JayB Posted March 25, 2008 Share Posted March 25, 2008 Source: http://seattlebubble.com/blog/ Quote Link to comment Share on other sites More sharing options...
Peter_Puget Posted March 25, 2008 Share Posted March 25, 2008 Hey Jay - what's the status of our wager? BTW you're punk for not climbing with me in Boston! Quote Link to comment Share on other sites More sharing options...
John Frieh Posted March 25, 2008 Share Posted March 25, 2008 “The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” (Time, December 1, 1947) “The days when you couldn’t lose on a house purchase are no longer with us.” (House Beautiful, November 1948) “The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.” (Business Week, September 4, 1969) “The median price of a home today is approaching $50,000 . . . Housing experts predict that in the future price rises won’t be that great.” (Nations Business, June 1977) “The era of easy profits in real estate may be drawing to a close.” (Money, January 1981) “In California . . . for example, it is not unusual to find families of average means buying $100,000 houses . . . I’m confident prices have passed their peak.” (John Wesley English and Gray Emerson Cardiff, The Coming Real Estate Crash, 1980) “If you’re looking to buy, be careful. Rising home values are not a sure thing anymore.” (Miami Herald, October 25, 1985) “Most economists agree . . . [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980s.” (Money, April 1986) “The baby boomers are all housed now. They are being followed by the baby bust. By 2005,real housing prices will sit 40 percent below where they are today.” (Harvard Economist, Gregory Mankiw, “The Baby Boom, the Baby Bust, and the Coming Collapse of Housing Prices,” Journal of Regional Economics, Fall, 1989) “Financial planners agree that houses will continue to be a poor investment.” (Kiplinger’s Personal Financial Magazine, November 1993) “A home is where the bad investment is.” (San Francisco Examiner, November 17, 1996) “Your house is a roof over your head. It is not an investment.” (Everything You Know About Money Is Wrong, 2000) “But the real question is, how will [housing prices] look longer term? As I’ve said in the past, I do not think that housing values will be higher five to ten years from now.” (Yale Economist Rob ert Shiller, quoted in Newsweek, January 27, 2005) Quote Link to comment Share on other sites More sharing options...
JANUS Posted March 25, 2008 Share Posted March 25, 2008 Hi JayB. For some reason that graph reminds me more of Scorched Earth than Missle Command. If you haven't checked out Scorched Earth it is a pretty fun game. Quote Link to comment Share on other sites More sharing options...
JayB Posted March 25, 2008 Author Share Posted March 25, 2008 Still on. Remember the terms I posted back in November? Maybe you can find the thread. Total Pot: $100. -I pay $50 if the Case-Schiller-Weiss index for Seattle is positive Y-O-Y between Nov.1 '07 and Nov.1 '08. -I pay $50 if the value of a house of your choosing (on Nov.1 '07) is positive Y-O-Y between those dates. The Zillow algorithm seems to be almost a random number generator, and must take refi valuations into account as well as actual sales, but there may not be any alternative. This one will have to be an honor-system deal for you since I don't recall a specific property being posted back in November. You pay $50 for the reverse of either. In the event that I'm out of state at that time, I'll leave the money behind so that it's available to pay for $100 worth of beer at the bar of everyone's choosing if I lose on both counts. Quote Link to comment Share on other sites More sharing options...
olyclimber Posted March 25, 2008 Share Posted March 25, 2008 Hey Jay, someone bought that house next door and moved in! Quote Link to comment Share on other sites More sharing options...
JayB Posted March 25, 2008 Author Share Posted March 25, 2008 Hey Jay - what's the status of our wager? BTW you're punk for not climbing with me in Boston! When were you in Boston? Not really worth getting the gear out here unless you are going to NH IMO... Quote Link to comment Share on other sites More sharing options...
JayB Posted March 25, 2008 Author Share Posted March 25, 2008 Hey Jay, someone bought that house next door and moved in! ! Be interesting to crack open the books and look at total costs from start to finish vs total sales price... Quote Link to comment Share on other sites More sharing options...
Jim Posted March 25, 2008 Share Posted March 25, 2008 So Seattle housing prices are down 5.5% from the peak. Given I'm not selling my house until after it's paid off in 10 more years, I'm not losing any sleep over this. Quote Link to comment Share on other sites More sharing options...
ericb Posted March 25, 2008 Share Posted March 25, 2008 Jay - what's driving your obsession with declining housing market...are you a smug renter? Quote Link to comment Share on other sites More sharing options...
JayB Posted March 25, 2008 Author Share Posted March 25, 2008 Only folks who should be worried at this point are people who bought with an intention to flip, or who engaged in cash-out refis near the peak - and need to sell before the market recovers. I think that there's a reasonable possibility that this list will eventually expand to include people who bought, cash-out refi'd, or HELOC'd themselves into peak-value debt between at least 2004 and 2007, and who need to sell before 2010/11. Percentage losses tend to hurt way more on the way down. Pay $100k, gain 20% and you're at $120K. Lose 20% from that point and you are $4K in the hole - before you factor in transaction costs, commissions, taxes, maintenance/remodels, inflation, etc. Quote Link to comment Share on other sites More sharing options...
KaskadskyjKozak Posted March 25, 2008 Share Posted March 25, 2008 Jay - what's driving your obsession with declining housing market...are you a smug renter? Schadenfreude Quote Link to comment Share on other sites More sharing options...
JayB Posted March 25, 2008 Author Share Posted March 25, 2008 Jay - what's driving your obsession with declining housing market...are you a smug renter? Nope. Renting just seemed (and seems)like the least-bad option for us for a while. I'd personally be happy to milk the tax adjusted difference between renting and owning for as long as it persists, but I suspect that that sentiment is not unanimous in our household, so who knows how long that'll actually last. I'm pretty confident that constraints on personal income growth will prevent rising rents from closing the bulk of the rent-own differential. I became interested in what was driving home prices when a combination of statistical data, and experiences from my own life made me wonder what the hell was going on in about 2002, and I started trying to figure out what was driving home prices. Nothing I came across suggested fundamentals were responsible, and it was an interesting puzzle to interpret. I just wasn't convinced that all of the articles of faith being bandied about at cocktail parties and in the less sober media outlets: "Buy now or be....priced out FOREVER..." "Home prices never go down..." "If you rent, you're just throwing your money away..." and the like had any basis in fact that would make them unequivocally true or logically compelling for all people at all times. The main concrete benefit of the downturn for me at the moment is that at social gatherings I no longer have to listen to people discuss their real estate investments, nor endure whatever used to follow when they discovered that we didn't own a home and had no interest in buying one for the forseable future. Quote Link to comment Share on other sites More sharing options...
Jim Posted March 25, 2008 Share Posted March 25, 2008 The main concrete benefit of the downturn for me at the moment is that at social gatherings I no longer have to listen to people discuss their real estate investments, nor endure whatever used to follow when they discovered that we didn't own a home and had no interest in buying one for the forseable future. Conversely I recently had a chat with some folks at a get-together who spilled out their tale of woe. Mortgaged up to their eyeballs on a teaser rate. Guess what after two years? Rates go way up and they can't unload the anchor around their neck. I nodded sympathetically while thinking WTF were you thinking? Certainly looks like your cautious approach while in the NE temporarily worked out just fine. Quote Link to comment Share on other sites More sharing options...
olyclimber Posted March 25, 2008 Share Posted March 25, 2008 well Jay, while you were a wall flower in that time frame some of us bought houses and did pretty well. when i bought my house i thought it was overpriced, but was a bargain given the market. now i'm astounded with what my house is "valued" at. heck, even the property+building taxes have far exceeded the value that we paid for the house. but fortunately for you i don't frequent these East coast social dinner circles you mention, or else you'd have to hear me go on and on about my squalid little hovel whilst sipping the chardonnay and eating all the mini-hotdogs. I actually DO feel like I'm glad I bought when I did, or else I WOULD feel priced out of the Seattle housing market. Its going to have to correct quite a bit more actually before it is back to a level where I think a home is a relative value as compared to what I paid way back in 2002 (or was it 03, I can't remember now). Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted March 25, 2008 Share Posted March 25, 2008 You would have been much, much better off had you bought in 2002. Quote Link to comment Share on other sites More sharing options...
tomtom Posted March 25, 2008 Share Posted March 25, 2008 Prices haven't bottomed out yet. Quote Link to comment Share on other sites More sharing options...
JayB Posted March 26, 2008 Author Share Posted March 26, 2008 well Jay, while you were a wall flower in that time frame some of us bought houses and did pretty well. when i bought my house i thought it was overpriced, but was a bargain given the market. now i'm astounded with what my house is "valued" at. heck, even the property+building taxes have far exceeded the value that we paid for the house. but fortunately for you i don't frequent these East coast social dinner circles you mention, or else you'd have to hear me go on and on about my squalid little hovel whilst sipping the chardonnay and eating all the mini-hotdogs. I actually DO feel like I'm glad I bought when I did, or else I WOULD feel priced out of the Seattle housing market. Its going to have to correct quite a bit more actually before it is back to a level where I think a home is a relative value as compared to what I paid way back in 2002 (or was it 03, I can't remember now). It's only the folks that confuse the results of good fortune with good analysis that I find tiresome. Pretty easy to tell who belongs in the former camp and who belongs in the latter category when you hear them lay out the analysis that supported the decision to buy at a particular time. Quote Link to comment Share on other sites More sharing options...
ivan Posted March 26, 2008 Share Posted March 26, 2008 the lesson of missile command: if i'm in charge of our nuclear defense, we're as fucked as elliot spitzer at a marti gras social Quote Link to comment Share on other sites More sharing options...
KaskadskyjKozak Posted March 26, 2008 Share Posted March 26, 2008 Source: http://seattlebubble.com/blog/ Looks like 4 mushroom clouds are about to appear Quote Link to comment Share on other sites More sharing options...
tvashtarkatena Posted March 26, 2008 Share Posted March 26, 2008 (edited) Prices haven't bottomed out yet. Hard to say, given the recent blip. You certainly don't know one way or the other, just like the rest of us, chowderhead. Edited March 26, 2008 by tvashtarkatena Quote Link to comment Share on other sites More sharing options...
Hugh Conway Posted March 26, 2008 Share Posted March 26, 2008 Prices haven't bottomed out yet. Hard to say, given the recent blip. You certainly don't know one way or the other, just like the rest of us, chowderhead. IN CASE YOU MISSED IT JAYB MOVED IN THE MIDDLE OF THAT TIME FRAME GREATLY INCREASING COSTS FOR SAID PROPERTY Quote Link to comment Share on other sites More sharing options...
tomtom Posted March 26, 2008 Share Posted March 26, 2008 Prices haven't bottomed out yet. Hard to say, given the recent blip. You certainly don't know one way or the other, just like the rest of us, chowderhead. Name calling by Tvash. Oh gosh. How mature. Quote Link to comment Share on other sites More sharing options...
KaskadskyjKozak Posted March 26, 2008 Share Posted March 26, 2008 Prices haven't bottomed out yet. Hard to say, given the recent blip. You certainly don't know one way or the other, just like the rest of us, chowderhead. Name calling by Tvash. Oh gosh. How mature. at least he's consistent. consistently an ass. Quote Link to comment Share on other sites More sharing options...
archenemy Posted March 26, 2008 Share Posted March 26, 2008 Namecalling is fun. I like it. And any of you little babies out there that can't take it should stay off the interwebs. Quote Link to comment Share on other sites More sharing options...
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