Around the Sound: Still a dismal market for buyers everywhere

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Let’s take a look at our stats for the local regions outside of the King/Snohomish core. Here’s your October update to our “Around the Sound” statistics for Pierce, Kitsap, Thurston, Island, Skagit, and Whatcom counties.

Things are looking pretty similar all around the Puget Sound region—extremely low supply, high demand, and skyrocketing prices. The one tiny bright spot for buyers is that new listings are higher than they were a year ago in every county.

First up, a summary table:

October 2020 King Snohomish Pierce Kitsap Thurston Island Skagit Whatcom
Median Price $745,000 $579,972 $430,000 $437,000 $395,000 $449,000 $441,500 $474,450
Price YOY 12.9% 17.2% 17.8% 13.2% 13.4% 24.7% 17.6% 13.2%
New Listings 2,986 1,309 1,512 472 492 173 197 320
New Listings YOY 29.7% 20.6% 23.1% 27.9% 21.8% 29.1% 4.2% 4.9%
Active Listings 2,258 652 881 280 217 122 188 323
Active YOY -37.6% -59.2% -46.6% -42.5% -54.4% -60.3% -44.9% -51.4%
Pending Sales 3,007 1,403 1,658 524 549 182 219 331
Pending YOY 16.0% 12.4% 11.2% 10.3% 11.8% 16.7% -0.5% 2.2%
Closed Sales 3,027 1,438 1,520 527 522 179 232 344
Closed YOY 36.0% 36.0% 18.0% 28.9% 15.0% 32.6% 22.1% 19.0%
Months of Supply 0.7 0.5 0.6 0.5 0.4 0.7 0.8 0.9

Median home prices were up in every single county from a year earlier. King County’s 13 percent increase was actually the smallest around the sound, while the largest price gains were in Island County.

Median Sale Price Single-Family Homes

Year-Over-Year Change in Median Sale Price Single-Family Homes

Here’s the one sort-of bright spot for buyers: New listings are on the rise, especially in King County.

New Listings of Single-Family Homes

However, active listings are down dramatically from a year ago in every county. The biggest decline was in Island County (probably no surprise then that prices are up the most there), where listings fell by 60 percent from a year earlier. King County saw the smallest drop, but was still down 38 percent.

Active Listings of Single-Family Homes

Closed sales were up across the board in every single county. The biggest gains were in King and Snohomish Counties, which both saw closed sales increase 36 percent from a year ago. Pierce and Thurston had the smallest gains at 18 percent and 15 percent, respectively.

Closed Sales of Single-Family Homes

Months of supply is just absolutely abysmal for buyers everywhere. Every single county less than one month of supply in October.

Months of Supply Single Family Homes

In summary: It’s still a pretty terrible time to be a home buyer, across the entire Greater Seattle Area.

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

5.00 avg. rating (97% score) - 7 votes

About The Tim

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


  1. 1751
    Justsomedude12 says:

    Socialists Unite
    Flinging Red Herrings Around
    Yet Still Incorrect

    -A double tax Haiku

  2. 1752
    Erik says:

    RE: Justsomedude12 @ 1729
    I believe Joe was the agent that kept screaming that the market was crash big in 2019. He’s the agent I talk about that drove from open house to open house in Woodinville and counted the number of potential buyers. He used those numbers to report whether the Seattle housing market was either hot or not. Him, Justme, and Sfrz fought me all of 2019 screaming the market is crashing.

    Joe has a poor track record. I wouldn’t put too much weight on what he says.

  3. 1753
    Erik says:

    RE: Joe @ 1732
    Hey Joe,

    Weren’t you the agent that banned together with Justme and Sfrz in 2019 screaming the market is crashing? Your proof was low open house attendance rates in Woodinville.

    Justme and Sfrz got embarrassed and left because they were so wrong. You stuck around. No shame I guess?

  4. 1754
    ruxpert says:

    The dispiriting housing boom
    – NAR Chief Economist Laurence Yun
    ‘This is not a bubble. It is simply a lack of supply’ ?

  5. 1755
    ruxpert says:

    RE: ruxpert @ 1730

    Judge Strikes Down National Moratorium On Evictions | MTP Daily | MSNBC
    May 5, 2021

  6. 1756
  7. 1757
    Whatsmyname says:

    NWMLS April stats are out. It’s what you thought.

    Month end SFR listings are under 1,000, (YOY down 54%). Pending sales are up 28%. Closed sales up 22.6%. Median price of $824,997 is up 14.5%, and months of inventory is 0.43.

    Condo market numbers are more buyer friendly.

  8. 1758
    Eastsider says:

    By Joe @ 1732:

    As I’ve said many times. There is no double tax. Each taxable entity pays tax once.

    We don’t need to argue about the semantic. Many corporations choose share buyback over dividends to distribute earnings to shareholders to avoid double-taxation.

    You have explain why that tax result to the business owner is unfair relative to the income earned by others in the economy. Why should an entrepreneur escape tax on his capital gain income, while the wage earner does not? The fact that some income is earned in the nature of capital gains doesn’t make it any different. Upon sale of the underlying asset, the capital gain represents in money in your pocket that can be spent, just like wages.

    The ‘unfair’ part about capital gains tax is that it is not indexed to inflation. If we have a decade of 30% hyperinflation, a $.5m stock portfolio can easily be $5.5m in a decade. Is it fair to tax that $5m ‘gain’?

    A small business owner sells his business after 5 decades for $5m. Over his working life, he lived modestly and reinvested all his savings to build that business. Why should he be subject to capital gains tax just because the gain is over $1m? Should that $5m be divided over 50 years? $5m/50 = $100k/yr. And that’s before adjusting for inflation over that period.

  9. 1759
    Eastsider says:

    By Whatsmyname @ 1739:

    Month end SFR listings are under 1,000, (YOY down 54%). Pending sales are up 28%. Closed sales up 22.6%. Median price of $824,997 is up 14.5%, and months of inventory is 0.43.

    If you think about it, how can listings be down when closed sales are up? Logically, inventory down => sales down. But this has not been the case for months. Just sayin’

  10. 1760
    Whatsmyname says:

    By Eastsider @ 1741:

    By Whatsmyname @ 1739:

    Month end SFR listings are under 1,000, (YOY down 54%). Pending sales are up 28%. Closed sales up 22.6%. Median price of $824,997 is up 14.5%, and months of inventory is 0.43.

    If you think about it, how can listings be down when closed sales are up? Logically, inventory down => sales down. But this has not been the case for months. Just sayin’

    That couldn’t be more easy. The NWMLS chart (which I had attached) portrays the month end number of active listings in one of the columns as they have done for many years. This is the number of houses that you would have to choose from on April 30, and coincides with the number Tim used in his charts.

    You can also see in that chart how many listings are coming in, and how same for last year. If more new listings come in than are sold, that number goes up; and vice versa. But the value of that number is to compare it with the 20 years Tim has charted it. There you can see that it is less than half of what it was last year, and that even last year was very, very low. What you see is sustained buying pressure preventing inventory from rebuilding to normal.

    EDIT – However, joke is on me. I saw an updated release from NWMLS, but the statistics haven’t been updated, so pulled the March numbers without looking at the date. We’ll see what the April reality is. In the meantime, my comments were correct for March

  11. 1761
    Joe says:

    RE: Eastsider @ 1740

    Capital gains should not be indexed to inflation, simply because our wages are also not indexed to inflation. The wages of the average worker go up 2% per year, which is the inflation rate. Thus, the annual increase in the average worker’s salary is entirely due inflation, yet all of that wage increase is subject to tax without any inflation adjustment. Wage earners actually suffer worse because the inflationary component of the wage is taxed each year, and not deferred, like a capital gain.

  12. 1762
    Eastsider says:

    RE: Joe @ 1743 – You clearly don’t understand tax code, This year’s tax bracket has been adjusted for inflation. If inflation is 2%, your wage increases 2%, tax bracket will also gains 2%. You will be taxed at the same rate. If tax bracket stays unchanged, after a decade or two, most people would be in the highest tax bracket!

    If we withhold your wages in the last 10 years and pay you all at once this year, you will be taxed at the highest rate because you earn a million dollar! No you are not ‘wealthy’. Same in the case of long term capital gains.

  13. 1763
    Erik says:

    RE: Joe @ 1738
    So you think you made the right choice in 2019 by telling potential buyers the market was going to crash hard and not to buy?

    You are in denial. You screwed people that only had 5% down and didn’t buy based on your comments.

  14. 1764
    Eastsider says:

    RE: Whatsmyname @ 1742 – The inventory has been increasing yoy, though not at the same rate as sales. The headline is misleading. The number to watch is closed sales. Ignore the noise. If there is really no inventory, sales will be down. But sales has been increasing…

  15. 1765
    Joe says:

    RE: Erik @ 1745

    Take a math course, then offer commentary.

  16. 1766
    Joe says:

    RE: Eastsider @ 1744

    Not true. The tax brackets don’t apply for people making over $1M, which is when Biden’s capital gain hikes would kick in. Marginal income is always subject to the highest rate of tax, which receives no benefit from bracketing.

    Bottom line: If you support indexing cap gains > $1M, you should also support indexing highest marginal tax rates on wage income, which face an even higher inflation tax burden, otherwise you are providing government subsidies to one class of income, but not the other. If you believe in free markets, you should be arguing against a capital gains preference because it distorts the economy.

  17. 1767
    Joe says:

    Eastsider, Justsomedude12, and Eric,

    I’ll be checking back in a month or so. Time spent here is a definite luxury.

    I think you learned a few lessons today, whether you admit it or not.

    Stay away from the hyperbole, use your calculators, and read up!!! You’ll get there.


  18. 1768
    Eastsider says:

    RE: Joe @ 1748
    The highest tax bracket (37%) for married couples filing jointly applies to income above $518,400 in 2020 and $523,600 in 2021. People making over $1M fall in that bracket in both years. But couples making $520k will have different marginal tax rates. Yes the tax bracket is indexed to inflation.

    I’m not arguing about capital gains preference here. That is a policy matter. (lower capital gains => higher growth.) I’m arguing about a fair tax system that will only tax ‘real’ gains, not phantom ‘inflation’ gains.

    If a young person who is not a risk taker puts his savings in a bond indexed to inflation, he should not be taxed when he withdraws the money in some future date for retirement or emergency. A fair system would only tax ‘real’ gains. The current preference rate partly addresses that unfairness.

  19. 1769
    David says:

    I took the cash out and invested it in stocks. Which so far have been very rewarding on paper. I’m also selling 55 acres of land right now because I want to sell while the market is hot (closing is delayed by 2 weeks as of today).

    I like liquidity. There is ultimately a limit on how high real estate can go IMO. Course, investing cash is harder in stocks because the tax consequences are not nice if you feel you need to sell the stocks.

    Biden sounds like he wants to make it harder to keep the gains from real estate – which may make housing even less available and more expensive.

    RE: Erik @ 1707

  20. 1770
    David says:

    Also, try and find a stock that isn’t in the 30s for P/E. The Government is never going to raise rates or it would go bankrupt.

    I’m very distrustful of what the Government does financially because I don’t see how they get out of the fiscal mess they’ve made.

    I’d make sure you own at least your own house free and clear – I see that as the ultimate hedge fund.

    RE: David @ 1751

  21. 1771
    Whatsmyname says:

    RE: Eastsider @ 1746 – Inventory, like all balance sheet items, is definitionally a point in time concept. From a practical standpoint as well, last week’s sales are not available for sale today. If in 2020, you brought more toilet paper than ever before into your store, but your shelves are nearly empty; you do not have high inventory. That is the kind of high inventory our housing market has right now.

  22. 1772
    Eastsider says:

    April condo sales in KC. YoY change in median sale price – Seattle +4.5%, Eastside -1.0%,

    The market dynamic has changed. Check out the last map in the article. A couple areas in Seattle is experiencing YoY price decline! (I previously predicted a price decline this year.)

    Some relief for Seattle-area homebuyers, as more houses are listed and condo buyers find plenty to choose from

    Two key measures of how much buyers have to choose from — the number of new single-family home listings and the number of listings still active by the end of the month — were both on the rise in April. More homes were newly listed for sale last month in King County and Pierce County than in any month since last July. In Snohomish County, new listings were at their highest level since 2019.

    Matthew Gardner, chief economist at Windermere, said in a statement the boost in inventory could cool off listing prices. The average list price in King County for single-family homes fell about 7% from March to April, according to Gardner. (Emphasis mine)

  23. 1773
    Blurtman says:

    RE: Eastsider @ 1754RE: Eastsider @ 1754 – From my own non-scientific survey, I have quite a few Zillow searches set up for RE around the country. Based upon the content of periodic Zillow e-mails, there are a ton of ugly condos, many new, for sale in Seattle at ridiculous prices. In many cases, no on site parking. Many with very narrow dimensions – hello, wall! All with unappealing and uninspired sales blurbs. Doesn’t mean there is a surfeit of inventory. May merely mean that the salespeople are more amenable to using Zillow to sell. Back in the day, these used to be called tenement housing, but without the expensive price tag.

    A few regions I am looking at outside of WA state, sadly, have already been discovered, and I’ve seen it happen in real time over the last 2 years.

  24. 1774
    Whatsmyname says:

    By Eastsider @ 1754:

    April condo sales in KC. YoY change in median sale price – Seattle +4.5%, Eastside -1.0%,

    Surely, it is not controversial on the Seattle Bubble that the condo market is nearly always weaker than the SFR market. Your Seattle Times article carries a twin April sales chart for SFR’s:

    YoY change in median sale price – Seattle +7.4%, Eastside +38.7%.
    Also, North KC +27.5%, SW KC +18.4%, SE KC +19.8%.

    Change in market dynamic? Your same Times article has a price bar chart by county. Most of King County’s $115,000 YOY price increase is since January.

    MOM increase in listings? If you are on the Bubble, you are 2 clicks away from knowing that inventory increases from March to April every year. You may have clued into a tiny secular factor, but it’s basically seasonal.

    I’m sure Matt Gardiner is a fine economist, but his job in the monthly press release is to give the masses encouragement to jump into the marketplace.

  25. 1775
    Eastsider says:

    RE: Whatsmyname @ 1756

    I highlighted the condo sales for our condo king here. lol.

    It doesn’t matter how you interpret the (same) data. But here is the trend – “The average list price in King County for single-family homes fell about 7% from March to April”. Frankly, even I’m surprised by such a drastic drop in prices so early in the spring. Perhaps you can claim it is seasonal but I doubt it.

    Lastly, I predicted earlier in the year that we would see MoM drop in prices. It looks to be on target, except a lot sooner than I thought.

    Now I’m going to predict that Jan 2022 we will have YoY price decline. Mark it on your calendar!

  26. 1776
    Erik says:

    RE: Whatsmyname @ 1756
    If you own houses and condos, 2024 may be the time to sell your houses and only own paid for condos? It would be nice to have cash flow during the next housing price crash and not be concerned about values dropping.

  27. 1777
    Whatsmyname says:

    RE: Eastsider @ 1757 – Fair enough regarding the condo’s.

    I would say be careful with listing prices. They are running counter to better indicators, and
    A: it can be a shift in the mix. I am seeing a surge of sub 1,000sf houses in 2 areas I watch.
    B: listing prices are not sold prices. This could be strategy. I am seeing houses go for $70, $100, $150 over asking. It’s not like a small number of houses. I’ve never seen anything like this before.

    I think you are wrong about next year, although I am aware enough to know that I don’t know the future. So, we’ll see.

  28. 1778
    Whatsmyname says:

    RE: Erik @ 1758 – Erik, I did break my own rules and buy 1 condo because it had a set up and amenities that I really liked. In general, though, the monthly HOA fees on condo’s function as a net rent reducer, maybe 20%. I think this same load impacts what owner occupants will pay to purchase, thereby limiting price growth. I think these do affect the unit I bought.

    Because you also bring the rehab work to the party, I don’t doubt this is very successful for you. For me, I’m just more comfortable with houses.

  29. 1779
    Erik says:

    RE: Whatsmyname @ 1760
    Condos were all I could afford 10 years ago, so I started there and did well. I own condos and houses now. I took baby steps out of the poor house.

    Here is my point… Don’t you think it would make sense to sell a house that has seen massive appreciation and pay off that condo before the housing market crashes? I was thinking of selling one of my houses and paying off 2 condos if the market is still high in 2024. I’ve never owned real estate without a mortgage, and it sounds like something I may enjoy.

  30. 1780
    Erik says:

    RE: David @ 1751
    You buy stuff that you think will go up in value and you sell it when the value is up. That’s your approach. You bought a house in Tukwila when values were down and you sold it when values went up. I guess that makes sense.

  31. 1781
    Whatsmyname says:

    RE: Erik @ 1761 – Here are my thoughts on that. First, I do expect an eventual bear market; I don’t expect a crash.

    If you’ve had massive appreciation, and you sell without a 1031, you will lock in the maximum potential in capital gains taxes. Now, that’s better than taking a loss, but if that property also has better recovery potential, and better interim operating income; then that’s the one you want to save. And so on down the line. The best properties to liquidate are those with lower eventual potential and lower taxable gains. They are the most efficient both to get liquid, and for your portfolio. Then stay pretty liquid.

    A 1031 could change this somewhat, but it’s not clear this would be a good year for that.

    Unlevered property is not really that great. You still have taxes and insurance, and possibly HOA fees. So you still have outgo. It’s lumpy, and needs to be managed. If you are lightly levered and liquid, the bank handles the payments evenly through the months, you’ve got positive cash flow, and you have cushion to get through long interruptions without much stress. In fact, by being more liquid, you will be in a stronger credit position if you get your crash, and want to acquire near what you perceive to be the bottom. Financing and especially cash out refi is harder to get when the market is bad.

  32. 1782
    David says:

    You will love the feeling of being out of debt. Course, my neighbor has a 2.25% mortgage. It would take him about 32 years to pay as much in interest as he paid for the house. He is controlling a $500k asset in the meantime but he is, nevertheless, going to pay dead money for shelter of $500k over that 32 year period.

    My view is that if you know you have an asset that can cash out well above historical returns – book it and cash out. Look for the next deal in Rainier Valley or Auburn or stocks.

    I made well over $300k in the last 60 days in Berkshire Hathaway and Bank of New York Mellon. I have 0 in S&P 500 funds which I sold as stated. I am 75% BRK & 25% BK. A smattering of CitiGroup, T-Rowe Price, Boeing, & HCHC.

    Eventually housing begins to depreciate like any asset with diminishing returns and then negative returns YOY.

    Here’s a true-life example of a house we lived in when I was very small kid:

    The same amount paid for this house invested at 6% would be worth almost 18 times more than the value paid originally. Unless you put that same house into downtown Seattle 50 years ago and sold it NOW !!

    RE: Erik @ 1762

  33. 1783
    Eastsider says:

    By Blurtman @ 1755:

    A few regions I am looking at outside of WA state, sadly, have already been discovered, and I’ve seen it happen in real time over the last 2 years.

    If we return back to ‘normal’, i.e. no more remote work, you will be able to ‘rediscover’ those regions, if you are still interested then. James Dimon clearly believes the current WFH arrangement is temporary. Jack Dorsey, on the other hand, believes in 100% WFH. I personally think we will be back to 80% normal. The current traffic pattern seems to trend in that direction. But who knows.

  34. 1784
    Eastsider says:

    By Whatsmyname @ 1759:

    I would say be careful with listing prices. They are running counter to better indicators, and
    A: it can be a shift in the mix. I am seeing a surge of sub 1,000sf houses in 2 areas I watch.
    B: listing prices are not sold prices. This could be strategy. I am seeing houses go for $70, $100, $150 over asking. It’s not like a small number of houses. I’ve never seen anything like this before.

    The flaw in your argument is this is not a single home or a small sample. It is county-wide data – “The average list price in King County for single-family homes fell about 7% from March to April.”

    The 7% drop is just that – yes asking prices are dropping. You can’t ‘explain’ it away as you often do and just did.

    Yes, we had crazy bidding wars in January/February, probably a result of buyers rushing to “lock in” historical low mortgage rates at that time.

  35. 1785
    Whatsmyname says:

    RE: Eastsider @ 1766 – It’s not a matter of explaining things away. You’ve got to understand what the numbers mean, for which I am not hopeful. If a house listed at $850 is removed from inventory by selling for $950, and it’s place is taken by an inferior house listed at $550, that does not mean that listing prices are going down.

    Tell me: How big a sample in universe of <1400 diverse houses do you need to get statistical relevance? You have no idea of that, just as you have no idea of how many I sample. I individually follow 7 neighborhoods pretty hard. This is good, because neighborhood is a big value factor in otherwise similar properties. I check the new listings daily, so I see everything that comes in. I look at houses almost weekly. I follow many that interest me through closing.

    Here's one neighborhood I follow:
    No houses for sale in Jan or Feb. 8 houses came on the market mid March to mid April. Most went pending in a week. Sales were:
    1 $5,000 under asking
    1 $69,000 over
    1 $70,000 over
    1 $80,000 over
    1 $90,000 over
    1 $135,000 over
    1 $140,000 over
    1 still pending
    There are currently no active listings in this neighborhood. Does this mean that houses selling at less than $60,000 over asking are anecdotal?

    I am seeing a definite upswing in 2/1's which is a type that doesn't typically interest me – but you notice when they go from 3 a week to 6 a week in one of your areas. They do cost less than other types, but they are asking a lot more than they were a year ago.

    You are welcome to restrict your analysis to regurgitating parts of newspaper articles. But you've been dead wrong for several years and hundreds of thousands of dollars. Maybe you're not doing it right.

  36. 1786
    ruxpert says:

    “Literally Shocking Data” – April Payrolls Miss Huge, Just 266K Jobs Added Below Expectations Of 1 Million

    “The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.”

    U.S. Chamber of Commerce calls for ending $300 weekly supplemental unemployment benefits to address labor shortages

  37. 1787
    ruxpert says:

    RE: ruxpert @ 1700

    “As noted at the outset, this explosion in fraud of late is merely indicative of just how successful the Fed has been in stoking ‘animal spirits.’ JP Morgan said, ‘Nothing so undermines your financial judgement as the sight of your neighbour getting rich.’ Clearly, financial judgement in a broad sense has been undermined like never before.”

    What the boom in fraud says about the current market environment

    ‘Felder gives perspective to the current mania and those who exploit it for their own purposes. Nicholas Taleb’s comments on bitcoin alone are worth the visit to the link above. ‘

  38. 1788
    ruxpert says:

    RE: ruxpert @ 1508

    “Political failure could well become a mounting crisis for markets in coming years – especially if weak governments come alongside the kind of short, sharp shock of inflation which many strategists and economists now expect. Inflation could fuel union demands for wage rises at a time when corporates remain weakened in wake of pandemic – fueling the kind of industrial wage militancy we last saw in the 1970s.”

    Failing global politics and inflation will be a nasty shock

  39. 1789
    Erik says:

    RE: Whatsmyname @ 1763
    Where do you get the money to buy the houses if you don’t sell occasionally and pay capital gains tax?

  40. 1790
    David says:

    Under Trump, economic numbers were routinely revised up. Under Obama and Biden, we’re now back to economic numbers routinely being revised down.

    RE: ruxpert @ 1768

  41. 1791
    Erik says:

    RE: David @ 1764
    I like to hold investments a long time. I will hold most of the real estate I own now probably through the next downturn. I may sell a house and own a couple condos without a mortgage just to minimize my risk. Other than that, I’m playing the long game. My real estate portfolio is negative cash flow with high appreciation potential, so I will consider using some of that equity to pay off other units to make everything cash flow. Then keep buying more.

    I buy in areas I think will go up in value. That Tukwila house is gonna go up, so I would have probably held onto it indefinitely. South Seattle l, Renton, Tukwila, etc, are all long plays in my opinion.

  42. 1792
    Whatsmyname says:

    RE: Erik @ 1771 – Eric, I do sell occasionally, although I think more occasionally than you. The earlier post is about different criteria in picking the targets. Also, I sometimes have a little other money coming in that I will save and direct toward real estate.

    For a big equity deal, I will favor alternatives like borrowing on one for the down on new one, or 1031’s if I’m selling. 1031’s are not that expensive or difficult most times, and you can get up to 3 replacement properties if there is enough equity. This is a hold, or mostly hold through the bad times/ and not a get out of the market strategy.

  43. 1793
    ruxpert says:

    Screw Lumber, Just 3D-Print Your Next Home


    “The Lumber to Gold ratio is at levels not seen since 2005, just as the housing bubble was
    nearing its final year, three years before the Great Financial Crisis of 2008.”

  44. 1794
    Erik says:

    RE: Whatsmyname @ 1774
    I like to buy, sell, and buy more. I figure I can get $80k equity or more after remodeling a distressed auction house or condo. Then after that, I get appreciation, which is the real money. The more I buy, the higher my net worth. Paying 15% capital gains after subtracting remodel costs is a small price to pay. Say I pay $30k capital gains minus $350k on a sale. Then I buy 5 more rentals in Seattle using the BRRRR strategy. That’s probably $400k in instant equity and if real estate goes up 10%, that’s another $250k that year in appreciation.

    The point is that worrying about paying a little capital gains tax is nothing worth worrying about. By virtue of owning more properties, you will be wealthier.

    By the way, I don’t manage anything. I just decide who I pay to help me manage properties, do my taxes, etc. My wife runs all my book keeping because she’s an accountant/MBA and likes it. I just make sure I really like everyone helping me, which I do. Adding more means no increase in work, because I don’t do any of the managing anyway. I make sure my condos get new water heaters. I tell my property manager and she works with the HOA and does it for me. If I died tomorrow, my rentals would just keep renting and not even know I’m gone.

  45. 1795
    Whatsmyname says:

    RE: Erik @ 1776
    BRRRR really relies on the rehab value-add in order to work, as does what you do. Looks to be a great business. I am in a slightly different business. It’s all good. Happy mother’s day.

  46. 1796
    Erik says:

    RE: Whatsmyname @ 1777
    Sure, different strokes for different folks. Work within what you can do. Just keep buying if you can. BRRRR just makes it so you can own more faster because you don’t have to spend 25% every transaction. BRRRR is not required, but you can buy more faster that way. When you are done, the units are remodeled and nice.

    Happy mother’s day. My mom came from Camano Island to New Orleans see her grandkids and we went to fountainebleau park for mother’s day. I like that it only cost me $6 to get 6 of us in and everyone had fun.

  47. 1797
    Joe says:

    RE: Erik @ 1776

    You should understand what happens to your empire if rental payments drop permanent by 30%, like what is happening in San Francisco right now. Good to know your downside.

  48. 1798
  49. 1799
    Erik says:

    RE: Joe @ 1779
    During the Great Recession, Seattle rents barely dropped if at all. I don’t see rents dropping much this time either if at all. Rents don’t follow real estate prices. I’ve said this to people in this site so many times and I will not entertain another debate. When the market crashes and people can’t buy, they rent.

    Sorry to be short, I’ve been telling Eastsider this for years and he still doesn’t believe me.

    If you still think I’m wrong, tell me why and we can go through the process again.

    In general, I don’t care about losing a few grand in rent. What I care about is making millions in price appreciation. In Seattle, the worse the cash flow the better. That means asset prices are probably going to go up faster. For example that house I bought at auction a couple years ago, I lose $600/mo on. It’s appreciated about $80k/year since i bought it in 2019. I don’t care about the cash flow because if I sell, my net worth will go up.

  50. 1800
    Eastsider says:

    By Erik @ 1781:

    I don’t see rents dropping much this time either if at all.

    Zumper has rent data from Nov 2014. Today’s Studio/1BR/2BR rents are the lowest since they started collecting data. Rents are almost 1/3 below their peak.

  51. 1801
    S-Crow says:

    RE: Eastsider @ 1782 – You have more patience than I.

  52. 1802
    Eastsider says:

    Here is an article on the migration trend. King County has been losing households for at least the past 3 years.

    Americans Up and Moved During the Pandemic. Here’s Where They Went. (Paywall)

    Seattle and Portland
    At the same time, the loss of households from King County (Seattle), which suffered the early impact of Covid-19, rocketed from 1,000 to 19,000 in a year. Multnomah County (Portland), more than doubled the net loss of households.

  53. 1803
    Eastsider says:

    RE: S-Crow @ 1783 – You would think people would be talking about the housing bubble here. But this site has been hijacked by countless BullS.

  54. 1804
    Voight-kampff says:

    RE: Eastsider @ 1785

    I actually consider myself bearish in most investment matters. If someone disagrees with you, this does not mean they have “hijacked” this site, or even that they are a “bull”. The simple fact is that the “bears” here have been dead wrong for years. I’m afraid this is indisputable.
    Eventually the tide may turn and you may bestow us with I-told-you-so’s.
    Until then, you shouldn’t be surprised by disagreements over where this market is headed.
    The recovery is definitely long in the tooth, but there is a lot of money sloshing around out there looking for return. Speaking for myself, I don’t know what happens next. If only there were a Real estate blog where we can all discuss what we think may happen next.

  55. 1805
    marlo says:

    Hi Eastsider, you have predicted a YOY decline by January 2022. Would you mind explaining your reasoning behind this? (for example, are you anticipating higher interest rates, greater supply etc). Thanks!

  56. 1806
    Eastsider says:

    RE: Voight-kampff @ 1786 – I’ve been on both sides – bull & bear. I am neutral on homeownership, i.e. it does not matter how much you pay (assuming your finance is sound) if you intend to live in the same house for 30 years. For investment purpose, the current elevated prices in Seattle is not sustainable. Seriously, if you need to count on government bailout to make your investment work, as promoted by Erik multiple times, you should find something else to do with your savings.

    That said, if we enter a period of high inflation, all bets are off.

  57. 1807
    Whatsmyname says:

    Talk about unsustainable. That “all bets are off” thing would have been a good idea in 2019:

    Eastsider says:
    January 4, 2019 at 2:25 pm
    RE: steven @ 1 – You are probably right.

    Dec ’17 KC listings is 1,168. All months of 2018 have higher numbers, as high as 4.5x the Dec ’17 number.

    Dec ’18 active listings is 2,844. 4.5 x 2,844 = 12,000+! This is a very crude calculation but we may see 10k listings in coming months, especially if we hit a recession.

    This is bad news for sellers but buyers should sit out for now.

  58. 1808
    chip&dip says:

    RE: Eastsider @ 1782 – “The average rent a one-bedroom apartment in notoriously expensive cities like San Francisco, Manhattan and Seattle is decreasing. Cities where average one-bedroom rents are decreasing: 1. San Francisco. Rents have decreased 45%. 2. Chesapeake, Virginia. Rents have decreased 29.4%. 3. Manhattan. Rent have decreased 27.3%. 4. Long Beach, California. Rents have decreased 27%. 5. Colorado Springs, Colorado. Rents have decreased 24.6%. 6. Seattle. Rents have decreased 18.9%. 7. San Jose, California. Rents have decreased 16.2%. 8. Los Angeles. Rents have decreased 16.0%. 9. Jersey City, New Jersey. Rents have decreased 15.5%. 10. San Antonio, Texas. Rents have decreased 15.4%.”

  59. 1809
    ruxpert says:

    Could Seattle-area homebuyers be getting some relief? New report shows rise in new listings

  60. 1810
    Eastsider says:

    RE: Whatsmyname @ 1788 – What’s wrong with a (wrong) projection? If the Fed/Biden want to pump another trillion or two or 10, I can’t stop them. If the pandemic takes a worse turn in fall, we are all scr**d.

  61. 1811
    Whatsmyname says:

    RE: Eastsider @ 1791 – That projection is nearly 2 and 1/2 years old. It is instructive to the reader that when the King County median house price was $610,000, you used a sadly simplistic speculation to misjudge the future inventory top by 100%, and told buyers to sit it out. Now the median is $830,000. Imagine the damage if someone was dumb enough to find you other than entertainment.

  62. 1812
    Erik says:

    RE: S-Crow @ 1783
    It’s penny wise and pound foolish to worry about cash flow. Penny pinching and playing it real tight is what keeps people poor.

  63. 1813
    Eastsider says:

    RE: Whatsmyname @ 1792 – Are you telling everyone you have great hindsight? Okay, I’ll grant you that.

    I made 2 projections this year. Rates are heading (much) higher. MoM price decline by end of summer. Smart one, do you have something to add? Or just an empty vase with great hindsight?

  64. 1814
    Whatsmyname says:

    By Eastsider @ 1794:

    RE: Whatsmyname @ 1792 – Are you telling everyone you have great hindsight? Okay, I’ll grant you that.

    I made 2 projections this year. Rates are heading (much) higher. MoM price decline by end of summer. Smart one, do you have something to add? Or just an empty vase with great hindsight?

    I certainly think nominal rates will move up with inflation. I’m actually trying to lock up a little fixed rate cheap money right now.

    I congratulate you on looking closely enough at Tim’s charts to see that we experience a MOM price decline nearly every year between May and September. But are you forecasting a meaningful drop that helps buyers, or just some easy to verify seasonal noise? Will people be glad they shelved the housing project at the $610 median?

  65. 1815
    Blurtman says:

    A reverse wealth effect beginning in the stock market? Weak, non-functional leader breeds no confidence, coupled with tax increase proposals = bad environment for risk taking. Unexpected consequences for RE?

  66. 1816
    S-Crow says:

    RE: Erik @ 1793 – No, what keeps people poor is reliance on debt. What makes people financially independent is having very little to zero debt. They are then able to plow their income towards buying MORE real estate with no mortgage and with cash flows and cash on cash returns that would make one blush. I’ll do the 100% cash flow route all day before I follow probably 70% of what I see in the Escrow business. Do what works for you Erik but the incessant drum beat of leveraging yourself to riches is a fools game. My education is nearly 18 yrs in the Escrow business alone that tells that story as clear as possible. The public doesn’t see it. I do. Your paid off property are what will payoff for you. And keeping them a very long time.

  67. 1817
    S-Crow says:

    RE: Blurtman @ 1796 – Yup.

  68. 1818
    Whatsmyname says:

    RE: Blurtman @ 1796 – Probably a good idea to let it get down to at least the best number the former guy ever had before blaming it on the current leadership.

  69. 1819
    Eastsider says:

    RE: Whatsmyname @ 1799 – Haha. The current guy has already brought us the highest inflation in decades, $5 gas is coming. And I’m being conservative. LOL.

  70. 1820
    Whatsmyname says:

    RE: Eastsider @ 1800 – It could be that the greatest loss of jobs since Hoover helped quash the effects of $6 or $8T in deficits over the last 4 years. But it’s a bit early to dismiss the inflation inertia of all that in favor of much smaller money barely out the door.

    Glad to hear from you, though. Did you ever decide if your projected MoM price decline is more than seasonal noise that happens pretty much every year? Quick update on the neighborhood I mentioned in post 1767: the pending deal closed at $120,000 over asking.

  71. 1821
    Eastsider says:

    By Whatsmyname @ 1801:

    Did you ever decide if your projected MoM price decline is more than seasonal noise that happens pretty much every year?

    I decided you made up the seasonal noise nonsense.

    P.s. For a decade prior to the housing crash, decline in Seattle home prices were minimal and in very few winter months, as in single digit number of winter months over a decade. (Source: CS Seattle HPI)

  72. 1822
    Whatsmyname says:

    RE: Eastsider @ 1802 – You are literally 2 clicks away from Tim’s October NWMLS update, featuring multiple graphs we’ve watched him build over the years; one of which plots the SFR monthly median King County Home Prices for about 24 years. There, you may look at each year as a line.

    2020 declined in May
    2019 declined in June through Sept, every month
    2018 declined in June through Sept, every month
    2017 declined in August
    2016 declined in June, July, August
    2015 declined in July and September
    2014 declined in August
    2013 declined in August
    Then it gets harder to tell the years apart, but still plenty of downslopes in most of the lines in various months of our chosen season. And you think a summer MoM decline is news????

    Seattle is slightly different than King County, and the scale of your Zillow chart makes monthly fluctuations very difficult to see. Still, I had no trouble finding a few summertime MoM drops in just a quick scroll through the 5 year view. If you can’t get that far on your own, why would anyone give you any credibility at all? Sad.

  73. 1823
    Eastsider says:

    RE: Whatsmyname @ 1803 – You could have easily googled Case Shiller Home Price Index Seattle. As I mentioned, for a decade prior to the housing crash, Seattle home price declines were minimal.

  74. 1824
    Whatsmyname says:

    RE: Eastsider @ 1804 – Something wrong with using numbers consistent with the numbers used here for about 15 years? Straight up numbers that haven’t been massaged for time value, and thereby less transparent the further back you go?

    But to your point, the very frequent summer MoM declines, particularly in recent years, amount to mere noise, as the secular result has been large increases in price. You re-make my point for me. So it would appear that we agree your projection of MoM decline before the end of summer this year amounts to, well, nothing.

    How many hundreds of thousands of dollars has the median price risen since you so cleverly decided to beat the system?

  75. 1825
    Eastsider says:

    By Whatsmyname @ 1805:

    How many hundreds of thousands of dollars has the median price risen since you so cleverly decided to beat the system?

    I only recently turned bearish on RE investment. It sounds like you missed the massive gain in the stock market over the past year. But I’m glad that you potentially profited hundreds of thousands of dollars in RE. 50% vs 10%? I’ll take 50% any day lol.

  76. 1826
    Whatsmyname says:

    RE: Eastsider @ 1806 – Sorry, no. I’m diversified. So I’m well aware that 50% up after 30% down is a lot less than you’d like to pretend. The 15 month result is about 14% up. Nice, and I’ll take it.

    But this isn’t about me. It’s about you. You’ve been consistently and incorrectly vocal about impending real estate doom for much longer than the 2019 quote I referenced. Even from there, you’ve missed 36% growth on leveraged money. That’s 180% if you were leveraged at 20% equity.

    It’s just a warning to the newbies: This guy has demonstrated he consistently gets it wrong, and is unable to learn. He uses the language, but he doesn’t understand it. Stay safe.

  77. 1827
    Eastsider says:

    By Whatsmyname @ 1807:

    It’s just a warning to the newbies

    This is too funny. You don’t even know my finances to comment on my investment return.

  78. 1828
    Whatsmyname says:

    By Eastsider @ 1808:

    By Whatsmyname @ 1807:

    It’s just a warning to the newbies

    This is too funny. You don’t even know my finances to comment on my investment return.

    No one here knows your finances. We only know what you say. And what you say is demonstrated to be consistently wrong. And ignorant. That’s all we need to know.

  79. 1829
    Erik says:

    RE: S-Crow @ 1797
    When I started, I was not leveraged and I was poor with a low net worth. I took on what I thought was a lot of leverage at the time and now I have plenty of money and a high net worth compared to the people I know. You and others on this site preach being frugal and not taking on debt, but my experience is opposite. You don’t get wealthy by not going out to eat and being frugal. That’s how you retire at 65 with a million dollars to try to survive off until you die. That’s a bad life plan in my opinion. In general, the people that frequent this site are poor because they are scared of debt. I’d like to help others break free from that myth like did so they can have a lot more wealth and retire with passive income and a continually increasing net worth.

  80. 1830
    Eastsider says:

    Has anyone noticed the (dis)interest in Seattle housing here lately? When a market is hot (e.g. r/WSB), it attracts lots of people and comments. And the post itself is over half a year old. Perhaps people are losing interest. Just an observation lol. (btw – where is SWE?)

  81. 1831
    Whatsmyname says:

    RE: Eastsider @ 1811 – The Tim, and possibly for employer related reasons, lost interest in this blog a long time ago. But my observation has been that the historical majority of reader comments were in the realm of identifying something in the wind that the commenter hoped/predicted would break prices or flood inventory. At first these were heavily centered on data releases. As the market improved, comments would slow down fast after the NWMLS data was released, and build mostly in the period between reports.

    Inventory/sales, bidding wars, and sales prices show this continues to be an extremely robust recovery, causing a general loss of confidence in theories based on ever more tenuous evidence chains. You can see from occasional posts that at least some of these posters are still watching. There is just nothing happening that they want to talk about. The market activity shows that there is still a lot of interest in real estate among the general population.

  82. 1832
    ruxpert says:

    The Day the Pandemic Changed in Washington State
    After May 13, “normal” is finally in sight. Read More »

    The tide is turning ?

  83. 1833
    wreckingbull says:

    RE: Eastsider @ 1811 – I check back every month or so hoping to see some interesting insight, and sometimes I find it from the likes of you, S-Crow and a few others.

    But typically it is the same self-affirming, low-effort posts from the resident condo expert and debt enthusiast. Same old drivel. Maybe SWE finally loaded up the blue couch and found his dream home in Kansas.

  84. 1834
    Paulie says:

    RE: Erik @ 1810

    “ In general, the people that frequent this site are poor because they are scared of debt.”

    How do you know the people who frequent this site are poor? I’ve got a loaded wagon baybayyyyyyy. Multiple properties, stocks, crypto, cash, gold and art.

    You’re making sh*t up. And assuming “in general” most of the people on the site are poor, a completely made up statistic by an upper middle class internet troll as far as i can see, why is it because they are afraid of debt? Credit standards are very high. Maybe that is a factor? Who knows.

    Well off to go hang out with the other “poor” people. So many of us, and we all suck! But it can all be traced to one simple reason: fear of debt.

    Seriously, your love of debt+real estate reminds me of those gun fanatic friends who, every time you go to their house, any conversation turns into the same thing: guns. If i talk about the academy awards or last night’s utah jazz game, it takes about 120 seconds for the conversation to veer to them showing me their gun collection. For you, if your best friend wanted advice on how to get in shape, I bet the answer would he to take on debt, buy houses, get rich, and then hire a personal trainer (except you would lose your train of thought by the last part and just stay on the debt + real estate part). Every one of your comments has been virtually identical for several years, with no interesting market insight.

  85. 1835
    Erik says:

    RE: Paulie @ 1815
    You are right Paulie, I have a one track mind. I focus on one thing and don’t really stop. I have gotten the feedback that I talk about the same thing over and over like the people you are talking about. I have wondered if I have some some degree of autism, it’s possible. I am an obsessive compulsive person by nature and I’m really good at math which I have in common with autistic people.

    I’m not sure why you are angry at me? I think it’s great that you invest in real estate, crypto, and stocks. I invest in all those things too. The place to start is taking on debt in real estate. People need to start there and expand. The mentality on this site is that debt is scary and bad. That’s horrible advice. Why have you been reading my comments for years if you hate me? That doesn’t make sense.

    The people on here that comment are making comments a poor person would make. That’s why I assume they are poor workers. Poor person mindset is something they can change and they should change that so they can have more money to live a lower stress and do what they want. People on here want to work for money and put their paychecks in a 401k. The reason they are poor and struggling, because of that mindset that was told to them to keep them poor.

    And I’m not rich. I was a very poor 401k saver for a long time. Once I got into real estate, my situation changed. Most commenters on here are pushing that lie to keep everyone else poor. It’s a big fat lie pushed to keep poor people working for money so wealthy business owners can get richer.

  86. 1836
    Eastsider says:

    I just came across the NWMLS KC April stat. A few observations –

    – Seattle’s summer of love is having a major detrimental impact on RE values. RES+CONDO YoY median price gain of 4.46% is the lowest in KC. SW King +21.44%, SE King +23.93%, N King +27.38%, Eastside +24.89%, Vashon +34.30%.

    – N King’s RES median sales price. $870k, is on track to overtake Seattle’s $875k. At this rate, Seattle may become the next ‘Everett’ (Erik’s joke :)) in a couple years.

    – Eastside’s RES median price spiked $363k(!!!) from $937k to $1.3m. It totally obliterates Seattle’s prestige and influence, if there is still any left.

    People voted with their feet. Sadly, Seattle’s majority renters don’t care about the city they destroyed. So don’t expect the situation to improve. Let’s wait for Expedia to follow its employees to decamp to the Eastside. I believe employee preference was the reason they moved to Seattle. No? (Perhaps Chelsea was involved in that dumb decision lol.)

  87. 1837
    Blurtman says:

    RE: Eastsider @ 1817 – The composition of the Seattle city council tells you all that you need to know. Big children with fantasy beliefs, pandering to the my grievance mob. Two things that put this in focus for me – those BLM imbeciles stealing the mic from Bernie and hijacking his rally, and worse, helpless Bernie dong nothing about it, and an early televised march in Seattle with some dopey drab white liberal apologizing for his privelege, which by appearance he did not seem to have. There is no out in the cesspool of flagellation and self-flagellation. But it obviously gets enough people off.

  88. 1838
    Whatsmyname says:

    RE: Eastsider @ 1817 – Seattle’s paltry 4.6% price growth is like a mere $40k on the median city house. Those who succumb to the charms of the city proper only need to find an additional $8k in down payment to keep up. But for those of us in the burbs; making 20%+ on the bank’s money feels great.

    This is probably not the kind of insight that wreckingbull is looking for.

  89. 1839
    Eastsider says:

    By Whatsmyname @ 1819:

    Seattle’s paltry 4.6% price growth is like a mere $40k on the median city house.

    To put this in perspective. We are experiencing global asset inflation. Seattle’s paltry 4.6% is far below national/global price gain. If there were no asset inflation, Seattle homes would be losing values YoY. And if you believe the 4.2% CPI increase understates inflation, as many do, in real term, Seattle homes just experienced a YoY decline. Likelihood of a nominal decline going forward is not out of question.

  90. 1840
    Erik says:

    RE: Paulie @ 1815
    If someone has credit holding them back, I can help them fix it in 4 months or less. Most things come off much more quickly though. If that’s your situation and that’s why you got so angry at me, I can help. Credit repair is just a learned skill that is easily remedied. I had a 580 credit score and now my credit score is over 800 and has been for years. When I was poor, I was terrible at paying bills because I didn’t have the money, so I learned how to repair my credit so I could buy more Seattle real estate. I’ve gotten things off my credit report that most people think could never come off and I don’t do anything illegal or lie.

    You seem pretty angry and frustrated. I was in your position once working for money and trying to climb the corporate ladder by working harder, which is a great way to grow as a person, but not a great way to become wealthy. Buy more real estate at discount prices in great areas is all you gotta do Paulie. You wouldn’t be attacking me on the World Wide Web if you were happy and content with your situation. I may be dumb, but I’m not that dumb.

  91. 1841
    Whatsmyname says:

    RE: Whatsmyname @ 1819 – Oh, my goodness. I should have gone to the source. RES ONLY is up 7.36% in Seattle, or $60k per the chart. So you’d really need $12k in additional down payment if you wanted to actually have a house.

    Re: asset inflation, Seattle homeowners are doing much better than the bank, bondholders, or savers. Eastsider, do you regularly adjust your stock returns for inflation? I presume you’re not counting the $12k needed for inflated down payment as part of your return?

  92. 1842
    Eastsider says:

    By Whatsmyname @ 1822:

    Oh, my goodness. I should have gone to the source.

    That’s the reason not to engage with you. Most comments are skewed and twisted. Just like Erik.

  93. 1843
    ruxpert says:

    Priced Out Of The Newly-Built Housing Market, Millennials Are Turning To “Fixer-Uppers”

    “So, how does it play-out with all these people that haven’t been paying their rent and mortgage?”

  94. 1844
    ruxpert says:

    RE: ruxpert @ 1620

    We’re returning to the ‘70s era of social decay, crime, and stagflation – Scott Rothbort
    May 15

    Portland Police Union President Says City Is “On The Precipice Of A Gang War”

  95. 1845
    Whatsmyname says:

    By Eastsider @ 1823:

    By Whatsmyname @ 1822:

    Oh, my goodness. I should have gone to the source.

    That’s the reason not to engage with you. Most comments are skewed and twisted. Just like Erik.

    You quoted the appreciation rate from RES CONDO; then you used the RES ONLY for the comparison with North King. As a result, my first numbers were quick estimate based on the wrong number.

    I think it’s fair to bring apples to apples. It is you that’s engaged in skewing and twisting.

    Oversimplified for sure, but if the median house price increases $60k, and the owner put down 20% of $875k, or $175k; $60k would be a very strong 1 year return.

  96. 1846
    Eastsider says:

    By Whatsmyname @ 1826:

    Oversimplified for sure, but if the median house price increases $60k, and the owner put down 20% of $875k, or $175k; $60k would be a very strong 1 year return.

    Buying a house is not like trading stocks. There is no liquidity. And you lose almost 10% in transaction costs each round trip. Bye!

    P.s. If you have reading comprehension problem, that’s on you. I even highlighted RES and CONDO just for dumb people like you.

  97. 1847
    Whatsmyname says:

    RE: Eastsider @ 1827
    I always say real estate is not for day traders; but I keep my 401k money in for the long haul too. Btw, we’re all paying rent in one way or another.

    You did identify your sources. But unlike comparisons are still not good comparisons, and especially easy to overlook if you are anticipating a reasonable argument. Still, I came up with bad numbers, and it was on me that I should correct them. Shouldn’t I have?

    p.s. Do you try and grow/compound your stock earnings, or is it imperative to get them out for cigarettes?

  98. 1848
    Erik says:

    RE: Eastsider @ 1827
    When I buy with hard money at the auction, I do my repair and all that. Then I apply for a $100k BECU HELOC. I’m conservative, so I don’t take the money out. I like to know it’s there though for security. Is that considered liquidity?

  99. 1849
    Erik says:

    RE: Whatsmyname @ 1828
    I do 20% plus whatever company match I get for my 401k. I use to do 8%, but Eastsider convinced me to do 20% because i’m competitive. You never know what this world will bring and I agree, don’t put all your eggs in one basket. My real estate dwarfs my stocks only because my real estate has been so much more successful than stocks. I just keep recycling the real estate money to buy more real estate and after a while, it really adds up.

  100. 1850
    Eastsider says:

    RE: Erik @ 1829 – HELOC is not liquidity. It is a line of credit that can be pulled anytime. When you sell a stock, you no longer own it. When you take out a HELOC loan, you still own the underlying asset. It’s like margin borrowing. Homes are not liquid because you can’t dispose of them easily.

  101. 1851
    Eastsider says:

    RE: Erik @ 1830 – I’m glad you find some of my advice helpful. Here is an idea for you to consider when you quit your job. You can rollover your 401k to a self-directed IRA that permits RE investing. It is not a typical Fidelity IRA, but you can read up more when you are ready. Since IRA is tax deferred/free, you don’t have to worry about taxes. (Check with your CPA.) That said, I don’t think it is wise to put all eggs in one basket.

    P.s. If you have self employment income, you can set aside upwards of $50k+ in a retirement account a year. And if it is a Roth account, there is currently no tax!

  102. 1852
    Acon says:

    RE: Eastsider @ 1832 – My Fidelity IRA allows me to invest however I wish, like a cash account. What do you mean by “self-directed IRA that permits RE investing?”

  103. 1853
    Whatsmyname says:

    By Erik @ 1830:

    My real estate dwarfs my stocks only because my real estate has been so much more successful than stocks.

    Me too. I have always contributed at a level to at least get the maximum employer match. I have never taken anything out. But my net real estate is much bigger.

  104. 1854
    ruxpert says:

    RE: ruxpert @ 1825

    Real estate bubble is about to pop, invest here for safety – Scott Rothbort
    May 16, 2021

  105. 1855
    S-Crow says:

    RE: Eastsider @ 1831 – “Homes are not liquid because you can’t dispose of them easily.” True. However, time to sell at this time in this market (from list to recorded at the county sold) is dizzyingly quick vs back in the day when 45-60 days was routine. Your prior remarks about HELOC’s are dead on which is commonly overlooked. Trust me, open HELOC’s access will be shut down immediately at the first real signs of market problems.

  106. 1856
    Eastsider says:

    RE: S-Crow @ 1835 – Yes, I realize that closing nowadays is faster than ever. But if the market heads south, it could take 2mo (fast) to 4mo (typical) to 6mo+ (slow) to close a sale. Transaction costs has not come down measurably though. In fact, it might have gone up for ‘expensive’ homes (via excise tax) when many homes today are ‘expensive’ (e.g. Eastside’s $1.3m median sales price!)

  107. 1857
    Whatsmyname says:

    RE: Eastsider @ 1836 – One can take a 27% bitcoin loss with remarkable speed, and very small transaction costs, (although that might not be one’s biggest concern at this point). And that market may have already gone south – saving even more time!!

  108. 1858
    Erik says:

    RE: Whatsmyname @ 1833
    Cool. Like it or not, we are on the same program. It sounds like the only difference is that I’m attracted to distressed real estate at the auction and you buy on the mls. Now that I have some money I’ve been thinking about just buying on the mls because it’s so much easier. We’ll see.

  109. 1859
    Erik says:

    RE: Eastsider @ 1832
    I rolled my 401k over to a self directed Roth IRA when I got laid off once. The money is a Roth in M1 finance now if you are familiar with that brokerage. I’m not sure your advice is helpful, but I do have a slow growth 401k backup plan. I’ll probably bump my contribution up when I sell a house and own my condos straight up. The rental money has to go somewhere and we already have an excess. We have college funds for the kids too. I do the traditional things too, but my point has consistently been, real estate grows a lot faster.

  110. 1860
    Eastsider says:

    RE: Erik @ 1839 – I don’t believe M1 finance and most brokerages/banks allow RE investment in IRA. You will need some individualized IRA to purchase/hold properties.

  111. 1861
    S-Crow says:

    RE: Eastsider @ 1840 – Closed a transaction a few years ago that was in a IRA Real Estate centered investment . It was the only one I ran into and really interesting to me. I remember I spent a couple of hours looking at the mechanics of it after work at the time. Can’t remember who the IRA custodian (investment company) was or much about it today.

  112. 1862
    Erik says:

    RE: Eastsider @ 1840
    I’m just talking about a Roth IRA, not real estate. I have a Roth IRA as well as a traditional Ira with M1. My pie is electric vehicles which are taking a beating right now.

    I’m very active investing in stocks. My position is that real estate is much more lucrative, especially when you have less than a million dollars.

  113. 1863
    Blurtman says:

    RE: S-Crow @ 1835 – RE agents are telling me that folks are doing virtual tours and buying without an in person visit; the agent with iPhone as physical proxy. Kind of makes sense considering Zillow, Redfin, etc. How many people actually visit a company’s facilities when they buy its stock? The total financialization of RE?

  114. 1864
    Eastsider says:

    RE: S-Crow @ 1841 – IRA RE investment is rare because it has to finance the whole transaction. So it needs to have at least a 6 figure balance. But there are no taxes, depreciations, income and 1031s to deal with in tax deferred/free accounts.

    It is possible to set aside upwards of $60k in a retirement account a year. So yes some people do invest in RE in their IRA accounts.

  115. 1865
    S-Crow says:

    RE: Blurtman @ 1843 – Yup, people are buying and selling with less human personal interaction. However, “tech” has been trying forever to basically make it a “push the button” transaction but what the tech industry has yet to overcome (or fully understand as I laugh and SMH at some of what is proposed or marketed as “this is a gamechanger!” type bs) is that real estate is a moving, breathing, changing thing and even more so legally. People go in and out of Title, encumbrances change, documents are recorded that are incorrect, clearing Title hurdles and on and on and on. Just too much to go into here. This is what takes time. Real estate agents also neglect to think that buyers can bring baggage to the transaction too. The virtual tours really started in earnest due to Covid and has kind of been cemented. However, there is nothing like touring a property in person. There are things that a Matterport/or equivalent generated virtual tour cannot offer that an in- person inspection/tour provides. Transactionally, yes, lots of transactions are being done without as much “interaction” per se of tours and meeting in person with allied pro’s (agents, loan officers, Escrow etc). In my eyes, the most beneficial tech innovation has been the offering of listings of near instant notification available for all to see including history of sales and public tax information. It is when Tech thinks they can control the entire pipeline is when Escrow and Title people get the popcorn out and get ready to be entertained.

  116. 1866
  117. 1867
    ruxpert says:
    Eden Neighborhood Association Joins Call to Preserve Single Family Zoning in San José – Grass Roots Coalition Grows to Eleven City-Based Organizations
    May 18, 2021.

  118. 1868
    ruxpert says:

    Seattle’s Biggest Houseboat Is a Floating Mansion ?

    At almost 5,000 square feet, it may be the only Lake Union house with a home theater.

    907 N Northlake Way
    Size: 4,850 square feet, 3 bedroom/2 bath
    List Date: 5/14/2021
    List Price: $3,950,000

  119. 1869

    RE: Whatsmyname @ 1846

    Opposite of pricing. DOM goes into Spring Dip vs Spring Bump. :) I agree with the guy who commented that the numbers are “propped up” by review dates. More so now after the NWMLS warning about accepting early offers. Allowed…but discouraged more in the last 6 weeks or so than earlier this year.

  120. 1870
    Erik says:

    RE: Whatsmyname @ 1846
    King county is going to be one of those areas where only the wealthy can afford to own real estate. “If only I would have started buying king county real estate 10 years ago…”

  121. 1871
  122. 1872
    ruxpert says:

    Gundlach on Stimulus Distortions, Crypto, Universal Basic Income; etc.
    There’s reasons to be worried about inflation: Jeffrey Gundlach
    May 13, 2021

    Stanley Druckenmiller: Current Fed policy is totally inappropriate
    May 11, 2021

  123. 1873
    ruxpert says:

    RE: ruxpert @ 1852

    BlackRock’s Rieder Says Fed Should Taper ‘Sooner Rather Than Later’
    May 17, 2021

  124. 1874
    ruxpert says:

    RE: ruxpert @ 1853

    the Fed starts talking about tapering bond purchases
    May 19, 2021

    Why the Fed JUST made things WORSE….
    May 19, 2021

  125. 1875
    Whatsmyname says:

    RE: Erik @ 1850 – Generally I think there are always deals out there. Right now it seems the imbalance of buyers to houses ensures every house is very visible/competitive. This too will pass, but direction now is very much up.

    RE: Ardell DellaLoggia @ 1849 – I’d been thinking chicken or egg? But I agree; it does seem to really put immediacy on the buyers, pushing the market. I experienced trying to see properties before the review date, and was told they’d gone pending twice. My initial reaction was really? You don’t want to work inside your own framework to maybe get more? But I will say the prices they closed on were higher than I would have gone.

  126. 1876
    S-Crow says:

    Hit the link to this listing via Redfin in Mesa, AZ. (Hat tip to my kid who works in the Phx lending market) Then click the tax & sales history and make sure to go down all the way to 2018. And, yeah, my opinion is this reflects classic bubble price action.

    Hope everyone had a great day in the equity markets over the last few sessions where we all can’t hide and some are getting smoked.

  127. 1877
    Snp says:

    RE: S-Crow @ 1856

    O.O Just the price increase from the prior sale in MARCH… with no visible improvements. I am assuming this is someone that assumed they could work wherever they want forever and their employer is requiring them to come back to work trying to recoup the costs of relocating.

    We’re not in a bubble though. Nothing to see here.

  128. 1878
    ruxpert says:

    RE: ruxpert @ 1854

    Peter Schiff Warns Tucker Carlson: The Coming Financial Crisis Will Be Worse Than The Pandemic

    All Signs Point to Stagflation – Ep 691
    May 15, 2021

  129. 1879
    Back to Basics says:

    Inflation is about too much money chasing fewer goods produced due to pandimic. While people receive checks sitting at home and fewer service and good produced, there will be consequences: inflation. Housing is one of them.

  130. 1880
    ARDELL DellaLoggia says:

    RE: Whatsmyname @ 1855

    I did a few early offers this year. Two worked fine. The 3rd rejected it and ended up with $130,000 less on review date. We went pending on a different house by then.

  131. 1881
    Whatsmyname says:

    RE: ruxpert @ 1858 – “Peter Schiff appeared on Tucker Carlson’s show to talk about the consequences of more printed money chasing fewer goods. Peter said inflation is going to hit the middle class harder than the pandemic.”

    After ignoring much, much more printed money for the last 4 years; these 2 are hyperventilating over the fantasized disaster of much less money being spread to the wrong people today. Unemployment checks, (temporary and mostly paid by the states) are somehow the driver of inflation and Fed printing, and hurt the middle class and poor evidently more than losing their homes, and certainly more than becoming unemployed by the pandemic or losing a family member.

    Zero Hedge is, as always, for suckers and losers.

  132. 1882
    ruxpert says:

    RE: ruxpert @ 1858

    Opposing Views on the Role of Government and the Essence of Money
    (w/Michael Green & Peter Schiff)
    May 10, 2021

  133. 1883
  134. 1884
    Eastsider says:

    Peter Schiff was among the very few who foresaw the housing crisis. Signs of inflation are everywhere today. Even Buffett warned about rapidly rising inflation recently.

    In an August 2006 interview, Schiff said, “The United States is like the Titanic and I am here with the lifeboat trying to get people to leave the ship…. I see a real financial crisis coming for the United States.”[15] On December 31, 2006, in a telecast debate on Fox News, Schiff forecast that “what’s going to happen in 2007 is that real estate prices,” which had peaked in December 2005,[16] “are going to come crashing back down to Earth.”

  135. 1885
    Matt P says:

    Anyone have any experience using Flyhomes to make an offer? Will using them for a cash offer really be that helpful? I’ll be using a VA loan, so I’ll be further disadvantaged against cash offers than even a conventional loan since closing times are slow. Looking to buy on the East side in Issaquah/Bellevue area after selling my townhome in West Seattle. The bridge is just untenable for my wife’s work and I’m fully remote now. It’s probably just a matter of bend over and pray I guess.

  136. 1886

    RE: Matt P @ 1865

    I don’t know what flyhomes is. Heard of it but didn’t look into it. But I will say buying with a VA loan right now in that area would be very tough. Buying zero down VA? Or some other reason you are using VA?

  137. 1887
    Matt P says:

    Flyhomes basically buys the home for you with cash acting as your agent to keep the buyer’s fee, then you pay them a per diem until your loan closes and buy it back from them.

    I could put money down with a VA loan, $100k or so, but the VA loan gets much better rates, and I’d rather not put money down if I don’t have to. VA loan is basically free money, so might as well use it (I’m a disabled vet, so no funding fee). I definitely don’t have the money to do anything close to an all cash offer to out compete anyone and my limit is probably the VA loan max of $776k plus $100k cash. Won’t get me far on the east side I know.

  138. 1888
    Whatsmyname says:

    Peter Schiff is one of the people who are regularly credited with forecasting 12 of the last 2 financial crisis. He is a gold bug who wants a “savings” based banking system vs the artifice of the Fed; and follows a long line of Fed blaming doomsayers since 1913. Here are a few more Schiff insights featured by wikipedia.

    On December 13, 2007, in an interview on the Bloomberg TV show “Open Exchange,” Schiff added that he felt that the crisis would extend to the credit card lending industry, and he called consumer credit “a cancer on the free-market economy.” Schiff said that interest rates would rise, that the dollar would “collapse,” and that all classes of dollar-denominated assets would fall in value relative to non-US assets.

    In January 2009, economic blogger and investment adviser Michael Shedlock wrote, “I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008.

    In September 2009, with gold below $1,000 per ounce, Schiff said that he foresaw gold at over $5000 per ounce in the future, and that the stock market rally which began that year was a “rally in a bear market.”

    Signs of inflation are indeed everywhere today. The Fed has been openly trying to encourage some inflation for several years.

  139. 1889
    ARDELL DellaLoggia says:

    RE: Matt P @ 1867

    “no funding fee” makes sense. Usually the APR is higher because of the Funding Fee. I have seen people do the same as you are saying using Hard Money same as cash. Compare both as to cost. I have never done either for a client. I have seen it as a listing agent but that buyer didn’t get the house. The actual cash buyer with Proof of Funds did. Would be nice to see a comparison of FlyHomes and Hard Money. Generally I don’t have to deal with either, but I do have a backburner client in Seattle that may work for. But since they take my commission…might not work. LOL! But I’ll tell them to look into it.

  140. 1890
    SeAH says:

    Are you hearing anything unusual this spring market , ardell? Anything “out of the norm “ and what’s the norm?

    Flyhomes make cash offers on your behalf . You technically buying the house from flyhomes . It theoretically gives you a competitive edge to compete with cash offers at a premium .RE: ARDELL DellaLoggia @ 1860

  141. 1891
    Seah says:

    Ardell , what do you think of Opendoor, that real estate tech company ? I know RE agents aren’t fond of them . What’s your take and outlook of them ? RE: ARDELL DellaLoggia @ 1869

  142. 1892
    ruxpert says:

    Mish Shedlock Exposed

    ‘In January 2009, economic blogger and investment adviser Michael Shedlock wrote, “I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008.’

  143. 1893
    Eastsider says:

    RE: ruxpert @ 1872 – Yup, I haven’t visited Mish blog for a long time since I determined he was a fraud, just like oh what’s his name?

  144. 1894
    ruxpert says:

    Danielle DiMartino Booth
    Author of the book:
    Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America

    also re: The Federal Reserve:
    The Creature From Jekyll Island | G. Edward Griffin

  145. 1895
    ruxpert says:

    RE: Eastsider @ 1873

    ‘Welcome to the Masquerade’

  146. 1896
    Whatsmyname says:

    RE: Eastsider @ 1873RE: ruxpert @ 1872
    I’ve never been a follower of Mish. You will see that both he and Schiff are carried by aggregators to the same disaffected audience. But let’s get down to brass tacks:

    The reason it took Schiff 3 years to respond is that Mish had him on the facts of his performance at the time. Three years later things have changed, and Schiff does the same to him. A pox on both their houses, but it doesn’t make 2008’s -40 to -70% a good call for Schiff.

  147. 1897
    Eastsider says:

    RE: Whatsmyname @ 1876 – I care about fundamentals, not timing. If you make a small fortune investing in GME stock, good for you. It does not mean the hedge fund guys were wrong. I will still pick those hedgies over diamond hands any day!

    Back to Schiff. I do not know him nor follow him. But to be able to call the housing crash is no small feat. He deserves credit for his analysis.

  148. 1898
    Whatsmyname says:

    RE: Eastsider @ 1877 – If credit cards had imploded, US dollar collapsed, gold went to $5,000, and the stocks were a bear market for the 7 years following 2009, many people would be crediting his analysis.

  149. 1899
    ruxpert says:

    RE: ruxpert @ 1862

    aside from misdirection routines,
    please deal directly with details herein:
    Opposing Views on the Role of Government and the Essence of Money
    I would greatly appreciate some critical feedback regarding such.

  150. 1900
    Whatsmyname says:

    RE: ruxpert @ 1879 – Early on, Schiff establishes a gross assumptive misunderstanding of turn of the previous century life quality and productivity for maybe 80% of American and immigrant workers. He then builds a ham-fisted ideological fairy tale, showing no ability for any nuance excepting when he explains away his prior mistaken prognostications. Despite every crime in history, he sees the profit motive as the single solution for any good. He insists that the poor and working people will be the great beneficiaries of lower prices in his hoped for deflation (called depression by most), although they will have no money, food or services. He seeks to redefine the word inflation to remove it from the realm of practical concerns when called out on incoherence there, and lays out his investment strategy that is basically all in for a US collapse – which may explain the other things he encourages.

    Near the end, he does an excellent job of skewering bitcoin. He kind of ruins that with an explicit denunciation of democracy.

    Mike was very good.

  151. 1901
    don says:

    Anyone here remember Elaine Garzarelli ?

    A few get lucky, very few call the relevant factors and outcomes, the rest are in the chicken little club.
    But, in the meantime, chicken little has for sale all that you need to survive the coming armageddon.

  152. 1902
    Erik says:

    RE: Eastsider @ 1806
    The real estate I have came from a $4500 down payment I made in 2011. If I invested that money in a stock and it 10X’d, I’d have about a $40k profit and be able to brag about my 1,000% gain.

    If I used the velocity of money to kept reinvesting that money and owned 10 properties, my gain would be about $1M after 10 years. There are a lot of assumptions there, so I was more generous with the stock example and less generous with the real estate example. With the real estate example, you’d probably have more like 40% equity and $2M increase in net worth. Plus with the real estate, you could sell 5 and own 5 without a mortgage eventually and then have $2.5M in equity and a $8k/mo cash flow.

    Both Whatsmyname and I have said we both invest in a 401k and we both buy rental real estate. We have both said that our real estate gain is much much higher than our 401k gain. I guess if you put $40k into Costco 30 years ago and are now 60, it’s too late to change. And if you have $2.5M, you are probably fine. I just like the idea of collecting cash flow while my net worth goes up every year when I’m your age.

  153. 1903
    Eastsider says:

    RE: Erik @ 1882 – You bought at the bottom with leverage. That amplified the gains. But if you buy today with 20% down (also leveraged), a drop of 20% will wipe out your down payment.

    In 2010, many short sellers had multiple properties for sale (forced sale). Leverage can go both ways.

    Homeowner leverage is very different from investor leverage. Homeowners are heavily subsidized by the government. No so for private investors. If private investors can get the same sweetheart deals like regular homeowners, nobody would be able to afford any home.

  154. 1904
    Whatsmyname says:

    By Eastsider @ 1883:

    But if you buy today with 20% down (also leveraged), a drop of 20% will wipe out your down payment.

    Equally true at every time anyone has purchased a house. I have bought many times, and not at the bottom. You’ll have to develop a little further if you want to have a point.

    In 2010, many short sellers had multiple properties for sale (forced sale). Leverage can go both ways.

    Source please. That was not a bad time to be in the house renting biz. We can always say that a bad thing happened to “many” people giving the impression that certain people were particularly at risk – when perhaps the opposite was true.

    Homeowner leverage is very different from investor leverage. Homeowners are heavily subsidized by the government. No so for private investors. If private investors can get the same sweetheart deals like regular homeowners, nobody would be able to afford any home.

    As a homeowner and an investor, I would like to know how my home is heavily more subsidized by the government than my investments???

  155. 1905
    disasteraverted says:

    Was at the in laws today, in Top Hat/White Center area. Checked out a flip as they had an open house. Decently done. They bought a few months back in the low $400s, asking $620K now after a to the studs remodel.

    The agent at the open mentioned things were cooling down a bit in this area. She thinks $620 is the most that they’ll get and that they very well have no offers by the Mon/Tue review date. Interest has been low.

    I don’t know if she is right, but was interesting to hear someone say the market in this neighborhood is finally too far out over its skis.

    I think this may be what Ardell was talking about a while ago. People keep upping their ask price based on last month’s bid up comps… at some point people can’t/won’t bid it up any further. Some might see this as a slow down, but if inventory still trades, albeit slower, it’s still a strong seller’s market.

  156. 1906
    Wile E. Millenial says:

    There are more houses on the market in my nice neighborhood this week than anytime in recent memory. They all have deadlines in the next day or two though — not a straggler among them.

    I actually have some data people might find entertaining. I looked up the buyers for the 40 most recent SFH homes in my area [prices ~$800k-$1.6m] and categorized them based on Linkedin. It may or may not agree with your narrative…

    60.0% local tech people
    32.5% local non-tech people
    5.0% people who didn’t already live in Seattle or King Co
    2.5% (!) investors

    20.0% Amazon
    15.0% other tech companies
    12.5% MSFT
    10.0% doctors
    7.5% lawyers
    5.0% Google
    5.0% entrepreneurs
    5.0% construction professionals
    2.5% Boeing

  157. 1907
    David says:

    Peter Schiff sells mostly gold-backed investments. Nuff said. I like him, but gold is impractical.

    Skip gold, buy real assets or Berkshire Hathaway.

    RE: Whatsmyname @ 1868

  158. 1908
    ARDELL DellaLoggia says:

    RE: Wile E. Millenial @ 1886

    The Google vs lawyers looks off., unless it’s Seattle vs say Kirkland. Also, many “investors” work at tech companies. Interesting though…if we had maybe a zip code.

  159. 1909
    Wile E. Millenial says:

    @ardell: urban areas of Northeast Seattle.

    Small dataset so large margin of error on the small numbers for sure. And yes, there may be investors in the mix who overlap with the groups above. Most of the homes in that sample are kinda pricey to be rental investments, but nothing’s impossible of course.

  160. 1910

    RE: Wile E. Millenial @ 1889

    Thank you. Yes. Looked right for North Seattle. Much appreciated.

    Seah 1870 and 1871. Sorry I missed those follow up questions. Had a buyer move up closing by two weeks on my listing and got diverted scrambling to empty the place two weeks earlier than expected. :)

    As to FlyHomes and OpenDoor, I support all new ideas in the real estate space. I saw one this weekend that should have been an OpenDoor deal. Not every house fares best in the Open Market. Most do…but not all. Usually when the deferred maintenance of the house and property are too overwhelming for the seller and they want to sell it “as is” without airing their “dirty laundry” all over the internet. I’m watching it to see if they would have done better with OpenDoor. Don’t know the sold price yet.

    I have always wanted a day when real estate was like filing taxes. Some people hire someone to do it… but most all people have other options. I want as many options available to consumers as possible.

    I don’t see any surprises that I haven’t seen before. Sometimes the season starts early…moves fast and high and wimpers out by mid end of May or mid June. This is feeling like one of those years. Most commonly the end is mid July…but with no solid school year this year, I don’t see thing playing out that way. If the market stays uber strong with continued bid ups of at least 10 offers per most houses through end of August, then we know next year will be a repeat of this year. But I don’t think that is what’s happening. # of offers has reduced by about 66% to 75%. Still plenty of them, but not nearly the strong seller’s market of earlier this year.

    Actually that last sentence probably addresses disasteraverted’s mention of me in 1885. Yes…this is what I was referring to a few to several weeks ago. But I wouldn’t call right now a “strong” seller’s market. Still a seller’s market for sure. But relatively speaking…much weaker than December 2020 through April 2021. And yes…mainly because the list prices have leveled up. Slightly healthier seller’s market. :)

  161. 1911

    Just an update. I picked a house that shouldn’t sell this week as I often do to test where the market is. It did not get offers. It could end up selling at full price in the next week or so, so I’m still tracking it. But we do know the market is less batshit crazy as of now. :) Spring Bump is officially over and things should level out until Jan – Feb at this point.

  162. 1912
    uwp says:

    New data from the U.S. Census Bureau shows that between July 1, 2019, and July 1, 2020, Seattle had a net gain of about 16,400 residents, hitting a total population of 769,700. That pencils out to a growth rate of 2.2% last year.
    And that means that among the 50 biggest U.S. cities, Seattle is — are you sitting down? — No. 1 for growth in 2020.

    But but but… I had it on very good authority that Seattle was Dying ™???

  163. 1913
    Matt P says:

    RE: uwp @ 1892 – The 2nd and 3rd largest companies by market cap are headquartered here. #4 and 5 have large offices here and are still growing. Disney has a small office here now and growing. #44 Tmobil, #47 Costco, #55 Boeing, #61 Starbucks all here. Then a bunch of smaller companies and startups – Nordstrom, Expedia, Alaska Air, Redfin, Zillow, Paccar, and on and on. If you don’t want to go to the bay area for a job, then the next best place is Seattle.

  164. 1914
    Eastsider says:

    RE: uwp @ 1892 – Note the US Census Bureau data is from July 2019 and June 2020. The more recent US Postal Service permanent change of address registrations in 2020 show a very different picture.

    Seattle and Portland
    At the same time, the loss of households from King County (Seattle), which suffered the early impact of Covid-19, rocketed from 1,000 to 19,000 in a year. Multnomah County (Portland), more than doubled the net loss of households.

    Americans Up and Moved During the Pandemic. Here’s Where They Went.
    Big cities lost residents and the suburbs gained after 2020 lockdowns and low mortgage rates supercharged shifts in where people want to live

  165. 1915
    Whatsmyname says:

    RE: Eastsider @ 1894 – I think you can see this very thing in the NWMLS monthly statistics where Pierce and Snohomish house prices are increasing even faster than King County, which is, in turn, increasing faster than Seattle. Thanks for calling our attention to these increases. Some of them are quite large.

  166. 1916
    Erik says:

    By Eastsider @ 1883:

    RE: Erik @ 1882 – You bought at the bottom with leverage. That amplified the gains. But if you buy today with 20% down (also leveraged), a drop of 20% will wipe out your down payment.

    In 2010, many short sellers had multiple properties for sale (forced sale). Leverage can go both ways.

    Homeowner leverage is very different from investor leverage. Homeowners are heavily subsidized by the government. No so for private investors. If private investors can get the same sweetheart deals like regular homeowners, nobody would be able to afford any home.

    I first bought near the top in 2004. Then I bought near the bottom in 2011. Then I bought in 2014, 2017, and 2019. It’s not a sprint, it’s a marathon. The secret is to never give up and keep making high quality investments. I failed big on the one I bought in 2004. I dusted myself off and kept going, which was a great decision. I wasn’t lucky or had everything go my way. I believed in the mission to get rentals in Seattle and right now my tenacity is paying off. When I buy, I keep buying as many as I am financially comfortable buying aka run low on money because my dream is to keep going. But I run out of money.

    Whatsmyname is right. Real estate investors scored huge during the Great Recession. That’s when I realized what a great investment real estate was. The government bailed out landlords big time.

    Are you referring to the 25% down investor loan vs the 5% owner occupied loan? I don’t put 25% down because I buy with hard money, improve the property, and do a 75% LTV loan. It’s kinda the BRRRR strategy. Buy, Rehab, Rent, Refinance, and Repeat. I’ve never been able to do it with no money out of pocket after the refinance, but I don’t pay 25% down.

  167. 1917
    S-Crow says:

    From the trenches: Texas +1 Family . Met with a Nurse this late afternoon leaving Washington. Said her co workers were split about her leaving. Said about half were concerned about the “culture” in Texas. Isn’t that the point she was laughing. Property they were selling was north of $1M. The top destinations for my clients over 2019 and into 2020 was Arizona, Idaho, Texas. She talked about the Covid 19 pandemic and healthcare too which was highly interesting but that is for another blog.

  168. 1918
    Eastsider says:

    RE: S-Crow @ 1897 – Every major tech employer is scrambling to offer their employees LT care policy before the Nov 1 deadline. If the the long-term capital gains tax survives the court challenge, there will be a plethora of other ‘excised’ taxes (e.g. on income, interests, labor, dividends) on the way. Count on it!

  169. 1919
    S-Crow says:

    Memorial Day Remembrance on this Memorial Day weekend:

    As the son of a Greatest Generation WWII Navy veteran (Pacific theater) who’s deep Newark (South Amboy) New Jersey roots stayed with him throughout his life, while clearing out some old boxes in my basement this week I came across a small box with an old envelope containing very faded black and white photos. I’ve never seen the photos until now and my Dad never shared them when he was alive. They were of him in Guam, among others and photos of his brothers in 1943 in uniform (two of his three brothers were in the Navy).

    Though he rarely (pretty much never) talked about the War he did share that both of his brothers ships were shelled and sunk and incredibly both survived and continued on after the war with careers in the Navy. My Dad’s post WWII path took him to Kansas State University (of all places) and ended up here in Seattle after seeing the area in person while on a weekend trip to Husky field at the University of Washington as a full back for the KSU Wildcats. On his team was one of his good friends (who was in my Dad’s wedding party), the late Harold “Robbie” Robinson, the first African-American football athlete to ever be given a scholarship in the Big 7 at the time. Robbie ended the decades long “color barrier.” He was congratulated by a letter received from Jackie Robinson (no family affiliation). My Dad, after earning a degree at KSU and smitten by the “slower pace” of Seattle (in comparison to his rough childhood neighborhood) and the area’s amazing geography he ended up enrolled in the University of Washington’s School of Engineering and Architecture. As fate would have it he and my mother ended up living in an a tiny apartment of a brick building (still exists) across the street from Volunteer Park on Capitol Hill and then later buying a home several blocks away for $16,000. The rest is history.

    As a kid growing up I ended up working part, part time for another Greatest Generation fellow at his pharmacy across the street from St. Joe’s: late long -time Seattle Councilman George Benson. I am firmly of the belief that George wouldn’t recognize or believe what Seattle has become politically and socially today. Nor would my Dad who rests at Lakeview Cemetery just a couple blocks down the street from his first apartment.

    To all the servicemen and women who paid the ultimate price and to the Greatest Generation , I remember and salute you.

  170. 1920
    Voight-kampff says:

    RE: S-Crow @ 1899

    I sincerely appreciate your fathers service. My late grandfather was a marine in the pacific theater (Tawara, Tinian, and Saipan). I’m thankful he survived the war as I learned so much from him. He passed away only a few years ago. His brother was killed in the European theater and I recently visited his grave in Belgium, quite an experience. Respect.

  171. 1921
    S-Crow says:

    RE: Voight-kampff @ 1900 – Thanks and I salute your family member as well. I’ve never been overseas to Europe. Belgium has quite a history. Some day. Ironically my son was in Belgium in January 2020 just as Covid started really rolling worldwide but he flew home to Los Angeles just before the shutdowns.

  172. 1922
    JustMe says:

    RE: ARDELL DellaLoggia @ 1891

    You are clueless or your clientele is non-techies. The typical home being sought by techie families is a SFH with 4BR, 2BA, 2500 sqft.

    A couple of homes is all that is available in Redmond, Kirkland under 1.75M . Is this a buyer’s market? It is a crazy seller’s market if inventory in this bracket is near ZERO.

    See for yourself,max-price=1.75M,min-beds=4,min-baths=2,min-sqft=2.5k-sqft,viewport=47.72374:47.56112:-121.87176:-122.28478,no-outline

  173. 1923
    Eastsider says:

    Here is some interesting data on commercial office market by Colliers.

    – Twelve metro office markets posted negative absorption exceeding one million square feet in the first quarter. New York easily outpaced the other markets, at negative 12.2 million square feet, followed by Los Angeles (-3.6 million), Dallas (-3.0 million ), Atlanta and Washington, D.C. (-2.8 million), San Francisco Bay Area (-2.7 million) and Seattle (-2.6 million).

    – Top U.S. Office Leases in Q1 2021
    Amazon 1 Boston Wharf Rd Boston 706,996
    Amazon 10627 NE 8th St Seattle/Puget Sound 605,000 (That’s Bellevue!)

    – Top 10 Markets: Class A Sublease Space – Rental Discount (%)
    Seattle 28%

    Much more in the downloadable PDF.

    U.S. Office Sector Still Faces Challenges Despite Improving Economic Fundamentals

  174. 1924
    Whatsmyname says:

    RE: Eastsider @ 1902 – It was reassuring to look through the tables in the article to note that Seattle/Puget Sound still has lower vacancy rates than the averages, and right about half that of Dallas/Ft Worth.

    But timely post, anyway. Our company, which sent nearly everyone in the offices to work from home 15 months ago, just circulated its 2nd employee survey regarding preferences in working from home/office/hybrid. Work from home may turn out to be a long term force on office space that is similar in scale to the impact of Amazon on retail space. In turn, that could drive changes in the housing market such as demand for dedicated home office space, more space, and less importance for some location factors. Should be good for SFR prices.

  175. 1925
    S-Crow says:

    RE: Whatsmyname @ 1903 – And ridership for our billions dollar rail system?

  176. 1926
    Whatsmyname says:

    By S-Crow @ 1904:

    RE: Whatsmyname @ 1903 – And ridership for our billions dollar rail system?

    Probably in the toilet. It was always a poorly designed conceit for the city, destined to move college kids to the airport, and people with a short bus ride or suburban execs downtown. The very, very last priority was workers who had to come downtown from cheaper, suburban locations they could afford – the same people real railways were built to serve 100 years ago.

  177. 1927
    Eastsider says:

    RE: Whatsmyname @ 1903 – If WFH becomes the norm, perhaps employees will move to more desirable and affordable areas. Unfortunately, Seattle is neither desirable nor affordable.

  178. 1928
    Whatsmyname says:

    RE: Eastsider @ 1906 – I think the new norm will be a combination of WFH, regular office, and hybrid. Two of these will require some physical proximity.

    People are drawn to the amenities and services available in an urban area. I saw a Bankrate article on on all the people moving out of major cities. It said 90% were staying in the same metro areas. Also, I have talked to a couple of people who brought up that they would be OK with bad commutes if it’s only once or twice a week. I think what we’ll see is an effective increase in the area that can be effectively utilized as suburbs, and more population pressure on the suburban component of metro areas. This is kind of what’s been happening recently, and I think it will force more 1st time buyers out further, although that may be OK for their lifestyle.

    This pressure does ease price pressure in the core city. In growing cities there may be some offset by people relocating from high priced traditional cities.

  179. 1929
    Eastsider says:

    RE: Whatsmyname @ 1907 – The best model is the Tokyo model. We just need bullet train N-S, E-W to bring people into the city (Bellevue of course!) North Bend is 10 minutes away and Centralia is a 30 mins ride. But of course we will never get there with the current crop of politicians.

  180. 1930
    Rentin’ says:

    Has anyone seen the local king county inventory data or know where I can find a current inventory chart? From what I’m reading, inventory nationwide has started to increase slightly for the last three weeks in a row, after declining for months, but I don’t know if the same is true for king county. Also, lots of price reductions in Pierce county today. I’m hoping the price peak has already happened for this year.

  181. 1931
    uwp says:

    RE: Rentin’ @ 1909

    Redfin’s Data Center is probably best for this at the moment.

  182. 1932
    Rentin’ says:

    RE: uwp @ 1910 – thank you!

  183. 1933
    Whatsmyname says:

    RE: Eastsider @ 1908 – You are right. I don’t we’ll see one here, in my lifetime anyway. But riding one is now a bucket list item for me.

  184. 1934
    Back to Basics says:

    RE: Eastsider @ 1908
    yes. we can everything if you like to pay more tax on this fast rail?

  185. 1935
    Eastsider says:

    RE: Back to Basics @ 1913 – Seriously, bullet trains are not that expensive. Even a small country like Spain has 2000 miles of high speed rail. Imagine what WA would be like with 2000 miles of high speed rail! Bullet trains are like public housing. We can build them just like Spain and other countries.

    Think about it. The trains will lower housing costs dramatically. Return on investment is extreme. Every worker in Tokyo has a home to return to after work because of trains.

  186. 1936
    Back to Basics says:

    RE: Eastsider @ 1914

    Like I said, it needs money. Who is to pay?

  187. 1937
    Eastsider says:

    RE: Back to Basics @ 1915

    WA GDP is about half of Spain. CA GDP is 2 times Spain.
    WA/CA GDP per capita is 2.75 times Spain.

    We clearly can afford it.

    In addition, a typical home in Centralia is $300k compared to Seattle’s $830k. The difference is over $.5m. The savings from (affordable) homes alone will far exceed the cost of high speed rail.

  188. 1938
    Eastsider says:

    RE: Eastsider @ 1916

    Here is one way to fund high speed rail in WA. Add the cost of buildout to WA property tax collection. Currently the revenue is a ‘fixed’ amount and your property’s share is based on its proportional assessment value statewide. We increase the ‘fixed’ revenue to pay for the rail. Properties that benefit from the rail will see increased values and will pay higher property taxes. If Centralia home values go from $300k to $400k because of the rail, their property taxes will increase by roughly 1/3. The owners should not complain because the increase in their property values far exceed the additional tax. Once people realize the benefit, Yakima may demand high speed rail to their region and soon the whole state will be connected!

    Ultimately, the rail costs nothing and actually increases wealth. Who says you can’t have a cake and eat it too?

  189. 1939
    northender says:

    RE: Eastsider @ 1917 – But not every community wants their housing and property taxes to increase by 33%.

  190. 1940
    Eastsider says:

    RE: northender @ 1918 – No it won’t affect other communities. Assuming WA collects $30B in property tax revenue a year. Your share of $30B is based on your property value relative to other properties. If Seattle property values go up 10% yoy and the rest of state go up only 3%, Seattle will pay higher share of $30B property tax revenue and the rest of the state may see a decline in property taxes.

    According to one estimate, CA’s 500 miles of high speed rail costs about $80b. We could increase WA property tax collection by $3B/yr to pay for hundreds of miles of rail over time. The increased taxes will primarily be paid by properties alone the rail because of higher property values.

  191. 1941
    Whatsmyname says:

    RE: Eastsider @ 1919 – Although the cost of a thing may be worthwhile, nothing in this world is free.

    Many years before the plans are finished, the land is bought, and construction is completed; there will need to be new taxes to pay for those things as we go.

    Once operations start, the same market pressures that work to raise values in Centralia will be working to decrease them in Seattle, albeit with potential to more than overcome that if this were to spur more manhattanization for Seattle.

    This is not to say that I would oppose a well planned bullet train.

  192. 1942
    Back to Basics says:

    RE: Eastsider @ 1916
    Would you like to pay Spain level income tax? Besides, the property tax is mainly pay for your local community police, fire fighter and school. To use county wide property to fund estsider fast rail to city center is like tax everyone to fund estsider affordablity to purchase a home. What a good idea!

  193. 1943
    Eastsider says:

    RE: Back to Basics @ 1921 – Spain median household income is $22k. WA median household income is $79k. Why do you think we will pay “Spain level income tax”? I won’t respond any further.

  194. 1944
    ARDELL DellaLoggia says:

    RE: Whatsmyname @ 1920

    There’s only one high speed train in the U.S. and it “can” go 160 mph, but it only goes 70 between stations. NY to Boston I think. That’s lower than the speed I used to drive into NYC on The Jersey Turnpike. Don’t waste your money. The pricey areas stayed pricey and the cheap areas stayed cheap.

  195. 1945
    Whatsmyname says:

    NWMLS stats for May are out. Holy Moly. For King County SFR’s:

    New listings increased 21% YOY to 3,417, but down slightly from April’s 3,584.
    EOM inventory was down 52% YOY to 1200; down from 1,380 in April.
    Pendings increased 23.7% YOY to 3,434; up from 3,050 in April
    Median prices increased 29.5% YOY to $869,975; up from $830,000 in April.

  196. 1946
    Mikal says:

    RE: Whatsmyname @ 1924 – Good. I’m listing my house in Seattle on the 25th. I paid 220,000 for it in 2012. Listing for 700,000. Thank you Seattle and Amazon.

  197. 1947
    Erik says:

    RE: Mikal @ 1925
    That’s awesome! Congratulations on your excellent timing.

    I’d take the proceeds and use it as a down payment to buy more real estate, but you could grow it other ways.

  198. 1948
    formerSeattleite says:

    “As of June 1, there were still just over 2 million homeowners in Covid-related mortgage bailout programs, according to the Black Knight real estate data company. As these plans begin to expire, having home equity will help those in trouble. They can still sell and get out with a potential profit if they have to.
    “This reduces the likelihood for a large numbers of distressed sales of homeowners to emerge from forbearance later in the year,” CoreLogic chief economist Frank Nothaft said, adding that the average homeowner now has about $216,000 in equity.

     The share of borrowers in a negative equity position, owing more on their mortgages than their homes are worth, consequently dropped. From the fourth quarter of 2020 to the first quarter of 2021, the total number of mortgaged homes in negative equity decreased by 7% to 1.4 million homes, or 2.6% of all mortgaged properties. Annually, the number of underwater homes dropped by 24%.”

    “Home values are expected to cool off in coming months because buyers are already hitting an affordability wall. Sales have begun to slow, and price drops usually follow.
    Home prices are not, however, expected to crash, since there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.”

    Your guys’ thoughts / analysis on this latest article? Erik? Eastsider? Ardell? Whatsmyname? (I like to read a broad thought of opinions :] )

  199. 1949
    Eastsider says:

    RE: formerSeattleite @ 1927

    Inflation is up measurably and is not ‘transitory’ (according to Costco?) Interestingly, as inflation flares, interest rate heads down! As of now, 10yr treasury yields 1.44%, down from 1.745% peak on March 31. This is due to an excessive liquidity that can no longer finds any outlet (e.g. investments/loans.) WSB Apes are happily sending $billions of savings to AMC, GME with huge negative returns! The current bubble is a lot worse than the Internet bubble. The reverse repo is now at $.5T heading to $1T with no end in sight. People are willingly holding massive amount of cash despite negative (real) interest (-5%?) I can’t predict where all this is going but I would reduce leverage now.

  200. 1950
    Beano says:

    Lockdown policies have been a total disaster. We are just starting to see how painful of a mistake it all was.

  201. 1951
    Erik says:

    RE: formerSeattleite @ 1927
    CNBC is a Democratic propaganda machine to manipulate the masses, so generally is never read that garbage. I read it and it didn’t really say anything new.

    Some landlords are taking 18 months off making payments on their mortgages. Those same landlords will be allowed to refinance or go into a 40 year loan at the end of their forbearance so they have better cash flow and 18 months of rental income in the bank. Homeowners and landlords with mortgages got bailed out once again. This is a huge lesson in my opinion why to never pay off your home unless you want to retire and are no longer interested in generating money.

    Landlords are once again flush with cash while renters are getting screwed. It’s not fair. This same thing happens every time. I’m making this point because this is how it always goes. If you are interested in getting bailed out, you want to own real estate with a mortgage. The more you own, the more you can make.

    3 months after the forbearance plans are over, landlords will be flush with cash and ready to buy more real estate. The whole thing is completely unfair to those that don’t know the game. This is how the rich get richer and the poor(people that work for money and rent) get poorer.

  202. 1952
    formerSeattleite says:

    RE: Eastsider @ 1928RE: Erik @ 1930 – Thank you gentlemen!

  203. 1953
    Erik says:

    RE: Eastsider @ 1928
    CPI data released yesterday was down month over month. That supports what the Fed has been saying that inflation will be transitory.

    I don’t have a strong opinion on whether inflation will be transitory or not because I’ve heard good arguments on both sides. Having CPI data go down .2% this month compared to last month supports that inflation will be transitory so I’m leaning more towards the transitory hypothesis, but as you know, that could change. So far, CPI data supports what the fed has been saying. They may be right this time.

    If inflation does get out of hand, the fed will increase lending rates and housing prices will go down probably. Either way doesn’t really matter to me. Either we will have a smaller crash now or a bigger crash later. I’m prepared for either scenario.

  204. 1954
    Whatsmyname says:

    RE: formerSeattleite @ 1927 – I don’t pay much attention to underwater houses. Anything underwater in this region would have issues far beyond the real estate market. But all in all, this article reads pretty reasonable to me for the national market generally. I agree that the buyer’s field seems to have shrunk. I’m not sure it’s as much affordability as sticker shock. It seems like cooling prices would be an appropriate adjustment.

    Still, there’s a lot of money coming in from stimulus, ppp forgiveness, and the re-opening economy. That increases home purchasing demand directly; but also the amount of capital available for secured loans, which helps keep down interest rates. If we are really inflating, there’s not a much better inflation hedge than a house.

    Also we’ve had a lot of population growth, (King County up to 2.3mm from 1.8mm in 2007), which far outstrips a proportional increase in houses. In fact, for about 4 years we pretty much didn’t build any houses. For several years after, all house building was skewed to the higher end.

    We’re also getting closer to seeing just how much work from home will be permanent. This could create intra-metro patterns different than either pre-covid or recent purchases. I think some people are waiting to see how this will shake out for them personally.

    So a small weakening in local prices may well be near, but I think the likelihood is more upward movement before this is done, at least in some parts of the metro. Of course this could always go sideways, but Plan A is for the expected.

  205. 1955
    Whatsmyname says:

    RE: Eastsider @ 1928
    Why do you think people are willing to hold cash?
    Why do you think the reverse repo is skyrocketing?
    Why would you be looking to reduce leverage now?

  206. 1956
    Whatsmyname says:

    RE: Whatsmyname @ 1934 – To clarify; I agree that people are willing to hold cash and the the reverse repo is skyrocketing. I’m asking what you think are the underlying reasons for these things.

  207. 1957
    Eastsider says:

    By Whatsmyname @ 1934:

    Why do you think people are willing to hold cash?

    When banks/corporations/individuals hold cash (mind you – with neg return!) they want to preserve capital. E.g. Banks find no qualified borrowers.

    Why do you think the reverse repo is skyrocketing?

    See answer above. Also, the Fed’s QE has reached its limits. The excess QE is now showing up in the reverse repo, and it will grow larger until the Fed ‘tappers’.

    Why would you be looking to reduce leverage now?

    Leverage reduces your options. If bad things happen, you don’t want to be forced between rock and hard place. And if the market tanks, you may be able to take full advantage with your cash!

  208. 1958
    Eastsider says:

    By Erik @ 1932:

    CPI data released yesterday was down month over month. That supports what the Fed has been saying that inflation will be transitory.

    This is a misreading of the inflation data. March-April was up 0.8%. April-May was up 0.6%. So March-May was up 1.4%. YoY May/May was up 5%.

    Inflation based on last 3 months data is running at 8.3% (annual), the highest since 1982.

  209. 1959
    Whatsmyname says:

    RE: Eastsider @ 1936 – I’m going to take the liberty of expanding on your answers.

    People will hold more cash when there is uncertainty about a better place to place it, or when cash is coming in faster than they can place it.

    The thing that is unique for the reverse repo at this time comes from ppp loan forgiveness. The 2020 prospects for banks looking to place credit weren’t looking so good. But the banks turned out to have a great year, making over $780B in good quality (gvmt gtee) ppp loans. This year more are being made, but the massive effort is in processing forgiveness of prior ppp loans. The banks made the loans, but the banks don’t forgive the loans. The government pays the loan amount to the banks. And now the banks have an avalanche of money coming in that is above and beyond their normal continuing business. So for now that goes to the Fed where it can get a tiny rate – which is better than no rate at all.

    It’s a hard time right now for institutional investors to find investments that don’t seem fully priced. But if an individual can find the small and unique positive investment, and can do it with someone else’s money at an interest price that is less than the money is depreciating, they make money on the loan. IF you can do that, and have ample reserves; this is a great time to get leverage.

  210. 1960
    Eastsider says:

    RE: Whatsmyname @ 1938 – The Fed is purchasing mortgages and treasuries at a rate of $180B(+-) every month. Reverse repo is basically reversing the QE. The extra money has no productive place to go so they are going back to the Fed. In another 3 months, if nothing changes, reverse repo could hit $1T. So something will be done before then or the system could break.

  211. 1961
    Blurtman says:

    Incredible power resides in the ability to create and issue digital credits. To what extent can you do this?

  212. 1962
    Whatsmyname says:

    RE: Eastsider @ 1939 – Reverse repo activity is mainly overnight transactions, so not really removing liquidity in any practical sense. Not sure how this, in and of itself, could break the system. Banking sector does have more money than they can lend. Improvement is anticipated through re-opening the impacted parts of the economy, but look for low rates, especially on deposits, for some time to come.

  213. 1963
    Eastsider says:

    By Whatsmyname @ 1941:

    Reverse repo activity is mainly overnight transactions, so not really removing liquidity in any practical sense.

    Well, it’s not a problem if it is transitory. But if the reverse repo amount stays the same or more likely balloons over a prolonged period, it does remove excess liquidity from the system. Basically QE now accomplishes nothing and its effect is likely negative. Under current extreme QE, interest rate is likely negative (reverse repo imposes a zero bound). and inflation is up to 8%. How sustainable do you think it is? I’m most concerned about reduced purchasing power that hits the lower wage workers.

  214. 1964
    Whatsmyname says:

    RE: Eastsider @ 1942 – I think it is expected to be transitory, but that will require a much expanding economy. In the interim, the nature of ppp loan forgiveness means liquidity is coming back to the banks faster than loan business from the early stage expanding economy. So reverse repo probably will grow short term. Still, as long as it is centered in overnights, there this no removal of liquidity. It is just evidence of continued excess liquidity in the banks. The day that institutions can do better is the same day they don’t buy as much, and the Fed will scale back accordingly.

    QE can hit broader and different targets. Treasury acquisitions can support the treasury market specifically, and/or may be desired for potentially larger reverse repo base in the near future. Mortgage purchases may be signaling originators that there will be a residual investor market, even at these prices. This part is all conjecture, but it does illustrate that the Fed can use these multiple tools at one time for different goals.

    There are a lot of good things happening for workers right now. If we do see sustained inflation at the rates you’re talking, the populations most hard hit will be lower end fixed income people and non-investing “savers”.

  215. 1965
    Eastsider says:

    RE: Whatsmyname @ 1943 – Well, that’s the current narrative. But try squaring Fed Funds rate at 0% with inflation at 5% and likely much higher! Again, if you don’t trust the narrative, you should deleverage now.

  216. 1966
    Whatsmyname says:

    RE: Eastsider @ 1944
    Easy; Fed funds rate is determined by the Fed.

    But more than that, the market is about supply and demand. It does not guarantee an inflation cushion for lenders anymore than it does a profit for farmers. If the market is saturated, at least one lender will lend at a small loss to avoid holding for a larger loss. One of the strengths of our intermediary system is that this cyclical aspect of the market need not kill our banks.

    Here’s a super simplified thought experiment, but it captures the biggest part of what’s happening at, let’s say, 5% inflation:

    You lend the bank (deposit) $100 at 0.25%; the bank lends me $100 at 4.1% (investor rates).
    At the end of the year you pull your deposit for $100.25 (now worth $95.24)
    I pay the bank $104.10 (discounted value $98.90)
    The banker gets $3.85, ($104.10-$100.25) (discount value $3.66) to go toward overhead (including preservation of their capital) and profit.

    The bank lives on the margins. They are fine. It’s really about how many loans can they make. So long as there is excess liquidity in the bank, they are lending your capital, not theirs.

  217. 1967
    chip&dip says:
    Blackrock is buying every single family house they can find, paying 20-50% above asking price and outbidding normal home buyers. Why are corporations, pension funds and property investment groups buying…

  218. 1968
    Erik says:

    RE: chip&dip @ 1946
    I told you 2019 was the time to buy party snack. You argued and insulted me. It’s gonna go higher before we crash.

  219. 1969
    Blurtman says:

    RE: Whatsmyname @ 1945 – An appallingly bad transactional analysis. Banks lend a multiple of what is deposited. That is, banks create money.

    The reserve ratio, i.e., how much should be on deposit can range from 10% to 0%.


    You lend the bank (deposit) $100 at 0.25%; the bank lends me $1000 at 4.1% (investor rates).
    At the end of the year you pull your deposit for $100.25 (now worth $95.24)
    I pay the bank $1041 (discounted value $989)

    The banker gets $940.71, ($1041-$100.25) (discount value $894) to go toward overhead (including preservation of their capital) and profit.

    That is a quite a return on your $100 depost.

    Can you create money like this? The ability to create money is an incredible power. In whose hands does this power reside?

  220. 1970
    Whatsmyname says:

    RE: Blurtman @ 1948 – I start with the caveat that this was grossly simplified because I wanted to avoid the complexities of the leverage. It’s true that the bank lends more than its deposits, and the banks ultimately do better than I illustrated. But if your maxed out example was accurate today, the banks wouldn’t be floating in excess liquidity.

    You can check with FRED for US bank total assets and US bank total deposits, and you will find that they show $21.4T in total assets and $17T in deposits.** The lion’s share of money losing 5% to inflation is depositor money that costs the bank very little (before overhead). What’s more, at $0.5T, it’s only 3%, even of that.

    Illustrated but not explicitly called out in both our examples, is that in the “real return” concerns of Eastsider, the depositor gets back less money than he put in, and the borrower pays back less money than he borrowed in this scenario.

    **Intuitively seems low for leverage, and you can see higher leverage in the big banks. But also reflects very tough year after already tough years following the great recession. Looking at BAC for 2016-2018; deposit to asset ratio centers more in the 60% to 70% area. Also pertinent, demand deposits are only about 1/3rd of their deposits (savings and time are the majority). But they have a lot of other investments on the other side. In fact Gross loans are less than their deposits in every year.

  221. 1971
    chip&dip says:

    Dylan Ratigan of “tastytrade” with Jimmy Dore. What is going on? Blackrock? NAR? money printing? “The New Housing Crisis Is Stealing Homeowners Future”

  222. 1972
    Joe says:

    RE: Blurtman @ 1948

    You say, the bank takes in a $100 deposit then loans you $1000. Ask yourself where the bank got the $1000. No money is created. Bank loans and bank liabilities are created, but not money.

  223. 1973
    Erik says:

    RE: Joe @ 1951
    The federal reserve prints the money and gives it to the bank. $1000 per every $100 is the rule.

  224. 1974
    Blurtman says:

    RE: Joe @ 1951 – Of course commercial banks create money. Could you lend your neighbor your car and simultaneously still continue to drive the car?

    You have only $100 dollars in your wallet, and lend your friend $90. You then reach into your wallet and buy one $100 Meat Puppets reunion concert ticket, and your friend buys a $90 ticket to the same show.

    The giver of all knowledge, Wiki, acknowledges that commercial banks create money, as do many, many sources.

  225. 1975
    Whatsmyname says:

    RE: Blurtman @ 1953 – Banks can lend their deposits, money they borrow, and even equity – all subject to limiting regulations, But Joe is right. They can’t lend 10X deposits; rather 10% of deposits must be held in liquid form to protect against a run on the bank. Some of that cash could be borrowed to match timing of opportunities or other reasons.

    Going back to the original question, the primary inflation risk is with the depositors or the lenders to the bank.

  226. 1976
    ruxpert says:

    Markets felt the Fed needed a little ‘spice’ in their monthly meeting.

    Hot Sauce Kc GIF by Kim’s Convenience

    That’s why they dropped the ‘stagflation’ bomb this morning with high inflation and low demand.

    Wait, what???

    Yes, stagflation is in the air.

    A word that conjures up images of Japan in the 1990s (and Narnia if you’re a nerd).

    Economists define stagflation by three metrics:

    High inflation
    Low/stagnant demand
    High unemployment


  227. 1977
    Whatsmyname says:

    RE: Blurtman @ 1953 – Also, your analogies are flawed, (I won’t say appalling).

    In a truly analogous car bank, many people could lend a car to the bank with a return-of-car on demand proviso. The bank would lend most of the cars to other people, retaining enough to meet anticipated demand by the car depositors and a cushion. All cars are the same. You get a car back, not necessarily the one you put in. No one is driving the same car at the same time. But it would create the ability for more cars to be driven at the same time.

    If you have $100 in your wallet, and lend your friend $90 of it; you only have $10 left in your wallet. You would have to buy your $100 ticket using at least $90 from other sources. No magic.

  228. 1978
    ruxpert says:

    RE: ruxpert @ 1955

    Does this go along with BlackRock
    making a permanent class of renters. Making the middle class peasants who cannot afford a home ?

    Also btw, is BlackRock using FED &/or Taxpayer money?

  229. 1979
    Whatsmyname says:

    RE: ruxpert @ 1957 – It’s not Blackrock. It is the natural evolution of 40 years cutting worker pay, benefits, protections, and government subsidies (i.e. higher education, retirement perks); while consistently transferring an ever larger portion of the tax load to those same people.

    Wealthier people therefore have relatively more of the money, and whether they are trying to advance their position or merely keep up, they need to go farther and farther afield to find money generators to meet their goals. In this, they are like everyone else.

  230. 1980
    ruxpert says:

    RE: Whatsmyname @ 1958
    Via more miss-direction you miss-characterized Shiff vs ‘MMT’/Modern Monetary Theory … why would I start ‘believing’ in your wokeness now?

  231. 1981
    Blurtman says:

    RE: Whatsmyname @ 1956 – These analogies only go so far, but look, if you deposited $100 in your bank account, and the bank lent $90 of your money to your friend, You can buy that $100 Meat Puppets concert ticket, and your friend can buy a $90 ticket. And when your friend’s bank lends $81 of your friend’s deposited money to Stoner Johnny, he can buy an $81 Meat Puppets ticket and down the line.

    So from only a single deposit of $100, multiple people now have the money to see the amazing Meat Puppets perform. That is money creation.

  232. 1982
    Whatsmyname says:

    RE: Blurtman @ 1960 – Is my friend buying a $90 ticket with that loan, or is he depositing the $90 in the bank? It can’t be both.

    Btw, I am a great fan of money creation through banking. It’s just not as extreme, untethered, or unsound as some people would have us believe.

  233. 1983
    Whatsmyname says:

    RE: ruxpert @ 1959 – I don’t recall ever having time to create a misrepresentation of Peter Schiff, who does a fine job of misrepresentation by himself. But I did enjoy your video, and the irony of being called “woke” by a person trying to turn a big business into a scapegoat.

    I just briefly laid out 40 years of employment world observations, all of which are easily verifiable. While the conclusion is pretty inescapable from a factual standpoint, it took your brain to emotionalize it, and look for escape through distraction and attack. But why did that even happen?

    BlackRock is not preventing you from getting a house. It is you that is doing that by filling your head with this garbage when you need your wits about you. It’s harder for you starting out than it was for me, just as it was harder for me than for my parents generation. For now, accept it and concentrate on what to do if you want to move forward. If you don’t like the way things are, and you’re not willing to see why, who will take you seriously?

  234. 1984
    ruxpert says:

    RE: Whatsmyname @ 1962
    You continue the distraction racket, focusing on Schiff per se, rather than the MMT issue/Debate details.

    and further double-down w hypocritical woke-victim routine, further in lieu of the MMT debate details!

    The victim racket / misdirection routine, wokening ?

  235. 1985
    ruxpert says:

    RE: ruxpert @ 1957

    #Blackrock is outbidding the average American in the housing market. They’re backed by
    the Federal Reserve. Meaning they’re outbidding YOU with YOUR tax dollars. There is
    nothing “free enterprise” about that!
    Penny Passino
    Selller beware. When #Blackrock owns every home in a neighborhood, they hold onto each
    house. Because it’s never put up for sale, a permanent class of renters is created. Making
    the middle class peasants. There is no natural correction to the market

    Corporations Buying Neighborhoods So They Can Charge You Rent Forever

  236. 1986
    Whatsmyname says:

    RE: ruxpert @ 1963 – I really enjoyed the make-yourself-a-victim video as a response to my lack of response to MMT issues/details that you have not made a case for, or even identified for that matter. This is a level of irony I could only dream of.

  237. 1987
    Whatsmyname says:

    By Whatsmyname @ 1961:

    RE: Blurtman @ 1960 – Is my friend buying a $90 ticket with that loan, or is he depositing the $90 in the bank? It can’t be both.

    Btw, I am a great fan of money creation through banking. It’s just not as extreme, untethered, or unsound as some people would have us believe.

    Oh wait, I get it. He will deposit the $90, and then write a check for the ticket off of that. Very good, although this bank would need to be very fast to work through the chain before the checks start hitting, and collapsing the money total to what it was at the beginning. Still, where is my $1,000 you promised?

  238. 1988
    Blurtman says:

    RE: Whatsmyname @ 1966 – A zero reserve ratio, 100 dollars deposited, lent 9 times = $1,000. And yes, a zero reserve ratio is possible.

    And you are throwing up straw men arguments in your retreat. No one said it wasn’t regulated. Commercial banks create money. Glad you agree.

  239. 1989
    Whatsmyname says:

    RE: Blurtman @ 1967 – I’ve said for years here on this site that banks create money. My objection was to your reasoning that lending based on deposits can be 10X deposits, (or that it would be relevant today even if it could).

    What you are doing here is trying to build a money supply multiplier on the float. Ephemeral, and not a reserve banking issue, so I thought we were sufficiently down the silliness slope, I could throw a joke at you.

    No retreat, and no straw men here.

  240. 1990
    Whatsmyname says:

    RE: ruxpert @ 1964
    Define “backed by the Federal Reserve”
    Explain how tax dollars are going to BlackRock via the Fed.
    When BlackRock owns every house in the neighborhood….. it’s like an apartment complex. wooh.

    Please stop hyperventilating.

  241. 1991
    Eastsider says:

    By Whatsmyname @ 1961:

    Is my friend buying a $90 ticket with that loan, or is he depositing the $90 in the bank? It can’t be both.

    Yes, it can be both. You are just clueless.

    ‘A’ deposits $100 into the Bank. Bank keeps $10 for reserve and lends $90 to ‘B’.
    ‘B’ deposits $90 into the Bank. Bank keeps $9 for reserve and lends $81 to ‘C’.
    ‘C’ deposits $81 into the Bank. Bank keeps $8.10 for reserve and lends $72.90 to ‘C’.

    Now Bank has $1000 in deposits from ‘A’, ‘B’, ‘C’,…. and has $100 in reserve.

    ‘A’, ‘B’, ‘C’,… are mesmerized by massive profits made in meme stocks. They decide to yolo their money in AMC options. ‘A”s original $100 deposit becomes $1000 in option trades, which magnifies into $100,000 stock trade to push AMC stock to the moon. Now ‘B’, ‘C’,… all make enough money to pay back the loans and still have leftover to invest in BTC. Who says you can’t have your cake and eat it too?! (Housing is not much different btw.)

    Haha, reduce your leverage now!

  242. 1992
    Whatsmyname says:

    By Blurtman @ 1967:

    RE: Whatsmyname @ 1966 – A zero reserve ratio, 100 dollars deposited, lent 9 times = $1,000. And yes, a zero reserve ratio is possible.

    This scenario is a possibility if the reserve ratio is changed, AND a chain of 9 people borrow that money at bank loan rates in order to put it all into deposit accounts.

    So this is remotely possible theoretical. Yet you called it “appalling” that I did not use $1,000 on a lent 1 times – a very different and more problematic assumption.

    But the current market does not test reserve limits anyway. So I will recast it like this:
    You deposit $100
    I borrow $100 or $1,000, or $1,000,000.
    It doesn’t really matter because the banks have so much liquidity right now that your deposit is utterly irrelevant to what the bank can lend.

    This model was introduced to illustrate that the bank’s liquid funds are primarily the depositors property. Cost to the bank is the agreed upon price for deposits. Inflation based erosion of that capital is the depositor’s problem until such time as enough of them move their money to a better place that the bank will adjust its pricing. This is even true if the bank lends the deposits to another bank or the Fed at a zero rate. Model had the added benefit of dollar for dollar matching the results for borrowers, as the leverage decision was part of the conversation which spawned it.

    You missed the point entirely to incorrectly correct the model to something that reflects neither the structure of the system as designed, nor as it operates today. Why?

  243. 1993
    Whatsmyname says:

    By Eastsider @ 1970:

    By Whatsmyname @ 1961:

    Is my friend buying a $90 ticket with that loan, or is he depositing the $90 in the bank? It can’t be both.

    Yes, it can be both. You are just clueless.

    ‘A’ deposits $100 into the Bank. Bank keeps $10 for reserve and lends $90 to ‘B’.
    ‘B’ deposits $90 into the Bank. Bank keeps $9 for reserve and lends $81 to ‘C’.
    ‘C’ deposits $81 into the Bank. Bank keeps $8.10 for reserve and lends $72.90 to ‘C’.

    Now Bank has $1000 in deposits from ‘A’, ‘B’, ‘C’,…. and has $100 in reserve.

    ‘A’, ‘B’, ‘C’,… are mesmerized by massive profits made in meme stocks. They decide to yolo their money in AMC options. ‘A”s original $100 deposit becomes $1000 in option trades, which magnifies into $100,000 stock trade to push AMC stock to the moon. Now ‘B’, ‘C’,… all make enough money to pay back the loans and still have leftover to invest in BTC. Who says you can’t have your cake and eat it too?! (Housing is not much different btw.)

    Haha, reduce your leverage now!

    Haha. The person depositing the $90 is B. You totally failed to allow him to buy the $90 ticket, which was one of the 2 things you were going to prove he could do. Cool that he made so much money, but he missed the concert before before lightning struck. I did allow him to do both in post 1966. but I had to notice that when the check for the ticket clears (or immediately if he uses his debit card), the deposit account and the money supply also lose that $90. The post in question was about how these things would affect money creation, remember?

    Why not relink to post 1945 where you can see the arithmetic behind why someone borrowing in the circumstances you previously described actually pays back less “real” dollars than what he borrowed – even after paying interest. And, of course the opposite result for the depositor. Don’t get me wrong. I have a lot of money in deposits right now. I think of the inflation loss as insurance payment to protect the assets that are really making me money from the short term bumps and scrapes that life can bring.

  244. 1994
    ruxpert says:

    RE: Whatsmyname @ 1969
    remember what I wrote yesterday?:
    “You continue the distraction racket, focusing on Schiff per se, rather than the MMT issue/Debate details.”
    You who misdirects instead of dealing with detail of a subject topic, demands what from others?
    If you ever start behaving accountably, then you can be taken seriously.

    You present as a ridiculous hypocrite of a hyperventilating spreader-event of ‘nuanced nonsense’ ;-)
    (I don’t currently have a funny video to add, but am on the look-out)

    Start your redemption by explaining your various ‘nuanced’ lines and how they might be construed as critical analysis of the MMT issue/debate:

  245. 1995
    ruxpert says:

    The COVID Coup: The BlackRock Takeover Of American Interests


  246. 1996
    Whatsmyname says:

    RE: ruxpert @ 1973 – OMG. It was the rarest of occasions that I would wade through a 1:40 hour video. I certainly don’t have time to do that again. I will say that my comments on selected Schiff arguments are sincere, and should be straightforward when compared with the cited remarks. I will add that his use of shared opinions with Greenspan as support or proof gets no traction here, as I think Greenspan was FOS. I will also add that the MMT line that “correct” government policy will result in stable full employment might be true, but only in the Soviet sense. And who wants to deal with disinterested incompetents every day. On the whole, I think MMT is discredited by the numbers of errors I pointed to.

    If you disagree with my specific comments, tell me why they are wrong. Then I will tell you why you are wrong, or right, or misunderstanding my point. That’s the way this works.

  247. 1997
    ruxpert says:

    HIGH LUMBER PRICES | Who is Getting Rich?
    May 9, 2021
    Lumber Prices Are Falling Fast, Turning Hoarders Into Sellers

  248. 1998
    ruxpert says:

    RE: Whatsmyname @ 1975

    Acknowledged & noted:
    You fail to explain how your various ‘nuanced’ lines might be construed as critical analysis of the MMT issue/debate!
    Full Stop.
    Have a pleasant evening.

  249. 1999
    Whatsmyname says:

    RE: ruxpert @ 1977 – I was not crediting myself with particularly nuanced argument. I was objecting to Schiff’s unrelenting, doctrinaire assertions that business is somehow the one pristine area in human experience where no governor is needed, and no amount of suffering or impoverishment is too much to restore his idea of “balance” and cheap prices. But his prior failed forecasts of Armageddon were just delayed, because you know, stuff happened.

    You are right that I am not really doing much with MMT issues. In fact, I’ve been looking right past that part of your questions. This is because Schiff’s Austrian claptrap is so abhorrent, it compels a strong response on so many fronts. That just sucks up all the oxygen.

  250. 2000
    Joe says:

    I believe we have seen a five-year top in Seattle RE. The Fed is setting markets up for interest rate rises. Stimulus is ending. Looks like the infrastructure bill will be underwhelming. Stock market has topped. SPACS, Bitcoin, etc. are deflating. Jitters all over.

    Plus, the ridiculous RE price rises over the last few months appear to be a blow-off top. An active and experienced realtor told me the other day the price of houses seems to be correlating with buyer age. The younger the buyer, the more they pay. To me, this underscores the unsustainable level of naivete and FOMO we see in the markets. History teaches us that bagholders are more inexperienced, greedy and impulsive than bright.

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