patrick.net

I have been reading this blog for a little over a year now and have decided I can't take it anymore, I need some help.

I've been renting for about 1.5 years now. I couldn't be happier, I live on a beautiful lake in a 1.5 million dollar house and I pay $2850/month. Hows that for return on investment for the owner. I've been preaching the housing bubble since March of last year when I sold my triplex. I try to explain the basics.....housing cost/income ratio, rental cost/mortgage cost ratio, etc.etc... Even my most educated and intelligent friends think I'm an idiot for renting and that you can't lose $ in realstate. Lately I've been pointing out what's happening in Fla, Ca, L.V., etc. Seattle is rarely mentioned on this blog nor in articles around the country.

Even though people are seeing the problems in other areas I am astounded that the new catch phrase in Seattle is that "Seattle is different". A week after a friend said that another close friend said "Seattle is Unique". I'm not hearing the famous "you can't build more land in Seattle" anymore, it's been replaced with Seattle is Special. Please help me with some arguments to explain why Seattle will not be spared the carnage.

Thanks for all of the great info over the last year

DTN.IQ. That's more than I need for what I do.

Please help me with some arguments to explain why Seattle will not be spared the carnage.

Seattle will not go down because it is coffee-locked. ;)

The best argument is that there should be no argument. I used to be offended by people saying that the Bay Area is different. Now I could not care less.

Reality will always assert itself over wishful thinking.

Now I have a worse worry: the proliferation of vegetarianism.

Thanks Peter, that's what I figured, no upside in a frindship whether I'm right or wrong. It's a little sad that talking about realstate is similar to talking about religion or politics, not worth the time

Thanks Peter, that’s what I figured, no upside in a frindship whether I’m right or wrong.

Very true. I have friends who are RE professionals and they own many investment properties. And they are turning vegetarians. :(

(They actually still want to eat meat again but they were shown a brainwashing video that conditioned them not to eat meat. Evil.)

It’s a little sad that talking about realstate is similar to talking about religion or politics, not worth the time

RE is worse than religion or politics because one's financial welfare depends on it. You cannot get a person to reconcile the fact that he has made a potentially stupid decision.

All the children are above average.

85% of all drivers are above-average drivers.

@Seattle Stooge,
Check out this website: http://www.benengebreth.org/housingtracker/

I find it interesting, as it lists ASKING prices and inventory by city (including Seattle). These are IMO very leading indicators, and you can even in a "Special" place like Seattle, inventory has gone up significantly. I think you guys are behind in the bubble time frame - what's happened in "leading" areas like LV, SD, Boston, FL (ie, actual price declines), is just starting to happen here in the BA, and will happen even later in Seattle. You guys have the luxury of watching the implosion unfold before it gets to you. Sort of like when my friend was chilling in a field at Stanford and saw the wavefront of the Loma Prieta earthquake come across the field from one end to the other.

I was a stockbroker from 98-02 and this feels earily similar, wont make the same mistakes twice

thanks skibum, I'll check it out. btw are you in seattle?

It’s a little sad that talking about realstate is similar to talking about religion or politics, not worth the time

RE is worse than religion or politics because one’s financial welfare depends on it.

On the other hand, one's soul's eternal welfare could potentially depend on religion! ; )

On the other hand, one’s soul’s eternal welfare could potentially depend on religion!

Yeah but those who do not believe in religion do not believe in such "eternal welfare" anyway. ;)

SeattleStooge Says:

thanks skibum, I’ll check it out. btw are you in seattle?

Nah, but it IS a beautiful place. I've stayed up there a bunch with friends, usually on the way up to Whistler for some skiing.

Peter P Says:

Yeah but those who do not believe in religion do not believe in such “eternal welfare” anyway.

But maybe it's a good idea to hedge your bets and join a religion or two, just in case you're wrong.

But maybe it’s a good idea to hedge your bets and join a religion or two, just in case you’re wrong.

With religions, two is not necessarily better than one. :)

TheFinalExam.wmv (1720.3 KB)
Sorry if the link doesn't work but if you haven't seen this is great. Picking a religion is easynow.

damn it didn't work, help

BTW, doesn't hedging implies a lack of faith?

Will the Hell still be a horrible place if it freezes over?

So I am at the local Yamaha dealer attempting to buy tires for Mrs-X's motorcycle. I over hear one of the salespeople talking to Tom McShyster, realtwhore. McShyster said "yeah nothings moving, us experienced agents are still making money but there are too many agents, all the new agents aren't making any money".

Interesting, very interesting. When you over hear a local realtwhore saying that the "new" agents will be purged it is truly over.

@HARM, cat and dogs are currently living together at my pathetic rental.

SeattleStooge,

I hope you'll understand if many of the posters here do not fall all over themselves when you mention "not making the same mistakes twice". As an equity market crash survivor my damn self I think I've milked what little empathy this blog has long ago. (Your observations do not fall on deaf ears).

*astrid did an entire dissertation on why Seattle will fare better than most markets and surprisingly NONE of it for the typical realt-whore BS we are usually spoon fed. None of the "mild winter, openess to innovation, SBUX, MSFT and BA (although no longer) headquartered here" type stuff. More to do w/access to deep water ports and rec. the brunt of the trade growth w/China being the life raft rather than the "Microsoft millionaire receptionist" theory. She can tell it better than I and it actually made sense.

Don't get me wrong, they're still gonna get a spankin' but from a practical standpoint may have a better claim to recovery.

SeattleStooge Says:

> I have been reading this blog for a little over a
> year now and have decided I can’t take it
> anymore, I need some help.

We are always happy to help…

> I’ve been renting for about 1.5 years now.

I’ve been renting for twice as long as you, and probably sold a little early since I waited too long in the early 90’s and lost everything (and I still have a hard time believing that my little Peninsula home sold for over a million) …

> I couldn’t be happier, I live on a beautiful lake in a
> $1.5 million dollar house and I pay $2850/month.

I’m up the hill from a beautiful bay and paying just a little more than you in a flat that would sell for about the same to some TIC idiot.

> How’s that for return on investment for the owner?

Your owner is doing better than the guy that owns my sister’s $1.5mm rental in San Mateo that rents for just over $2K a month…

> I’ve been preaching the housing bubble since
> March of last year when I sold my triplex. I try
> to explain the basics…..housing cost/income
> ratio, rental cost/mortgage cost ratio, etc.etc…

Here is where we can help, you do not want to do this… You will have better luck trying to convince a bunch of Southern Baptists that the Bible is wrong and the world is not 2,500 years old (or was created in 7 days) than you will having trying to convince a typical homedebtor that homes have any chance of dropping in value…

> Even my most educated and intelligent friends think
> I’m an idiot for renting and that you can’t lose $
> in real estate.

All “educated” people are not “intelligent”… There are a lot of super smart guys with PhDs in astrophysics who are part of “creation science” groups who still believe that the earth was created in 7 days…

> Lately I’ve been pointing out what’s happening in
> Fla, Ca, L.V., etc. Seattle is rarely mentioned
> on this blog nor in articles around the country.

Don’t do this socially, people will hate you and not invite you to parties. The only thing worse than a guy talking about the housing bubble at a party is someone talking about how bad things are in Africa (who also hits you up for money)…

> Even though people are seeing the problems in
> other areas I am astounded that the new
> catch phrase in Seattle is that “Seattle is
> different”.

Seattle is different than the Bay Area in that the housing is about half as expensive on average and homes have “lake” and “sound” views rather than “bay” and “ocean” views. The good news is that people in Seattle make more than half as much as Bay Area people on average so you guys are only “way way” out of line with historical valuation multiples and not “way way the f*uck” out if line with historical valuation multiples like we are in the Bay Area…

> A week after a friend said that another close
> friend said “Seattle is Unique”.

Seattle may be unique, since unlike most other cities in the Pacific Northwest it actually has some good looking women, but “unique” will not help the huge number of Seattle people who bought old fixer uppers in places like Ballard with neg am IO loans that will soon reset to above their total take home pay…

Ahem,

On "distress".

How is it that one can have a "moderate level" of distress?

"Captain, the ship is taking on water and the aft generator is out of commission".

But, we still have our forward generator functioning?

Send up our "moderate distress" flair!

People c'mom! Distress is distress. When the bow is about ready to be lost beneath the waves do we have a "I'm totally freaking out" distress flair?

I intend to create a new super pet by genetically splicing a cat and dog. Think of it! An animal with the loyalty of a cat, and the cleanliness of a dog! Who wouldn’t want one?

:lol:

Think of it! An animal with the loyalty of a cat, and the cleanliness of a dog! Who wouldn’t want one?

We do have a dog-like cat. She can fetch small objects like hair ties. She is loyal and is always around us. She is very clean and she smells nice all the time. She is independent and she is a cat.

Her patterns are not symmetrical though. Otherwise she would be a show cat.

Send up our “moderate distress” flair!

LOL

It seems a young medical doctor I used to know has now become a realtor - I just saw his picture and name in the latest edition of the MV Voice. How odd.

I think his wife operated on his wallet when they got divorced. But he's only in his 30's. I wonder if this is a part time gig or if he has left medicine for the cult of RE.

The ship will sink, but we have “some” lifeboats.

LOL :lol:

Ensign: we have received a moderate distress signal from within the delta quadrant.

Starfleet capitain: set a course, minimum warp

I was driving to work this morning going by oh so many for sale signs and the thought came to me "you know, they just are not making any more Baby Boomers, so whose going to buy all these places?"

fyi: There's some asshat going around making spurious posts as "Surfer-X" at Housing Panic, Ben's blog, Calculated Risk. This is NOT our beloved VP of sin and Scourge of Boomerdom, though.

Moderate: Your mast is down, the engine is out, and you've lost your rudder.

Distress: There's also a hole in the boat.

Personally, I think if the labor market stays strong, there is a good chance for a soft landing in most places. Agree or disagree?

I am not an econ person. But if the labor market stays strong, there should be soft landing in the most desirable places.

What is a soft landing anyway?

I soft landing is a landing that is soft.

Soft landing is a marketing term with sufficient feel-good factor.

Don’t do this socially, people will hate you and not invite you to parties. The only thing worse than a guy talking about the housing bubble at a party is someone talking about how bad things are in Africa (who also hits you up for money)…

Seriously. That's why I had to stop inviting Bono over. Man, what a drag.

*unlurks*
@Robert Cote

ROTF

@Peter
I want your cat, allergies not withstanding. If you can't keep her anymore, ship 'er over here!
*relurks*

The good news is that people in Seattle make more than half as much as Bay Area people on average so you guys are only “way way” out of line with historical valuation multiples and not “way way the f*uck” out if line with historical valuation multiples like we are in the Bay Area…

Incomes:
SEATTLE-TACOMA-BELLEVUE, WA: $70800
SAN JOSE-SUNNYVALE-SANTA CLARA, CA: $97100

Home Prices:
Seattle: $394,950
San Jose: $705,000

Ratio:
Seattle: 5.58x
San Jose: 7.26x

But remember, San Jose is much more special...

I want your cat, allergies not withstanding. If you can’t keep her anymore, ship ‘er over here!

Both of my cats have Canadian ancestry. One was born in Calgary.

I am sure you can find dog-like cats there. Just look for Ragdolls or Siberians.

BTW, Siberians are hypoallergenic.