Seattle Bubble

Okay, so that title was a bit overdramatic. But that’s the job of a “reporter” right? Heh. Anyway, about 100 miles east of Seattle on I-90, the Ellensburg area is experiencing its own real estate boom, with new homes popping up at a record pace:

Building permits issued for new homes in Kittitas County outside city limits hit an all-time high of 286 in 2004, an increase over the 235 issued in 2003.

The 2004 record level was reached and exceeded on or about Oct. 19, according to Darryl Piercy, director of Kittitas County Community Development Services.

“It’s definitely a continuation of the trend we’ve seen in the last few years,” Piercy said. “This area is tremendously attractive if you live in the Puget Sound area where your faced with traffic congestion, a large population and crime.”

I’m not familiar enough with real estate lingo to know whether 286 permits means 286 homes, or 286 projects (which could each be multi-home), so I’m not sure how big a number we’re really talking about here, but it’s apparently enough to get noticed frequently by the locals. Speaking of locals, it seems that quite a few of the new homes aren’t going to be inhabited by them:

Piercy estimated 20 to 25 percent of new homes are second or vacation homes.

Bob Hansen, a 31-year veteran in real estate, said if the nation’s economy doesn’t change dramatically, the boom trend could continue through 2006, at least.
…
He said a Seattle resident looking to retire in the Kittitas Valley can sell their $300,000 to $400,000 home and come here, buy acreage in the country and build a new home. The demand is high for three- to five-acre rural lots.

“They want to get out of the mess over there,” Hansen said. “It’s the lifestyle they are after.”

Or is it the relatively cheap land that they think will appreciate considerably in the coming years? When I hear “second or vacation home” lately, that tends to be translated in my head as “investment home.” Good thing a “dramatic” change in the nation’s economy is so unlikely. Right?

(Mike Johnston, Ellensburg Daily Record, 10.22.2005)

Nothing shocking going on here, just more confirmation of local neighborhoods still on the rise. Specifically, this story is about Thurston County.

South Sound’s booming housing market and recovering economy are contributing to record gains in Thurston County property values.

For the second year in a row, Thurston County set a record for gains in residential property tax assessments.

This year’s overall 12 percent gain beat last year’s 8 percent gain, which was a record dating back to at least 1999, according to Dennis Pulsipher, the county’s chief deputy assessor. Such gains are reflected in 108,000 assessment notices scheduled to be mailed Wednesday to property tax payers.

Those lucky tax payers!

(Jim Szymanski, The Olympian, 10.18.2005)

You may recall last month that over on the other side of the Sound Kitsap County made King County’s gains look small, and in the month of September they’ve done it again, with Silverdale posting a 36.7% year-on-year increase.

Doney said the demand for affordable housing continues to increase, but that demand has the perhaps unintended affect of driving prices up, pushing south the line between affordable neighborhoods and higher priced ones.

A year ago in September, of the 19 Kitsap County areas measured by the listing service, Silverdale was the ninth most expensive. This September it came in sixth.

In Central Kitsap 108 homes sold during September, up 21 from the same month a year ago. More than half of those were in East Central Kitsap, where the median price jumped from $189,000 to $249,975, a 32.3 percent increase.

Affordability has left the building.

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CK Home Prices Jump

October 16, 2005

While the usual suspects — Bainbridge Island and North Kitsap — continue to see housing price increase, Silverdale appears to gaining momentum.

“I think it comes down to affordable housing,” said Cathy Doney, a broker in the Silverdale Reid Real Estate office.

The median home price in Silverdale was $312,250 in September, compared to $228,495 in the same month a year ago, according to figures released by the Northwest Multiple Listing Service.

The 36.7 percent median Silverdale home price increase matches the rise on Bainbridge Island, where the median home price jumped from $416,250 to $569,000.

Doney said the demand for affordable housing continues to increase, but that demand has the perhaps unintended affect of driving prices up, pushing south the line between affordable neighborhoods and higher priced ones.

A year ago in September, of the 19 Kitsap County areas measured by the listing service, Silverdale was the ninth most expensive. This September it came in sixth.

In Central Kitsap 108 homes sold during September, up 21 from the same month a year ago. More than half of those were in East Central Kitsap, where the median price jumped from $189,000 to $249,975, a 32.3 percent increase.

Apparently, the view of Seattle had an impact last month as well. Prices in the Manchester/Retsil area of South Kitsap jumped 48.5 percent, from $191,950 to $285,000.

The median price in East Bremerton went up 16.3 percent to $223,750, while West Bremerton at $157,500 saw a 6.2 percent jump.

Doney said the demand for affordable housing will eventually create higher home value increases in Bremerton, too.

In terms of total volume, buyers spent a total of about $164 million on 493 homes during September, and average of $333,114, a 10.3 percent rise in sales and a 22.2 percent increase in average price.

Kitsap County’s 18.6 percent overall median home price increase $221,000 to $262,000 was 11th highest in the areas the Northwest Multiple Listing Service covers. Mason County median prices increased 20.9 percent from $145,000 to $175,250.

The median home price was $349,898 in King County, $245,000 in Pierce County and $285,000 in Jefferson County.

By Steven Gardner

sgardner@kitsapsun.com
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(Steven Gardner, Kitsap Sun (free sign-up req.), 10.16.2005)

I failed to mention this before, but I’m actually on vacation right now, through October 30th. So expect posts here to be sporadic, but I will try to get in an update every few days. Although it doesn’t have anything to do with Seattle specifically, I thought some of you might enjoy this comic I saw in the Sunday paper. Click it to view a larger version.

(Berkeley Breathed, Washington Post, 10.16.2005)

Here’s another update on the continuing focus on the “spend or save” question when it comes to property & real estate tax revenue windfalls. The Seattle Education Association chimes in on the side of “spend,” requesting a big piece of the pie.

The Seattle Education Association (SEA), which represents the district’s teachers, instructional aides and office staff, called on the City Council and Mayor Greg Nickels to set aside for the district $25 million a year for the next five years. The city expects to collect about $55 million more than analysts had predicted in sales, business and real-estate taxes by the end of next year.

While the city is not immediately acquiescing to the request, it seems the debate isn’t whether to spend or save, but rather just how to spend.

Nickels’ spokeswoman, Marianne Bichsel, said the city has sustained $120 million in budget cuts over the past three years, and that the higher-than-expected revenue should be used to restore funding to public safety, transportation and human services.

Great idea. Then we can go through the exact same budget cuts a few years from now when the real estate money tree shrivels up and dies.

(Sanjay Bhatt, Seattle Times, 10.13.2005)