Most people reading this blog have probably already seen this month-old report from Forbes that ranks Seattle as the #1 most overpriced city in the country, but I thought it would be pertinent to post here anyway, especially considering the more recent report that places Seattle “way down” at #86 most over valued.
To determine the ten most overpriced places in the country, we started with the 150 cities examined in Forbes’ 2005 list of the Best Places for Business and Careers. They were ranked from 1 to 150, with 150 being the worst. We extracted the rankings for job growth, income growth and cost of living (which includes the cost of housing, utilities, transportation and other expenditures), then added to the mix a housing affordability index from research firm Economy.com. The index measures how much of a local median-priced home (the price at which 50% of homes are more expensive and 50% are less expensive) you can buy if you earn the local median income, given current interest rates. We totaled everything to see which cities come out on top–or on the bottom–depending on your perspective.Seattle, once again, took the highest spot on the “Overpriced List,” because it’s still recovering from the dot-com blowout five years ago.
Go Seattle! We’re #1! Well, we’re either #1 or #86, depending on who you listen to. All I know is that there’s no way I can afford a house around here, and I make a decent living. So it’s overpriced for me. Of course…
If you’re unfortunate enough to live in an overpriced city, stop your whining. After all, there must be something keeping you there, whether it’s the museums or the easy commute. And if you’re lucky enough to live outside of the top ten, count your blessings–and your dollars.
Hey, they’ve got a point. FYI, the purpose of this blog isn’t to “whine” per se, but rather to initiate discussion among interested parties. If I’m wrong and Seattle isn’t in a bubble, and prices just keep going up and up, then there’s a good chance I will just leave.
(Sara Clemence, Forbes, 07.14.2005)
Thanks for doing this site so I didn’t have to.
I moved to Seattle from Marin County, CA six years ago. We laughed when others complained about the prices in Seattle.
I’m amazed at the stagnant rental market here compared to buying. I have no desire to buy in the city when I can rent a decent flat for $925 in Ballard.
By contrast, I used to live in Seattle, and have moved to Marin. By the end of the dot-bomb, I suspected housing here was driven up by speculation, but I did not imagine to this extent. Now, everyone and his dog is “investing”, and the prices show it. Traveling back to Seattle recently, I’m noticing gains similar to hear 5 years ago. I think it will burst in CA first, and then ripple north.
The Tim:
You’ve got the right attitude. As I mentioned previously, I’m aiming to retire in the Puget Sound area in about eight to ten years. Accumulating cash in the meantime. Of course, that is only if I can afford a home by conventional methods.
My hope (not prediction as I gave up market timing long ago)is the hissing will be over by then, the blood in the street mopped up, and houses will back to realistic valuations.
Otherwise, I’ll examine the rent/own ratio and just head elsewhere too if things are way out of whack.