Misleading Media on the real stats on house prices (Seattle: bank owned, short sales)

[Fallingwaters]

Originally Posted by Condorll

Fallingwaters, try not to mix your political affiliation with the current real estate situation in Puget Sound. They are not connected.

If you read that in context of what LordBalfor (Ken) wrote, it was a comment on the recent national vs local press -- not getting political (the Reagan allusion was a joke, mainly). My follow up post to Irrational Exhuberance's later comment was but that's because he brought something else up that was political.

Also, it was sarcastic; I don't really think we're "doomed." My other comments on the local housing market will reflect this.

[70Ford]

but when sellers get disgusted and take their houses off of the market

When their ARM explodes, they are selling to get out of the loan. If they take it off the market, they get foreclosed on. If they leave it on the market, they can (hopefully ) sell it, "short" sell it (sell for less than they owe) or get foreclosed on. When your stuck in a spot like that....you can't take it off the market.

They better sell, and sell fast.

[irrational exuberance]

Originally Posted by Fallingwaters

Not sure if you're joking or if I've just gotten to the point in life that 1200 bucks isn't that exciting (and no, none of you are getting my $1200 just because I said that, sure, I'll take it, but I'll passive aggressively use it to go shopping in Canada, hehe). I'd rather have long term job stability and an affordable house than a "shot in the arm" that might pay down .3% of the principal on a home loan. I'm more interested in my tax rebate on interest paid as an itemized deduction.

Other than the house, I have no other debt -- however, it's not about me, is it?

The same problems you've noted were caused by deregulation and the sub-prime lending industry (that could have been kept under control had anyone in govt bothered). I seem to remember, in 2003, hearing that Bush had "this plan to help people who have the income (note that, with many lenders "income" got pencil-whipped and creatively computed a lot), but not the downpayment, more easily 'own their own homes'" (read, get a risky high interest loan with little to no money down) -- I'll have to look that one up, but it seemed like kindling to the current meltdown.

However, again, I'm not sure if you were kidding or not.

Added, here it is, from HUD's website, article early 2004:
Statement of John C. Weicher - HUD

I was being sarcastic but not really. On a political tip, The Bush adminstration shows what happens to the economy when you have a spend, spend, spend agenda. The fiscal policy is in place for a reason. But when you got a government spending over a trillion dollars on 2 wars, that takes away from decreased government spending. When you have politician promising tax cuts to get into office they have to deliver on something. So basically Bush is running a contradicting fiscal policy. More goverment spending and less tax revenue coming in. When the real fiscal policy should be less government spending and tax cuts or more government spending and no tax cuts......people are so scared of taxes that they will vote for whoever can give them a tax cut although those are the same people not to regulate industries that are inelastic meaning, oil and energy is something we need so we have no real price sensitivity to price change,we pay what they charge or dont work and drive our cars and heat our homes. The federal reserve is in a catch 22, the monetary policy in place now is to ease the bankruptcy of banks by lowering the federal funds rate and discount rate which in turn lowers the prime rate helping everyone borrow money for cheaper. Only problem is that inflation is at the highest level in 17 years so how do you hedge that? Rate hikes. But you do that and banks for positively go bankrupt by adjusting a bunch of loans at really high rates. I am glad I am not in the federal reserve right now but I am a firm believer in the zero sum game so just because all kinds of people are going foreclosure and banks and builders are a check from bankruptcy, My wife and I get to buy a house at 2-3 year low prices and get mortgages at 2003-4 interest rates. Its sucks but it all about timing

[mthomson]

I'm amazed at the way this forum works. I give hard, factual #'s with a cited source, and am told I'm lying and twisting the facts. Irrational Exuberance gives numbers such as "$30k+" and "25%+" with the only source being "driving around neighborhoods" and he's being viewed as an expert here.
That's a great example of why our country is so worked up right now.
IR's stat of sales dropping 25% quarterly is ridiculous. For those who care, here are the actual #'s.
Gig Harbor--1st Q 146 sales, 2nd Q 220 (+51%), 3rd Q 186 (-15%), 4th Q 101 (-46%).
Tacoma-- 1st Q 856 sales, 2nd Q 1042 (+22%), 3rd Q 835 (-20%), 4th Q 592 (-29%).
Port Orchard--1st Q 223, 2nd Q 278 (+25%), 3rd Q 238 (-14%), 4th Q 172 (-28%).

So as you can see, sales ARE declining, our market ISN'T great, but to say we've had 25% quarterly decreases is flat wrong. These #'s are actual #'s for ALL houses listed and sold via NWMLS, which only doesn't include For Sale By Owner homes (estimated less than 1% of all sales, but I have no source for that).
I've said all I can say. You can continue to believe ambiguous, sourceless hype or take the numbers for what they are.

[irrational exuberance]

Originally Posted by mthomson

I'm amazed at the way this forum works. I give hard, factual #'s with a cited source, and am told I'm lying and twisting the facts. Irrational Exuberance gives numbers such as "$30k+" and "25%+" with the only source being "driving around neighborhoods" and he's being viewed as an expert here.
That's a great example of why our country is so worked up right now.
IR's stat of sales dropping 25% quarterly is ridiculous. For those who care, here are the actual #'s.
Gig Harbor--1st Q 146 sales, 2nd Q 220 (+51%), 3rd Q 186 (-15%), 4th Q 101 (-46%).
Tacoma-- 1st Q 856 sales, 2nd Q 1042 (+22%), 3rd Q 835 (-20%), 4th Q 592 (-29%).
Port Orchard--1st Q 223, 2nd Q 278 (+25%), 3rd Q 238 (-14%), 4th Q 172 (-28%).

So as you can see, sales ARE declining, our market ISN'T great, but to say we've had 25% quarterly decreases is flat wrong. These #'s are actual #'s for ALL houses listed and sold via NWMLS, which only doesn't include For Sale By Owner homes (estimated less than 1% of all sales, but I have no source for that).
I've said all I can say. You can continue to believe ambiguous, sourceless hype or take the numbers for what they are.

I am viewed as an expert because I state the obvious and not things that prop up my agenda.....My living is not made by selling houses. I look at this from a macroeconomic prospective to understand why the market as a whole is going down as look at your own states Gig Harbor Q2 51% 3rd Qtr -15% 4th Quarter -46% so by my count that is negative for the year. I was talking about 3rd and 4th qtr for sales btw. You say demand is going up and that why prices increase yet when respond to it you show sales as negative. So if sales dont equal demand what do they equal? If you actually looked at things on a bigger level the smaller things start to add up. So I will tell you what you keep investing in a real estate since prices are going up. I will buy my house expect a 3-5% appreciation rate like it has been historically and call it a day. Your stats further my point of how increased supply ie less sales with alot of inventory on the market despite a halt in construction, decreased demand ie less sales = decreased prices ie. bigger buyer bonuses and incentives to buy house as well as price decreases every month. MThomson our country is so worked up right now because of people like you who make their decisions based solely on optimism and not fundamental facts/values/theory and historic trends. Ignorance = Billions of dollars for corporations and businessman. Informed/Educated = Not getting ripped off and going in way over your head.

[irrational exuberance]

Mthomson, does this sound familiar...........
QUOTE]"Things are screwy because while supply has increased, demand has also increased. More people are still moving in to Washington each year, we're not seeing an exodus like many states where the market is struggling. So supply is up, as is demand, which is keeping prices up. You can throw your theories at me all day, but I'll counter them with reality. Supply has outpaced demand, which is why prices have slowed."[/quote]

Out of your own mouth or typed by your own fingers, but yet you just posted stats to completely contradict what you said then you question my validity. You should be a politician they are known for saying something then completely flip flopping when the time is right. You should listen/learn from the theories I throw at you. You have Masters in Education, visualize it, draw a supply and demand curve with Price and Quantity of the X and Y axis then look at the equilbruim price and determine what shifts the supply curve and what shifts the demand curve. Because if you truly understood economics 101 you wouldnt make the statements you make. In your world you like things to be the way they are because that is the way they are. In my world I like to understand why things are the way they are.

[mthomson]

Your last post is your best. We live in totally different worlds. You live in a world where big words make you big time. You live in a world where people are experts in areas where they don't work, and apparently the industry people work in they know nothing about.
I'm not seeing the contradictions in what I said. You said that we are seeing 25%+ quarterly drops. No, we're not. One quarter of 4 saw a 25% drop. One quarter of 4 saw an increase, too, but you don't mention that. Overall, for the year, there was a decline in # of sales, but not 25%.
How can I say that demand has increased if sales decreased? Investors are out of the picture now. Our population is still growing, more people live in W Washington now than at the start of '06 or '07. That creates increased demand. But very few people are buying multiple houses as investors, thus sales are down.
Prices are still up.
Am I an optimist? Yep. I have every reason to be. Not one house I've ever bought, nor any of my clients homes have lost money.
Thanks.

[irrational exuberance]

Originally Posted by mthomson

Your last post is your best. We live in totally different worlds. You live in a world where big words make you big time. You live in a world where people are experts in areas where they don't work, and apparently the industry people work in they know nothing about.
I'm not seeing the contradictions in what I said. You said that we are seeing 25%+ quarterly drops. No, we're not. One quarter of 4 saw a 25% drop. One quarter of 4 saw an increase, too, but you don't mention that. Overall, for the year, there was a decline in # of sales, but not 25%.
How can I say that demand has increased if sales decreased? Investors are out of the picture now. Our population is still growing, more people live in W Washington now than at the start of '06 or '07. That creates increased demand. But very few people are buying multiple houses as investors, thus sales are down.
Prices are still up.
Am I an optimist? Yep. I have every reason to be. Not one house I've ever bought, nor any of my clients homes have lost money.
Thanks.

Where did I say all quarters had a drop of 25%. I started really looking at the market in September/October when I started looking. I think that constitutes the 3rd and 4th quarter. You claim that population growth means more houses sold? I say that population growth is another reason why the demand isnt going up. You are on these post how many people are saying they are renting for 2 years because of this unstable market? And your point about investors is something I said months ago. At one point 40% of the housing market in Pierce county. But the real blow is the subprime loans that are gone. Its the people who act on the my forum name that created this mess along with crooked banks. When you have people who see a trend of making $40k + in one year on a house they start to believe that they are investors and start the irrational exuberance cycle that Alan Greenspan and Robert Schiller wrote about. For no other reason than optimism people turn into cattle and herd in one direction. I dont know what advice you give your clients but I was always taught to understand the market. I follow warren buffet, I dont invest in what I dont understand. I dont need to know about the housing market, I know economics and Time value money/investing....those are the things far more valuable than assessing house values and pushing paperwork. The people I learn from are multi millionaires with their own brokerages. If you look at the housing market or home ownership a house isnt an investment as much as it is a liability..that is if we assume liabililty = taking money out of your pocket and asset = putting money in your pocket. Only when you own a house does it become an asset but you will have paid almost $750k in interest. So my friend be optimistic but Im not as optimistic as I am opportunistic....only instead of the myriads of ignorant involved in the housing market I will do research and let historical trends guide me....after all when people are out there selling their life away I will be there to buy low and sell high because I had the patience and common sense to see that 15% appreciation rates for 4 years wont sustain when the average income growth annually is under 5%. Check those stats.

[irrational exuberance]

Originally Posted by irrational exuberance

Where did I say all quarters had a drop of 25%. I started really looking at the market in September/October when I started looking. I think that constitutes the 3rd and 4th quarter. You claim that population growth means more houses sold? I say that population growth is another reason why the demand isnt going up. You are on these post how many people are saying they are renting for 2 years because of this unstable market? And your point about investors is something I said months ago. At one point 40% of the housing market in Pierce county. But the real blow is the subprime loans that are gone. Its the people who act on the my forum name that created this mess along with crooked banks. When you have people who see a trend of making $40k + in one year on a house they start to believe that they are investors and start the irrational exuberance cycle that Alan Greenspan and Robert Schiller wrote about. For no other reason than optimism people turn into cattle and herd in one direction. I dont know what advice you give your clients but I was always taught to understand the market. I follow warren buffet, I dont invest in what I dont understand. I dont need to know about the housing market, I know economics and Time value money/investing....those are the things far more valuable than assessing house values and pushing paperwork. The people I learn from are multi millionaires with their own brokerages. If you look at the housing market or home ownership a house isnt an investment as much as it is a liability..that is if we assume liabililty = taking money out of your pocket and asset = putting money in your pocket. Only when you own a house does it become an asset but you will have paid almost $750k in interest. So my friend be optimistic but Im not as optimistic as I am opportunistic....only instead of the myriads of ignorant involved in the housing market I will do research and let historical trends guide me....after all when people are out there selling their life away I will be there to buy low and sell high because I had the patience and common sense to see that 15% appreciation rates for 4 years wont sustain when the average income growth annually is under 5%. Check those stats.

Let me clarify a couple things because I know you are the type to correct grammar rather than look at the point I am trying to make. I started actually paying attention to housing trends in September/October timeframe. That is when I started paying attention to sales and median prices etc. When I was saying I dont understand the market I mean I understand the most important mechanism in any market....money and investment standpoint,obviously the most important factor in purchasing a home and what anyone to actually purchase a house. I understand the market but from a more theoretical viewpoint and not from using MLS, giving house tours, filling out purchasing agreements etc. And the last point. After interest you end up paying $750k for a house that cost about $330k

[Kim Emmons]

Here's the skinny:

Median price for all of King County for December 2006 was $525,000 and the median for all of King County for December 2007 was $499,800. This data comes from the Northwest MLS. Our average market time in December 2006 was 84 days on the market and December of 2007 was 106 days on the market.

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