A number of readers pointed out the latest series of rah, rah, real estate stories from Money Magazine that sing the praises of real estate in Washington State. The gist of the articles is that while the slowdown in real estate is undeniable in most of the country, the crystal ball predicts that a number of areas in Washington State will defy all logic and economic reason and continue to experience double-digit appreciation, so you should totally invest all your money in Washington real estate so you can cash in on the party.
As forecasts for housing price growth have cooled for most of the country, they are calling for booming values in the state of Washington.
For the June issue of MONEY Magazine, Fiserv Lending Solutions and Moody’s Economy.com provided forecasts for the coming 12 months for 380 metro areas – they predict that five of the top 10 fastest growers will be in Washington. Ten of the top 17 will be.
“Although price growth has been steady in Washington, it has not been outstripping the economic fundamentals,” says Celia Chen, Director of Housing Economics for Economy.com.
The real estate markets have been pretty much balanced in the Northwest while many others have been sellers-markets for years.
Lennox Scott, who runs John L. Scott real estate, one of the biggest brokers in the Northwest, attributes much of the future market strength in Washington to job growth. “Microsoft announced it’s hiring 10,000 more people,” he says. “Boeing is hiring. The anomaly of historic low mortgage rates drove prices for the past few years. Job growth will drive them for the next few.”
Microsoft and Boeing are driving our stellar job market? Where have I heard that argument before? Oh yeah, four posts ago, that’s where. I guess Lennox doesn’t read this blog yet.
By their reckoning, the Seattle-Bellevue-Everett region (why so encompassing?) is sitting pretty in position to gain another big 10% in the coming year. That would bring the median house price in King County to roughly $465,000 by April 2007. I suppose it’s possible, but my gut feeling tells me that just ain’t gonna happen. Of course, I don’t even own a crystal ball, so what do I know?
Here are their forecasts for various cities in Washington. “Historical” refers to home appreciation from 2001 to 2005 (an amusing usage of the word “historical”), while “Forecast” is what the crystal ball predicts for June 2006 – June 2007:
Update: A reader pointed out in the comments section that a mere eighteen days ago the very same reporter (Les Christie) at the very same news source (CNN Money) presented a forecast from the very same firm (Fiserv Lending Solutions) that was mysteriously very different. In fact, the highest forecasted appreciation for a Washington metro area in the May 1st report is lower than the lowest forecast in today’s report. Hmm.
|Metro||Median Price||’04 – ’05||Forecast|
(Les Christie, CNN Money, 05.01.2006)