Interview with The Tim of Seattle Bubble


Sep 4

Real estate

Timothy Ellis

Tim Ellis is the founder of, Seattle’s premier bubble blog. It’s the place to go for serious market discussions. A typical post will pick up 50+ comments, which is virtually unheard of on blogs that don’t allow anonymous posters. I’ve interacted with “the_tim” over the last couple of years on Rain City Guide and at Seattle Bubble and met him in person at a real estate blogger dinner last summer. He was a nay sayer when the conventional wisdom was real estate could never go down in value.

We at Estately asked him to do this interview in part because we are fascinated by market predictions, by metrics and the people who wield them, and we’re fascinated by the success The Tim has found with Seattle Bubble.

Tell us a little about yourself – your age, where you live, your job.

I’m currently twenty-eight and I live in Kenmore (it’s just west of Bothell and north of Kirkland). I’m self-employed, pursuing a variety of projects both online and offline, of which Seattle Bubble is one.

Do you own a home? Did you own before you started worrying about the bubble?

My wife and I do not own a home yet, but we would definitely like to someday when it makes sense. I started Seattle Bubble in fall of 2005 after we had spent several months looking around for houses. I wouldn’t say I am or was “worrying about the bubble,” I just was seeing things that didn’t make sense and wanted to get as much information about the market as I could. I figured if I was putting all this time into gathering the information, I may as well put it online for other people that might be interested.

What interested you in the housing bubble and when did you decide to start it? Was there one event or something that inspired you?

As we looked at houses in the Bothell / Woodinville area in 2005, we found that even with our above-average income a tiny mobile home was about the best we could afford without taking out an unacceptably dangerous loan. That seemed seriously out of whack to me, so I started researching the market, which led me to newspaper articles and blogs about the “housing bubble.” Many cities had their own blogs specifically exploring the housing bubble for that area, and since Seattle didn’t have one at that time, I figured I may as well start it myself.

Why do you care about the bubble? Home owners want to “root for the home team,” but why spend time and energy rooting against it?

I care about the housing bubble because I don’t think that the rapid price gains we’ve seen in recent years is good for anyone, home “owner” or not (does someone that put zero down and got an interest-only loan really “own” anything?). When prices get out of hand as they have in Seattle since 2004, it becomes harder and harder for people to get into “entry-level” houses, which inevitably affects the entire market. It’s also dangerous for the economy as a whole (as we are now seeing) for so much to be riding on permanently increasing home values.

Are there other blogs that inspired you or continue to inspire you today?

When I first started researching the housing market I stumbled on a handful of other “bubble blogs,” including Ben Jones’ Housing Bubble Blog, Calculated Risk, and Rich Toscano’s Professor Piggington. Piggington is probably my favorite housing blog out there today. I love his tagline: “In God We Trust. Everyone Else Bring Data.”

What are your three all-time favorite posts on the Seattle Bubble?

Probably my favorite posts are the ones where I dig into the data to see if the clichés spouted by real estate salespeople hold any water. For example, I tackled the “we’re running out of land / homebuilding isn’t keeping up with population growth” claim in the post Big Picture: Supply vs. Demand (follow-up here). I examined the claim that job growth has been a primary driver of Seattle home prices in the post Does Job Growth == Home Buying Demand? I guess my third favorite would be Seattle Soft Landing: Do The Math (and its 2008 follow-up), where I explored what it would look like for prices to “flatten out” while incomes catch back up.

What was your goal when you started Seattle Bubble? Have your goals changed?

When I started Seattle Bubble, my goal was just to take all this research I was doing for myself and put it online to share with others. Today I’d say those goals are largely unchanged. I just want to provide a good resource where people can find out what’s really going on in the local housing market. Your only other source of this kind of information is newspapers and TV reports, which rarely do more than republish real estate press releases.

If there is one metric to judge the size of bubbles, what would it be?

There are many economic fundamentals that you can compare with housing prices, but I think the best metric is probably rents. Seattle Bubble contributor Deejayoh did a great post on this subject back in January: Rents to Rise, or Home Prices to Fall?

Is the bubble popping in the way you thought it would (as dramatic, faster, slower, etc)? Anything happening differently?

I didn’t really have much of an idea how things would play out once we finally topped out and started the ride back down. My best guess has been that the decline will be spread out over many years, but there are so many factors at play that all I really know is that things will be going down, and we won’t be returning to 10%+ appreciation any time soon.

Where do you see the housing market going from here – 2 years out? 5 years out? 10 years out? Will the world end? Will you ever be gung-ho about buying a home?

See above. My guess is that prices will decline 10-20% for a few years, then be flat to slightly negative for 5-10 more years after that. But who knows. I think once the correction plays out the housing market and the overall economy will be in a much better place than we are today, and I think everyone should be looking forward to that time, not trying (in vain) to stop it. I guess I’ll be “gung ho” about buying a house when it makes financial sense and the housing market is finally healthy again. I define “healthy” as home prices that are in line with their historic relationship to rents and yearly price gains of 3-5%, tops.

It’s clear that the bubble has hurt the economy, but do you see anything good coming out of it?

Hopefully we’ll learn from our mistakes and in the future we’ll avoid repeating the “irrational exuberance” that inflated this whole mess in the first place.

Are you just a cheapskate real estate lover who is rooting for the downturn so you can get a mansion on the cheap?

Hah! How about just a financially prudent guy that wants to buy a modest house to live in without taking out a suicidal loan?

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