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Still More Evidence The Seattle Housing Market Has Hit Some Sort Of Threshold

A report from the Seattle Times in Washington. “In June, the median home price in Seattle fell to $781,000, a 3.9% drop from June of 2018, according to the Northwest Multiple Listing Service. In King County overall, median prices dropped by 2.3% in June from the same period last year, to $695,000. In the Queen Anne-Magnolia neighborhood, the median price in June fell to $1,107,500, down 8.1% from June 2018. In the Ballard-Greenlake neighborhood, the median price settled to $799,950, which is 6.4% lower than a year ago. In Redmond, the median home price fell to $840,000, down 10.2% from a year ago.”

“June’s year-over-year decline is a marked change from the double-digit price growth of the last several years — and still more evidence that the Seattle area housing market has hit some sort of threshold. The King County market is ‘experiencing a bit of a hangover,’ says Mike Larson, the president at Allen Realtors in Lakewood.”

“The cooling Seattle-area market is rippling across the real-estate sector. Stephen Cancler, who owns Full House Inspections Services, says his business is down around 25% since 2017, when a booming market pushed up demand for inspections. ‘I’d like to see it come back up a bit,’ he said.”

This Post Has 89 Comments
    1. Do you think they were too dumb to hedge their top dollar real estate investments at the second Housing Bubble peak?

      1. Mortgage Lender Stearns Holdings Files for Bankruptcy

        ‘Stearns Holdings LLC, based in Santa Ana, Calif., filed for chapter 11 protection Tuesday morning in U.S. Bankruptcy Court in New York, listing assets and liabilities each in the range of $1 billion and $10 billion.’

        https://www.wsj.com/articles/mortgage-lender-stearns-holdings-files-for-bankruptcy-11562661890

        Tiptoe through the window
        By the window, that is where I’ll be
        Come tiptoe through the tulips with me

        Oh, tiptoe from the garden
        By the garden of the willow tree
        And tiptoe through the tulips with me

        Knee deep in flowers we’ll stray
        We’ll keep the showers away
        And if I kiss you in the garden, in the moonlight
        Will you pardon me?
        And tiptoe through the tulips with me

        Knee deep in flowers we’ll stray
        We’ll keep the showers away
        And if I kiss you in the garden, in the moonlight
        Will you pardon me?
        And tiptoe through the tulips with me

  1. Are you concerned the Fed may choose a thumbs down on any July rate cut, whatsoever, to reaffirm its political independence?

      1. Wall St. and the media pumpers “decided” there should and will be a rate cut. Cutting rates at all-time stock market highs during the largest credit bubble in the history of the world is the most delusional, irresponsible idea I’ve ever heard of.

    1. Is easy money losing its heft?

      Easy-money policies are sweeping the globe — one big problem: they’re losing potency
      By Mark DeCambre
      Published: July 3, 2019 1:11 p.m. ET
      Getty Images
      International Monetary Fund (IMF) Managing Director Christine Lagarde

      Global central bankers are confronting a nettlesome problem. Attempts to inject fresh life into anemic regional economies are proving increasingly less effective, argues Torsten Slok, chief economist at Deutsche Bank Securities in a recent report titled “QE no longer works”.

    2. I do not think they will vote one down to affirm their independence. They may not cut to reaffirm their globalist ideology. If they are not cutting because Trump wants a cut then they should be removed since they have no professionalism. The market is clearly telling them that they are too tight by inverting. They need to do their job, when there is no inversion they probably have the rates at correct levels.

      1. On the other hand, a failure to loosen rates at the next meeting could lead to a healthy air release from the Wall Street rate cut cult’s stock market bubble. This, in turn, could lure some of the money parked in mid-duration Treasurys (i.e. the inverted part of the curve) back into the stock market, smoothing out the big dip in the middle of the yield curve.

        Why not let the markets solve this problem? Wouldn’t that be a better approach than a kneejerk response to the violent yanking on the puppet strings?

        1. Cutting would be following the markets direction, you post almost everyday how the ten year yield had dropped. The reason that inverted yields are rare is because the Fed usually always listen s to the market and cuts short term rates. There can be instances where inflation is running above target which justifies not cutting but that is not the case here. This is particularly true since the last unemployment report showed that there are still people available to work and wages are not running too hot. seven raises under Trump, none under Obama until after Trump was elected. They continued to raise after inverted rates had appeared, show me another time when we did not have an inflation problem when that had occurred.

    3. There is zero possibility the Fed will eschew a rate cut. We are going to see at least a .25 cut in July, since the Fed is clearly panicked over the prospect of the long-deferred financial reckoning day drawing closer.

  2. Just saw the HBO documentary on Theranos/Elizabeth Holmes. Much respect to the young whistle blowers like George Schultz’ grandson. They took a lot of heat for telling the truth about what they saw. Interesting that the legal team threatening them consisted of David Boies and at least one other goon that represented the Clinton foundation. Probably going to be billing more hours as the Epstein cancer spreads. Owns plenty of RE too, would be nice to see all those places on the auction block for pennies although given what transpired at those places it may be best to burn them to the ground and salting the earth after.

    1. “It’s a big club and you ain’t in it.” – George Carlin

      And, Epstein ran the clubhouses.

      1. This wealthy banker guy wasn’t getting rich running young women; they were just made available like “dessert.” Something else was going on…hidden cameras, extortion, etc., and the timing of this arrest is likely political too. Think about it…for a guy in his fifties is there really that much of a difference between sleeping with an 16-yr/old vs an 18-yr/old?

        1. “…that much of a difference between sleeping with an 16-yr/old vs an 18-yr/old?”

          Not in a moral sense, but certainly in a legal sense.

          1. Another way to view the situation:

            Mr. Epstein apparently believed he was too rich to jail.

        2. Cutting would be following the markets direction, you post almost everyday how the ten year yield had dropped. The reason that inverted yields are rare is because the Fed usually always listen s to the market and cuts short term rates. There can be instances where inflation is running above target which justifies not cutting but that is not the case here. This is particularly true since the last unemployment report showed that there are still people available to work and wages are not running too hot. seven raises under Trump, none under Obama until after Trump was elected. They continued to raise after inverted rates had appeared, show me another time when we did not have an inflation problem when that had occurred.

  3. In King County overall, median prices dropped by 2.3%

    that all you got willis

    I think chighetto will catch up soon

    1. The most expensive off way more than that, but I can always count on you to miss the point.

      Just over a year ago, Seattle was the hottest in the US. Before that it was San Jose, after it was Las Vegas. All in crater now. How can that be? One after another the red hot sinks like a turd in a well. Wait a minute, the same thing happened globally. London, Vancouver, Sydney. Jeebus it’s like there’s something going on here other than supply and demand!

      1. Next up is Boston. The outer suburbs are noticeably softer than they were last year.

        Eeee-bola Boston, it’s coming for you next.

  4. I would like to know if people are overpaying for shelter and health care , how are people going to save for retirement? There is just to much money going to these sectors.

    This is not good for the younger generations and I can see why they are pissed.

      1. I should of included education also.

        When the median price for shelter in Seattle is 781 thousand I’m just unnerved that this could happen.

    1. Simple: They aren’t saving for retirement, and it isn’t just the young people, it’s all age spectrums. I’ve always said that socialism will be voted in but by the older Boomers and not the young people. Boomers are broke and don’t sacrifice. Gimmie my healthcare, gimmie my money, gimme everything!!!!

      1. Democrats don’t seem interested in the discussion of how we can provide free healthcare to everybody (“it’s a basic right”) without severely diluting the quality and availability of care for anybody who critically needs it.

        And regardless of the outcome of the epic battle over healthcare access and insurance coverage, I expect that the Congress will come out of it with their own special plan, separate from and superior to whatever they serve up to the hoi polloi.

        1. “I expect that the Congress will come out of it with their own special plan, separate from and superior to whatever they serve up to the hoi polloi.”

          That is 100% certain.

        2. “Democrats don’t seem interested in the discussion of how we can provide free healthcare to everybody (“it’s a basic right”) without severely diluting the quality and availability of care for anybody who critically needs it.”

          That’s not the debate I usually hear. Rather, it’s “how we can provide free healthcare to everybody (“it’s a basic right”) without severely diluting the quality and availability of care for anybody who has a ton of cash or a great insurance plan to pay for it.

      2. Nope, don’t think Boomers will vote in socialism. But if you paid into Medicare and Social Security for 45 years you might want to have that promise kept.

        1. Like Libya and Syria? The Libyan war destabilize the region led to rise of ISIS and massive immigration to Europe and terrorist attacks in the US. So I would vote for someone who opposed globalisation. Not the person who created the middle East policies as Secretary of State Clinton did. Thus if you want less wars you should have been picking Trump over Clinton. I doubt that is the way you voted

  5. China’s furniture makers hope for trade war’s end as US orders ‘disappear’ following the 25 per cent import tariff

    “The 25 per cent additional tariff was detrimental to us because American merchandisers balked at the lofty prices after paying the tariffs,” said Zhang. “It indeed killed our business.”

    ‘Some Chinese furniture manufacturers said their lean manufacturing operations and low margins left them with limited ability to adjust prices in the face of the levies. Zhang said adjusting prices by as little as 10 per cent would effectively destroy all profit on sofas shipped to the US, given Mengnu’s low margins.’

    “A 25 per cent tariff is a death sentence to Chinese furniture companies like us since our net profit margin stays at about 5 per cent,” he added. “We cannot afford a further price reduction.”

    https://sg.news.yahoo.com/china-furniture-makers-hope-trade-150005282.html

    Stamp em’!

    1. This must be that furniture with the American company name on it that used to be made in America, but is now made in China and still sold at made in America prices. And those companies passed those tariffs right along to you.

        1. The first time I ever became aware of this was in a JC Penney several years back, when I saw a Tiffany stained glass lamp with a price tag of over $200, which seemed kind of pricey for something being sold there. Flipped it over to see the country of origin.

          A bunch of assemblers somewhere in the hinterlands of our country lost their jobs, and the rich got richer.

          No, I didn’t buy the lamp. But I wouldn’t have been as angered by it had the price been something like $29.95, more reflective of the margin that should be on something built in a gulag with prison labor.

    2. It is not just a “do or die” situation for furniture companies it is the same for many of the other industries. Xi can stamp his feet but the 25 percent tariffs are killing China and Trump can add another $300 billion or so more goods to the list if China does not capitulate. What is China going to do, it already stopped buying soybeans. Trump knows it is better to wait to supply chain adjust so he will. However due to rising wages in China more due now to an aging population than a booming economy and rising energy costs due to running out of oil and having to import even coal the supply chains were moving before the tariffs. The process has just moved from impulse to warp drive. Additionally, it was before China had moved sufficient ly into higher margin goods. Trump has the winning hand.

  6. “The cooling Seattle-area market is rippling across the real-estate sector. Stephen Cancler, who owns Full House Inspections Services, says his business is down around 25% since 2017, when a booming market pushed up demand for inspections. ‘I’d like to see it come back up a bit,’ he said.”

    I also like to be 6’2 and have a full head of hair like in high school….lets stamp our feet together!!!

    1. And I’m sure that’s spreading to the Boise area now, what with WA and CA equity locusts having a hard time making anything local pencil out in their own areas, let alone elsewhere.

      I’m still tracking local rents in Meridian and Southeast Boise, as I’m due to move there at the end of the year, and I’m seeing comparable rents drop $100-200 from last year.

      I’m certain I can make a go of it up there, as I’ll be making 15-20% less than I do in the SF Bay, but will be paying 50-60% less for EVERYTHING up there. Quality of life will be drastically better up there, which is all I need.

      1. “And I’m sure that’s spreading to the Boise area now, what with WA and CA equity locusts having a hard time making anything local pencil out in their own areas, let alone elsewhere.”

        That’s it right there.

  7. “In Tacoma and Pierce County, the median home price in June climbed to $376,500, representing a 7.3% year-over-year increase, and a 1.7% increase over the median price in May. The data is yet another indication that Pierce County’s relatively large supply of affordable homes is still highly attractive to priced-out buyers from Seattle and King County.”

    …later

    “The downside, Larson acknowledges, is a Tacoma-to-Seattle commute that can easily eat up two to three hours a day if those new Pierce County homeowners are still working in the Seattle area, which has a much more robust job market than does Tacoma-Pierce County.”

    CLICK!

    1. All we are missing are the high gasoline prices of 2008, to really make the commute a deal killer.

  8. ‘Mexico has been supplying the market at an incredible rate. In fact, it has nearly doubled its weekly production volumes over last year’s. Due to these factors, we have seen a dramatic price drop of more than 50% in these past eight weeks, with a high of US$26.62 and a low of US$12.62 as seen in the following chart.’

    ‘With the vast volumes from Mexico saturating the market over the last couple of weeks, prices are significantly lower. Specifically, they have reached the lowest figure that we have seen in the past five years.’

    https://www.freshfruitportal.com/news/2019/07/09/grapes-in-charts-california-sees-low-prices-after-mexican-supply-surge/

    Still love the free market California?

  9. Is the visible hand limiting the Dow to 100 point daily losses, in order to avoid spooking the bovine herd into a stampede?

    1. At these levels a 100 point move in either direction is just noise which no PPT would even bother addressing. Normal consolidation after a big move up.

    1. Like redfins call that it was to the moon Alice! for Seattle a few months ago, (and wrong for every month since) why do these MSM never reflect? “Uh redfin, how could you be so wrong? You are losing millions of yellen bucks a month and can’t even call the market in your own back yard? Oh, right, you are flipping shacks and are talking up your book. Got it.”

      1. So this one is humping the “shortage” lie, while her buddy Skylar over at Zillow is telling us all that we WILL pay more.

    2. Danielle Hale’s title should be changed to chief liar.

      The article isn’t necessarily off in suggesting completion probably won’t come back to the overpriced cities as much. It’s full of a lot of speculation “if demand comes back”, while we’ve yet to see it do so. Demand is still down, inventory is up. Way too premature.

  10. See today’s CNBC explanation for Dow drop due to reduction of job openings which are theorized partly due to drop in construction speanding.

    Like the home inspection guy, my business is tied to real estate related services. In my case specifically new construction. I can tell you with certainty that, in my area, new home construction is waning at a rate not being reported in media. May be different in other areas.

    Where there used to be heards of construction crews, taco trucks, heavy construction vehicles etc, you now see a couple construction crews and many vacant lots with long grass or weeds.

    In one large modern development there are close to 400 platted lots. About 20 properties have sold since opening about a year ago and there is currently 1 house under construction. Several finished inventory or spec homes with for sale signs. If it were July 2018, the same development would have dozens of crews, many dozens of workers and high levels of activity. Things are changing rapidly and severely. Yet no detailed mention in media locally. Bad news not in vogue.

    1. “If it were July 2018, the same development would have dozens of crews, many dozens of workers and high levels of activity.”

      Thanks for the great anecdotal information. The multiplier effect of real estate construction on employment which you describe explains why the Fed loves real estate investment activity to remain consistently high.

  11. RIP, Ross Perot. You were a prophet before your time as you tried to warn the sheeple about NAFTA and globalism.

    1. Everyone laughed about the “giant sucking sound” back in ‘92. No one is laughing anymore, now that China sucks even worse.

    2. Yes, people laughed at Ross Perot when he talked about the giant sucking sound of job losses. I’d imagine some of them weren’t laughing after they lost their cushy manufacturing jobs.

      1. I don’t think there was much overlap between the people laughing at him and the people working mfg jobs. He got a LOT of votes considering the extenuating circumstances of his non-traditional non-professional campaign.

        It was the media laughing at him. The same media that laughed at Trump and said he would never get elected. But a lot had changed between 1992 and 2016.

        1. I stand corrected — I was thinking mainly of those you pointed out specifically, and unintentionally downplayed the support he did get from voters.

        2. He may have inadvertently helped Bill Clinton into the WH, by siphoning off proportionally more Bush votes than Clinton votes.

          1. Probably. I was one of the people who voted for him and probably would have voted Bush if he hadn’t existed.

            But I do have to say, Clinton was an interesting case. In 1992 he seemed like the kind of person who could almost convince me to give the Ds a chance. I wasn’t a fan of the blueblood wing of the Rs and Clinton seemed reasonable. But 1993-1994 was when I learned a harsh lesson on the party baggage that comes with any candidate. By 1994 I was 100% behind Contract With America. Which brought its own disappointments but that’s another subject.

    3. Ro$$ Perot = Thee People’$ Profit!

      https://www.peoplesworld.org/article/did-ross-perot-help-enron-bilk-california/

      “Perot $ystems, Inc., was in a unique position to instruct energy traders on how to $windle California ratepayers because it designed the computer software for the California Independent Systems Operator as well as the now defunct Power Exchange, both of which controlled the flow of electricity through California’s enormous power grid. Perot $ystems had an intimate knowledge of the flaw$ in California’s deregulated electricity market and could instruct Reliant, Enron, Dynegy, Duke Power and other energy traders on how to create “phantom” $hortages that would drive up electricity prices, how to divert electricity across state borders and then reimport it at prices four or five times higher than California’s capped prices.

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