Sunday, November 11, 2007

sinking in seattle



(I picked this photo' because in the smaller version, the hose hanging on the left looks like a person in a green jacket standing there. That, with the trellis, reminded me of the iconic American Gothic, and it seemed kind of fitting.

And what is it with RE agents that frame pictures like drunken land-lubbers at sea in a pitching storm?)


patriotz left a link (on an earlier post about the place in New West.) to a Seattle house listed for $475k (roughly $425K CAN - grin). This is a brick house boasting 1,750 sq', and is close (relatively) to DT Seattle. I might remind you that Seattle actually has industry (Boeing, Microsoft, etc.). Your mortgage interest is tax deductible.

Check out their other listings too, it's interesting to see the reductions, and the $475K, 900 sq' Puget Sound view condo's. If Seattle is going down, so are we.

The unfortunate side effect of this sub-prime debacle (nowhere near over), and the Roman holiday that will be visited on the RE market, and further, is going to make the Depression look like a cake walk. That is part of why I wanted to see this bubble burst a long time ago. It's never so simple as it seems.

8 comments:

fish10 said...

I agree- the very fact that they let this speculative bubble get out of control as much as it did- will just lead to much more pain in the future.

By 'they' I mean the financial decision makers...the central banks and big banking execs.

the one central bank that tried it's best to try an burst it's real estate bubble by raising rates was New Zealand's.

Anonymous said...

Make the Depression look like a cake walk? What are we talking about here? The total collapse of society? Seems a bit much.

Anonymous said...

yes vancouver isn't going to be invincible thats for sure. its all going down the toilet. the is no record of the olympics ever impacting city positively afterwards. all's it seems to do is put the city in debt

capcialist said...

society will not collapse, because it has a greater value of wealth than before the depression. However, in the US if the value of houses drop near Schiller's expectations, then wealth loss will be greater than the depression. If US manufacturing does not pick up as the dollar drops or if displaced financial industry workers are not prepared to try another profession then you can expect to see an increase in homelessness to go along with it all. Enough to create as much hardship as the Depression? I don't see it.

patriotz said...

If US manufacturing does not pick up as the dollar drops or if displaced financial industry workers are not prepared to try another profession then you can expect to see an increase in homelessness to go along with it all.

Disagree. The very reason the US RE bubble is bursting, is that there is now way more housing in the US than there are people to put into it (thanks to the ridiculous speculation of the last few years). The eventual owners of all these properties, whoever they are, are going to rent them out for whatever they can get.

If that means to people on welfare or working at Mickey Dees, well that's what's going to happen. Actually it's already happening.

patriotz said...

Oh and here's another one. This area is comparable to Dunbar (note golf course nearby).

And prices are falling in Seattle. What will C$450K get you in Vancouver?

capcialist said...

Interesting point, patriotz. I never thought of the housing bubble collapse as helping prevent homelessness. You are correct. I guess there will also be an uptick in squatting with all of those unsold subdivisions :)

solipsist said...

Make the Depression look like a cake walk? What are we talking about here? The total collapse of society? Seems a bit much.

While there is a difference between a global depression worse than the 1930's, and the total collapse of society, I do not think that the latter is completely out of the question.

One of the larger reasons that loom in my mind is that during the 1930's, there was an abundance of cheap oil, but not such a demand as exists today, and now, oil is getting scarcer all the time. We also have six times the global population now, and the problem of climate changes.

I started to formulate an argument based on urban vs. rural populations, but quickly realized that it might not be a sound basis for such.

At present, 79.219% of the US population is living in urban areas.(source) My thought was that if things go really sideways, the urban areas will be worse off than rural areas (competition for food and resources). But still, one would have to get pretty remote from urban areas to be "secure", as the marauding and lawless would soon realize where the food was.

Then I found this link (excerpted below), which gave me pause for thought.

Sociologists Jane Jacobs and Lewis Mumford have each noted that during the Depression and other hard times, urban residents have generally fared better than ruralites. The causes mainly boil down to market forces and simple physics. Since most of the population lives in or near cities, when goods are scarce the greater demand, density, and economic power in the cities directs resources to them. Shipping hubs are mostly in cities, so trucks are emptied before they get out of town.

In the Depression, farmers initially had the advantage of being able to feed themselves. But they soon ran out of other supplies: coal to run forges to fix machinery, fertilizer, medicine, clothing, and almost every other non-food item. Without those, they couldn’t grow food. Farmers who could still do business with cities survived. Those too remote or obstinate blew away with the Kansas dust.

Survival Skills

Today the situation for farmers has worsened. Few farmers grow their own food. Agribusiness has made them utterly dependent on chemicals and other shipped-in products. The main lack of cities compared to farms is food-growing, but farms lack nearly everything else—and most of that comes from cities. Setting aside for the moment the all-important issue of social and political cohesion, for cities to survive a peak-oil crash, the critical necessity is for them to learn to grow food. For country people to survive, inhabitants will need to provide nearly every single other essential good for themselves. And since many country people are simply transplanted urbanites lacking gardening or other land skills, but having the isolation that makes social cohesion unnecessary to learn (for now), their survival is even more doubtful. If catastrophe comes, the cities may be unpleasant, but I fear the countryside may be far worse off.


And those are very good points.

I am not a doomsayer as such, but if one looks around with an open mind, the situation can become very dire, very quickly. I am starting to change my view of urban life in such a situation. My neighbour is 15- 30 feet away from me, and we do look out for each other, share food, etc. Parks can quickly be turned to productive land, along with boulevards, back yards, laneways, etc. Pity those living in condo's though. Not much arable land in them.