We’ve been working diligently over the holiday to try working with another blog layout so that searching for information is easier and more appealing to the eye. We’re excited to have finally found a new layout, but for those of you who visit this blog often, you’ll see some technical issues over the next few days. Some of the formating and search functions will need to be programmed before everything is at 100%. In addition, we’ll be holding off on posting. Please be patient and be sure to let us know what you think when you see the change.
The Bravern Residence in Bellevue hosted an intimate educational seminar for the areas top agents this morning with keynote speaker Professor Michael Palmer. On the way there during our carpool, we wondered if this was going to be a sales pitch on how great the market is and why buyers should buy at Bravern. However, it wasn’t. The guest speaker and professor of finance with Leeds School of Business (University of Colorado) delivered an informative 2-hour presentation on the national and global economy whereby he discussed the past, present, and future. Mr. Palmer addressed issues such as the sub-prime market, Greenspan’s push on rates, consumer confidence/spending, unemployment rates, and of course his prediction on how much longer we should expect this recession to last.
According to Mr. Palmer, the economy got into this mess by creating unsustainable bubbles which were created between 2002 and 2006 by over stimulation (monetary & fiscal). As a result, the housing bubble was the first to burst. Statistics on foreclosures were presented to support this idea, although it’s not really any new news.
- Foreclosures in 3rd Quarter ’06: 223,223
- Foreclosures in 3rd Quarter ’07: 446,726 (+100%)
- Foreclosures in 3rd Quarter ’08: 765,558 (+71%) and the highest since records began in January 2005.
In addition to the slide of home prices, the world has been affected by other factors which were identified as:
- Fannie Mae/Freddie Mac bailout on Sept. 8th
- Lehman Brothers failure on Sept. 12th
- Merrill Lynch take-over by B of A on Sept. 15th
- AIG $85 billion rescue plan on Sept. 16th
- Washington Mutual take-over by JP Morgan on Sept 25th
- Federal Reserve rescue of commercial paper markets on Oct. 7th
Palmer also discussed how household debt has skyrocketed and personal savings have plummeted — creating a even stronger decline in consumer confidence.
Another interesting topic was the feds lowering of interest rates and how the intention of doing so is to fuel consumer confidence. However, Palmer states that, “While lower interest rates might make us feel better — they have done little up to now to stimulate buying or lending or to restore confidence.” Most importantly to note was that lending institutions appear to have no tolerance for risk. The money pumped into system from the feds appear to not being trickling down to public quite yet. Instead, it appears that lending institutions are placing money into secure investments to shore up assets rather than take the risk at lending. This is displayed below (notice how little return they’re willing to except rather than taking any risk at higher returns):
But, what kind of Realtor would we be if we didn’t end with the good news? Palmer’s prediction is that the nation will experience an 18-month recession. Since the nation began experiencing it’s recession in December of ’07, Palmer pointed out that we’re already 12 months in with U.S. history showing an average of 13 months for previous economic troubles since 1900. That would place an expected recovery by the 2nd or 3rd quarter of ’09. However, since these predictions are national, Palmer communicated a more probable rebound happening sooner for Seattle based on a number of factors including our employers (Microsoft, Boeing, Expedia, Amazon, etc.) and the metropolitan area being the fourth largest export market in the nation with Japan, China, and Canada.
An article in the P.I. yesterday quoted councilmen Nick Licata in asking, “Why would you put a streetcar in a neighborhood when the neighbors don’t want it?”
Granted, gas is now under $2.00 a gallon, but the Times reported yesterday in another article regarding the progress of the streetcar expansion that ridership has exceeded what was expected. By December 12th (the S.L.U.T. 1-year anniversary) the streetcar will have carried approximately 500,000 riders–80% of which . 150,000 more than what was estimated. With that said, it begs the question of what neighbors Licata is referring to?
With downtown condo prices being the way they are (even in a “slump”), it would seem that the streetcar expansion would create more opportunity for those to live and work in the city without having to pay the downtown premium.
However, the argument from those who oppose is the lack of planning on how the $685 million streetcar project will be paid for. Suggestions have been made that the money would come from a tax on local business’s. The S.L.U. streetcar was paid for by nearby property owners, and there certainly is much more of a buzz in the neighborhood that was not long ago, not a neighborhood at all.
We want to know if you are for the streetcar? Let us know what you think.
In combination with the completion of Four Seasons, a hard hat tour for Olive 8 & Rollin Street, the last couple of weeks have been rather exciting for Seattle’s new construction. Even better news is that they’ve all sold impressively well, and Fifteen Twenty-One is no exception. Today, there’s only 8 currently available in the 143 unit high-rise. Four Seasons has 10 remaining of their 36, and Olive 8 had reported they sold approximately 75% of their 231 available units when we toured about month ago.
The team that made it all possible is also one of the most experienced and reputable groups of professionals anyone could ask for.
Blaine Weber/Weber Thompson Architects – Project architect and founding principle at Weber Thompson Architects, the award-winning firm has also designed the 5-star Hotel 1000/Madison Tower on 1st Avenue, the much anticipated AVA, and one of Seattle’s most cherished condominium high-rises The Cristalla (from which Mr. Weber had lived before 1521).
Susan Marinello Interiors – Another local based firm who has an impressive portfolio designing upscale residential, commercial, hospitality projects. .Susan has also trophied her work at the Four Seasons Private Residences, The Condominiums at One Lincoln Tower, and the Hyatt Regency.
Opus/Samis Land Company – Opus (one of the top ten developers in the country) worked together with William Justen (managing director of Samis) who is one of the states largest commercial landowners and has made a significant impact on Seattle’s urban development.