We’re No. 1 in yet another survey — which state’s residents are most worried they are in a housing bubble? Also, a sex-shop chain with unfulfilled ambitions files for bankruptcy protection, and Microsoft’s Surface is now a key player in NFL officiating.
If there’s one word that comes up more than any other in the Seattle-area housing market, it’s probably “bubble.”
George Moorhead, owner of Bentley Properties in Bothell, said the b-word comes up with just about every buyer he represents.
“They’re getting very wary about a bubble,” Moorhead said. “It is very much a huge concern. The perception is: how long can this go?”
Now a new national survey finds that 71 percent of adults across Washington are worried about a housing bubble and think prices are overvalued and unsustainable. That’s the highest rate of any state in the nation.
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The finding may not be surprising, since home prices both in the Puget Sound region and across the state have been rising faster than anywhere in the country for about a year now.
In the Seattle metro area, single-family-home costs are up 13.3 percent from a year ago and are rising at the fastest clipsince the 2006 housing bubble, according to the Case-Shiller index. Compare that with 5.6 percent home-price growth nationally.
Across Washington, home values are up 12.7 percent from a year ago, also easily tops in the nation, according to CoreLogic. Even cheaper places like Spokane and Bellingham have become less affordable.
The bubble survey was released by ValueInsured, a company that sells insurance to protect against declining home values. That presumably gives it an interest in propping up bubble fears.
Nevertheless, any such bias wouldn’t explain why Washington residents were more likely to predict a bubble than anywhere else. Next was New York, where 68 percent predicted an impending market correction, followed by Florida (63 percent), California (59 percent) and Texas (58 percent).
One more note on the survey: It looked at a representative sample of 1,079 people across the country in July. But the sample sizes in individual states was relatively small.
We should note that a majority of local real-estate agents do not believe a bubble is coming (though not everyone will trust them, either).
One thing is for sure: The problems that led to the last bubble before the recession, like underqualified buyers egged on by unscrupulous lenders, aren’t present this time around.
Home-loan data show local buyers are getting good credit scores, forking over big down payments and paying their mortgages on time.
It’s unclear what could even cause housing prices to drop right now. Layoffs at Amazon and Microsoft? A sudden flooding of the market with homes for sale? The smoke overhead sticking around for good?
There’s also a third, less talked about and more boring scenario for the market’s future: Somewhere between a bubble and continued exuberance.
Moorhead, for instance, expects 2018 to be a “flattening market,” with prices rising at a more normal rate — like 3 percent or so.
Mike Rosenberg: firstname.lastname@example.org
Sex-shop chain in Chapter 11
After flirting with a public stock offering and trying to catch the eye of many potential buyers, the 46-store “sexual wellness” retailer Peekay Boutiques of Auburn has filed for Chapter 11 protection to clear the way for a sale.
The chain, founded in 1982 by Phyliss Heppenstall as a family business, has been owned since 2012 by private equity investors who borrowed heavily to acquire several regional retailers in hopes of building a national franchise. It does business under four names: Christals, Lovers, ConRev and A Touch of Romance.
The company’s debts to its primary lenders, originally $38.2 million, have since grown through unpaid interest and fees to nearly $52 million, according to the Chapter 11 filing by Peekay Acquisition in bankruptcy court in Delaware.
The owners of the various retailers that were acquired also provided seller financing totaling $12.7 million, which has grown to $19 million due to unpaid interest.
Peekay filed papers for an initial public offering of stock in 2015, showing it was losing money because payments on the debt were larger than its profits from selling sex toys, lingerie and other products. It abandoned that IPO plan the following year and has tried in vain to find a buyer or restructure its debts outside of bankruptcy.
The last straw apparently was a second effort at consummating a deal with one unidentified suitor, which was dropped last month.
According to the documents, the largest lenders have agreed to bid up to $30 million (as a credit from what they are owed) to buy the chain’s assets unless a higher offer materializes.
A declaration by chief restructuring officer Albert Altro says the goal is “to maintain the business as a going concern, thereby preserving hundreds of jobs.”
In a news release, Peekay CEO Lisa Berman said the company also intends to implement “an aggressive online e-commerce strategy to tap into the growing number of customers who purchase their sexual-wellness products through the internet.”
— Rami Grunbaum: email@example.com
Microsoft’s Surface gains new role in replays
The senior vice president of officiating, Alberto Riveron, sounds genuinely excited about the NFL’s decision to use Microsoft Surface tablets for referees to watch replays.
That procedure began in earnest with the Aug. 3 Hall of Fame game between Dallas and Arizona. The technology worked like a charm, with the one coach’s challenge settled in quick order by referee Jerome Boger and the officiating staff in New York.
“It definitely offers an opportunity after the referee signals there is a review to expedite the process of getting to the video,” Riveron says. “We’re not hurrying the process of reviewing the videos or of the decisions.”
Unlike in the past, the referee no longer will be charged with making that final decision; Riveron and his crew at league headquarters will do so in consultation with the ref.
“The only thing that’s changed about the process, that instead of the final decision being with the referee on the field, it’s now with New York,” he said. “The consultation process, the way we look at the film, the plays we show him, the angles, that hasn’t changed.
“Microsoft has been very sensitive to our needs to get the job done,” Riveron adds. “They worked hard on weather conditions and glare and the like. They have worked hard to make this process work.”
Already, the Surface tablets were being used by coaches and players on the sidelines to download photos of the action. Troy Vincent, who oversees football operations for the league, says the NFL is moving carefully on the use of video by coaches, rather than just photos, during the regular season.
“Some have embraced it, some oppose it,” he says, adding with a laugh, “It’s part of my greatest challenge: when innovation and tradition meet.”
In using the Surface tablets for officiating reviews, two systems will be set up, one at each end of the field, as opposed to the single under-the-hood procedure of the past.
This will be the most visual use of the tablet, but it’s hardly the only one. All 32 teams have been utilizing it for virtually every task.
“Microsoft Surface devices have become ubiquitous on NFL sidelines and in the coaches’ booth,” Microsoft general manager Robert Matthews said in an email.
“Currently, every NFL team is using Microsoft Surface in some capacity throughout their organization — ranging from serving as playbooks to film review being conducted on Surface Hubs, to in-stadium and business-operations teams using Microsoft Surface in their front office.
Also for the first time this season, medical personnel on NFL sidelines will have access to Surface devices that will feature the NFL’s “Game Management” system. That app displays key moments in every game and allows for medical-data collection and sharing across games.
— Associated Press