The impending Seattle housing market collapse. (Puyallup, Mill Creek: 2011, condos, broker)

[Condorll]

Originally Posted by drewba

There's an interesting article in the Seattle Times today that ties much of the rise in housing prices to government regulations such as the Growth Management Act, Critical Areas Ordinance and permitting processes. The inflation adjusted median price of homes in the Seattle area increased from $221,000 to $447,800 between 1989 and 2006. According to this UW study, almost $200k of that increase was due to regulations.

Business & Technology | UW study: Rules add $200,000 to Seattle house price | Seattle Times Newspaper

That would mean without the regulations pricing would have gone from 221 to 247 in 17 years? That's nonsense. Whoever wrote that article and/or is interpreting that data needs a serious education in math and real estate.

[drewba]

While I have a hard time fully accepting the researcher's findings given the dramatic run-up of the past 7 years, the median numbers quoted are inflation adjusted. Thus, the actual median price was far lower than $221,000 in 1989.

[studioiduts]

We have a sub-prime financial system. All these mortgages were wrapped up in investment packages. And it wasn't just residential mortgages. It was also commercial mortgages, credit cards, student loans, equity loans and car loans. All these were divided and chopped up into SIVs(Structured investment Vehicles) and CDOs (Collateralised Debt Obligations). These were sold off as investment packages all over the world as well as through public companies for 401k's. These were basically, fraudulently rated as AAA through Moodys, colluding with the big banks, in order to sell them. Now they are all blowing up. High foreclosure rates. High delinquent rates. Repos. People walking out on there homes and mailing in the keys to the bank. All the commercial lending has stopped. None of the banks now trust each other because no one knows what kind of toxic garbage is on each banks books. It is spreading into the prime lending as well. You also have the municipal bonds that could potentially blow up. They were financed by sales tax, property tax and corporate tax. They were insured by outside organizations (monolines) to be guaranteed. Well,now you have house prices falling, so proerty taxes are falling. We are in a recession with stagflation and now spending way down. So low sales tax collection. PPI is high as commodities and commercial supplies are inflating in price, combined with low sales. Corporate profit taxes are on decline. This leeds to a default by the local gov on muni bonds. The insurers don't have enough money to cover a default. The bonds won't be paid. Combined with a negative economy, high inflation, no credit, high unemployment, a potential stock market crash, an outrageous deficit and the possibility for people's life savings of 401k's to be wiped out, it's a nice storm that's brewing.

Home sales are just a small part of everything. You can't buy one without credit unless your paying cash. All the lending institutions are bankrupt. All the "stimulus" isn't going to do a thing. It's all just putting off the inevitable. And it will hit that much harder in the end.

Don't buy anything. Rent at a low rate and wait things out. The whole market is toxic at the moment.

see:

RGE - The Coming Muni Bonds Default Crisis…and the Monoline Downgrade Saga…

RGE - The Worsening Credit Crunch...

The Daily Reckoning

RGE - The Rising Risk of a Systemic Financial Meltdown: The Twelve Steps to Financial Disaster

Mike Whitney: Henry Paulsen's Wild Ride on the Economic Hindenberg

[Condorll]

Well,now you have house prices falling, so proerty taxes are falling.
.....................................

Where do you renters get your info?

Seattle Property Taxes are not falling, they have gone up a few bucks and so has the appraised value for 2008 (I just got my 2008 tax bill yesterday, appraisal up 9 %, mill rate down, Total Property taxes up 1% for 2008).

Doom and Gloomers will be renters forever.

I saw the same thing in the 70's, late 80's and now again. Bought my first home with a 1st mortgage at 13% and a second mortage at 18% back in the late 70's. A little short term pain for major long term gain.

This is the buying opportunity of a lifetime with 5.7% mortgages fixed for 30 years!

[jenlion]

5.7? We locked in 5.25 a couple weeks ago.

[studioiduts]

5.x percent on an asset for 30 years that will drop in value 20 -30% within the next 2 years. Add on to that, that if you do stay in it for life(you won't) you pay 3 times the borrowed amount because of the interest. And inflation running 12%. Good luck with that, sucker.I don't understand how you think you are getting any value out of that. That's real estate speculation. And that's exactly what's unwinding right now.

[Condorll]

Originally Posted by studioiduts

5.x percent on an asset for 30 years that will drop in value 20 -30% within the next 2 years. Add on to that, that if you do stay in it for life(you won't) you pay 3 times the borrowed amount because of the interest. And inflation running 12%. Good luck with that, sucker.I don't understand how you think you are getting any value out of that. That's real estate speculation. And that's exactly what's unwinding right now.

So, you are the "Big Businessman" that moved from Atlanta to Portland to open a music studio and failed. Got raked over on a lease among other problems.

Seems to me before you start touting your so called "financial expertise", posting nonsense statistics and calling people suckers, you need to take a good hard look at your own failures.

Free advice is just what it is...consider the source.
Studioiduts is not a credible source.

My 2 cents

[oldie]

While it's easy to look for someone to blame for the housing prices, all we need to do is get in front of a mirror- the market is set by the public. Someone is paying those insane prices. It's like with professional athletes. We moan that they are overpaid by millions of dollars. Well, technically they're not: there are owners willing to shell out for them, so that's what they're worth!

[70Ford]

Originally Posted by oldie

While it's easy to look for someone to blame for the housing prices, all we need to do is get in front of a mirror- the market is set by the public. Someone is paying those insane prices. It's like with professional athletes. We moan that they are overpaid by millions of dollars. Well, technically they're not: there are owners willing to shell out for them, so that's what they're worth!

Hrmm...what is the market/public saying now?

The median home-sales price in Washington during the fourth quarter was $293,900, down 2.5 percent from the final quarter of 2006. That's the first year-to-year decline since the center began compiling the data in 1994, Crellin said.

In King County, sales were down 28.1 percent to 24,170 and the median price dropped 0.2 percent to $439,000. In Snohomish County, sales were off 35.8 percent to 8,620, while the price rose 2.4 percent to $363,400.

Pierce County saw a 35.1 percent drop in sales to 10,600 and the median price dropped 0.5 percent to $275,000, while sales were off 23.6 percent in Kitsap County to 3,430 homes, with the median price down 2.6 percent to $272,600.

Real Estate | Home sales, prices decline across Washington | Seattle Times Newspaper

[baba_yaga]

Sales are down in King County because people aren't buying as indiscriminately as when it was a seller's market. Prices are down 0.2%, that's nothing. Seems like a more normal market to me. The best homes in the better locations are still going STI within a few days.

Of course, I last bought in 1995 when interest rates were high and buyers had a lot of choices.