Seattle Bubble

The real estate blitz is having a noticeable effect on state revenue:

Washington state’s surging economy, driven by a continuing construction boom and red-hot real estate market, will pump an additional $493 million into state coffers, forecasters said today.

The good news – the third quarterly revenue surge in a row – brings the state’s reserves to over $1.1 billion.

Will the state be as blithe with the money as some local governments have been? Hopefully not, but what politician can resist spending money?

[Washington State Chief Economist ChangMook] Sohn said the sizzling housing market is responsible for nearly half of the latest windfall. But he cautioned that the pace will soon start slowing to a more normal rate.

It will be interesting to see if his advice is heeded.

(David Ammons, AP (Seattle Times), 09.15.2005)