so we ended up back in the black year-over-year, just barely.

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

King County SFH Prices

August 2019: $670,000
August 2018: $669,000
July 2007: $481,000 (previous cycle high)

Here’s the article about these numbers from the Seattle Times: The market’s chilled out, but Seattle home prices still too hot for many first-time buyers

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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.

257 comments:

  1. 1
    Eastsider says:

    It would be interesting to see data showing divergence between the top and bottom quartile homes in this market.

  2. 2
    Justme says:

    New listings drying up? Just wait until the recalcitrant sellers realize that the already past-the-peak prices is as good as it’s gonna get. And “drying up” is a bit of an exaggeration already, is it not? I’d say it is just as likely that we’ll get a flash flood of new listings as listings drying up.

  3. 3
    The Tim says:

    RE: Justme @ 2 – I think going from the fourth-highest number of new listings in the last 20 years in May down to the third-lowest in the last 20 years in August is worthy of the phrase “drying up.”

    Look at how dramatically the number of new listings fell between May and August of this year compared to every other year on record:

  4. 4
    N says:

    Great chart Tim. What I find interesting, is that 2018 when inventory seemingly kept rising into October, new listings were down 25% May-Aug, tying a record at the time (back to 2000 anyways). But rates were heading up and buyers disappeared to the point where inventory still went up.

    Seems this would point to the Seattle market really being driven by buyer activity. We focus so much on inventory but maybe demand is where it all starts and ends.

  5. 5
    GoHawks! says:

    Good to have you back Tim! Thanks for your great work.

    Could it be simple supply and demand. Sellers came out in droves last May to try and capture record high prices. Now they know they will get a good, but not great number/terms for their home so they are deciding not to sell (refinance with lower rates?).

    Given the big run up in prices, this “correction” feels pretty tame. Prices up 70%, then down 4-6% over 18 months.

  6. 6
    Joe says:

    RE: Justme @ 2

    I think you are correct on that. Mortgage rates lowered a full point, which add a bunch of buyer fire power, but there was no buyer rush. If a 1% mortgage rate reduction will not bring buyers out, what will?

    There are two things that can bring buyers out – lowered interest rates and lowered prices. Now that rates can go no lower, only reduced prices will work.

    We are at the end of a 10-year massive price run, and most potential buyers now understand the implications of that. There has been a huge change in sentiment, and that’s all that really matters after a speculative run-up.

  7. 7
    Joe says:

    RE: N @ 4

    My take, after talking with many smart people, is that sellers in 2018 were worried about a quick price drop. 2018 was the first time prices dropped in years, so there was a small seller panic. As the year progressed through 2019, people realized there would be no quick-moving price action, and they now think there is no harm in waiting a bit to see where the trend heads.

    Buyers see no need to panic either. The buyer panic reversed in 2018, and they are also taking a wait and see approach.

    We have entered a market where sellers and buyers are waiting it out a bit for more feedback. The wait should prove quite fruitful for patient buyers. With S&P profit growth now in negative territory, stocks clearly facing headwinds, tariffs running wild, interest rates at rock bottom, etc., I think we will see a recession and layoffs soon. The seller panic will re-emerge over the next year.

    Successful people have a knack for identifying trend reversals. They don’t buy anywhere near the top.

  8. 8
    JustNoise says:

    Will be interesting to see the numbers from September, too. Completely anecdotal evidence, but it seems to me that a lot of listings came on the market after Labor Day.

  9. 9
    SeattleBubble says:

    Seattle is still adding jobs. Net population are still moving to Seattle area. Apartment are no cheaper to rent than buy. SFH inventory is still low. Mortgage rate aredroping. Seattle traffic is bad enough. New buyer bite the bullet and accept the high price.

  10. 10
    Erik says:

    RE: Justme @ 2
    You, Joe, and Sfrz were all wrong.

    I recommend learning from the more experienced people moving forward. You 3 looked at the wrong indicators.

  11. 11
    Erik says:

    RE: Joe @ 7
    Going back to try and fill in the logic of why the market stalled is a fools errand. You need to think differently if you want to learn how to see a crash coming. This one was pretty obvious and you were on the wrong side. More data and less words is what you need to look at.

    Even when I read Tim’s posts, I just read the data the first time to form an opinion. Then I come back and look at the words.

  12. 12
    Longtime Listener First Time Caller says:

    Well done Eirk, you should be proud of yourself!

    Really, really proud…

  13. 13
    Erik says:

    RE: The Tim @ 3
    Great job Tim, puts things in perspective.

    Also, thank you for noting “only 2011 and 2012 had less new listings.” It’s sometimes difficult for me to differentiate between 2006 and 2012. Even more difficult for me is 2011 and 2014. It’s nice that you put the words too.

  14. 14
    Erik says:

    RE: Longtime Listener First Time Caller @ 12
    Thank you, I’ve put a lot of time into trying to predict what will happen. Justme, Sfrz, and Joe need to adjust their approach so they can make more money.

  15. 15
    Eastsider says:

    If you were in the market for a home in 2008, you would have witnessed the same inventory ‘dry up’ phenomenon – see Tim’s chart in comment #3. So don’t pretend that you know where market is heading from here. We all knew how it went after the 2008 inventory drought. Just sayin’

  16. 16
    Deerhawke says:

    RE: The Tim @ 3

    Thanks for again updating and posting.

    And thanks especially for clapping back at our resident permabear evangelist with data.

    I know you are busy, but if you get a spare moment, any chance we could get the months of inventory chart updated too?

  17. 17
    Erik says:

    RE: Eastsider @ 15
    Are you talking to me?

    2008 inventory was 12k
    2019 inventory is 4K

    Totally different situation.

  18. 18
    Erik says:

    RE: Deerhawke @ 16
    I just look at the king county inventory feed on Tim’s main page and image that dot on the September x-axis. You can do it, it’s easy.

  19. 19
    N says:

    If your going to compare standing inventory from 2008, why not compare new listings, # of closed sales etc.

    Something tells me the demand will tell you just as much as to why inventory was 12k. Oh, by the way the Dow was down around 33%, having its largest ever one day point drop in 2008 when the banks were failing and congress refused to bail them out….at least for a moment.

  20. 20
    Blurtman says:

    Nothing unusual about purchases decreasing in the face of falling rates. Let’s examine why.

    1. It’s just too ‘spensive. See new auto sales.

    2. Where do I move to? Everything is just too ‘spensive.

    3. Fear about economic collapse and job loss. Thanks, MSM and TDS lunatics.

    4. Fear that you’ll be catching a falling knife.

    5. Russian collusion.

  21. 21
    Erik says:

    RE: Blurtman @ 20
    We are waiting for rates to go down more. I want 3.25% on a refi for a 30 year.

  22. 22
    Eastsider says:

    RE: Erik @ 17 – Yes, 2008 and 2019 are different. But prices fell despite declining inventory in 2008.

    Affordability matters. Homebuyers reached their limits in 2018.

  23. 23

    Listing Decrease Sizable and Note Worthy Tim

    Much clearer tracking from your 40+% blog decrease data. I’m seeing much more listings in my SE King Co area, the open house signs all over compared to last year back it up….so cumulative data and specific area or neighborhood data seem to differ?

    Prices seem overall flat over years from your other chart. Great job Tim.

    Interesting market changes and Erik I like your Bull attitude no matter what. Blurtman, cars are tumbling in sales IMO because by 2025 the 5 year loan on gas cars banned in California means its scrap by 2025? I sure hope not, for new buyers’ sake. $30K gas cars is a lot of money to just throw in the scrap heap after its paid for?

    My Kansas home doubled in estimated realtor value since I bought it in 2013. Did Seattle homes follow this same trend? Erik may know. Questions, questions…

  24. 24

    If You Own a Rental I’d Use Realtor.com Estimates

    They’re a bit lower than Zillow, but that 5 year price Realtor.com estimate trending chart is better for trend data, prices went down a bit in 2019 end of year there, but 5 year trends show regression analysis doubling in price on my Kansas rental. [from 50K to about 100K]…purchased for about 30-35K if you include all the code improvements on top of $26K. S-crow is right, you must include all the fall out too.

    Its a bit hard to scroll down to it, but just select the screen with your cursor and drag down. Its there.

  25. 25
    whatsmyname says:

    Eastsider,

    I’ve recently noticed that you have a fondness for up to date Robert Shiller quotes. I don’t know how you missed this one from yesterday, but I am pleased to know that you will have the opportunity to see this.

    https://www.fnlondon.com/articles/robert-shiller-less-than-50-chance-of-us-recession-20190909

  26. 26
    richard says:

    RE: whatsmyname @ 25 – who take these economists opinion serously? the outcome is binary: recession or no recession. whats the point to give a probability. also their forecast is always less than 50% for obviouss reason: they dont want to be single out as a bear for being too pessimistic and in the mean meantime,they want to claim credit when there is indeed one recession. mr. schiller is very cautious to protect his reputation, he never gave a definite conclusion on anything based on my observation on him over years.

  27. 27
    whatsmyname says:

    By Eastsider @ 22:

    Affordability matters. Homebuyers reached their limits in 2018.

    Wow – if 2018 prices are the limit with HQ2 panic and much higher interest rates in play, what do you think will be the limit without them?

  28. 28
    Erik says:

    RE: Eastsider @ 22
    Your logic is the same reason Justme, Sfrz, and Joe are always wrong. Just because the market is moving in one direction doesn’t mean that it will continue moving in that direction. You look at the number relative to historical data.

    People on here that knew what was going to happen saw the low inventory and knew the area wasn’t losing jobs. From those 2 data points, you can determine that prices are very unlikely to crash. Joe uses other data points like the number of people at open houses in woodinville . Joe is wrong. Just me and Sfrz extrapolate the direction a market is heading and are wrong. This is not complicated if you look at what matters. Don’t fall for all the noise.

  29. 29
    Erik says:

    RE: Eastsider @ 22
    Doesn’t matter the direction. This is not a bowling ball, this is a real estate market.

  30. 30
    oldmonk says:

    Hi Guys/Tim, have been reading this blog for ever, time to give up the silent reader status.

  31. 31
    Eastsider says:

    RE: Erik @ 28 – I’m neither a permabull nor permabear unlike most here. But I’m certainly not bullish today.

  32. 32
    Eastsider says:

    By whatsmyname @ 27:

    By Eastsider @ 22:

    Affordability matters. Homebuyers reached their limits in 2018.

    Wow – if 2018 prices are the limit with HQ2 panic and much higher interest rates in play, what do you think will be the limit without them?

    HQ2 news have not moved prices in the last year.

    When I wrote ‘limits’, I was referring to Affordability, not Prices. Homebuyers reached their monthly mortgage payment limits in 2018. Still confused?

  33. 33
    Eastsider says:

    RE: whatsmyname @ 25 – I noticed you have a fondness for trolling. Unlike you, I don’t even follow Shiller. I was just pointing out that you cherry picked Shiller statements to support your bullish narrative. Are you suggesting that under 50% chance of recession is now a bullish signal? LOL.

  34. 34
    whatsmyname says:

    By Eastsider @ 31:

    When I wrote ‘limits’, I was referring to Affordability, not Prices. Homebuyers reached their monthly mortgage payment limits in 2018. Still confused?

    The only confusion I have is this: How is it you could spend so much time here, and not realize that a lower interest rate allows an equal mortgage payment at a higher price? You know, “affordability”.

  35. 35
    Brianna says:

    RE: whatsmyname @ 33

    There’s more to affordability than just your mortgage payment:

    “Scenario 1: A More Expensive Home

    Sales price: $400,000
    Loan amount: $320,000 (20% down payment = $80,000)
    Mortgage rate: 4.50%
    Mortgage payment: $1621.39
    Total paid including interest: $583,700.40

    Now imagine home prices fall 10 percent over the next year or two, while mortgage rates rise from 4.50% to 6.00%, which while possible, probably isn’t all that likely.

    Scenario 2: A Higher Mortgage Rate

    Sales price: $360,000
    Loan amount: $288,000 (20% down = $72,000)
    Mortgage rate: 6.00%
    Mortgage payment: $1726.71
    Total paid including interest: $621,615.60”

    https://www.thetruthaboutmortgage.com/home-prices-vs-mortgage-rates/

    Lower prices are better for buyers than low rates.

  36. 36
    whatsmyname says:

    By Eastsider @ 32:

    RE: whatsmyname @ 25 – I noticed you have a fondness for trolling. Unlike you, I don’t even follow Shiller. I was just pointing out that you cherry picked Shiller statements to support your bullish narrative. Are you suggesting that under 50% chance of recession is now a bullish signal? LOL.

    Justme used some Shiller quotes to infer Shiller was telling people not to buy. Unfortunately, he linked the whole source interview where Shiller stated the opposite multiple times, and I simply pointed that out. I am not sure in what world that constitutes “cherry picking” on my part.

    Here is the quote of you “just pointing out” my cherry picking by using a quote from a different article:
    “If you are still confused, here’s what Shiller said today – “It would suggest declining home prices in the near future, I wouldn’t be at all surprised if house prices started falling.”

    IMHO, you should stay out of this market until the dust settles. (18 months – 2 years?)”

    To be clear, that last part is you, not Shiller. And it sounds like you’re trying to make a point that has nothing to do with cherry picking. Also, sounds like you were the one following Shiller. All I had done was to read Justme’s link.

    Do you think less than 50% is a bearish call? LOL.

  37. 37
    Richard says:

    RE: Brianna @ 34 – high price higher property tax, higher insurance

  38. 38
    whatsmyname says:

    RE: Brianna @ 34 – In the real world, you just don’t get to pick random price and rate actions. Rather, you get what the math says. Let’s say a year ago you could get your first example just as you have laid out. Now, let’s say the rate has dropped 1% to 3.5%. If we hold the planned payment to $1621.39, you can borrow $361,075, or about $41,000 more for the same monthly outlay. You’re going to have to balance with an increased down payment, but once you’re past that, the affordability is the same.

  39. 39
    Eastsider says:

    RE: whatsmyname @ 37 – ‘Affordability’ is just a factor. Would you get a 100yr mortgage if monthly payment is the same as that of a 30yr loan? Both are equally ‘affordable’ based on your reasoning. As Richard@36 pointed out, there are a host of other costs – higher property tax, insurance etc. Also, average homeowners sell their homes in the first 10 years. So you can be paying much more for a home even if monthly mortgage payment is identical. Price matters.

  40. 40
    Eastsider says:

    Missing in the NWMLS press release is the following – “In Seattle, sales were up 5.1% year-over-year, and inventory was up 25% year-over-year from very low levels.” – https://www.calculatedriskblog.com/2019/09/seattle-real-estate-in-august-sales-up.html

    So it appears that we have a bifurcated market. The entry level is gaining. Not so much for the high tier.

    Separately, 10yr treasury yield has gone up a 1/4 point in a week!

  41. 41
    MKK says:

    RE: Brianna @ 34
    Brianna, I don’t see in your examples that the lower price is clearly the winner. Sure, you pay $8k less for the down payment, but the monthly payment is higher and you pay more in total interest at the end. The only hope is that interest rates will fall (this is uncertain) and you can refinance.
    This may be a matter of personal choice. Pay more upfront and have a lower monthly payment, or pay less upfront and have a higher monthly payment.

  42. 42

    If You Live or Consider Buying in West Seattle This is Not Good News in My Book

    You sit down to read the Seattle Bubble at the WIFI Cafe there and suddenly a vicious thug smashes the large window glass on your breakfast [and in your face], random gifts of kindness?

    https://www.yahoo.com/news/bizarre-rock-throwing-attack-seattle-224507662.html

    We need better vetting for mental illness and low pay with high real estate prices are the cause, not the cure…these thugs in Seattle are getting at us with dump trucks and rocks, without guns, recently.

  43. 43
    MKK says:

    RE: Eastsider @ 38
    Yes, of course, price matters. And so does the monthly payment cost. Both do. But you have to deal with the reality you live in, and wishing prices would go down won’t make it happen. There are some people who will gamble that prices will go down in Seattle in the future in a significant way. And they will wait for it. Fine for them, but that is a gamble, especially if you are spending several thousand a month on rent anyway. Because anyone who tells you that they know what will happen is full of BS.
    My guess is that a city hemmed in by water is going to continue to have short supply, thus upward pressure on prices. See San Fran.
    And I say this only as an observer, as I own a home and am looking to buy another in Bellingham. I only watch this blog to see what will happen in Bham as it tends to follow trends in Seattle by 1-2 years.
    My only advice for those out there who are renting and don’t own is this: If you can drum up a down payment and can afford the payment to buy the tinyest, crappiest little place in Seattle or the burbs, do it. Now you’ve got an asset that most likely will appreciate. Sell it later and get your dream place with the proceeds. Even if it doesn’t appreciate, you will have paid down the balance some and will make $ on the sale. Or rent it out and wait longer for an appreciation spike. If you are still renting in 10 years, you have nothing to show for it.

  44. 44
    Deerhawke says:

    RE: Eastsider @ 40

    Well, you could get pre-digested bits and pieces of the questionable data from sources like Calculated Risk or you could go to the source data and figure it out for yourself. You could then see if CR represents a valid or skewed representation of the data.

    The King County Breakouts can be found by going to:

    -NWMLS.com
    -click on Latest Press Releases
    -click on Market Statistics
    -click on Current King County Breakouts
    -Scroll down to page 2. Residential Only.

    Here is what you will find in the Seattle market:

    overall inventory went up 18.61% YOY from 994 in 2018 to 1179 in 2019, but
    new inventory decreased by 10.2% from 823 to 739
    months of inventory tightened from 1.7 last month to 1.61 this month

    Meanwhile on the demand side
    Pending Sales went up 10.83% YOY from 665 in 2018 to 737 in 2019, and
    Closed Sales went up 11.94% YOY from 653 in 2018 to 731 in 2019

    Median Prices were unchanged YOY at $760,000

    So when you look at the actual NWMLS data, you actually can see a market where the peripheral areas with lower prices are in fact going up faster than the core Seattle market. But that doesn’t mean the core market is doing badly. It is stable and all signs point toward a tighter market later this year and into next year.

    Things that I see in the Seattle market:

    1) There are a group of angry, unrealistic sellers who priced their offerings above a frothy market in early 2018. They keep bringing the same product on the market at prices that make no particular sense. When they cut their prices, they keep cutting their prices behind the market. And by now they are behind the 8-ball because their product is shopworn– nobody is paying attention anymore.

    2) There are more townhouses on the market than there were in 2018 relative to SFH. People who have identified a search area and SFH type are astounded that total inventory is supposed to be up so much in Seattle when they can’t find much to look at.

    3) Inventory for the last ten days shows a small Labor Day bump up that has now been absorbed. Check out the Redfin stats on this blog. We were at a low of 4098 before Labor Day. We went up to 4235 after Labor Day. We are now at 4055 and trending downward.

    What does this all mean for the Seattle market?

    Over time, continual decreases in new inventory will take their toll by whittling away at total inventory. In the next few months, the unrealistic sellers will get more realistic about selling (or their agents will and move on). Perhaps they will decide not to sell, or will refinance and rent until they see a better market.

    Eventually townhouse inventory will drop as the new HALA tax takes its toll and few new ones will be built to replace them. Over the next year, the new Seattle building code (which became effective August 9th ) will take its toll on building new SFHs in Seattle zip codes.

    So at some point, rising pending sales and closed sales will meet dropping inventory at prices that already drifted down and stabilized in 2019.

    And remember that the Expedia will start moving its people to Seattle a few hundred at a time starting –this month. Remember that Apple, Google and Facebook have announced they are hiring to fill new facilities under construction. And according to the Seattle Times article this week, even Amazon is still hiring for positions in Seattle, despite a clear preference for Bellevue.

    No question that national economic factors will have a strong effect on Seattle. If the US tips into a bad recession, we need to flip all the cards. But right now if I had money in euros or pounds sterling, I would be moving that money into dollar-denominated assets. It could be that Boris Johnson is popular with our orange headed fool because he is causing even greater chaos than he can and is keeping our economy from tipping toward recession.

    But if there is no imminent recession and given stable/rising rents plus dropping interest rates, what do you think is going to happen the rest of this year and into the spring market?

  45. 45
    Erik says:

    RE: oldmonk @ 30
    Way to come out of the shadows!

    I just ask that you base your comments on real things like supply/demand, jobs, etc. and not opinion articles.

  46. 46

    All the Bears and Bulls Rationales Have Ambiguous Truths in Them

    But relying on history repeating itself in today’s completely changed world is catching knives, IMO.

    Time to Relax and Enjoy the Yuban and Sunshine [rain later?] with the Seattle Times Brief:

    “…The Seattle Times
    MORNING BRIEF
    Wednesday, September 11, 2019
    Detainees are moved through Northwest ICE Processing Center
    A rare look inside the ICE detention center in Tacoma
    Detainees are moved through the Northwest ICE Processing Center in Tacoma, which holds people facing deportation proceedings. The federal government provided a look inside, after years of complaints and lawsuits over conditions there. While an Immigration and Customs Enforcement official called the center “transformational” for detainees, an activist outside declared the tour a whitewash and said maggots had been found in the food. (Bettina Hansen / The Seattle Times)
    NEED TO KNOW
    Police are seeking the hit-and-run driver who killed a man who was changing a tire on the side of I-405 in Kirkland late last night.

    Europeans will flight-test the Boeing 737 MAX themselves, opting not to take the FAA’s word on when the plane is ready to fly. Europe’s aviation regulator also said it favors a sensor system redesign that goes beyond what the company has planned. For Boeing, a disagreement between regulators could be a massive problem.

    King County would spend $1 million to bus homeless people to other states where they could reconnect with family, under a proposal from Councilmember Reagan Dunn. Similar programs elsewhere have had varying degrees of success.

    Why President Donald Trump fired John Bolton, his national security adviser: The sudden shake-up yesterday marks the latest departure of a prominent voice of dissent from the president’s inner circle, following divisions over North Korea, Russia and the Taliban. Their relationship has long had its challenges, from a bushy mustache to the heated phone call that brought it all to a head.

    Let’s pause today to remember the nearly 3,000 people who died in the terror attacks of Sept. 11, 2001. As the nation marks the 18th anniversary with war still raging, the stories continue to emerge: The Muslim woman who survived the attacks and rebuilt a crash site as a chapel. The moments when, as the Pentagon burned on 9/11, the White House couldn’t find then-Defense chief Donald Rumsfeld. And the tiniest of personal tributes that drive home “the beauty that was lost that day.”…”

    SWE’s Take:

    I see the other GOP War Hawks like Graham Lindsey [ya know, the old Never Trumper Bush Supporter] didn’t like the Bolton firing too, because it was getting out of that endless Trillions wasted on Afghanistan [ask Russia]. The Orange Haired Guy’s supporters beg to differ…Seattle Times hates the Orange Haired Guy so much now they side with war hawks against his base wishes? LOL, Seattle Times better think better about what they print instead of printing anything.

    Give me a break Seattle Times, legal homeless citizens eating on the ground in filth is far worse than fancy ICE facilities kitchens, in comparison.

    LOL…cure homelessness, bus ’em all out of the State of Washington? I’m sure there’s no funding for homeless children Foster Homes without budgets for tiny house for the legal citizen homeless moms and children in the Seattle Area…they’ve squandered all the property taxes on subpar teachers’ salaries instead. What a mess. My sister taught 3rd grade in a Seattle Area public school [she’s retired now] and agrees with me, no Foster Home money or Tiny House money for homeless kids, no public school admission for homeless kids in filth and decay. We discussed this issue last Sunday, its SOP at our public schools folks.

  47. 47
    ronp says:

    RE: Deerhawke @ 44 – You really think new and remodeled single family in Seattle will decline due to new zoning and building regulations? I would assume the single family form will just change, all high end ones will have a back yard cottage/studio workshop and basement mother in law accessory unit. Pricing will be higher due to construction cost increase dependent on more exterior walls/plumbing/heating. But demand will still be there due to high income professionals and dual income couples?

  48. 48
    Eastsider says:

    RE: MKK @ 43 – In a normal market, I would agree with you. However, this is an expensive market. Would you buy a home in Vancouver BC? The answer is probably no. The upside is limited and the downside is substantial and real. The last bubble ruined many lives. Smart property investors were in the market in first half of this decade. They are not buying today.

  49. 49
    Eastsider says:

    RE: Deerhawke @ 44 – CR has access to more data. He likely uses a different set of NWMLS areas in his Seattle numbers. (E.g. Are areas 140, 710, 715 part of Seattle?) Regardless, it does not change what I wrote – “So it appears that we have a bifurcated market. The entry level is gaining. Not so much for the high tier.

    People reading the headline may have been mistaken that inventory is “drying up”. But that is clearly untrue in the high tier markets in Seattle and Eastside. According to the breakout, areas 710 (N Seattle), 715 and 720 saw YOY median price declines of 5-6%, with 710 gaining a whopping 46% in inventory YOY.

    But if there is no imminent recession and given stable/rising rents plus dropping interest rates, what do you think is going to happen the rest of this year and into the spring market?

    Again, interest rate is now heading north, not south.

  50. 50
    SeattleNoBubble says:

    RE: Eastsider @ 48
    I will buy Vancouver BC if BC goverment withdraw 15% foreign buyer tax. Compare Vancouver to Seattle, it is much more modern and exciting place to live. Housing price is set by how much a buyer is willing to pay and there is reason behind it. Would you like to pay $100k for a SFH in downtown Cleveland or $1 mil in Seattle eastside (sorry no downtown Seattle, too many homeless and druggies)? Interest is still under4%, way lower than 7% when I bought my 1st house in 1990.

  51. 51
    N says:

    @MKK 43 –
    You said: “Even if it doesn’t appreciate, you will have paid down the balance some and will make $ on the sale.”

    For the sake of argument this really plays down the risk – the risk of sinking money into repairs, the risk that with no appreciation you WILL not make money on a sale. with selling costs around 9% if you sold 3-5 years later and had no appreciation you’d be hard pressed to break even given the monthly pay down on a 30 year note. Sounds very much like the 2007 or 2015 mentality — buy any place at any costs right now. Granted the odds are in your favor in Seattle in the long run.

    The idea that lack of building is a result of natural barriers always gets me. Not that there isn’t truth to it, but I feel like an even bigger factor is the growth management act and decisions the region has made to not allow many types of buildings. There is a reason a high rise will not be built in most areas of the region (not in West Seattle, not in much of the I5 corridor etc). Heck, the community in West Seattle screams if someone proposes building a 5 story building in the most visiting commercial block in all of West Seattle. Go to Vancouver or other cities and you see high rises, including residential high rises in the suburbs and many other places.

    The tug and pull of urban design and a need for housing vs. protecting the way of life here I suppose.

  52. 52
    Joe says:

    RE: richard @ 26

    You are right about Shiller. He never predicts anything. What’s interesting is that he continues to say things are very pricey and he wouldn’t be surprised by a large drop in the stock market or RE, even though he never goes out on a limb to predict anything.

  53. 53
    Lulu says:

    RE: Joe @ 51RE: Joe @ 51
    Shiller only said things are get ultra expensive and bubbly. He never said when and how the bubble will burst. He should share Noble prize with Roubini on the regard. Both of them predict housing bubble will bust in 2006,7.

  54. 54
    Joe says:

    RE: Erik @ 28

    Erik, you can’t even track the main points of what I’ve said. You are being highly selective with your facts or just plain sloppy.

    My comments, for the most part, have been correct. RE has dropped. Gold has risen. Stocks continue to be shakey. This has all been in line with my predictions.

    Don’t put your faith in a little blip in the downward trend. That would be a rookie error.

  55. 55
    Erik says:

    RE: Deerhawke @ 44
    Good summary as usual.

  56. 56
    Deerhawke says:

    RE: ronp @ 47

    This is a still rather unclear. The legislation has not, as far as I know, been turned into full code. What will happen in the short term is that nobody will do much of anything until they see what happens to the early adopters.

    Most builders will build through their inventory while they wait to see what happened to those who went first. Can you build 2500 sf on a 5000 sf lot plus a garage instead of an ADU? In addition to an ADU? What pencils out? How much risk is there? If you can’t build from scratch, might you be able to do a “remodel” that is large enough to pencil?

    I have gone through the numbers on several projects I was offered and they would not pencil with a house, ADU and DADU. It is also unclear how many high end buyers want to turn into instant landlords, especially since the city spent so much time making that harder, riskier and more bureaucratic to do.

    Mike O’Brian led the city council on this and while he said they ran real world simulations, it is not clear what world those simulations were from and what numbers were used. I know him and think he is an ideological dolt, so don’t trust his numbers in the least.

    Over time I think something will be found to pencil out. Perhaps a house with only an ADU that can double as living or rec space. I have built those before and they sold well. But the square footage restriction will inevitably lead to more $/sf because the land represents a larger percentage of the overall price. Maybe people will just get 2500 sf homes with an attached 1000 sf ADU at a price that is 25-35% higher than a 3500 sf house (to account for additional kitchen, bath, laundry, electrical panel, permitting, etc.)

    One thing I do not believe is that this new legislation will make housing in the city a) cheaper or b) more plentiful. In fact, I would be willing to bet that it is the opposite.

  57. 57
    N says:

    @Joe – sorry but your loosing me when you praise gold and a shakey stock market. Do you mean simply based on short term volatility. S&P is up 19% YTD.

  58. 58
    Deerhawke says:

    RE: Eastsider @ 49

    CR has the same data as the rest of us, but chooses to chop it up in ways that favor the argument he is making. On the other side is a real estate agent in the north end who sends out very positive numbers and I have never been able to make his numbers and predictions match with the standard NWMLS breakouts

    I think people need to remember to look at all the numbers. There may be more stale inventory in some of the areas you mentioned (or it might be that a bunch of townhouse projects came on the market) but you will notice that new inventory in the Seattle map areas is down pretty much across the board. That is what you could consider a leading indicator.

  59. 59
    ronp says:

    RE: Deerhawke @ 55 – Thanks for the excellent perspective, I also think the changes will make owner occupied housing more expensive, as much as I feel for my neighbors that have large structures built next to them I really feel no size decrease in allowed single family home size should have been made, and the city should have just copied the “triplexes allowed in all single family areas” that Minneapolis passed. Maybe the easier accessory unit permitting and construction might have a small downward pressure on rents, but I doubt it.

  60. 60
    JustNoise says:

    RE: Deerhawke @ 55
    Just out of curiosity, is an ADU or DADU required by legislation/code to have its own kitchen and electrical panel?

  61. 61
    ohd1122 says:

    By Joe @ 53:

    RE: Erik @ 28

    Erik, you can’t even track the main points of what I’ve said. You are being highly selective with your facts or just plain sloppy.

    My comments, for the most part, have been correct. RE has dropped. Gold has risen. Stocks continue to be shakey. This has all been in line with my predictions.

    Don’t put your faith in a little blip in the downward trend. That would be a rookie error.

    Shaky stock market? I’ll agree there has been some volatility and a couple pullbacks in 2019, but that’s not really out of the ordinary on an annual basis. The S&P closed above 3,000 today and is <1% off an all-time high. The YTD trend is pretty clear. Maybe tomorrow things will be different and the S&P will drop 20%.

  62. 62
    Justme says:

    RE: richard @ 26
    RE: Joe @ 51
    RE: Lulu @ 52

    Shiller’s “prediction” in 2007 of the upcoming bubble bust was no more strongly worded than his 2019 statements, which we may therefore equally call the 2019 statements a “prediction” of an upcoming bubble bust. Look in Wikipedia under Shiller and there will be a link to what he wrote in Sep 2007.

    Joe is correct. Shiller never said that he was predicting a bust, not in 2007 and not in 2019. Shiller is much too careful to make such a strong statement, as he does not want to be blamed for the consequences.

    Upshot: If you believe in Shiller making consistent statements, his words indicate that the bust is coming soon.

  63. 63
    Deerhawke says:

    RE: ronp @ 58

    Before a substantial code change, it is generally a good idea to get input from people who know the subject matter in the real world, not just hear from like-minded ideologues. But not in Seattle.

    Mike O’Brien surrounded himself with planners of similar perspective, so (surprise!) nobody really knows what the new code will achieve. He then just pushed it through the help of the other fools on the council because he knows that he cannot run again (awful poll numbers) so he has to do what he can because his time on the council is limited. I imagine Jenny Durkan will eventually have to admit that she signed a really bad piece of legislation, but will blame it on O’Brien.

    My guess is that in a year or so when they look at what is actually happening, they will make some in-line changes in the code. That may take a couple of years, so you can expect new SFH construction to be pretty costly on a $/sf basis.

    I was talking about this topic with a friend and just heard of one person who is planning to build under the new code. He has a small, old POS house on a piece of property on a busy through street in Ballard. He is planning to build the 2500 sf house and turn it into, in essence, a 5 bedroom 5.5 bath Apodment/boarding house. Then he will build a 2 bedroom ADU under it and put a 2 bedroom DADU behind it on the alley. Really cheap, boxy construction throughout. 9 rents averaging $900-950 per month (and they pay the utilities). No off-street parking. He expects to clear almost $8000 per month.

    I am not sure Mike O’Brien had this kind of thing in mind. You can be sure the neighbors will be thrilled.

  64. 64
    Joe says:

    RE: N @ 56

    Look at results over the past year.

  65. 65
    Erik says:

    RE: ohd1122 @ 60
    You are wasting your time. There has to be wealthy people in this world and there has to be poor people in this world. Just let nature take it’s course. The information is there.

    The reason that Justme, Sfrz, and Joe don’t understand what is being told to them is probably the same reason they don’t understand today. They are not capable of understanding the market for whatever the reason. My suggestion is to let it go. Read Deerhawk’s recent comments, I think he nailed it. I’m not sure what more needs to be said.

  66. 66
    Eastsider says:

    RE: Deerhawke @ 57 – I assume you don’t follow CR. He is hardly a housing bear and has been pretty accurate on his housing market assessment since at least since 2005. I challenge you to find someone who has a better track record and credibility than CR on housing.

  67. 67
    Deerhawke says:

    By JustNoise @ 59:

    RE: Deerhawke @ 55
    Just out of curiosity, is an ADU or DADU required by legislation/code to have its own kitchen and electrical panel?

    Bathroom and kitchen required. At this point, as I understand it, you would need to have at least a sub-panel that contains all the breakers for the ADU or DADU. Since the city (read O’Brian) is now pushing for all units to be electrically heated, it will make more sense soon to allow additional strikes and panels.

    BTW, I have to say that I have built a couple of houses that were made to be ADU compliant. But I have never been able to get an ADU permitted as part of a larger building permit. The city may say that they want them, but the zoning and land use inspectors seem to hate them and do everything in their power to keep them from being permitted as a part of an overall building permit for a SFH.

  68. 68
    Erik says:

    RE: Justme @ 61
    This is why you, Joe, and Sfrz are chronically wrong. You read other people’s words without understanding the market. You need to figure this out for yourself so you stop polluting my site with misinformation.

  69. 69
    Deerhawke says:

    RE: Eastsider @ 65

    I will check them out, but I was not impressed by what they wrote about the Seattle RE market this past month. All second-hand reporting.

    It was a previous life, but I once worked as an economic analyst and forecaster. I have been following the Seattle economy and real estate market pretty consistently since we moved here in the early 90’s and very consistently since the late 90’s when I started to develop and build here. I like to do my own analysis based on consistent, reliable source materials. That way I don’t have anybody else to blame.

  70. 70
    N says:

    I don’t read CR often but from what I have read he posts mostly official data and very little predictions or opinions. The only thing I saw in the post on Seattle was his suggestion that the inventory build up may be ending. So yep, I would say it’s second hand reporting if that’s what you call collecting economic data points and posted them on one site.

  71. 71
    GoHawks! says:

    RE: Joe @ 63 – stock market is within 1% of the all time highs.

  72. 72
    JustNoise says:

    RE: Deerhawke @ 66
    I see. I’ve toured a couple places claiming (D)ADUs. All had separate entrances and bathrooms, not all had separate electric panels and/or kitchens. Does water have to be submetered?

    Are there any legal consequences to renting out an accessory dwelling that doesn’t meet code? Seems like the only reasons an owner would spend money to upgrade to code is to make it easier to rent out, be able to charge higher rent, and/or attract better tenants. I guess would also increase equity.

  73. 73
    JustNoise says:

    To all the resident real estate permabulls, honest question:

    How’d you end up on Seattle Bubble? And why do you continue to monitor the blog and/or the market?

  74. 74
    Erik says:

    RE: JustNoise @ 72
    My parents moved here from Ketchikan Alaska in 1989. I got a bachelor’s in mechanical engineering after high school at central. I bounced around jobs and landed at Boeing doing stress analysis on the wing. I got my masters degree in mechanical engineering cause the company paid for it and my lead urged me to do it. It’s difficult to turn down free money and a higher wage.

    Now I own a modest home and rentals and I like to buy and sell real estate in Seattle and the east side. I’m sure I have more time and effort into real estate than I do my engineering degrees. If we had a housing bust, I’d do well because I’m positioned for it, but all the indicators point to housing appreciation. I’m losing cash fast because I keep buying more, so I want to sell more before the next bust.

    My goal is to own 10 rentals free and clear. It’s probably gonna be a long road, but it’s much more lucrative than my engineering job. It’s a balancing act between cash flow and capital investment, but I think I’m getting better at buying.

    I study the market and I read lots about it. I like reading Deerhawk and The Tim’s comments. I get the feeling Deerhawk and Tim aren’t big fans of me, but I can still read their comments and learn from them.

    Now for your story…

  75. 75
    Deerhawke says:

    RE: JustNoise @ 71

    Like I have said, I have not been able to get an ADU permitted as part of a new construction application. But the people who bought those houses had no problem getting those units permitted as ADUs. There are probably different criteria for new vs existing construction. You might want to google the client assistance memos (CAM) on ADUs and DADUs. If you still have questions, check out the new legislation and what others have written about it on other blogs.

    I am permitting three houses now under the previous code that have ADUs built into them. The reviewer asked us to include specifications on an electrical panel or sub-panel. As far as I know there is no requirement for a gas or water meter or sub-meter.

    There are all kinds of legal consequences for renting an illegal unit. Lots of CAMS published on this topic too. Or you could read it from a tenant’s perspective on the Tenant’s Union web site.

  76. 76

    There’s One Thing For Sure

    Plenty of opinions but much difference in Bear/Bull opinion now.

    I’m sure there’s no way to monitor it, its personal information…how much “old money” is left in Seattle? With declining saving interest rates and pension-less retirements [or worse yet, like Boeing, new workers not paying in to Machinist Union and SPEEA pension funds today decreasing your Boeing retirement present pension]. This stuff the retired Seattle Boeing folks clam up on too, “the haughty man falls” says the Bible [or common sense]….I’m from Seattle, I’m Uber Rich….LOL…then the toilet flushes it all down…

    Prepare for the worst and baton the hatches….IMO, when the “old money” dries up soon at a theater near you, its too late to sell then IMO. Cuts is Social Security soon? Same effect on Seattle Real estate prices. Timing is the key as Erik stated and buying up low priced foreclosures may become mainstream as “old money” dries up. I’m already seeing this phenomena at family homes for the disabled, they’re cutting severely mental retarded funding by 57% and the care giver managemet can’t complain or sent to the homeless camps with huge mortgage debt…its their only meal ticket, most caregiver family home managers have no other education or skills and can’t complain with DSHS butcher ax swipes down. I predicted the disabled budget cuts 5 years ago, but even then, couldn’t imagine them this big and this soon.

  77. 77
    N says:

    RE: ADU/DADU – We are looking for one. What I’ve learned is that a vast majority of those on the market are not legal and most realtors and others tell you who cares. Ardell gave some great responses to ADU questions I had several months back.

    Of course the most important reqs are things like proper windows for fire and other safety considerations. Whether you need certain items also depends on the age, if it’s been a rental over the years etc.

    They can be permitted but most older properties that have them don’t even have the basics covered to permit them (I’m thinking of at least a dozen I’ve looked at that didn’t meet the window/exit requirement for instance and several of them had been rented in recent years).

  78. 78
    Joe says:

    RE: GoHawks! @ 70

    Yes, I know. So that’s a 3% real loss in stocks and RE versus a 15-40% increase in gold and gold stocks, which I strongly recommended last Fall. I put my money where my mouth is, so I’ve done very well this past year.

    Fixed debt instruments, which I also recommended, have also returned 5-20%.

    Thus, the categories I discouraged (stocks and RE) performed poorly, while the categories I recommended (fixed instruments and gold) did very well.

    This is not attributable to luck. This relates to expert analysis of the macro economic environment.

  79. 79
    Joe says:

    RE: Joe @ 77

    Currently, I plan to hold shorter-term bonds and CDs (60%) and an inflation resistant equity fund like VGPMX (40%) that holds metals and other hard assets.

    For those interested in RE, I have the following comments for the record. If you are already tied into RE for living or rental income, hold it. If you plan to downsize, now is the time. Don’t buy more unless you add substantial value via your own personal labor to make improvements. Pure flippers that utilize contractors for improvements will likely not do well in RE over the next decade. I sense they are already suffering.

    If you are dying to get into a home as a potential first-time homebuyer, settle for a lower-end home and take advantage of a government sponsored loan so you can walk if things head south. You have to be very careful after an explosive 10-year price run-up and the economy threatens recession. Go for the mortgage insurance and low down payment, to protect against a large loss of hard-earned capital.

  80. 80
    Any says:

    Joe clearly knows what he’s talking about. Agree Joe, I’m heavy in short-term CD’s now as well, although it looks like short term the market may have broken through resistance and be heading a little higher. Word is that Trump is looking at caving to the Chinese. We knew it would happen someday since he wants to juice the economy as much as he can heading into the election. The question is, is that day really coming soon or is he going to pull the rug out once more to help out all his buddies with some more market manipulation? If its the latter, S&P will go back below 3k again in short order.

    Saw a number of relistings today that I had favorited earlier in the year and didn’t sell. All at lower prices of course. One in particular has dropped 15% since original listing price, can’t remember the exact original ask on the others.

  81. 81
    Joe says:

    RE: Eastsider @ 49

    Yes, keep an eye on that 10-year interest rate and TLT, which are moving fast. The temporary RE bump we are experiencing might dissipate sooner than expected, especially not that stocks are testing a triple top. Patience is warranted. There is low risk of RE prices resuming a continued upward trajectory during the next 1-2 years. Yet there is plenty of risk on the downside.

  82. 82
    kenmorem says:

    joe: you have some interesting takes on the situation. basically hedging against future gains with a super conservative strategy. are you FI?

  83. 83
    Erik says:

    RE: Joe @ 78
    Hahaha!! Right….

    You’ve been wrong every time, maybe you’ll get lucky, but I highly doubt it. Seattle values are up for the long term. Long term value is up. Seattle is under value and has room to grow until we catch up to Vancouver and San Francisco. Programmers are getting a great deal in Seattle right now while we transform into a 1st class city.

  84. 84
    Erik says:

    RE: Any @ 79
    Joe thinks the direction of inventory matters more than the absolute number. He’s wrong. Joe also believes housing prices follow affordability even though it’s been disproven on here many times. Joe doesn’t listen and trusts his own squirrel brain to logic it out.

    Listen to joe and I promise you’ll lose money.

  85. 85
    Eastsider says:

    RE: Joe @ 80 – I’m surprised by market actions following ECB’s interest rate cut (and QE) this morning. Both EU and US treasury yields continue the upward surge started about a week ago. Now I’m not sure if the expected FED rate cut will do anything to the long term rates. They may move in the opposite direction as happened this morning. If 10yr yield rises to mid 2%, home prices will likely resume the decline.

  86. 86
    Eastsider says:

    By Erik @ 83:

    Listen to joe and I promise you’ll lose money.*

    *This comes from someone who went broke.

    I added the asterisk for you. LOL.

  87. 87
    JustNoise says:

    RE: Erik @ 73
    I moved from Florida to Seattle in 2005 for grad school. Earned my PhD in 2010, left for postdoc and then entered industry. Bounced around east coast, but ended up in the Bay Area. Hated the Bay Area. Moved back to Seattle to start a tech company with some colleagues from UW in 2016.

    I love Seattle, my company is doing well, and my family is growing. Honestly, I’d never considered buying a house before I started a family. My biggest concern was freedom, not money. But I started looking for a house about 2 years ago and haven’t bought yet for many reasons. Had a front seat to the real estate sh*t show in Florida back in the aughts, and there were parts of my house search that reminded me of that. So I started watching and waiting, and researching the Seattle housing market. That’s how I ended up on the bubble. I think home prices will decline. Not just in Seattle, but all over the nation. And not indefinitely, obviously. But if that’s not the case, I want to be prepared.

    I like reading everyone’s comments. For me, each one contains little pieces of some kind of truth. Even if that truth is only personal experience. I’m here to learn.

  88. 88
    JustNoise says:

    By Joe @ 80:

    There is low risk of RE prices resuming a continued upward trajectory during the next 1-2 years. Yet there is plenty of risk on the downside.

    This is where I’m at.

  89. 89
    MKK says:

    RE: N @ 50
    I am not saying buy at any cost. And don’t sell after 3-5 years unless there is a very favorable reason to. I am saying that if you buy in a desirable, in demand place (Seattle or Western WA) and can afford the down payment and monthly payment and then hold the property long enough, you will likely do well. I don’t have a crystal ball about the future and nobody else does either.
    You take a risk if you buy (price depreciation) and you take a risk if you don’t (dumping $ into rent with nothing to show for it). I think the risk of price depreciation is much less than the risk of #2.
    I bought a rental house in Tacoma in 2004 for $200k. By 2010, it was down in value 20%. I was bummed but didn’t sell. It was rented out continuously from 2004 ($990/mo) until 2018 ($1750/mo) when we sold for $270k. This was the worst real estate deal my spouse and I have had, and spanned the housing crisis, and yet it wasn’t so bad. The net gain after all costs, including capital gains, was about 8% annualized return on our $40k down payment, mainly because the loan balance was reduced over 14 years. I could have done just as well on the stock market, I know. But I didn’t know that in 2004 when I bought. Had I actually lived in the house as a primary residence though, and not paid capital gains, it would have been much better. And that is the worst real estate deal I have done. So for me, I know that I can always hold a house if I can rent it out for something close to its PITI.
    Even when I buy a primary residence, I always look for a payment that is at least close to the monthly rental value. The rental value only tends to go up, and the mortgage stays constant.

  90. 90
    Juststoppedby says:

    Needs to be more recognition of the impact China had on Seattle RE prices.

    Look at

    Seattle prices over time vs:
    2015-2016 capital flight from china
    2016(?) Canada BC foreign surtax (juiced Seattle – you can find articles calling Seattle a #1 destination for china RE investment)
    China capital controls beginning 2016
    Redfin bidding wars
    Softening of Seattle RE prices

    I’m just saying…

  91. 91
    MKK says:

    RE: Eastsider @ 48
    I haven’t been watching the Vancouver market closely, but I hear it has significant price deflation. Buy low, sell high, right?
    As for if there is more upside potential in Seattle, I bet there is. There seems to be a heck of a lot of money there. And there is surely more upside potential north and south, as more and more people are priced out of Seattle.
    My market is Bellingham, which has seen lots of price appreciation too, more than local salaries can support. I bought a house here in 2015 and it is up 33% in value 4 years later. If I were just looking at local salaries, I would say prices couldn’t go higher. But that is not what this market is about. Unfortunately for us, tons of retirees from Bellevue and Seattle are buying up our “cheap” (to them) properties and driving up prices. I wish I had my crystal ball, as I would like to buy a rental property. If I can’t do it in Bham, I may take my own advice and buy further north.

  92. 92
    Deerhawke says:

    For those who are interested in ADUs and DADUs, here is a link a friend sent me. Clearly if AARP is having a position on this, it is a phenomenon that is going to grow.

    https://www.aarp.org/content/dam/aarp/livable-communities/livable-documents/documents-2019/ADU-guide-web-singles-071619.pdf

  93. 93
    Deerhawke says:

    RE: JustNoise @ 86

    You have a young family and a growing business. You already have plenty to keep you busy without taking on a house search, or for that matter a house– which always means a substantial “to do” list of its own.

    My own feeling is that the Seattle market is currently stabilizing after getting well out over its skis during 2012-2018. But I also think that this market will get a whole heck of a lot tighter over time.

    I have been saying since the mid-90’s that a major long-term transformation of this city is in progress. I don’t think that transformation is even close to over. I have never found anyone who can make a cogent opposing argument.

    But there are times when every market takes a breather. The market in Seattle had been on a tear during the 1980s– prices more than doubled. But I bought my first house here during one of those breathers– the Gulf War recession of 1991. The problem for me was finally pulling the trigger while the world felt very uncertain. (My wife made it easy. She wanted our kids to grow up in their own home rather than a rental house. She gave me a sound kick in the pants.)

    There are a lot of people who believe this next year could be one such breather period. The Trump administration is an exercise in economic chaos theory. And on top of that we have a very divisive election coming up. There is plenty to be worried about.

    But nobody has a crystal ball. You may look back on current prices and current interest rates and feel like you missed an opportunity.

    Either way it is a tough decision. Good luck.

  94. 94
    Erik says:

    RE: Eastsider @ 85
    I never went broke. I was born broke and short sold my house because I was already broke as a joke. I had nothing to lose. I wasn’t born into money like most real estate investors. Being given money to start is a huge advantage. Also having a parent show you how to make money in real estate is a huge advantage. I had neither.

  95. 95
    Erik says:

    RE: JustNoise @ 86
    What was your PhD in?

  96. 96
    Erik says:

    RE: JustNoise @ 87
    You only lose if the market is down when you sell. If the market is down and you want to move, just rent your house out until the market recovers. Investing in houses and condos ultra low risk. I don’t understand why this stresses everyone out so much. If you have to foreclose, no big deal. They just take the house and temporarily wreck your credit. I’ve never foreclosed, but I short sold and it was easy. Just write a cease and desist to your lender and enjoy mortgage free living.

  97. 97
    Joe says:

    RE: Eastsider @ 84

    With the European QE announcement, some people might be afraid that money printing will kick off inflation, which could explain why LT rates increased. This assumes the QE isn’t directed at long bonds. In the US, the announcement of QE has also increased the LT rate initially. When QE ends and it’s clear it didn’t work, the long rate goes back down.

    All those games are coming an end. Rate decreases now have drastically reduced effect, and rates can’t really go any lower. It’s pathetic the EU continues to push a program that clearly doesn’t generate any real demand, or even inflation. Enough evidence is in. Reminds me of that saying – if you only have a hammer, everything looks like a nail.

  98. 98
    Joe says:

    Jeffrey Gundlach, a well-respected fund manager, now puts the chance of recession before the 2020 election at 75%.

    Patience is warranted in the Seattle RE market. A recession will lead to layoffs.

  99. 99
    Bumble says:

    By JustNoise @ 86:

    RE: <a

    I like reading everyone's comments. For me, each one contains little pieces of some kind of truth. Even if that truth is only personal experience. I'm here to learn.

    Very well said.

    By Joe @ 94:

    Jeffrey Gundlach, a well-respected fund manager, now puts the chance of recession before the 2020 election at 75%.

    Is it possible that the fear of a 2020 recession is already priced into the Seattle RE market, at least to some degree? Buy the rumor, sell the news?

  100. 100
    sfrz says:

    RE: Erik @ 67RE: Erik @ 67 Just curious. When did Tim hand his site over to you? @TheTim- did you sign your site over to arrogant Eric?

  101. 101
    Any says:

    RE: Bumble @ 95

    You can’t price a recession into a housing market. Recession leads to layoffs, layoffs lead to people who HAVE to sell. When that happens the market will dictate prices in a way that can’t be “priced in” prior.

  102. 102
    Erik says:

    RE: sfrz @ 96
    December 2013 after my first highly successful deal.

  103. 103
    DavidE says:

    10% of Redfin Offers Faced Bidding Wars in August, a New 8-Year Low

    Just 10.4 percent of offers written by Redfin agents on behalf of their homebuying customers faced a bidding war in August, down from more than 42 percent a year earlier. That overtakes last month’s 11.4 percent bidding-war rate as the lowest on record since at least 2011.

    “Despite remaining near three-year lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” said Redfin chief economist Daryl Fairweather. “Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase.

    Competition in the Seattle area has certainly slowed down since the second half of 2018. Last year, five out of five offers I submitted faced competition; now, it’s one in five,” said local Redfin agent Michelle Santos. “Now, for desirable homes, competition is still fierce, and the winning offer is one that’s above the list price and waives contingencies. At the same time, average homes sit on the market for quite some time before they get any offers.”

    https://www.redfin.com/blog/august-2019-real-estate-bidding-wars

  104. 104
    Deerhawke says:

    RE: Bumble @ 95

    Is it possible that the fear of a 2020 recession is already priced into the Seattle RE market, at least to some degree? Buy the rumor, sell the news?

    Creative question.

    To some limited extent, I think that might be happening. Far fewer quick lipstick flips. Far fewer “investors” putting home country money to work renting out SFHs looking for a quick return. The people I see buying now are making a longer-term commitment to the area. Buyers are asking for and generally getting a discount off frothy 2018 prices. These buyers are value investors, not momentum investors.

  105. 105

    The Seattle Real Estate 737 MAX 8 Nightmare Has Now Expanded to the 767 Tanker to the AF

    With that kind of headline, better grab your Yuban and swallow today’s Seattle Times Brief:

    The Seattle Times
    MORNING BRIEF
    Friday, September 13, 2019
    NEED TO KNOW
    Seattle’s wild building boom is likely to slow down soon, new data signals. Fewer new apartments and condos are planned than at this time last year, and residents are already feeling this in the pocketbook: The median rent for Seattle properties recently hit its highest level in almost two years.

    Seattle and King County are trying to put a lid on downtown disorder by targeting “prolific offenders” who cycle in and out of jail. The $5.4 million plan includes more places to get help for substance abuse and mental health, and more incentives to seek the help.

    U.S. House leaders want to talk to Boeing employees who worked on the 737 MAX, as Congress ratchets up its scrutiny. And getting the plane back in the air is looking even more complicated. The MAX won’t fly in India until the country does its own checks, which won’t start until the FAA clears the jet, a source tells Bloomberg. Meanwhile, the Air Force has barred Boeing’s KC-46 tanker from carrying cargo and passengers after finding another problem with it.

    A body was found in the middle of Pacific Highway South in Federal Way early this morning. The police investigation closed the southbound lanes near South 279th Street.

    What if Ballard got a light-rail tunnel instead of a bridge for trains? Sound Transit painted a picture of what an extra $450 million would buy in the neighborhood. And it turns out that a suggestion to build all-elevated tracks through Sodo would add $300 million and shut down a segment of the light-rail line for months.
    Enjoy Morning Brief? Then you’ll love full digital access. Help us continue to bring you the news you care about, now. Subscribe to The Seattle Times for just $1 to start.

    SUBSCRIBE TODAY
    WATERY FOREST AT RISK
    Kelp
    Warming water could be killing off Puget Sound’s kelp beds. Why does it matter so much that the odd, Seussian forests are vanishing? Scientists are worried about the consequences to local ecosystems if we lose kelp, which forms the base of a marine food web that sustains everything from small fish and crabs to orcas. (Photo: Steve Ringman / The Seattle Times)
    WHAT WE’RE TALKING ABOUT
    The Okanogan County firefighter who was severely burned in a wildfire this month “will require multiple, multiple operations,” but he’s “definitely a fighter,” says one of Christian Johnson’s doctors at Harborview Medical Center, where he’s in a medically induced coma. Johnson’s wife, Pam, is talking about what people can do to honor him.

    Do you miss Morning Brief on Sundays? Check out our free new Sunday Morning newsletter, full of thought-provoking journalism and some fun diversions. Sign up here.

    Rant & Rave: A flight attendant has a heartfelt thank you for passengers stuck on a plane during last week’s epic lightning storm: “Way to represent humanity at its best!” Such a nice counterpoint to this story on how to handle tantrums at 30,000 feet.

    It’s Friday the 13th, and a full “micromoon” lurks behind the clouds. History provides a few hints about why this day is seen as so freaky. More weirdness:

    Need a morning jolt? Forget the coffee and check out this newly discovered, supercharged species of electric eel. Yep, we’re awake now.
    TODAY’S WEATHER
    Cloudy. High 71. Low 60. Sunrise 6:44. Sunset 7:25.

    SWE’s Edit on the News:

    FAA Certification on the MAX 8 now awaits a plethora of individual Boeing employee probes and questioning now. This sounds like years of investigation now not months? India won’t fly ’em without their aviation approval either, teamed against Boeing with EU now…yikes…AF grounding of all its 767s now too? That low production and high part manufactured 767 plane doesn’t make its parts at the Seattle area Auburn Fabrication anymore, those high paying [$30-40 per hour a decade ago] manufacturing skilled and experienced jobs were butcher axed from Seattle and it was outsourced over a decade ago….so where are the parts drawings now? In Japanese?…LOL…how does the AF and FAA read them? Ouija boards? LOL, Boeing is becoming a NWO mess. Boeing needs to teach Japanese speech training to its American manufacturing engineers still left in Seattle to survive?….LOL

    Alaska has its bridge to nowhere and Seattle wants its 1/2 billion trains to nowhere…ask Ballard now…LOL

    What is the root cause to wild fires along the West Coast? In my book, its lack of homelessness camp fire safety. Lightening and power lines were there long before the wild fire outbreaks, its a lame excuse.

    I asked a 6’6″ man at WINCO if he fit in a coach seat on today’s planes for midgets only, he told me “no”. A lot of shorter folks don’t grumble like us [I’m muscular 6’1″], but they aren’t forced to buy 1st class seats for 150% more cost. This insane seat squeezing has health threats too, leg veins get blocked, possibly causing anorisms [vein blockage].

  106. 106
    Deerhawke says:

    RE: DavidE @ 99

    Just to add a dash of perspective here.

    1) You have a Nero-personality in the White House who (desperate craziness of the week) is calling for the Fed to cut rates below zero. You have England threatening economic suicide which could also cause havoc throughout Europe. Growth down in China and the developing world. Most of Wall Street is anticipating a recession. And we are still getting multiple bids on more than 10 percent of properties in Seattle?

    2) Where else in the country are they getting a greater percentage of sales with multiple bids?

  107. 107
    Joe says:

    RE: Deerhawke @ 102

    Your are right. Seattle is different. And I think that’s why WaMu was one of the the first banks to go belly up in the last crisis.

  108. 108
    Eastsider says:

    By Eastsider @ 40:

    Separately, 10yr treasury yield has gone up a 1/4 point in a week!

    Make that 41 basis point in 10 days! This is a 28% increase from 1.461% on 9/3 to 1.875% this morning. It is still low for sure but mortgage rates will be heading higher in coming days.

  109. 109
    richard says:

    many people here talk about “buy the rumor and sell the news”. Clearly these people treat house like stock. That is the mentality of speculation. House is not like stock, it is very sticky assets with high transaction cost. I guess at current price level, you will stuck with your house for a long time before you can unload it.
    is there any value at current price? Aseller decided to become a millionaire today, he priced his 200K house two years ago at 1.2m today and found it won’t sell. He lowered the price to 1.1m and suddenly some buyer find value in it because there is 100K discount. Will you call these buyers value buyers? A value buyer will buy this house at price level lower than 2 years ago(200K).

  110. 110
    Notme says:

    RE: DavidE @ 99

    Mosspit, two offers
    That is not a bidding war
    It’s just two offers

    -a bubble haiku

  111. 111
    Any says:

    By Deerhawke @ 102:

    RE: DavidE @ 99

    Just to add a dash of perspective here.

    1) You have a Nero-personality in the White House who (desperate craziness of the week) is calling for the Fed to cut rates below zero. You have England threatening economic suicide which could also cause havoc throughout Europe. Growth down in China and the developing world. Most of Wall Street is anticipating a recession. And we are still getting multiple bids on more than 10 percent of properties in Seattle?

    Everything you cite there is not really impacting homebuyers YET aside from China’s growth slowdown. But even that has potential to impact house prices more if China’s debt bubble explodes. So imagine what happens if all these looming events really are impacting home prices to some extent within a year or two.

  112. 112
    Deerhawke says:

    RE: Joe @ 103

    WaMu was once a solid and even stodgy Northwest institution . Then Kerry Killinger started expanding all over the country and bought up subprime institutions with major exposure in California (rememeber Long Beach Financial?), New York, Texas, etc.

    Although there were some in Seattle, most of WaMu’s troubled loans were outside the area.

    So other than a snarky non-equivalency, your point is … what exactly…?

  113. 113
    Deerhawke says:

    RE: Any @ 111

    “So imagine what happens if all these looming events really are impacting home prices to some extent within a year or two.”

    My point is that these looming events probably are -already- impacting home prices to some extent. People are definitely being more cautions. Investors are holding back on new projects. Builders are not acquiring new projects– I know I’m not.

    Bears are sure that there is going to be a recession. I am not a bear, but I think there is going to be a recession too. On the other hand, I have been expecting one for rather a long time.

    Here is the perspective of those who are not sure we are headed toward a recession but toward a growth slowdown.
    https://www.nytimes.com/2019/09/13/business/economy/recession-slowdown-difference.html

    Bears are the ones saying snarkily, “Oh ho, so you think Seattle is different? Really? Seriously?”

    Actually I think Seattle IS different. We are not recession proof. We are not immune to recession. But, perhaps you can say we have a kind of qualified immunity. Even in a recession, Seattle will follow its historical pattern by going in late and coming out when the rest of the country does. Seattle gets a lot stronger after recessions and grows at the expense of other areas. Other areas limp out of a recession. We boom out of one.

    No question that 2008-2010 were no fun in Seattle. But not even the most wild eyed bulls could have foreseen what would happen from 2010 onward.

  114. 114
    JustNoise says:

    RE: Deerhawke @ 93
    Thanks for the thoughtful reply. I suppose one of these days I’ll decide I’m ready and jump in. Until then, I’ll keep saving money and watching everyone argue about it on the bubble. ;)

  115. 115
    JustNoise says:

    RE: Erik @ 96
    PhD is in mathematical and computational bio.

    Investing in houses and condos ultra low risk. I don’t understand why this stresses everyone out so much. If you have to foreclose, no big deal. They just take the house and temporarily wreck your credit.

    I’m not interested in investing in RE. And I’m certainly not interested in ruining my credit, for any length of time. I want to buy a home and not loose equity overnight. Even if the market goes back up, I’ve still lost money if I buy at the peak while prices are going down. I guess I’m frugal. But if waiting a year or two can save me $$$, and I literally have to do nothing but wait, why on earth wouldn’t I?

  116. 116
    JustNoise says:

    RE: JustNoise @ 115
    Also, it wouldn’t be just a house. It would be my home. Not that I’d ever buy a house I couldn’t afford and have to foreclose.

  117. 117
    Eastsider says:

    RE: Deerhawke @ 113 – If you are not acquiring new projects, perhaps you should stop encouraging others to buy. You and I both know the short term outlook is not good. And the election (of a socialist?) is coming up…

  118. 118
    JustNoise says:

    RE: Eastsider @ 108
    “Mortgage rates’ week goes from bad to worse”
    http://www.mortgagenewsdaily.com/consumer_rates/921578.aspx

    (As an aside, terrible article title.)

  119. 119
    richard says:

    hold for 5 years. survive the recession. invest somewhere else other than buying a house.
    5 years is fair amount of time given the unprecedent price runup from 2012 to 2018.
    Trust me, buying a house now is put yourself in a money pit. Property tax won’t go down anytime soon even with a recession. you are mostly will buy a junk which need constant repair.
    There are too many public projects going on which guarantee you your tax dollar will be wasted in no time.
    you lost 5 years’ rent. think of renting as you are sacrificing by living at a motel while those who choose to buy now are just prefer to live in Westin… Don’t dream you can own Westin after you live there for 5 years.

  120. 120
    Erik says:

    RE: JustNoise @ 115
    My recommendation is to purchase cheap houses in Seattle and rent them out. Hold them until the value doubles and sell. Then trade your new money for a nice home.

  121. 121
  122. 122
    oldmonk says:

    Unsure about this strategy, at current prices it will take 15-20 years to double, true maybe if you are in your 20’s RE: Erik @ 120

  123. 123
    richard says:

    RE: Coconut @ 121 – are you crazy? location,location. with this amount money, i prefer to buy a dump in bellevue. but go ahead and buy it… i like watching catching falling knife :)

  124. 124
    steven says:

    RE: richard @ 123

    agree. at that price in that location, you better get a castle

  125. 125
    Brianna says:

    RE: Coconut @ 121

    At that price, I would have a problem with how close your house is to the neighbor’s house. I would think almost $1 million would get you a little more space between. In fact I know you could find something with more space in that price range.

  126. 126
    Erik says:

    RE: oldmonk @ 122
    If you can buy something with little down and the unit rents for higher than it costs you, that unit can be held indefinitely with very low risk. Buy something cheap, remodel it, rent it out and refinance your money back out. Buy as many as you can. Sell when you want some cash.

  127. 127
    David says:

    By JustNoise @ 115:

    RE: Erik @ 96
    PhD is in mathematical and computational bio.

    Investing in houses and condos ultra low risk. I don’t understand why this stresses everyone out so much. If you have to foreclose, no big deal. They just take the house and temporarily wreck your credit.

    I’m not interested in investing in RE.

    Apparently, JustNoise’s moniker means he sits around in a tent farting at the moon.

    I just sold my West Seattle home for about a $125k profit. I’ve sold every other property over the past few years. So far I have made a substantial profit or broken even on every property I have bought.

    Honestly, if you don’t own a home when you are young, you are making a HUGE mistake. You DO NOT want to be a 40-year-old buying your first house IMO. Odds are you are NOT going to make out like a bandit. But you will save money and get the benefits of advancing inflation.

    You need to build your money momentum somehow (even kicking and screaming and scrimping through a mortgage).

    *Warren Buffett made 99.7% of his fortune after age 52 – because he had made investments over a long, long, long period of time.

  128. 128
    FN Brilliant says:

    Looks like we are getting a bit of a September inventory spike. That should be auspicious for a weekend update.

  129. 129
    Eastsider says:

    RE: David @ 127 – Deerhawke is not buying in this market and you are disposing your holdings. Yet both of you are encouraging others to buy. Hmm…

    If you buy at high prices, at current interest rate, you have slim chance of ‘refinancing’ into lower payments. You will be a debt slave for 30 years.

    It is possible that Seattle (Vancouver, SF) prices will stay elevated and out of reach for “middle income” families. Renting is an option and is usually a lot cheaper than owning. If you invest your money in the stock market instead, you will likely come out ahead in the long run. (E.g. compare S&P vs Seattle homes in the last decade.)

    We are at historic low in interest rates. When the tide turns, home prices will likely drop. It is always better to buy homes at low prices/high rates than high prices/low rates. At least you get an option to refinance into lower rates over the lifetime of the loan. The refinance option is usually not considered but should be when buying an expensive asset.

  130. 130

    RE: richard @ 119
    Yes Richard

    Even paying a low $600/mo rent in Kansas City for 6 years versus buying it as foreclosed with all the code improvement fall out later too adds up to about $30-35K total….versus renting it for those 6 years is 6x12x6=44, 000. Ya got all your money back and the Kansas City home went 100% in value the last 6 years. You do the numbers….LOL

    The $CASH$ vultures [like Erik and SWE] circle the foreclosures as low service sector “hamburger flipper, $14/hr AMZ warehouse, Boeing low tier new worker $12/hr scales and unknown low wage MSFT H-1B slave” wages and dried up old inheritance money now in Seattle implode the market in no time with no warning too…LOL…a possible worst case scenario at a theater near you. But Seattle is too big to fall, they’ll give us quantitative easing welfare to the banksters like Obama did and all will be well? We’ll all profit off $2000/mo Obama-care and increased lower middle income taxes…LOL

    Add in negative interest rates we’ll all flock to so home loans can reduce some more like Europe and Japan. Yeah, I’ll keep my $CASH$ in a bank if that happened, I’m rolling on the ground in laughter now…

  131. 131
    David says:

    RE: Eastsider @ 129 – You are incorrect. I am actively looking for properties as I sit here in an RV on the coast of Florida having just transited from Alaska.

    Which is why I have read this blog for many years.

    Face it – Amazon is the new Sears catalog with such a huge logistics advantage they most likely will be huge in 50 years. Microsoft has a monopoly on enterprise and desktops for eternity. Boeing is a commercial airplane monopoly the US Government is NEVER going to let go out of business (though they should encourage a new competitor IMO).

    Seattle is not going to have a permanent housing crash.

  132. 132
    David says:

    By Deerhawke @ 106:

    RE: DavidE @ 99

    Just to add a dash of perspective here.

    1) You have a Nero-personality in the White House …”

    Deerhawke IS the OLD white guy/gal whose DEATH all the Leftist Dems openly celebrated through Obama and his ilk’s administration. Did you ever hear Obama speak out against that sentiment? (ans: NOPE). Deerhawke is the blindsided old dude who gets mugged in NYC and wonders what he did wrong. The George McGovern type – only worse. Or the Kapo type in WW2 Poland.

    I’ve noticed Trump has shut their mouths for now. But you can count on it coming right back if they get power again.

    FYI, if you were about 30 when Trump won, YOU will be in the ‘oldster’ category when the celebrations break out again.

  133. 133
    Eastsider says:

    RE: David @ 131 – You are selling expensive Seattle and buying cheap Florida properties.

    Nobody suggests Seattle will have a permanent housing crash. But today’s prices are capped by what buyers can afford. Last year’s price decline shows we are near peak (un)affordability until income expands further. Affordability in this market loosely links to monthly payments. When prices go higher, homes will simply become speculative investment properties because few homeowners can afford them. This is already the case in San Francisco and Vancouver. Seattle is not far behind.

  134. 134
    JustNoise says:

    Apparently, JustNoise’s moniker means he sits around in a tent farting at the moon.

    I just sold my West Seattle home for about a $125k profit.

    I own a condo near DT, so that’s where I fart at the moon. I never said I wasn’t interested in owning my primary residence. That $125k profit – you putting it back into Seattle real estate right now?

  135. 135
    Joe says:

    RE: Coconut @ 121

    Very very overpriced, in my opinion. It has real potential to lose $300k in three years.

  136. 136
    David says:

    I might put money back into Seattle as an investment – not as a primary residence for now.

    I’m not saying to be an investor in Seattle – I’m saying if you are young you need to own your residence because:

    1) Your body represents an expense category. You have to do all sorts of things to maintain it and it is a depreciating asset all by itself. And it needs a shelter. The only way to make that shelter-need have any value is to SLOWLY bank equity and you need to do that WAAY before you hit 40 (cuz 50 is a short ride away at that point and you will start to realize your vulnerabilities around that time).

    Trust me on this – you will be happy you slogged through that mortgage and built up a slow growth asset like a house when you hit 45. Guaranteed.

    2) Inflation is your friend if you own a house with a mortgage. That mortgage is going to look smaller and smaller with higher inflation.

  137. 137
    Joe says:

    RE: Eastsider @ 117

    Yes. People often say that RE is always a good purchase because you can’t lose money if you stay in the property for 10 years or more. Well, that’s hogwash.

    If you buy a house for $1M and sell it for $1M in ten years, you lose $60,000 or so in realtor commissions, you lose $200,000 to inflation (10 years x 2%), and you lose at least $100,000 in opportunity costs because you could have had the $1M in higher earning but safe investments (factoring in that you would have incurred rent expense in this case). Loosely put, you should expect to lose about $300k to $400k over the 10-year period.

  138. 138
    dw8928@outlook.com says:

    By Eastsider @ 133:

    RE: David @ 131 – You are selling expensive Seattle and buying cheap Florida properties.

    So far I am honestly vexed by Florida real estate. I cannot understand how Orlando – DEAD LAST in hourly wages in the top 50 cities – can support new housing prices around $330k.

    I visited The Villages 55+ community with about 123k population this week. It is like a huge antique shop full of Deerhawkes who vote Republican. The place is super safe. If someone there found Joe Biden’s lost choppers, they would return them. Super easy golf cart transit ALL over the place. I’m worried I’d enjoy the place. I’m also worried that I’m so young that all the old ladies would have me targeted. Not good for investment.

    But somewhere here is the right combo of location, jobs, and price. So I am off to get on the ground in the Tampa area next week. Jupiter area thereafter. Maybe back discover more about Montana if I give up.

  139. 139
    JustNoise says:

    RE: dw8928@outlook.com @ 138 –
    My husband’s grandmother lives in The Villages. Those souped up golf carts are beyond ridiculous. No wonder you brought up farting at the moon – not much else to do there. Enjoy your canasta.

  140. 140
    David says:

    By JustNoise @ 139:

    RE: dw8928@outlook.com @ 138 –
    My husband’s grandmother lives in The Villages. Those souped up golf carts are beyond ridiculous. No wonder you brought up farting at the moon – not much else to do there. Enjoy your canasta.

    If you are in the right age range, there are a ton of things for them to do there. I bet she loves it!

  141. 141
    Funkseoulbrotha says:

    By Coconut @ 121:

    Community

    Is this over priced: https://www.redfin.com/WA/North-Bend/1430-Lot-11-Elk-Run-PL-SE-98045/home/166940686?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

    Thinking of buying now- thanks

    Very. North Bend homes that go close to million is hilarious.

  142. 142
    Juststoppedby says:

    Folks, I think that there should probably be more focus on the impact of China in the Seattle real estate market.

    Last year CNBC had an article pointing out that real estate prices had shot up since 2016 and made particular reference to the Vancouver BC real estate tax.
    https://www.cnbc.com/2018/08/02/seattle-housing-market-is-under-pressure-as-chinese-buying-dries-up.html

    If you were to overlay the following factors, I think you would see a strong correlation…

    – China had a huge amount of capital flight in 2015 and 16.

    – In 2016 Vancouver BC imposed a tax on foreign real estate purchases which drove a substantial amount of business down to Seattle.

    – about three years ago the Chinese government started imposing capital controls that substantially reduced Chinese real estate investment.

    They worked:
    https://www.prnewswire.com/news-releases/realtor-survey-shows-decline-in-foreign-investment-in-us-residential-real-estate-300886633.html

    – Seattle had been one of the top destinations for China home purchasers, but I don’t remember where I saw the link to that.

    – There would have been some lag between Chinese capital controls and the impact on the real estate market – with those controls in mind, look at the decline in bidding wars statistics that Redfin puts out. A year and a half or so ago, Seattle was at 82% w bidding wars, now we’ve had two months under 10%.

    – Home prices have begun to decline – look at the map in the latest Seattle Times article, and almost every neighborhood north of 520 had a decline.

    – there aren’t an infinite number of people that can afford $800K+ priced homes, and the reduction of Chinese investment due to capital controls and concerns about our current foreign policy would have appear to have left a substantial void in the buying side of the market.

    Just seems like there should be more discussion on this particular topic, since China was such a huge factor in the rising RE prices.

  143. 143
    Justme says:

    Weekend update

    https://twitter.com/coqumragep279/status/1172995098562269185

    King County (Seattle+suburbs) SFR inventory is back to growing rapidly. Why? Many sellers took the summer off to re-finance, and now that the re-fi boom is over, sellers are back whereas buyers are slowing down their activity, again due to higher mortgage rates. #bubblebust

  144. 144
    Justme says:

    RE: Justme @ 143

    Housing prices will resume sliding in Seattle and most other places. Even record low mortgage rates was only good for small spring bump in Seattle, and the real (job) economy is going nowhere. Speculators will soon be forced to sell, no re-fi available once under water. #bubblebust.

  145. 145
    Justme says:

    RE: Justme @ 144

    But wait, there is more.

    Sellers that sat out of the summer market (and did a re-finance instead) may soon regret that choice, because buyer activity is dwindling. Many potential buyers are on strike already, and the ones that did buy this summer were motivated by dropping mortgage rates and lower prices than last year. But that’s about it. Now that mortgage rates are on the way up again, and sellers are back, look for prices to resume sliding and still more buyers deciding to wait while the productive economy dwindles. Pretty soon there will be underwater owners that therefore cannot re-finance, and then price drops will get started for real. Is it not sad that all of this mess of greed and losses could have been avoided? But people cannot resist, Sellers are greedy, all the margin-skimmers of the REIC are greeedy, and buyers are greedy, too.

    It bears repeating: The housing bubble was caused by people PAYING TOO MUCH FOR HOUSES. There were all kinds of greedsters, buyers, banksters, brokers, builders, developers, realtors, crooks, central bankers, lenders, flippers, fraudsters, FOMOs, wall-streeters, top 0.1-percenters, swindlers, enablers, owners, sellers pushers, profiteers, landlords, appraisers, propagandists, front-runners and margin-skimmers involved, that participated directly or indirectly in the bubble and either benefited or hoped to benefit from ever rising crazy prices. At the expense of taxpayers, renters and everyone that needed to buy a house to live in.

  146. 146
    David says:

    RE: Juststoppedby @ 142 – The Chinese worry about the Democratically leaning Communist Government stepping in and taking their money. So they invest in high-end homes here as a hedge outside the country.

    Which seems like a terrible idea. But I guess if you worry about a total loss…

    The quality of Chinese property is TERRIBLE crap buckets.

  147. 147

    The Chinese Impact on Seattle Real estate Lacked One Thing

    Raw data “in % Sales volume” to back up the allegations….and assuming the Chinese investors that did it risk prison time in China for exporting more than $15K, I see why this a ghost.

  148. 148

    Its a Typical Beautiful Day in Seattle

    I see cloudy and rainy is forecast for days now, the fun goes on and on ….LOL

    Wild fire danger is zero now…LOL…we need to build mandatory solar systems on our roofs to up our grid electricity capacity for the “Uber Rich electric golf carts” for charging, that work horribly when its cloudy, ask Denmark….LOL…maybe we can use coal plants to increase the electric grid capacity for charging the carts like Denmark did? So what if the CARBON FOOTPRINT is worse than gasoline cars then…the Trump coal hats for jobs will all be smiling….LOL…what a NWO mess.

  149. 149
    oldmonk says:

    I was looking at rentals in 98053 zip code (novelty hill/redmond ridge, cookie cutter sub div) and also visited a few on sale open houses even though I intend to wait 18 months before I make a buy decision. I already see a 10-15% drop yoy, and this is a desirable area, pretty, with good schools and such.

    Looking at SFH rental rates, imo it makes no sense to rent OUT unless you were were the original buyer (2002-2004) or somehow you got a stellar deal in 2011-12. the 30-40% increase in taxes has made thing worse. I strongly believe for single family homes in this area rental is the way to go and buying is not even an option, but I am no realty expert .

    I am curious on what experts think in this forum.

  150. 150
    Brianna says:

    RE: oldmonk @ 149

    I’m no expert, but I am also a would-be buyer who has watched the market a long time. I have seen where the cost of monthly rent rates are cheaper than mortgage payments would be for comparable homes for sale in many areas.

  151. 151
    hp says:

    RE: Justme @ 143
    Will be interesting! Thanks for the update. Look forward to your graphs/updates!

  152. 152
    Juststoppedby says:

    RE: softwarengineer @ 147

    I don’t think you have to have explicit data to realize the China was having a huge impact in the Seattle market.

    As of December 2016, Seattle had been the number one city of interest in the US for 4 of 7 months:

    https://www.seattletimes.com/business/real-estate/seattle-becomes-no-1-us-market-for-chinese-homebuyers/

    David @146 – you are exactly right that money WAS leaving China as a hedge against the government, as well as for investment.

    The point I’m making, which SWE referenced, is that China imposed capital controls about 3 years ago which largely put a stop to that.

    The spigots have been turned off, and the Seattle market has lost one of the main drivers to increased prices.

  153. 153
    Deerhawke says:

    By Eastsider @ 117:

    RE: Deerhawke @ 113 – If you are not acquiring new projects, perhaps you should stop encouraging others to buy. You and I both know the short term outlook is not good. And the election (of a socialist?) is coming up…

    Just to set the record straight.

    1) I haven’t bought anything recently because I bought last last year when the market was correcting. I will close on those properties this year after getting permits.

    2) I am long-term bullish on the Seattle market but I have never encouraged others to buy. There are a lot of ways to skin this cat.

    If you can tolerate living in Mom & Dad’s extra room or basement, do it. If you can ride the Sounder and live in the country, great. If you can telecommute most of the time and live up in the islands, very smart. If you have a kind old landlord who is giving you a sub-market rent like Dariakus, take that deal with both hands. If you can work out a cohousing arrangement with friends, go for it. If you can find a comparable job in an area with a lower cost of living, by all means get the U-Haul.

    3) The one thing I do recommend (whether or not you buy) is living well below your means and saving/investing as much as you can in a well diversified portfolio.

  154. 154
    Notme says:

    Douchefalcon soaring
    high over Green Lake the fair
    pooping on buyers

    -a Seattle bubble haiku

  155. 155

    Great Blogs All and BTW I Read All of Them, I Love Opinions of all Types and Do Hope Everyone Makes Decisions They Can Live With and Are Happy

    There’s many ways to peel a real estate onion, but they all make ya cry [except Walla Walla Sweets, They’re Different]…LOL

    Time to fill your mugs with Yuban and Scan the Seattle Times Brief:

    “…The Seattle Times
    MORNING BRIEF
    Monday, September 16, 2019
    People at a light-rail station
    How rising costs of living and displacement are reshaping politics in our region
    Many people of color, immigrants and young working people who once might have inhabited Seattle now live south. That’s bringing opportunities for new candidates in the suburbs — but also a wave of worries about the voices that are being lost in Seattle. And as gentrification reshapes South Seattle, white people are now the largest racial/ethnic group there, marking a big shift. FYI Guy looks at the changing populations in South Seattle and the rest of the city. (Photo: Ken Lambert / The Seattle Times)
    NEED TO KNOW
    President Donald Trump says the U.S. is “locked and loaded” and ready to respond after Iran-backed rebels attacked Saudi Arabia’s largest oil-processing plant. The drone attack has halted more than 5% of the world’s daily crude oil production, sending oil prices up today. Photos show just how sophisticated and precise it was.

    Rodney Wheeler spent two years in jail on a murder charge before being acquitted. Now he’s suing the King County Sheriff’s Office and two detectives, accusing them of using false statements and cherry-picking evidence to charge him with a crime he didn’t commit.

    Batten down the hatches, or at least fold up the patio umbrella. The season’s first gale winds are heading into Western Washington this week, along with significant rain. But take heart: Nicer weather will probably return soon, a National Weather Service meteorologist says.

    “Climate change is really in your face.” Fishermen, scientists and Alaskans are witnessing dramatic changes as ice melts in the Bering Sea, putting a food chain at risk. Take a deep look as they worry about what lies ahead for a sea that produces some of the world’s biggest seafood harvests and helps sustain communities from Alaska to Seattle. This story is part of our participation in the worldwide Covering Climate Now initiative.

    Help us continue to bring you the news you care about, now. Subscribe to The Seattle Times for just $1 to start.

    SUBSCRIBE TODAY
    FALL ARTS GUIDE 2019
    Fall arts guide illustration
    There’s still nothing like seeing arts and entertainment live — even in this Netflix age, when going out can seem inconvenient and uncomfortable. What makes it so magical? We’re exploring all the reasons why, instead of falling on the couch, you might want to fall more deeply in love with the local arts scene. Our Fall Arts Guide includes seven best bets for theater and 10 top music events. (Illustration: Gabriel Campanario / The Seattle Times)
    WHAT WE’RE TALKING ABOUT
    Now let’s talk about school uniforms. As some public schools in the Puget Sound area add them, Seattle Public Schools’ extremely simple edict on its dress code is making waves.

    Provided by Providence St. Joseph Health
    Many seniors risk homelessness as they adjust to fixed income and Social Security that hasn’t kept pace with the cost of living. They have specific needs to keep them housed through retirement. Meet the faces of supportive housing.

    Two violent incidents are shaking light-rail riders as Seattle officials try to manage the perception and reality of safety downtown. Police have released surveillance video as they seek the gunman in Friday’s triple shooting at Westlake Station, which killed one man and left another in critical condition. On Saturday, a man was stabbed aboard a train.

    More than 49,000 members of the United Auto Workers walked off General Motors factory floors today. The national strike, the first in more than a decade, has shut down 33 plants in nine states.

    Our ski seasons will get shorter, and our wildfire seasons will stretch longer. These are among many ways recreation in Washington state is vulnerable to climate change. Outdoor industries are getting ready. Meanwhile, must you throw away (or recycle) your suitcase because planes emit hundreds of tons of carbon? Maybe not. Seattle-area researchers and innovators are pursuing bright ideas for climate-conscious travel.
    Produced by Advertising Publications
    From crime to wine, certificate programs in the Seattle area offer a low-risk way to learn about a possible career path and gain some experience without quitting your day job. Programs start at less than two weeks.
    EDITORIAL/OPINION
    Washington’s Supreme Court strengthened the state Public Records Act in a decision affirming that a batch of state employee emails on a public computer system are public records. This welcome decision reflects the will of Washingtonians, who created the act with a 1972 initiative that made the state a leader in government transparency, writes The Seattle Times editorial board.
    LATEST LIFE STORIES

    In this Netflix age, there’s still nothing like seeing arts and entertainment live
    Why go to the theater? It’s inconvenient. It can be uncomfortable. And here’s why I love it.
    7 best bets for theater in fall 2019 in the Seattle area

    TODAY’S WEATHER
    Take the bumbershoot. High 68. Low 56. Sunrise 6:48. Sunset 7:19.
    TODAY IN HISTORY
    In 1993, the first Salmon Homecoming Celebration is held on the Seattle waterfront to highlight conservation issues and local tribes’ cultural connection to salmon, including the Duwamish, Muckleshoot and Suquamish people. The event includes pow wows with dancing competitions, salmon bakes and canoe-welcoming ceremonies. “This is a bridge-building opportunity …. between the ages, between the young and the old, between the tribes and other governments, between natives and non-natives and between people and the world in which they live,” said Northwest Indian Fisheries Commission chairman Billy Frank Jr. (Compiled from HistoryLink.org)…”

    The Actual News From SWE:

    Polar Bear Population went up 500% in Bearing Straits Since 1950:
    https://images.search.yahoo.com/search/images;_ylt=Awr9BNuOqH9d8akAHkRXNyoA;_ylu=X3oDMTEydnRpNHJtBGNvbG8DZ3ExBHBvcwMxBHZ0aWQDQjg3NDVfMQRzZWMDc2M-?p=polar+bears+growing+in+numbers+in+Alaska+2019+bering+Straits&fr=yfp-t

    The average temperature in the Bearing Straits is actually flat-line [regression analysis] since 1950, we had a brief global warming in 1940, but it plummeted back down, check out the actual numbers:
    https://images.search.yahoo.com/search/images;_ylt=AwrTLfqyqH9de7UAhyqJzbkF;_ylu=X3oDMTBsZ29xY3ZzBHNlYwNzZWFyY2gEc2xrA2J1dHRvbg–;_ylc=X1MDOTYwNjI4NTcEX3IDMgRhY3RuA2NsawRjc3JjcHZpZAMxb1lzZVRFd0xqTFVqaWFHWER0bjFnelJNall3TVFBQUFBQXI1UmwwBGZyA3lmcC10BGZyMgNzYS1ncARncHJpZANQUmpmSHd6clFwLllIem4yS09UVE5BBG5fc3VnZwMwBG9yaWdpbgNpbWFnZXMuc2VhcmNoLnlhaG9vLmNvbQRwb3MDMARwcXN0cgMEcHFzdHJsAwRxc3RybAM3MARxdWVyeQNhdmVyYWdlJTIwdGVtcGVyYXR1cmUlMjBjaGFuZ2UlMjBzaW5jZSUyMDE5NTAlMjBpbiUyMGJlYXJpbmclMjBTdHJhaXRzBHRfc3RtcAMxNTY4NjQ3NjE0?p=average+temperature+change+since+1950+in+bearing+Straits&fr=yfp-t&fr2=sb-top-images.search&ei=UTF-8&n=60&x=wrt

    Prediction of Bearing Strait global warming has no raw data backup Seattle Times, redo your allegations.

    Toyota American Workers are paid about $20/hr:
    https://www.glassdoor.com/Salary/Toyota-North-America-Salaries-E3544.htm
    That’s inadequate slave labor pay for Seattle real estate prices….GM demanding $50/hr UAW pay will get ya a cheap Seattle Condo to rent…LOL. Make sure ya tip at the restaurants, the waitress makes low $10-15/hr pay.

    Ski Seasons Shorter? We had a record “cold temperature” glacier depth in the Cascades for 2019, am I missing something?

    LOL…one trip on a 737 equals a year of useless recycling in CARBON FOOTPRINT….Mother Earth is my news source not Seattle Times….they say one dog= 3 Hummers in CARBON FOOTPRINT too…its a NWO Mess folks. Start relying on engineer analysis, not wannabe engineer analysis Seattle Times.

    Have great day and read a book today, those laptops and iPhones suck you brain dry? LOL

  156. 156
    LessonIsNeverTry says:

    By David @ 127:

    By JustNoise @ 115:

    RE: Erik @ 96
    PhD is in mathematical and computational bio.

    Investing in houses and condos ultra low risk. I don’t understand why this stresses everyone out so much. If you have to foreclose, no big deal. They just take the house and temporarily wreck your credit.

    I’m not interested in investing in RE.

    *Warren Buffett made 99.7% of his fortune after age 52 – because he had made investments over a long, long, long period of time.

    And the majority of those long, long, long investments should NOT be in pure leveraged RE.

  157. 157
    LessonIsNeverTry says:

    By Joe @ 137:

    RE: Eastsider @ 117

    Yes. People often say that RE is always a good purchase because you can’t lose money if you stay in the property for 10 years or more. Well, that’s hogwash.

    If you buy a house for $1M and sell it for $1M in ten years, you lose $60,000 or so in realtor commissions, you lose $200,000 to inflation (10 years x 2%), and you lose at least $100,000 in opportunity costs because you could have had the $1M in higher earning but safe investments (factoring in that you would have incurred rent expense in this case). Loosely put, you should expect to lose about $300k to $400k over the 10-year period.

    This analysis embeds the majority of the loss via inflation to which housing is not indexed but “safe investments” are indexed. This is not realistic. However, the overall point is a good one. Embedded costs in RE are large, with a substantial exit tax. These costs are only trivial if owners are lucky enough to be in a boom market, which everyone mistakes for genius until it turns.

  158. 158
    oldmonk says:

    RE: LessonIsNeverTry @ 157 – Does this calculation take into account that for primary house the person is usually only vested @20% and the person still needs to live somewhere 2k X 120 months.

  159. 159
    Deerhawke says:

    RE: oldmonk @ 158

    This topic has been covered extensively in past SB posts. There are a lot of rent vs. buy calculators available online, some simple and some quite complex. At the very least, it should help you understand the basic trade-offs involved.

    Another way that people are coping with high prices in Seattle is by being urban pioneers and moving south. How does that change the demographics of the area? Check out Gene Balk’s column in today’s Seattle Times.

    https://www.seattletimes.com/seattle-news/data/as-south-seattle-gentrifies-white-people-become-largest-racial-group/

  160. 160
    Joe says:

    RE: LessonIsNeverTry @ 157

    In reality, the opportunity cost of being locked in a non-appreciated property for 10 year is much more significant than I described. The results will vary dramatically depending on what you would do with cash that was not spent on a house.

    If you spend the cash on junk, you build no wealth, and you would probably be worse off than buying the non-appreciating house.

    If you put it in safe investments, which yield 1% real return, you make out as I’ve described. It’s NOT unrealistic to achieve a conservative 1% real investment return in an environment when RE does not appreciate. Not sure why you want to argue with that.

    If you hold cash or ST fixed instruments for a while, then the stock market drops, and you put the funds to work at lower valuations, your opportunity cost of purchasing a non-appreciating house could be astronomical. Of course, this relies on successful market timing, but history show this strategy to be very lucrative during periods of peak stock market and RE valuations, which we see today.

  161. 161
    ruxpert says:

    RE: Juststoppedby @ 90

    Kyle Bass Explains The Chinese Currency Crisis As An Investment Opportunity

    https://youtu.be/ZBl05xNq_AU

  162. 162
    David says:

    By ruxpert @ 161:

    RE: Juststoppedby @ 90

    Kyle Bass Explains The Chinese Currency Crisis As An Investment Opportunity

    https://youtu.be/ZBl05xNq_AU

    I go to China. You should just see the crap they call “Construction” in China. Abysmal. Mostly empty speculative high rises of condos and office buildings too. They fall apart before your eyes.

    Also, who monitors Chinese public companies and their stock? Who audits their financials? Why do they incorporate in the Cayman Islands BUT all their operations and money are in China? Who has the right to demand an audit of the company?

  163. 163
    SeattleBubble says:

    By ruxpert @ 161:

    RE: Juststoppedby @ 90

    Kyle Bass Explains The Chinese Currency Crisis As An Investment Opportunity

    https://youtu.be/ZBl05xNq_AU

    He is George Soros Jr. He was burned shorting RMB in HK two years ago. If you would trust put your own money in his fund, then you could listen to his talk.

  164. 164

    Grab your Yuban mug, the Seattle Times Brief is Here”

    “…The Seattle Times
    MORNING BRIEF
    Tuesday, September 17, 2019
    Cars driving in the rain
    Why does it seem like Seattleites are so bad at driving in the rain?
    Nearly every time it rains, traffic nightmares abound in Western Washington. Why does this happen despite all the practice we get at this particular skill? Let’s be honest: “We’re bad drivers in general,” experts say, and rain like we’re seeing this week makes that more obvious. But most people think everyone else is the problem. It’s time for a little refresher on driving in the rain. You can check today’s traffic here before you go, then take eight simple steps to be a mindful driver. (Photo: Ellen M. Banner / The Seattle Times, file)
    NEED TO KNOW
    Light-rail violence: Seattle police have arrested a man suspected of shooting three people, one fatally, at the Westlake station. Sound Transit was worried about the safety of its 80,000 daily light-rail passengers long before Friday’s shooting. Here’s a look at crime in the transit system and what’s being done about it.

    Washington drivers are likely to feel pain at the gas pump because of the Saudi oil attacks. Prices could rise steeply this month, AAA says. The weekend attacks on major oil facilities highlighted what analysts say is a rapidly evolving threat from Iranian-made weapons, marking a potentially alarming shift toward precision strikes on critical infrastructure.

    Enjoy Morning Brief? Then you’ll love full digital access. Help us continue to bring you the news you care about, now. Subscribe to The Seattle Times for just $1 to start.

    SUBSCRIBE TODAY

    Inside KeyArena
    KeyArena has been gutted underneath its 44-million-pound roof as crews prepare for a rebuild that will lower the floor and double the Seattle arena’s square footage. The big question: Will it be done in time for the start of the Storm’s 2021 season and the NHL draft? See more images from inside. (Photo: Mike Siegel / The Seattle Times)
    WHAT WE’RE TALKING ABOUT
    “I see a ticking time bomb and I want to turn it off.” Never mind that Seattle’s Jamie Margolin, 17, can’t vote yet. She’s out to save the world from a climate catastrophe, and she’ll testify before a congressional panel tomorrow. Margolin, a student at Holy Names Academy, represents a growing generational movement as teens confront a future that will be increasingly wracked with the effects of climate change.

    A truck plunged into a creek when a wooden bridge collapsed in Monroe yesterday. Nobody was injured, according to fire officials who took quite the photo.

    “It’s impossible to live” while Growler jets scream relentlessly over Whidbey Island, one resident says. “Your body shakes. You can’t be outside.” She and more than three dozen fellow residents have sued the Navy over increased noise from the jets, seeking compensation for what they say is their inability to use their property.

    The Kona coffee you buy from Costco and Walmart might be fake. Growers have filed a federal lawsuit in Seattle accusing retailers of selling bogus Kona. They say much of the coffee sold under that name fails a lab test for the telltale chemical signatures of the real deal.

    Fall in Lake Chelan is the area’s best-kept secret: The pace slows down, blue skies abound and the smell of harvest surrounds you everywhere you go. Learn more about what the season has to offer.

    WORTH A READ
    Police are seeking a damaged gray 2000 Ford Ranger after bicyclist Tyler Rolph was hit and killed in Federal Way by a driver who didn’t stop. It was Rolph’s 34th birthday.

    You’ll be hearing about impeachment today. President Donald Trump’s former campaign manager, Corey Lewandowski, will testify in House Democrats’ first official impeachment hearing, which underscores a big dilemma for the party. Here’s a quick catch-up on Lewandowski and his role in the Mueller report.

    Seattle may set minimum pay for Uber and Lyft drivers. Mayor Jenny Durkan is considering a plan to beef up drivers’ rights, according to internal city records and letters exchanged with one of the ride-hailing giants. The city also is considering a tax on the rides.

    Here comes the rain again. Be prepared to take it on in a new rain jacket from a beloved Pacific Northwest backpack expert, big-name designer rain boots made of sustainable rubber and more locally made rain gear for fall.
    Are Other People, with their cellphones and noises, stopping you from going out for entertainment? Here’s what we need to do.
    TODAY’S WEATHER
    Rain. High 64. Low 55. Sunrise 6:49. Sunset 7:17.
    TODAY IN HISTORY
    The beginning of the Elwha Dam’s removal is marked by a 2011 ceremony featuring Lower Elwha Klallam tribal leaders and government officials near Port Angeles. The takedown of the 108-foot-high Elwha Dam and 210-foot-tall Glines Canyon Dam on the Olympia Peninsula is the largest dam removal in North America, and part of a massive river-restoration project. The river ecosystem begins to rapidly recover, with increasing numbers of salmon appearing above each former dam as soon as it is gone. (Compiled from HistoryLink.org)

    SWE’s Edit of the Seattle Times Today:

    Oil is $59/bbl today down from $62….the orange haired guy gets no credit, but we’re energy independent from Iran’s attacks.

    Jamie age 17 is not a scientist experienced and skilled to speak on Climate Change raw data. Period.

    Lake Chelan is a Hades Hole this Fall right now: cold, cloudy and wet…Beautiful Fall attraction now? LOL

    Impeachment time wasted by our Congress is not an agenda to push, ya might as well be campaigning for the orange haired guy instead…LOL

    Uber driver minimum wage now $15/hr….LOL…that will stock the Seattle Area homeless tent with supplies and maybe a Subway sandwich and Starbucks…LOL

  165. 165
    Juststoppedby says:

    RE: SeattleBubble @ 162 – I can’t speak to the overall investment strategy, but the main point to me (I don’t have 40 min to spare so I read a recent article/interview) is that China will continue to restrict capital flight with vigor.

    The spigots of cash from China that helped to inflate the Seattle RE market would appear to be turned off for some years to come.

  166. 166
    Voight-kampff says:

    The “solis” condo project on Capitol Hill (which is still under construction) is converting from condos to apartments, despite having over 50 percent of units under contract.

    The Volta apartments in bell town are converting from apartments to condos( they were originally designed as condos, but were converted to apartments during last downturn)

    Kind of weird.
    Mixed signals, right?

  167. 167
    N says:

    @ Voight-kampff — According to the last Seattle Times piece, condo prices are down 10% YOY. May be part of the reason condos are switching to apartments…

  168. 168
    Voight-kampff says:

    RE: N @ 166

    Then why are the Volta apartments converting to condos?
    Maybe developers aren’t even sure what do in this market?

  169. 169
    SeattleNoBubble says:

    RE: N @ 166
    You should say those condos are marked up 10% and now back to normal.

  170. 170
    ruxpert says:

    RE: SeattleBubble @ 162
    Thanks for the info.

  171. 171
    richard says:

    please, just give me one good reason to buy condo now.
    are you tired of paying ever-increasing HOA fees? are you not going to upgrade when you have a family?

  172. 172
    SeattleBubble says:

    RE: richard @ 170
    1) Lower price than SFH so your loss will be less than SFH if we have -20% overall drop.
    2) Location closer to public transport
    3) No yard to care, saving time and better life
    4) many many ….

  173. 173
    Voight-kampff says:

    RE: richard @ 170

    You need to differentiate between a condo downtown and a condo in the suburbs.
    There are no SFH’s in the downtown retail core,
    And a SFH on Capitol Hill or Queen Anne is quite pricey, to put it lightly.
    As hard as it is for some to fathom, not everyone is looking to start a family, or live a traditional suburban life.

  174. 174
    richard says:

    RE: Voight-kampff @ 172 – the hoa fee goes up with inflation, which is a killer for me. also, privacy is big problem.

  175. 175
    richard says:

    RE: SeattleBubble @ 171 – it is mpre overpriced than sfh in everyway. dollar per squarefoot,hoa fees,living quality ans more. if there is.a recession, the price drop on condo will be more percentage wise.

  176. 176
    Justme says:

    @The_TIm, Looks like the inventory data has not updated since last night.

    “As of 09.17.2019 @ 06:00 PM” it says right now.

  177. 177

    $600/mo HOA for Renton Condos May Not Be $2000/mo Condo HOA Fees in Seattle

    But its still horrifying, my hair stylist owns that $600/mo HOA fee Renton unit and I stopped complaining about my Glenbrook $185/mo fee [includes water and sewer too] and unlike plumbing maintenance, it goes on and on, like $7200/yr.

    Time to pour yourself some Yuban and scan the Seattle Times Brief:

    “…The Seattle Times
    MORNING BRIEF
    Wednesday, September 18, 2019

    Westlake Station shooting: A 13-year-old girl helped Seattle police identify a man who’s accused of fatally shooting one person and injuring two others in the transit tunnel last week. The suspect, 20, was arrested Monday. He’s already spent a few months in jail this year, court records show.

    Boeing CEO Dennis Muilenburg has been asked to testify before a U.S. House committee that’s scrutinizing two deadly crashes of the 737 MAX. The hearing is scheduled for Oct. 30, the day after the anniversary of the first crash. And U.S. aviation regulators want to tell other nations about their work with the grounded plane.

    The Seattle School Board will pick a new member today. Get to know the finalists to represent the South End, and check back here for updates this evening. Or watch it happen at 4:15 p.m. at the district’s John Stanford Center for Educational Excellence, 2445 Third Ave. S. Speaking of schools, cheers to Washington’s newly announced National Merit Scholarship semifinalists.

    Enjoy Morning Brief? Then you’ll love full digital access. Help us continue to bring you the news you care about, now. Subscribe to The Seattle Times for just $1 to start.

    SUBSCRIBE TODAY
    UH, THERE’S SOMETHING BEHIND YOU
    Burke Museum ostrich

    WHAT WE’RE TALKING ABOUT
    Seattle is supposed to be a model of democracy — but big money is swamping our City Council elections like never before. Columnist Danny Westneat outlines what you should know amid the coming political mud storm. Meanwhile, council candidates Tammy Morales and Mark Solomon diverged sharply in a debate last night, giving voters a clearer picture of where they stand on issues ranging from homelessness to bike lanes and police.

    Move over, Cougs and Huskies. Your turf isn’t the best college town in Washington state, according to a new ranking that looks at a wide range of factors, from cost of living to transportation. That honor belongs to a northern neighbor listed as one of the top 10 in the nation. But there’s a big caveat.

    WORTH A READ
    A long line of wannabe Amazonians stretched around a Seattle block yesterday as the company held a job fair in its push to fill more than 10,000 local jobs. The prospective workers ranged from recent college grads to a Boeing employee who worries that “with the 737 issues … maybe it’s time to look for different opportunities out there.”

    “They” officially has a new definition. Merriam-Webster is declaring in its dictionary that the pronoun can be used to refer to a person whose gender identity is nonbinary. “They” has been used as a singular pronoun since the late 1300s, the dictionary folks noted as they added a few new words.

    Can art help fight climate change? Four local artists think so; check out their vibrant work. And today’s installment of our Fall Arts Guide features six dance performances and nine classical-music events to catch in the Seattle area. Plus, there’s still time left to see the psychological thriller “People of the Book” at ACT Theatre.

    Here comes the rain again. Be prepared to take it on in a new rain jacket from a beloved Pacific Northwest backpack expert, big-name designer rain boots made of sustainable rubber and locally made rain gear for fall.

    LATEST LIFE STORIES

    ‘Ad Astra’ review: an intriguing space odyssey with Brad Pitt
    Review: Tensions simmer in ‘People of the Book,’ a delicate psychological thriller at ACT
    Can art help fight climate change? These 4 Seattle-area artists think so.

    TODAY’S WEATHER
    Clouds, then sun. High 66. Low 52. Sunrise 6:50. Sunset 7:15.

    I snipped it out because it was irritating to me, but I do hope “Washington adopting California’s emission standards” doesn’t mean all cars purchased today will be mandatorially scrapped after the 60 mo loan is paid off. You can be mad at Orange Head and still shudder at the prospect that “full electrical cars replacing gasoline in 2025 is good for you”…especially if you bought a $50K Lexus in Seattle. BTW, as a automotive design degreed safety engineer I just noticed an alarming fact, the Corollas and Lexus have no front bumper. They wouldn’t be allowed on the road in the 70s, they’re a safety risk The same with the Kia Soul, a big gap hole where a bumper should be, perhaps they run too hot without the extra radiator cooling vent blocked by the front bumper? Irrespective, most car enthusiasts looking for “eye candy” don’t like that ugly black shield where the front bumper used to be. They had to cheat on the crash test results too?

    Fleeing Boeing like its a sinking ship? Good reporting Seattle Times, I see the writing on the wall too, perhaps Boeing can keep Defense Systems and live without a cancelled 737 P-8 program and 767 program too? They’re having problems now too from too much engineering outsourcing.

    At least the rain isn’t continuous, but I wear slippers all day now, the floor is much colder.

  178. 178
    JWoods says:

    This listing should remind all of us that it’s important to keep a long term perspective.
    https://www.redfin.com/WA/Bellevue/1405-106th-Ave-NE-98004/home/506383

    It’s listed for $1.5M, it may be a bit stretch for that, I think it can sell for $1.4M .
    Owner bought the house in 2000 for $240,000.

    From year 2000 to 2019 we had:
    1) Dot-com bubble burst and Nasdaq crashed 78% from its peak;
    2) 9/11 the largest terrorist attack and multiple wars
    3) The great financial crisis, nation-wide housing crashed >30%, S&P crashed >40%.

    Yet, 19 years after the owner bought the property, it has appreciated 6X. Assuming 20% down payment, the initial $48,000 investment has become ~1.2M, for a total return of 25X.

  179. 179
    a-lurker says:

    RE: JWoods @ 177 – There are a few things wrong with your math. It’s not a 25x return. They didn’t just put $48k in and magically the rest of the $240k was paid off. Their profit, by the way, would be a little under a million, not a return of $1.2M. By your logic, if they had sold it for $240k they’d have a return of 5x, which obviously isn’t correct.

    A better way to look at it is that over the course of 19 years, that particular property, if sold for $1.2M, had a return of 9% annually (240k*1.09^19), which is pretty damn good, but not as ridiculously impressive as you might first think. (This also doesn’t include the interest rate on the money borrowed and other factors such as property taxes, general upkeep of the home, insurance, etc.)

    I personally don’t think that over the course of the next 19 years we’ll get that kind of return on housing around here.

  180. 180
    Eastsider says:

    RE: JWoods @ 177 – Assuming you bought your home 30 years ago –

    CS Seattle HPI 01/1990 = 58.23
    CS Seattle HPI 06/2019 = 255.53
    This is an annual gain of about 5%

    Annualized S&P 500 return (dividend reinvested) between 01/1990 and 06/2019 is 9.8%.
    https://dqydj.com/sp-500-return-calculator/

    Seattle was among top RE performers. National RE annual return is about 4%.

    S&P easily outperforms RE. And if you compare Seattle RE to those of dominant NW stocks (e.g. Boeing, Microsoft, Nordstrom, Costco, Amazon), its return is pathetic.

  181. 181

    RE: Eastsider @ 180

    Dominant in the 90s very different from today though…yes? I can’t remember the last time I was in a Nordstroms.

  182. 182
    richard says:

    RE: JWoods @ 178 – come on, be honest, you don’t know what going to happen in the next few years just like all of us. not in a few years, not in ten and twenty years.

  183. 183
    JWoods says:

    RE: a-lurker @ 179
    It was a back of envelop calculation, but I think it’s pretty close. Let’s break it down:

    Assuming it’s sold for $1.4M, 8% of selling cost and exercise tax, the owner will have
    $1.4M – $1.4M x 8% = $1.29M
    Assuming owner paid 20% down payment ($48,000) and took out 30 year mortgage of $196,000 in 2000, the remaining mortgage balance would be ~$110,000.
    Now after paying off all remaining mortgage balance, they have $1.18M left. (without factoring in the capital gain tax they will pay, with $0.5M exemption)
    So the initial $48,000 has grown to $1.18M, that’s 24.58X after 19 years, I think that’s close enough :-).

  184. 184
  185. 185
    JWoods says:

    RE: Eastsider @ 180
    You forgot one thing: leverage.

    If you paid 20% down payment and bought your house with mortgage, which is what most people do, your return won’t be 5%, but instead it’s 10.8% per year for the 30 year period with the Seattle housing price index you listed. Not only it’s higher than S&P, it also comes with mortgage interest/property tax deduction, and most importantly provided rent-free shelter.

    How it’s 10.8%? It’ll be a math homework for you to figure it out :-)

  186. 186
    Justme says:

    Allow me translate what FOMC/Powell said today, hidden behind all the mumbo-jumbo and happy-talk:

    “This sucker is going down, and hard”.

    https://twitter.com/coqumragep279/status/1174407838984101889

  187. 187
    Northend says:

    Well, QE is back and we’ve had a rate cut. Thanks Fed. Thanks for making home prices unaffordable to Americans.

  188. 188
    JWoods says:

    RE: richard @ 182
    Heck, I don’t even know what’s going to happen tomorrow. I’m simply illustrating what has happened.

    But why do you think housing return in Seattle for the next 20 years would be dramatically different from the past 20 years?
    What specific foresight and power do you have to convince you that housing in Seattle won’t do as well for the next 20 years?

  189. 189
  190. 190
    richard says:

    RE: JWoods @ 187 – simple price extrapolation to future to me is unrealistic. I don’t see how people’s income can keep. as you know, the economy grows like 2-3% in the last ten years. How can people can keep up average 9% annual price increase? one possibility is seattle will be a pure m(b)illionaire city.

  191. 191
    Eastsider says:

    RE: JWoods @ 185 – You cherry picked a house/timeframe that showed the best return. What about homes that were bought 15 years ago? 10 years ago? Average homeownership is just under 10 years. Your math simply doesn’t add up.

    RE: Ardell DellaLoggia @ 181 – Nordstrom aside, you would have made out like a bandit in the other stocks I mentioned and you would have retired long ago ;)

  192. 192
    JWoods says:

    RE: Eastsider @ 190
    I picked one random example to illustrate, but it’s not cherry picking to make any case for an opinion I have. One of the most important things to do well in anything is intellectual honesty, I don’t have a bias to be a housing bull or bear, I want to be on the side which I will do well.

    If you bought this house in the last 10 year, 15 year, 20 year, 30 year or 66 year (since it’s originally built in 1953), you are going to do really well.

    Heck, if you bought any random house in the 98004 zip code, where this house is, anytime in history since the houses were built (there are at least a few thousands of them) , if you hold them to today you are doing really well.

    Is that cherry picking?

  193. 193
    Al says:

    RE: Justme @ 186

    Hey man, serious question. Let’s say I’ve accepted that a massive recession or depression worse than 2008 is coming, and house prices will go down with it. I’m renting right now, and the only thing of value I have is cash in the bank, and that my job is recession proof (medical). What should I do with that cash? I’m obviously going to wait this out, even two or three years before I buy a house is ok with me, no way in hell I’m paying these over priced houses in the most unstable economical times in the past decade.
    Would you leave cash in the bank? (Scared banks won’t give money back if the recession is very bad)
    Buy something else like gold or silver? (Where would I keep it?)
    Buy already cheap land or RE in the mid west?

  194. 194
    JustNoise says:

    RE: Eastsider @ 190
    RE: JWoods @ 178

    Plus, the listing description says it’s the first time on the market “…ever!” “WOW!” Maybe grandma sold her house back in 2000 for well below market value.

  195. 195
    Justme says:

    RE: JWoods @ 191

    You are committing the time-travel fraud: “Because this house was a good deal in 19XX, it is a good deal now”.

    Then there is the problem with the very suspect cost basis as per RE: JustNoise @ 192 – , and the problem that the stock market would have returned much more than this house, as per
    RE: Eastsider @ 180

    Can you please just stop with the cockamamie Buy! Now! propaganda?

  196. 196
    a-lurker says:

    RE: richard @ 190 – Exactly. The logical conclusion is that housing was undervalued, especially when taking into account the people who could afford housing here today (i.e. tech people and other who have money – who were not here 19 years ago). It’s unrealistic to expect that in the next 20 years we’re going to be pricing housing even beyond what those folks can reasonably pay.

    As you say, we’d basically have millionaires only owning property in Seattle.

  197. 197
    kenmorem says:

    By Al @ 193:

    RE: Justme @ 186

    Hey man, serious question. Let’s say I’ve accepted that a massive recession or depression worse than 2008 is coming, and house prices will go down with it. I’m renting right now, and the only thing of value I have is cash in the bank, and that my job is recession proof (medical). What should I do with that cash? I’m obviously going to wait this out, even two or three years before I buy a house is ok with me, no way in hell I’m paying these over priced houses in the most unstable economical times in the past decade.
    Would you leave cash in the bank? (Scared banks won’t give money back if the recession is very bad)
    Buy something else like gold or silver? (Where would I keep it?)
    Buy already cheap land or RE in the mid west?

    … grabs tinfoil hat.

  198. 198
    kenmorem says:

    2 part question for the REA out there:
    – if you seismically retrofitted your house, do you advertise this in the listing?
    – if the answer to the first part is yes, then the followup question is: what if there was no permit pulled for the retrofit?

  199. 199
    Lulu says:

    RE: richard @ 190

    Build smaller house on smaller lot. Price stay the same or 2-3% increase YOY. But reduce SQ by 10%. We see P&G reduce their tooth paste tube while keep the same price.

  200. 200
    Eastsider says:

    RE: JWoods @ 192 – I suggest you read the following article or many others on the internet –

    https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp

    Remember, homes are depreciating assets. Using the IRS formula, the structure depreciates to zero in about 27 years,

  201. 201
    Al says:

    RE: kenmorem @ 197

    I wish you would grab an answer rather than a tinfoil hat. I don’t have much knowledge in real estate or money, that’s why I’m asking. No wonder I don’t know anything, I’ve been following this website for 4 years now, weekly!

  202. 202
    BacktoBasics says:

    By Eastsider @ 200:

    RE: JWoods @ 192 – I suggest you read the following article or many others on the internet –

    https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp

    Remember, homes are depreciating assets. Using the IRS formula, the structure depreciates to zero in about 27 years,

    The land is an appreciated asset esp good location with good school and low crime.

  203. 203
    SeattleNoBubble says:

    By Eastsider @ 200:

    RE: JWoods @ 192 – I suggest you read the following article or many others on the internet –

    https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp

    Remember, homes are depreciating assets. Using the IRS formula, the structure depreciates to zero in about 27 years,

    depend on where the real estate location. if you bought in SF and Vancouver BC, you will get better return from real estate (if you leveraged 5X, you will get even more). If you bought in Kansas City, Oklahoma City, good luck. If you bought a house in 1980 with 120K, now it will be worth 1.2 mil about 10x. Leverage with 3.5% tax deductable mortgage baby.

  204. 204
    N says:

    Not following the selling points of a tax deductible mortgage on home prices that were $200-300k. Even if you assume a 300k mortgage at 4% that equates to $12,000 in interest paid in year 1. Add in some property taxes but still. Hardly beneficial under the new tax law when the standard ded is 24,000 and under the old you would barely have come out ahead as a couple.

    Other factors not mentioned – selling costs are not insignificant on a $1.4M sale. Upwards of $125k.

    Upkeep and maintenance also is generally significant on a 100 year old home over 20-30 years so add that to your cost basis. The numbers still look pretty darn nice, as many things do over a 30 year period.

  205. 205
    whatsmyname says:

    By Eastsider @ 200:

    RE: JWoods @ 192 – I suggest you read the following article or many others on the internet –

    https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp

    Remember, homes are depreciating assets. Using the IRS formula, the structure depreciates to zero in about 27 years,

    No wonder I never see any pre-1992 houses in Seattle.

    Seriously, though. S&P 500 and Case Shiller are really not comparable. CSI essentially compares similar house sale prices where they can create pairs. Very hit and miss. The S&P takes the full capitalization of the 500 largest companies, and weights it by size. Growth comes in or gets a larger weight. Shrinkage reduces weight or drops out entirely. Imagine if CSI only used the 5000 most expensive houses.

    Also, there is much more to the whole article. Leverage and tax issues are also very asymmetrical in the real world – in ways that generally benefit real estate. I am not saying you should buy now, nor that you will never buy if you don’t buy now. Although, it would be good for me if you never do buy, so please feel free.

  206. 206
    BacktoBasics says:

    leverage plays import part of real estate investment. For Seattle housing, even if a healthy annual 2% gain will result a 10% return on your equity (5x). Mortgage backed bond charge very low interest (2.5%) compare to other type of loan.

  207. 207
    Eastsider says:

    By SeattleNoBubble @ 203:

    If you bought a house in 1980 with 120K, now it will be worth 1.2 mil about 10x. Leverage with 3.5% tax deductable mortgage baby.

    If you bought a house in 1980, by now it probably has
    – new roof
    – new floorings
    – new sidings
    – multiple paint jobs
    – new kitchen
    – new bathrooms
    – new patio / driveway

    The ‘original’ 40yo structure is basically worth less than zero. Good luck trying to sell the ‘original’ house for $1.2m. The value is in the land. I don’t know of any developer who will pay $1.2m for the lot today because he would have to build and sell a new house for well over $2.5m to make a profit.

    There are many good articles on home vs stock appreciations. I picked the very first one from google search. Most come to the same conclusions as the article.

    Home is a shelter, not an investment. You will have much bigger success with stocks than homes.

  208. 208
    JustNoise says:

    By whatsmyname @ 205:

    Seriously, though. S&P 500 and Case Shiller are really not comparable. CSI essentially compares similar house sale prices where they can create pairs. Very hit and miss. The S&P takes the full capitalization of the 500 largest companies, and weights it by size. Growth comes in or gets a larger weight. Shrinkage reduces weight or drops out entirely. Imagine if CSI only used the 5000 most expensive houses.

    But “very hit or miss” is part of the inherent risk of RE investment (at any given time, most people have an N = 1), so it’s not an unfair comparison. If one could easily invest in the 5000 most expensive houses or 5000 most appreciating houses, then perhaps real estate would be a better investment.

  209. 209
    SeattleNoBubble says:

    RE: Eastsider @ 207
    A new roof= $20k
    new floor=nah, hardwood floor
    siding= nah, paint every 5 years or new $20k
    new kitchen= $30k
    new bath=$10k
    new patio=$10k
    Total $90k

    many houses in Seattle were built in 1950 and structural still capable for another 50 years.

    You rent:$1500x12x30=$540K pay to house owner above.

  210. 210
    JWoods says:

    RE: Eastsider @ 200
    @Justme @A-lurker
    You came up with two arguments against my original post, rate of return of Seattle housing and cherry picking, I refuted them both with facts to show you how you were wrong. Now the argument you came up is that RE is depreciated to 0 after 27.5 years.

    Since these are all houses built 66 years ago, so they are all below 0 according to your book. The fact is property I listed can sell for $1.2M or more even there is no house structure on it at all, so are the case for vast majority of SFH lots in 98004 zip code.

    Why is it so hard for people to be intellectually honest? Is it hard to be intellectual, or is it hard to be honest?

  211. 211
    Eastsider says:

    By JWoods @ 210:

    Since these are all houses built 66 years ago, so they are all below 0 according to your book.

    Yes, the 66yo structures are below 0. Check out the hundreds of new homes that were built/sold in Kirkland Rose Hill areas in recent years. Check with Ardell if you don’t believe me. The old houses were sold for land values. Yes, some cute old houses sold for $1m+ but they were nothing like the ‘original’. The ‘original’ structures were worth less than 0.

    The 27.5 year depreciation schedule is straight from IRS. You can dispute it but I am on IRS side. Do some homework before accusing people of intellectual dishonesty.

    I don’t particularly like to respond to trolls.

  212. 212
    whatsmyname says:

    RE: JustNoise @ 208 – You are confusing bias in measurement with delta in results, which was my point.

  213. 213
    Eastsider says:

    By SeattleNoBubble @ 209:

    A new roof= $20k
    new floor=nah, hardwood floor
    siding= nah, paint every 5 years or new $20k
    new kitchen= $30k
    new bath=$10k
    new patio=$10k
    Total $90k

    Someone complained about remodel costs recently. Get a quote on a new roof and multiple the $90k by the same percentage difference.

    P.s. Even with the ‘$90k’, the house is still not comparable to a newly constructed home. E.g. Energy efficiency (windows, insulation, furnace.)

  214. 214
    Eastsider says:

    Re 27.5 year depreciation schedule –

    I understand why some people disagree with the schedule because you can clearly live in the structures even after 66 years (but with brownish drinking water and leaky windows yikes!) Yes, many people still live in those ‘teardowns’ until they are sold to developers one day… for no more than land values. Another way to look at it is to compare the prices of a 66yo home to a newly built home in the same neighborhood. The 66yo home sells at a significantly lower price than the new construction. I hope this clears up the confusion on the depreciation schedule.

  215. 215
    Justme says:

    At regular intervals, some bubble-monger troll will try to generate a distraction in the form of some stupid question or assertion.

    Today, the troll in question was JWoods. Don’t feed the troll.

    Every time there is news (or the prospect of news, as today’s Fed/FOMC interest rate decision) that economic conditions are deteriorating and that housing prices therefore will fall, the trolling goes into high gear.

    Don’t feed the troll. I know I have fed the troll before, but I will try not too. It’s ok to post a reminder…

  216. 216
    whatsmyname says:

    By Eastsider @ 214:

    Re 27.5 year depreciation schedule –

    I understand why some people disagree with the schedule because you can clearly live in the structures even after 66 years (but with brownish drinking water and leaky windows yikes!) Yes, many people still live in those ‘teardowns’ until they are sold to developers one day… for no more than land values. Another way to look at it is to compare the prices of a 66yo home to a newly built home in the same neighborhood. The 66yo home sells at a significantly lower price than the new construction. I hope this clears up the confusion on the depreciation schedule.

    Did you know that when you buy a rental house, you get 27.5 years to depreciate the improvements portion of the price regardless of the age of the house when you buy it? Do you know who says. “theres no value to those 66 year old improvements”? Nobody. And that’s what the IRS expects.

    Rocketing land values in a hot spot may exceed the value of a house and land “as is”. But the vast majority of old houses are not in these areas. Some of those houses will stand another 66 years.
    People buy those houses to live in, (or rent out), the existing house. The price they pay is well over what a vacant lot in the same neighborhood would go for, just as the price is less than what a newer better house would command. That’s utility, and it’s a far cry from no value to the house. Sheesh.

  217. 217
    JWoods says:

    RE: Eastsider @ 211
    You stated:
    “Remember, homes are depreciating assets. Using the IRS formula, the structure depreciates to zero in about 27 years”

    That’s clearly misleading, for the SFH case, most people would refer “homes” as both the structure and the land under it, no body is buying a SFH home without both the land and structure, what’s the point of arguing structure is worth less when the property (land + structure) is listed for $1.5M?

    You also stated:
    “Good luck trying to sell the ‘original’ house for $1.2m. The value is in the land. I don’t know of any developer who will pay $1.2m for the lot today because he would have to build and sell a new house for well over $2.5m to make a profit.”

    Wrong again. Plenty of developers have paid $1.2M for a lot in the area, and plenty of new houses sold for >$2.5M in the area. Take a look at the neighborhood yourself with Redfin or Zillow. Here are just two examples close to the property I posted originally:
    https://www.redfin.com/WA/Bellevue/10612-NE-18th-St-98004/home/506528
    https://www.redfin.com/WA/Bellevue/10425-NE-15th-St-98004/home/144581644

  218. 218
    Eastsider says:

    RE: JWoods @ 217 – We are clearly talking about different houses in different areas. Your Bellevue house is asking $1.5m (or $1.4m?), not $1.2m. In my reply #207 to SeattleNoBubble @ 203, we were talking about “a house in 1980 with 120K, now it will be worth 1.2 mil about 10x.” We are not talking about your specific Bellevue home.

    Yes, land in some areas of Bellevue is expensive. Your specific seller is not asking for not much more than the underlying land value. In your 10612 house example, the structure/improvement is assessed at practically $0. You may argue otherwise but the state assessor clearly agrees with me that the structure is worthless. When the said property sold in May for $1,232,000, it was sold at land value.

    Not only are you confused, you are quick to make accusations – TWICE! So don’t expect any further reply from me.

  219. 219
    Deerhawke says:

    RE: a-lurker @ 179
    b>RE: Eastsider @ 180

    I think it is fair to compare the returns on housing to the returns over time in an index fund like the S&P 500. But you need to do the full analysis with fully allocated costs and benefits, taking into account taxes and the alternate need for rent payments

    If you have one person who buys a house and puts down $X as a 20% down payment, you can do a calculation of the ROI, but it is complicated by the need to account for insurance, maintenance, periodic remodels, exit transaction costs, etc.

    Another person decides to rent an equivalent property for the same term and puts the money that they would otherwise have used for a down payment and maintenance into, say, VFINX the Vanguard 500 Index, paying the taxes on the annual gains.

    I would love to see somebody run those numbers. I think in the Seattle area you would definitely have come out ahead buying rather than renting. Maybe not in other areas of the country. Certainly not in Detroit or Youngstown.

    No question buying a house entails more work and commitment, but one of the benefits is that If you have a fixed rate mortgage, you have your own personal rent control. In fact, the way it has worked over the last two decades is that you could periodically cut your payment by refinancing. My neighbor refinanced from a fixed 30 to a fixed 15 and in the process cut his payment and his term. That is not the kind of thing that usually factored in these comparisons.

  220. 220
    Eastsider says:

    RE: Deerhawke @ 219 – Yes, Seattle homeowners have come out ahead so far. Seattle home prices have outstripped wage gains in the past 3 decades. The increase in prices is largely a result of lowering mortgage rates from 9.9% in Jan 1990 to 3.5% recently. Affordability has also steadily declined even as the rates dropped. I doubt we will see similar price growth over the next 3 decades. IMO, renting will continue to be ‘cheaper’ than owning at current prices.

  221. 221
    Juststoppedby says:

    RE: Eastsider @ 220
    Actually, seeing as how home prices jumped 45% from August 2016 to August 2018, juiced by home buyers from China, I’d argue that foreign purchases drove even more of the increase than interest rates.

    https://www.cnbc.com/2018/08/02/seattle-housing-market-is-under-pressure-as-chinese-buying-dries-up.html

  222. 222

    RE: Eastsider @ 214
    Some of the Old Stuff “American Engineered” is Much Better to Fix and Keep Than Replace With Foreign Junk

    Furniture is a great example, like solid wood stuff.

    Repairmen offer folks $200 $CASH$ for 30 year old washers and dryers, they run forever with no repairs, ask Maytag owners today [the new Maytags are junk now]…LOL

    Refrigerators too, Hades my rental has an old one in it and it still runs fine. The new stuff is junk. Heater elements from China….junk. The old America made stuff lasted forever in comparison.

    Real Wood siding on homes versus this glue board junk they sell us now.

    Hades, I still have the original kitchen faucet in my kitchen…the spray hose was leaking after 20 years, but $2 worth of Goo fixes it up without a leak for decades…I did replace the nozzle with a $10 washer fitting that replaced the spray hose…LOL….and my old faucet H/W is “indestructible”.

    remember the old axiom: if it runs don’t fix it…LOL…or you’ll be sending it to the scrap heap faster than I can say new 6 speed FWD Ford automatic transmission junk…LOL…Ford should have taken the Obama loan money in 2006 and kept all the American transmission engineers it “butcher axed”.

    Grab your mug and pour yourself a Yuban, the Seattle Times Brief is next:

    “….The Seattle Times
    MORNING BRIEF
    Thursday, September 19, 2019
    Orcas swimming
    Feds want vast swath of West Coast protected for orcas, salmon
    Most of the outer coast of Washington, Oregon and California would become protected habitat for southern resident killer whales under a federal proposal. It would greatly expand the “critical” area where federal actions that could affect the struggling orcas must be reviewed. (Photo: NOAA / 2015)
    NEED TO KNOW
    A crash last night in SeaTac killed two men and critically injured a woman. The men were in a car that crossed the center line on Des Moines Memorial Drive South and collided head-on with the woman’s vehicle, the King County Sheriff’s Office says. And a motorcyclist died when a car crashed into him on I-405 in Bothell last night; police say they were racing.

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    LOL…Might as well close the public schools for”alleged” climate change, they don’t teach math and science right anyway…hand out “flat earth” tee shirts for all the kids too? Give ’em unlimited iPhone access too to suck their brains dry of IQ? They’ll all be screaming for more transit taxes and “electric golf carts” in no time…LOL…we’ll brainwash ’em all…

    Where’s the pictures of baby Orcas? I hear they’re all dead now from too much sewage rinse from GROWTH in Seattle. Health risk from plastic? Hades canned foods have had plastic liners for a 100 years now, that’s gotta be 10,000 times worse….LOL…its killed no one I know.

  223. 223
    Eastsider says:

    RE: Juststoppedby @ 221 – Sure, foreign money is a factor in RE markets worldwide. But I doubt the Chinese are gobbling up lower tier homes and influencing their prices. So affordability/rates are still the dominant factors.

  224. 224
    Juststoppedby says:

    RE: Eastsider @ 223
    First, that article was about Seattle, not RE worldwide.

    https://www.cnbc.com/2018/08/02/seattle-housing-market-is-under-pressure-as-chinese-buying-dries-up.html

    Second, there is no math that can reasonably link interest rate changes to a 45% increase in home prices in 2 years.

    Lastly, we’re talking Seattle here… not exactly low priced homes, in my mind…

    Anyway, back to work for me!😀

  225. 225

    RE: Juststoppedby @ 224
    Do They Allow IPhones where ya Work?

    Ya know, the clandestine “gossip” devices to mask secret messages to friends, Hulu movie streams and useless internet surfing on work time?

    I have management experience and I’d ban iPhones at work if I were your boss….

  226. 226
    BacktoBasics says:

    RE: JWoods @ 183
    the owner doesn’t have to sell the property. he /she could pass it to heirs with zero tax. the value is the land. If you familiar with Bellvue, that house is just a block to Lincoln square. I wish I had the money to buy it. This area has huge potential in the future.

  227. 227
    Eastsider says:

    RE: Juststoppedby @ 224 – According to CS Seattle HPI, the increase between 8/2016 – 8/2018 is 24%, far lower than the 45% mentioned in the article. So obviously the article is about the relatively small high end market in Seattle where prices are driven by supply/demand and foreign purchase. So my claim about Chinese not influencing lower tier market stands.

    I have mentioned a few times here that there are 2 distinct markets in this area, low and high tiers. The low tier is doing quite well this year following the interest rates cut. The high end is struggling despite the rate cut. So interest rates play a major role in the overall market and foreign money in certain segment of the market.

  228. 228
    SeattleNoBubble says:

    By Eastsider @ 213:

    By SeattleNoBubble @ 209:

    A new roof= $20k
    new floor=nah, hardwood floor
    siding= nah, paint every 5 years or new $20k
    new kitchen= $30k
    new bath=$10k
    new patio=$10k
    Total $90k

    Someone complained about remodel costs recently. Get a quote on a new roof and multiple the $90k by the same percentage difference.

    P.s. Even with the ‘$90k’, the house is still not comparable to a newly constructed home. E.g. Energy efficiency (windows, insulation, furnace.)

    So 90K for a new roof is cost for replacement. So one million dollar house is not a bubbly price to ask considering the construction cost if we assuming the land value is zero.
    Roof 90K
    foundation 100K
    wall on the side 100LK
    Framing $200K
    plumbing and electricity $100K
    Floor $100k
    Etc 100k

    Total 800K for construction cost only
    plus fees, construction site prepare, loan interest

    A million dollar house sounds bubbly. But at Seattle wages, it is not. Same house build in Kansas will probably cost $300K. But in Seattle, you need to factor the cost of living. Those construction workers demand more money to live here.

  229. 229
    Joe says:

    RE: Eastsider @ 227

    I stopped at an open house in Redmond Ridge last weekend. The realtor said the median price of houses in that market is down 7% year-over-year. The high end has not been doing well this past year.

  230. 230
    JWoods says:

    RE: Eastsider @ 218

    The intention of my original post was to share how well Seattle housing has done as an investment in the past. I bumped into this listing and thought I would share, as scary as the future may look like, it’s important to have a long term perspective. I would not have bought my first house in 2001 if I knew all the events and crisis that would happen in the next 18 years, but yet that house purchase has turned out to be a great investment in the end.

    You keep bringing up different points, from Seattle’s housing return less than S&P, to accuse me of cherry picking and my math doesn’t add up, to state “homes are depreciating assets”, none of the statements is correct, I was simply pointing them out so people are not misled by these nonsense.

    Now you have move the target post again, the new argument is structure is worth 0 after 27.5 years of depreciation.
    “I understand why some people disagree with the schedule because you can clearly live in the structures even after 66 years (but with brownish drinking water and leaky windows yikes!) Yes, many people still live in those ‘teardowns’ until they are sold to developers one day… for no more than land values. ”

    Although this argument has nothing to do with my original post, but it’s so wrong and misleading I want to respond to you one last time to clarify. You are confusing IRS depreciating rules with actual value of the structure, nobody in their right mind would say a well maintained 27.5 year old home structure (or 66 year old structure) has a value of 0. You are confusing the “book value” of the structure with the actual market value of the structure. An analogy is Microsoft stock has a book value of $13.4 per share, but it’s actual market value is much higher, $140.6 per share last time I checked.

    To illustrate how wrong your statement is in real world, here are two recently sold listings in the same neighborhood,
    A. https://www.redfin.com/WA/Bellevue/10612-NE-18th-St-98004/home/506528
    B. https://www.redfin.com/WA/Bellevue/10617-NE-16th-St-98004/home/506186

    A & B are practically the same with regard to lot size (0.21 acre vs 0.23), build around the same time (1959 vs 1958), in the same neighborhood, sold around the same time. A was sold for $1.23M in May 2019, B was sold for $1.73M in Spet. 2019. Looks like you’re wrong by $0.5M, a whooping half million $$$, by assuming the structure on top of the lots are all worth 0.

  231. 231
    Eastsider says:

    RE: SeattleNoBubble @ 228 – You misunderstood. I did not say a new roof cost $90k. $90k refers to your ‘Total’ estimates which is way too low IMO.

  232. 232
    Deerhawke says:

    RE: Eastsider @ 220

    Seattle and Bellevue have become one of the main centers of a broad-based global technology revolution. This is not the quaint funky medium-sized city I moved to in 1991.

    Believe it or not, there were those in the early 2000’s who said buying here was a terrible idea because Microsoft was headed for a big fall. But then Microsoft survived Balmer, brought in Nadella and rose again. And meanwhile this quirky company called Amazon boomed. And behind Amazon and Microsoft are dozens more startups being founded by Microsoft and Amazon alumni. Some will fail, no question. But others will form the next wave of technology— transforming farming, transportation, logistics, communication, medicine, entertainment — you name it.

    People keep repeating the mantra that affordability will keep Seattle prices down below the level of increase of the last 20 years. Maybe that is because people
    1) can’t imagine the future, and
    2) can’t accept the fact that the near future can be anything like the recent past, so they
    3) posit that the future has to (just has to) be better and more comfortable than the recent past.

    But really, who says? Where is that written? Maybe this is part of a larger set of beliefs filed under “Life Should Be Fair (at least to me).

    I personally think the pace of change in this area is accelerating, not decelerating. Imagine what it would look like if we saw 1.5 times the change in Seattle and Bellevue during the next decade that we saw in the last 10. City planners are planning for that kind of growth and even they say it is hard to envision because our infrastructure is already badly lagging.

    Personally I think it has always been cheaper in this area to rent than to buy. In the future, that will probably also be the case. But you will need to keep moving further and further and further out to make it work for you.

  233. 233
    SeattleNoBubble says:

    By Eastsider @ 231:

    RE: SeattleNoBubble @ 228 – You misunderstood. I did not say a new roof cost $90k. $90k refers to your ‘Total’ estimates which is way too low IMO.

    By Eastsider @ 213:

    By SeattleNoBubble @ 209:

    A new roof= $20k
    new floor=nah, hardwood floor
    siding= nah, paint every 5 years or new $20k
    new kitchen= $30k
    new bath=$10k
    new patio=$10k
    Total $90k

    Someone complained about remodel costs recently. Get a quote on a new roof and multiple the $90k by the same percentage difference.

    P.s. Even with the ‘$90k’, the house is still not comparable to a newly constructed home. E.g. Energy efficiency (windows, insulation, furnace.)

    So 90K for a new roof is cost for replacement. So one million dollar house is not a bubbly price to ask considering the construction cost if we assuming the land value is zero.
    Roof 90K
    foundation 100K
    wall on the side 100LK
    Framing $200K
    plumbing and electricity $100K
    Floor $100k
    Etc 100k

    Total 800K for construction cost only
    plus fees, construction site prepare, loan interest

    A million dollar house sounds bubbly. But at Seattle wages, it is not. Same house build in Kansas will probably cost $300K. But in Seattle, you need to factor the cost of living. Those construction workers demand more money to live here.
    What’s the replacement cost for a house in Seattle? I’ve see county assessment, the land value in core low criminal area is about >$500 and above. Structure assessment seems very low if not zero. Have you ever visit HomeDepot recently? I guess you probably not since you don’t own. The construction material inflation is obvious. If you think housing is the only bubble, you are wrong. Everything in Seattle is expensive. Eat out, please read bill carefully. That’s why I am remodel my kitchen and learn to be a better chef, watch U-tube try to be my own auto mechanics and plumber. Welcome to Seattle Bubble, it is a desirable place to live and find a good paying job yet it is a not welcoming city with housing price.

  234. 234
    Eastsider says:

    RE: JWoods @ 230 – I shall be patient ;)

    Structures depreciate over time. IRS says it is 27.5 years. So if you don’t maintain a structure, it reaches the end of life in 27.5 years. That’s the general idea. But if you continuously maintain and update it over that period with new roof/kitchen/etc, the structure is obviously not worthless because you invest additional money to extend its useful life!

    I assume that your house A was sold as a teardown at land value. House B, because of regular update/maintenance by owner, was sold to a new homeowner for more than land value. One has a structure that is worthless and the other still habitable. There is nothing inconsistent here.

  235. 235
    SeattleNoBubble says:

    RE: Eastsider @ 233RE: Eastsider @ 233
    So 1.2 mil is only the land price+tear down cost + rebuild cost ($250/sqx2500sq)=1.825 mil cost for new house. Sounds reasonable to me.

  236. 236
    a-lurker says:

    RE: Deerhawke @ 232 – To me it’s all about likelihood. Yes, we can’t predict the future, but I don’t think it’s a stretch to imagine that prices won’t increase at the same rate as in the last 20 years mostly because to me the big gains of “software eating the world” (which is a big part of why Seattle prices have gone up, IMHO) have been accounted for. I do think software will continue to be a big industry, but I don’t think it’s going to grow at the same rate. A lot of tech coming out is no longer revolutionary and the low-hanging fruit for companies to go after is gone.

    On top of it, if prices continue to rise in the same way as the last 20 years, we’re pricing even more people out of homebuying. If that’s our future, we’ll have even more stratified population, which is unsustainable since you still need “regular” people working in less-paying jobs in the city. If prices get too high, commute times get longer and you hit a limit of how many people will want to put up with living far away just to commute for low pay. It’s just simple math that systems cannot grow forever (economic or otherwise).

  237. 237
    Eastsider says:

    RE: Deerhawke @ 232 – You are mostly right. But home prices can’t grow much faster than wages over time. We are at/near historic low on mortgage rates. Foreign money peaked a couple years ago. Unemployment at/near historic low. Renting is cheaper. So what are the catalysts that will propel home prices higher? That is the million dollar question.

    P.s. Will the coming automation era eliminate jobs?

  238. 238
    Eastsider says:

    RE: SeattleNoBubble @ 234 – Nobody will buy a $1.2m teardown only to build a $1.8m home. Try $2.5m++. You are obviously new to RE.

  239. 239
    Anonymous Coward says:

    By Eastsider @ 237:

    RE: Deerhawke @ 232 – But home prices can’t grow much faster than wages over time. eliminate jobs?

    They can if population growth (demand) exceeds housing growth (supply)…

  240. 240
    SeattleNoBubble says:

    RE: Eastsider @ 238
    maximize the value of land. 2.5 mil for a SFH? Must be very nice one. Need a good architecture and quality builder.

  241. 241
    N says:

    @SeattleNoBubble 207 –

    Hard to believe but actually average bath remodels are more in the $60-80k range, and kitchens $100k+. At least that’s what the studies show.

  242. 242
    SeattleNoBubble says:

    RE: N @ 241
    Yes they are very expensive. It is cheaper per sq to build a new house than build a new one. But if you bought an old house for 1.2mil in Bellevue like someone post above, make the house more livable by remodel the house is still a better option. Structure frame should be good for 100 years if maintained properly.

  243. 243
    Bumble says:

    By N @ 241:

    @SeattleNoBubble 207 –

    Hard to believe but actually average bath remodels are more in the $60-80k range, and kitchens $100k+. At least that’s what the studies show.

    So hard to believe that I don’t believe it. Google it. National average for bathroom remodels is less than $12k.

    For $60-$80k you should get a golden toilet.

    https://www.angieslist.com/articles/how-much-does-bathroom-remodel-cost.htm

    I’m paying $50k for remodel work in multiple rooms, and I’m amazed how far that money goes.

  244. 244
    N says:

    @Bumble – That is exactly what I thought when I read this Seattle Times piece. The distinction is a hallway bath versus a master bath.

    https://www.seattletimes.com/explore/nwhomes/calculating-the-cost-to-remodel-in-seattle/
    An upscale master-bathroom remodel in Seattle averages $74,198, according to the report. This includes a layout change — moving around plumbing and electrical — plus a tiled shower and a free-standing tub. The cost is significantly lower if you keep the existing layout, which most people do, and install a tub/shower combo. This will keep your bathroom remodel price tag closer to $50,000.

    According to the Cost vs. Value Report, a kitchen remodel in Seattle averages $145,658. Compare that with the national average of $131,510 and you’ve already noticed the trend. Remodeling in Seattle costs more than in most U.S. cities.

  245. 245
    Deerhawke says:

    RE: a-lurker @ 236
    RE: Eastsider @ 237

    When we arrived in Seattle in late 1990, everybody told us we should have gotten here before all those awful Californians arrived and caused prices to double in the 80’s. I thought this was hyperbole but in fact they had doubled (or more!) in the previous decade. So we bought during the 1991 recession and hoped that things would be OK. By 1992, things had stabilized and we watched prices double again during the next decade. In 2005 we bought a new property a block away and started building our new house. We sold the old one in the summer of 2007 (just before the deluge) for about 5x purchase price (after deducting to net out remodeling costs). Yes there was a big tumble after that, but that house is now valued at about 9X what we bought it for in 1991.

    I know you keep saying that this can’t keep going on and one part of my brain believes it. At least I want to believe it. But can you tell me when this is going to stop? Really stop?

    Or is it possible over the next decade or two that single family houses in the core Seattle and Bellevue neighborhoods will become almost as rare and expensive as they are in similar areas of New York, San Francisco and Chicago?

  246. 246
    Deerhawke says:

    By a-lurker @ 236:

    RE: Deerhawke @ 232
    On top of it, if prices continue to rise in the same way as the last 20 years, we’re pricing even more people out of homebuying. If that’s our future, we’ll have even more stratified population, which is unsustainable since you still need “regular” people working in less-paying jobs in the city. If prices get too high, commute times get longer and you hit a limit of how many people will want to put up with living far away just to commute for low pay. It’s just simple math that systems cannot grow forever (economic or otherwise).

    Again, the perspective of history.

    When I began remodeling my POS house in Greenlake in 1991, all my subs lived in working class areas of Ballard, Fremont or Interbay. Ballard was so working class that people used to make jokes about it. (Question: What is the difference between women in Ballard and Mercer Island? Answer: The women in Ballard have fake furs but real orgasms, while on Mercer Island it is vice versa.). Now all my subs live in Burien, Federal Way, Lake Stevens, Arlington, Gold Bar and Monroe. You say it is not sustainable but I have a siding crew that delivers all its supplies and equipment on day one by truck and then commutes together daily from up past Everett in a Prius.

    I miss funky old Seattle. I take no joy in saying that I think this portends our future, but it is just a continuation of our recent past. People keep repeating the mantra that this is unsustainable, this can’t go on, but alas it does. Despite the fact that the internet was supposed to free us all to work out in the woods or on the beach, the fact is that complex technologies are developed in technology clusters in certain urban areas. Seattle is one of them.

  247. 247
    Eastsider says:

    RE: Deerhawke @ 245 – If you had moved to Portland OR in 1990, you would have done as well on your home purchase. Check out the CS HPI for Portland. Portland does not have an Amazon or Microsoft. So how would one justify the insane prices there? Without the long term decline in interest rates, I don’t believe both Seattle and Portland prices could reach the current level. There were other factors of course. Where will prices be in 20 years? Hmm.. I don’t even know where the economy will be in 2 years! But IMO now is a bad time to buy a home (at peak prices.) The best time to buy was a few years back. I was not bearish until a couple years ago.

  248. 248
    Notme says:

    The poor Douchefalcon
    drove his contractors away
    with pricey houses

    -an oh-the-poor-baby bubble haiku

  249. 249
    Notme says:

    DoucheFalcon recalls,
    workers used to live here, too
    empty empathy

    -a Seattle bubble haiku

  250. 250
    Bumble says:

    By N @ 244:

    @Bumble – That is exactly what I thought when I read this Seattle Times piece. The distinction is a hallway bath versus a master bath. https://www.seattletimes.com/explore/nwhomes/calculating-the-cost-to-remodel-in-seattle/

    Thanks for the link.

    By Notme @ 248:

    The poor Douchefalcon
    drove his contractors away
    with pricey houses

    -an oh-the-poor-baby bubble haiku

    Seems like you are blaming the rain on the guy selling umbrellas.

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