Category Archives: Seattle Real Estate Stats

Sunday Night Stats

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It’s too early in the month to post the end of July stats.  We’ll do that next week as many agents will post their month end closings during this week.  Seems to me that August closings may keep pace with July and July will be down from June as to price, and maybe volume too.  Two of my listings are pending inspection for August closings, and one has been on market for quite sometime.  Another is at least a bridesmaid…waiting to hear if it made it to bide.  If there’s no offer, it was at least a close second  So it seems to me that some people who have been looking and looking, are starting to move in and make offers.

 

King County Condos

2004 – 1Q – 1,694 – $188, 2Q 2,636 – $199, 3Q 2,540 – $196, 4Q 2,176 – $195

2005 – 1Q – 2,066 – $198, 2Q 2,925 – $209, 3Q 2,769 – $226, 4Q 2,266 – $224

2006 – 1Q – 1,956 – $242, 2Q 2.748 – $252, 3Q 2,737 – $269, 4Q 2,217 – $278

2007 – 1Q – 2,042 – $295, 2Q 2,862 – $302, 3Q 2,676 – $311, 4Q 1,618 – $294

2008 – 1Q – 1,258 – $299, 2Q 1,508 – $287

Changes in condo stats for this week

Active Listings: 4,030 – DOWN 70 – median price $319,950 – MPPSF  asking $310 – DOM 65

In Escrow:  793 –  DOWN 39 – median asking price $289,950  – MPPSF asking $291  – DOM – 50

Sold YTD :  3,060 – UP 134 – median list price $289,950 – median sold price  $285,000 – MPPSF – $289 DOM 49  

Residential King county

2004 – 1Q 5,650 – $152, 2Q 9,237 – $160, 3Q 8.737 – $163, 4Q 7,467 – $165

2005 – 1Q 6,402 – $173, 2Q 9,093 – $185, 3Q 9,131 – $192, 4Q 7,301 – $195

2006 – 1Q 5,596 – $201, 2Q 8,248 – $214, 3Q 7,771 – $216, 4Q 6,204 – $217

2007 – 1Q 5,304 – $222, 2Q 7,393 – $230, 3Q 7,944 – $229, 4Q 4,301 – $221

2008 – 1Q 3,640 – $219, 2Q 4,641 – $220

Changes in residential stats for this week

In Escrow: 2,559 – DOWN 125- median asking price $419,950 – DOM 48 – MPPSF $204.8

SOLD YTD: 9737 –  UP 420 – median asking $449,950 – median sold price $440,000- DOM 49 – MPPSF $217 

Actively for sale 12,307 – DOWN 210 – MPPSF <$800,000 is $220 – MPPSF >$800,000 is $332

Stats not compiled or published by NWMLS. (Required disclosure)

The Housing Rescue Bill

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Today President Bush signed a housing “rescue” bill HR 3221.  I’m really still absorbing all of this (I think it’s taking me a bit longer after my trip to Inman Connect).   Here are a few quick pointers:

The FHA risked base mortgage insurance pricing (which I’m in favor of) that was to be effective last week is now postponed until September 30, 2009.   FHA can now save some borrowers in trouble with their mortgage if their existing lender will forgive the underlying debt to 85% 90% of the current value of the home.   Gee…risked based MIP might be handy in these cases.

Also with FHA, Seller paid down payment assistance programs are will be gone and the minimum down payment for an FHA insured loan will be 3.5% (which is a very small increase) beginning October 1, 2008.

Jumbo FHA and Jumbo Conforming loan limits will be reduced from the current 125% of median home value to 115% of the median home value beginning January 1, 2009.   As I mentioned, your days of a loan amount of $567,500 are numbered.   The new conforming/FHA jumbo limit may be closer to $520,000.  

First time homebuyers (someone who has not had interested in a property for the past 3 years) are eligible to receive a tax credit…however, it’s really an interest free loan to be paid back over 15 years or from the proceeds when the home is sold (which ever comes first).  This is available only for homes purchased on or after April 9, 2008 and before July 1, 2009.  Income restrictions do apply.   For more information, check out this website.   

Last but not least (and I’m sure I’m missing stuff) Fannie and Freddie have a new regulator: The Federal Finance Housing Agency aka FHFA.   This from James B. Lockhart:

“Today President Bush signed the ‘Housing and Economic Recovery Act of 2008.’ I thank President Bush and Secretary Paulson for their leadership in making government sponsored enterprise (GSE) regulatory reform a reality.

The Act creates a world-class, empowered regulator, the Federal Housing Finance Agency (FHFA), with all the authorities necessary to oversee vital components of our country’s secondary mortgage markets — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — at a very challenging time.  As Director of the new agency I look forward to working with the combined Federal Housing Finance Board (FHFB), Office of Federal Housing Enterprise (OFHEO) and Housing and Urban Development (HUD) GSE Mission teams and with other regulators to ensure the safety and soundness of the 14 housing related GSEs and the stability of the nation’s housing finance system.

For more than two years as Director of OFHEO I have worked to help create FHFA so that this new GSE regulator has far greater authorities than its predecessors.  As Director of FHFA, I commit that we will use these authorities to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing and operate safely and soundly.”

Too much to write about in detail for one post…just wanted to throw you some bits.

Sunday Night Stats – Where's the market heading?

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Tonight I want to get an idea of where the market is heading as we go into July, as to prices.  I’m going to bulk together some Zip Codes that I personally follow, to have a large enough area to be meaningful, and yet zero in on local at the same time.

I’m getting the data as I am typing, so I have no idea how the numbers will fall.  We’ll find out together.

First Group: 98033, 98052, 98004, 98005, 98007 and 98008 on a combined basis.

Residential:

In January of 2008: median Asking Price of homes sold was $652,450 and the median Sold Price of those same homes was $625,000.  Median days on market of those sold homes was 68 days and 27.66% sold in 30 days or less.  Median Price Per Square Foot = $267.66

Lets jump to May 2008 and see where the market went by that time from the beginning of the year.  Median Asking Price $643,500.  Median Sold Price $630,000.  Median Days on Market 41 and 38.28% sold in 30 days or less.  Median Price Per Square Foot = $272.72

June 2008: median Asking Price $710,000.  median sold price $690,000. Median days on market 61 and 33.58% sold in 30 days or less.  Median Price Per Square Foot = $277.10

July month to date: Median Asking Price $650,000.  median sold price $639,000.  Median days on market 50 and 30.92% sold in 30 days or less.  Median Price Per Square Foot = $253.57.  Median type of house was a 4 bedroom 2 1/2 bath 2,520 sf home.

Some pretty large homes are in escrow with the median square footage of all homes in escrow at 2,660 and a medain price per square foot of $262.20.  Of course that $262.20 is asking price and not sold price, so prices are trending down from July 1 to present.

Let’s compare that to June of 2007: Median Asking Price $699,000.  Median Sold Price $685,000.  Median days on market 21 and 61.09% of homes sold in 30 days or less.  Median Price Per Square Foot = $292.73.  Median type of house was a 4 bedroom 2 1/2 bath 2,340 sf home.

Interesting July stats so far.  The size of home is larger, the price is lower.  More home for less money as I said last week.  Very Interesting.  But the numbers are so different from May and June. Fewer houses sold quickly.  This data is worth tracking week to week, especially as we head into fall.

Second Group Seattle 98115 and 98103 on a combined basis excluding townhomes (townhomes on Eastside automatically not included for the most part, as on The Eastside townhomes are condos and not residential). Trying to keep this apples to apples.

In January of 2008: median Asking Price of homes sold was $540,000 and the median Sold Price of those same homes was $522,500  Median days on market of those sold homes was 51 days and 29.57% sold in 30 days or less.  Median Price Per Square Foot = $253.64

Lets jump to May 2008 and see where the market went by that time from the beginning of the year.  Median Asking Price $595,000.  Median Sold Price $580,000.  Median Days on Market 20 and 61.97% sold in 30 days or less.  Median Price Per Square Foot = $277.51

June 2008: median Asking Price $550,000.  median sold price $546,000. Median days on market 29 and 54,02% sold in 30 days or less.  Median Price Per Square Foot = $265.04

July month to date: Median Asking Price $567,450.  median sold price $553,450.  Median days on market 23 and 56.90% sold in 30 days or less.  Median Price Per Square Foot = $261.67.  Median type of house was a 3 bedroom 1 3/4 bath 2,115 sf home.

Let’s compare that to June of 2007: Median Asking Price $567,000.  Median Sold Price $569,500.  Median days on market 13 and 75.93% of homes sold in 30 days or less.  Median Price Per Square Foot = $273.79.  Median type of house was a 3 bedroom 1 3/4 bath 2,080 sf home.

The median asking price of all pending sales is $535,000 and the median square footage is 2,085.  Looks like better “deals” are in escrow as we speak at $256.59 MPPSF as to ASKING prices with that number to be pared down further as to sold prices.

Stats not compiled or published by NWMLS. (Required disclosure)


Unless someone asks for the regular weekly King County Stats, I’ll post them over on my blog tomorrow.  It’s been a long, back-breaking day for me.  I was more interested in finding out where the market was heading, than posting overall King County since last Sunday.  But I will post them on my blog tomorrow for the benefit of those who have been charting them on Excel Spreadsheets.

Goodnight!

*****************

You can find the regular weekly stats here.

Tami Michaels re Mayor Nickels & Multi-Family Design Standards

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Home Improvement Radio Expert Seattle 770 KTTHTomorrow morning, Saturday July 26th, at 11:00 a.m., a representative of the Seattle Mayor’s Office will be On Air with Tami Michaels.  The show will be devoted to Mayor Nickels proposed changes to multi-family zoned construction (original announcement from the Mayor’s Office).

And more details about Tami’s show tomorrow here.

Tami called me before I left for Inman Connect to discuss this topic, specifically with regard to regulations that could increase costs for builders and consumers at a time when the housing market is weakening.  The discussion led to the age old question “Can government dictate taste in housing style?”

I have had many discussions over the years with various municipalities regarding this topic, and they all hinge on this quote from City Councilmember, Sally Clark “The mayor and I have both heard a lot lately about how growth is affecting our neighborhoods, not all of it is positive…”

Over the span of my 18 plus years in real estate in various places on both Coasts, I have become involved with this issue from time to time, and EVERY time it boils down to nothing happening except a bunch of controversy with little to no satisfactory result.  I have been to several “town meetings” where everyone who was griping was invited to attend and participate in discussions to improve whatever everyone “wanted” or was griping about.  Each time what became apparent as a result of these meetings is that you can never get everyone to agree, and sometimes you can’t even get people to attend the meetings!!!  It’s one thing to hang around griping about change, it’s quite another to be asked to get involved in a viable solution.

So I ask anyone who thinks they might have something to add to the discussion regarding proposed changes to multi-family zoned building projects in Seattle, to head on over to Tami Michaels’ post and add a comment.  I’m going to listen to tomorrow’s radio show and gather more info before commenting.  Maybe you would like Free Flushes to become mandatory…maybe not.

Anyone involved in Seattle Real Estate, or residents who have something to add about townhomes or the proposal in general, should tune in tomorrow at 11:00. “The changes would affect the 10 percent of the city zoned for multifamily construction, from low-rise development throughout the city to high-rise residential towers on First Hill. The change is heralded by the Mayor’s Office as “… the first major update to multifamily zoning in Seattle in 20 years.”

Don’t let a once in 20 years change pass by, without at least craning your neck to take a peek at what it’s all about.

Reporting from ConnectSF08

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I’m here at the beautiful Palace Hotel in San Francisco for the Real Estate Connect conference put on by Inman News.  I’ve been to Connect conferences in the past and came away with some fond memories of presentations by Larry Page and John Seely Brown.  I’m sure my raincityguide blogger colleagues are here someplace; by this time of night I’ll guess they’re out drinking and I’ll hook up with them tomorrow.  There are two tracks to choose from tomorrow morning, blogging and foreclosures.  Guess which one I signed up for?  Tomorrow afternoon, Brad Inman delivers the opening keynote “How the Nomadic Culture Will Rock Your World” and right after that, we’ll here from Craig Newmark and RCG’s Dustin Luther and THEN finally, “The Housing Debate: Bull v. Bear” panel with two of my favorite bloggers, CR from CalculatedRisk and Yves Smith from Naked Capitalism.  It doesn’t look like all the meals are covered so if anyone who knows San Francisco has suggestions for where to step out for a quick bite, please let me know. I’m across the street from the Mongtomery Street BART station and I am armed with a four day BART pass. 

Sunday Night Stats

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Before I did the Quarterly and Weekly stats tonight, I did a few calculations on newer vs. older property.  I was wondering with lower volume, if more newer properties were selling at a higher rate.  Given more choices, would people disproportionately select newer homes and condos?  Answer was no, not dispropotionately. 

35% of residential properties for sale were built since 2000 and 33% of properties sold YTD were built since 2000.    32% of condos for sale were built since 2000 and 38% of condos sold were built since 2000.  So a tad overweighted toward newer on condos, but not by much. 

The significant news this year, since volume of property sold being down is really last year’s news that continues in a stablilized manner, is that this is the first time in many years that the MPPSF is lower in the 2nd quarter than in the 1st Quarter. 

The scarier number is the $206 per square foot on the residential properties currently in escrow.  It is quite possible that this lower number is being caused by short sales that are not closing at these low numbers.  Short sales take a long time to close, so we may not know that answer until the end of the 3rd Quarter.

King County Condos

2004 – 1Q – 1,694 – $188, 2Q 2,636 – $199, 3Q 2,540 – $196, 4Q 2,176 – $195

2005 – 1Q – 2,066 – $198, 2Q 2,925 – $209, 3Q 2,769 – $226, 4Q 2,266 – $224

2006 – 1Q – 1,956 – $242, 2Q 2.748 – $252, 3Q 2,737 – $269, 4Q 2,217 – $278

2007 – 1Q – 2,042 – $295, 2Q 2,862 – $302, 3Q 2,676 – $311, 4Q 1,618 – $294

2008 – 1Q – 1,258 – $299, 2Q 1,508 – $287

Changes in condo stats for this week

Active Listings: 3,958 – UP 90- median price $319,990 – MPPSF  asking $312 – DOM 65

In Escrow:  856 –  DOWN 14 – median asking price $289,000  – MPPSF asking $294  – DOM – 49

Sold YTD :  2,955 – UP 178 – median list price $290,000 – median sold price  $287,000 – median PPSF – $290 DOM 49  

Residential King county

2004 – 1Q 5,650 – $152, 2Q 9,237 – $160, 3Q 8.737 – $163, 4Q 7,467 – $165

2005 – 1Q 6,402 – $173, 2Q 9,093 – $185, 3Q 9,131 – $192, 4Q 7,301 – $195

2006 – 1Q 5,596 – $201, 2Q 8,248 – $214, 3Q 7,771 – $216, 4Q 6,204 – $217

2007 – 1Q 5,304 – $222, 2Q 7,393 – $230, 3Q 7,944 – $229, 4Q 4,301 – $221

2008 – 1Q 3,640 – $219, 2Q 4,641 – $220

Changes in residential stats for this week

In Escrow: 2,760 – UP 2- median asking price $425,000 – DOM 48 – MPPSF $206

SOLD YTD: 8,963 –  UP 648- median asking $449,950 – median sold price $440,000- DOM 49 – MPPSF $223 

Actively for sale 12,339 – UP 436- MPPSF <$800,000 is $220- MPPSF >$800,000 is $335

Stats not compiled or published by NWMLS. (Required disclosure)

Join us for a Ballard Conversation with Cory & Kate @ 4pm

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MyBallard.com screenshotI’m really excited that today’s episode of Rain City Radio will feature Cory and Kate of MyBallard.   I have an obvious Ballard-bias because I think it is one of the best areas in all of Seattle, so it should be a lot of fun to explore this neighborhood with some of the best local bloggers!

You can listen to the conversation starting at 4pm by simply clicking on the play button on the radio widget on the right panel, or call-in to the program by following the instructions on the TalkShoe page.

Arrive with questions, concerns, and comments as I expect another great conversation like our previous calls with local bloggers like Tracy of West Seattle and Justin of Capitol Hill.

UPDATE:

I thought it was a wondeful conversation with Cory and Kate of MyBallard!  You can listen to the entire conversation by using the “TalkShoe” widget to on the sidepanel of Rain City Guide!

We covered a mix of topics around both local blogging and their take on Ballard.   I found it particularly interesting that they both have only lived in Ballard for less than a year, and yet have quickly developed a strong connection to the neighborhood. Also interesting, is that like Tracy from the West Seattle blog, they both of journalism degrees and see this local blog as a future in terms of how news will spread through communities.

Sunday Night Stats – Volume is Stabilizing

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We have a couple of months to go before we have a full 12 months past Mortgage Meltdown to guide us into the future of the real estate market.  But volume has really been pretty stable.  As you can see from the above chart, September of 2007 is when the market dropped as to volume.  Compare this to some graphs I did at the end of last year showing the relationship of volume month to month back in 2005.  Then add my predictions as to volume back in mid April of this year.

When I predicted that total single family home sales in King County would be 16,500 by the end of 2008, I was basing that on the second chart in the first link above.   Let me bring that chart forward so you can follow what I’m saying better.

June 2008 sales were 1,557.  June in 2005 represented 10.3% of the total year sales.   1,557 is 10.3% of 15,116.  If you use April sales from the top wheel of 1,505 that would be 9% of 16,722 (which is where my prediction of 16,500 came from).  While volume is clearly drastically reduced, it is not dropping out from under us.  It basically dropped once and then stabilized.  That’s good news, though we do see some minor slippage in the relationship between April of 2008 and June of 2008, so we will continue to track that as the year progresses.

Where prices will go in response to the change in volume is another story and where Absorption Rates become a weak indicator.  Absorption Rates only work when you can expect all inventory to be “absorbed” .  that is not the case.  In a market like this you have to throw absorption rates out the window and try to find the point at which a property will not sell at all.  The worst I have seen is a market where only 3 of 10 houses will sell PERIOD!.  To say current inventory will be absorbed in eight months is not true.  At the end of eight months, some of those homes will still be on market and other properties that came on market after them will be the cream of the crop that sells.

When you see prices fluctuating upward, while volume is stablilizing and absorption rate is high, that is because the small percentage of homes that sell quickly and at higher prices, are influencing and increasing the price stats.  We saw that more in February, March and April than we did in May and June.  That is why the April prediction of 16,500 may turn out to be 15,500, since June did not expand much beyond April levels as it usually does.

Single Family Homes in May and June look like they sold at higher prices, as does the condo market, but that is because people are opting to get more for their money.  As price per square foot drops, people are opting for bigger houses and lower prices.  Instead of buying an 850 square foot condo for $250,000, they are buying an 1,100 square foot condo for $300,000.  So they are paying a higher price, but a lower price per square foot.  Same is true for single family homes.  In March the median price was $435,000 and the median price per square foot was $221.  In June the median price is up to $451,000 but people are opting for the higher price AND the larger house, as they trade in the lower price per square foot of $216 for more house. (Note, homes in escrow are at $207 MPPSF – see weekly stats)

It’s really a smart move.  People who are unsure of the market over the next several years are making sure they buy a condo or house that is large enough so that they can stay put, and not have to trade up as to size.  Those who are buying, and there are clearly fewer of them, are not buying with the idea that they will REFI or sell in a couple of years.  They are buying for the long term.  They are paying a higher price, but a lower price per square foot.  That is why it may appear that prices are going up, when they are really going down. 

Before I do this week’s stats, note that earlier this week I did the 1st half and 1st quarter to 2nd quarter comparison.  May and June did not do as well as expected, so the 2nd quarter did drop more as to volume YOY than the 1st quarter.  But if the market can sustain at this level for another 45 days, I think by year end it will still be in the 16,500 total sales for the year range.

Sorry this post is so long tonight.  There are no easy answers this year.

Changes in condo stats for this week

Active Listings: 4,014 – UP 56- median price $320,000 – MPPSF asking $313 – DOM 66

In Escrow:  847 –  DOWN 23 – median asking price $297,000  – MPPSF asking $302 – DOM – 48

Sold YTD :  2,875 – UP 98 – median list price $290,500 – median sold price  $285,500 – median PPSF – $289 DOM 48  Note: 35% selling in 30 days or less.

Residential:

In Escrow: 2,771 – UP 11 – median asking price $434,000 – DOM 49 – MPPSF $207

SOLD YTD: 8,612-  UP 297- median asking $449,950 – median sold price $440,000- DOM 49 – MPPSF $218  Note: 36% selling in 30 days or less.

Actively for sale 12,184 – UP 281- MPPSF <$800,000 is $220- MPPSF >$800,000 is $337

Note that the MPPSF Asking prices of homes not sold is virtually unchanged week to week while those going into escrow are the ones asking less and less each week.

(above info and graphs not compiled, published or verified by NWMLS – required disclosure)

Buying or selling a home: how are you making hiring decisions?

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As we are finding out (some for the first time), housing and the mortgages that finance it is a key economic engine.

Question: Is it important that the agent and/or loan officer you are working with have a keen understanding of fundamental market knowledge and economics? Should they show competency in basic fundamental economics and how it impacts housing?

How would you rate the importance:

1) Very important (it could make the difference in working with the agent/loan officer or not).

2) moderately important (would allow for good discussion, but it would not necessarily dissuade a working relationship).

3) somewhat important.

4) of little importance.

The First in a Series of Fannie and Freddie Bailouts

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The rumors floated on Friday regarding Fannie and Freddie turned out to be true.  This first bailout proposal, released a few hours ago, has three parts.  I say “first” because there is no way that this is going to be enough to save what’s headed our way nor will this be the only time the government will need to “bailout” F&F.

The U.S. Treasury plans to seek approval for a temporary increase in the line of credit granted to Fannie Mae and Freddie Mac. They will also seek authority to buy equity in either company, and the Federal Reserve voted to allow the New York Fed to loan F&F money, if needed, giving F&F access to the Federal Reserve’s discount window.

The Wall Street Journal says the U.S. Treasury and The Federal Reserve are doing this mainly to boost confidence in F&F, not necessarily because any of this is needed, which to me seems to be a flat out lie.

The weekend move means that Fed Chairman Ben Bernanke, who has been steadily accumulating authority as the U.S. grapples with the financial crisis, will have even more power. The Treasury envisions the Fed working with the mortgage giants’ regulator to help prevent situations that could be a risk for the entire financial system. The move builds on Treasury’s broader goal of remaking financial regulation to give the Fed broader influence over financial-market stability.

I’m not sure if we’re suppose to be happy or scared at the thought of Ben Bernanke accumulating more power.  Maybe what’s really going on is some preemptive planning due to known or unknown possibilities that tomorrow’s auction of Freddie Mac debt doesn’t go well.

The Sunday move was designed in part to head off fears about Monday’s auction of Freddie Mac notes. While small, the planned sale had assumed an outsized importance as a test of investor confidence. Freddie should be able to find buyers for its three- and six-month notes, market analysts said. But there is a chance that some financial institutions and investors may demand higher-then-usual yields.

Similar Freddie and Fannie notes that are currently outstanding yield around 2.5%. If weak demand for Freddie’s auction leads to sharply higher yields on the new notes, that could trigger a selloff across a wide range of debt issued by the companies, some analysts said. But most said such a scenario is unlikely.

I’ve been glued to the web, the radio, and my phone since Friday evening reading, listening, and talking about this with friends and colleagues. If the federal government choses to provide (the implied) government backing for bondholders, then the United States increases our national debt by 5 trillion dollars which would have a profoundly negative impact on the value of the dollar and potentially bankrupting the U. S. economy. If the federal government chooses to do nothing and F&F are forced to mark their portfolio closer to market value and sell off assets to accumulate capital, then the true value of what’s in the bag becomes known. The secret will be out and now nobody will be interested in buying our Residential Mortgage Backed Securities, the market will know the true value of the loans currently being held by banks all over the U.S., mortgage lending slows way down, interest rates go way up, and the housing market goes cliff diving.

It seems to me that with this first bailout proposal (I am preparing for more bailouts as should you) everything is just going to be delayed as long as possible, taking us down further into a deeper recession step-by-step.

This bailout proposal is not enough. We have only just begun to see foreclosures rise. We still have the rest of 2008 to get through, when another round of pay option ARMS originated in 2006 begins to adjust, and through 2009 when the ARMs originated in 2007 adjust. Defaults and foreclosures are far from over.

There was a guy who predicted the demise of Fannie and Freddie back in 2006.  His proposal is that we nationalize Fannie and Freddie, quit pretending that they’re a private company, and restructure the debt, thereby forcing the bondholders to take a haircut.

Sniglet asks an interesting question (comment 123): “So what happens to the shareholders? Do any of these plans ensure that there is no dilution of equity if any form of bail-out were to occur? If the GSE shareholders aren’t protected then we could see a complete abandonment of the financial system by investors. Who will want to buy shares in financial firms if the government isn’t going to ensure their investments remain safe?”

From everything I’ve read over the weekend, the government likely will not protect shareholder equity.  Whether or not they should is up for debate.