The Times piece also mentions the cyclicality of the Puget Sound real estate market relative to other metros in the country(which I’m sure all of your readers are well aware of). The piece says that during the 2001-2004 recession in Seattle, “home-price appreciation during much of that time coasted at 4 percent or so — roughly half of what it had been in the late ’90s.” I attribute the fact that home prices continued to appreciate even during the recession to pent-up demand from the preceding boom years, the continuance of low long-term rates, and the rise of the creative loan packages.

Homes are still affordable if you and your significant other both make the average wage or better, or if an individual makes significantly more than the average. I have to agree with the Times’ author in that I don’t see Puget Sound medianhome prices dropping significantly unless a large number of people used teaser/neg-am loans.

There will be a fire sale soon enough.

I’ve read a few metrics about construction costs actually *falling* as some builders are having trouble, slowing starts, and idling crews as these projects go to completion. It’s not just labor – some supply costs are falling too (was demand driven up by the building bubble, or was it gouging, or was it due to the general commodities bubble of the last few years? I would like to see some analysis if anyone has seen it)

Anyone who buys shelter today without negotiating *HARD* on cost is getting taken.

1. It’s those darn construction costs to blame for unaffordability downtown.
2. It’s the “females” (in LeslieW’s turn of phrase) who can’t afford downtown prices.
3. To soothe downtown affordability problems we just need to build more in Georgetown, Pioneer Square and SODO.
- Extra credit for statistical magic: the article says 17% of new owners downtown are single women, and that 80% of downtowners are renters. What’s the percentage of single women downtown, renters, existing owners, and new owners combined? Anyone?.. Bueller?…

The remaining units in a new building at Ninth and Virginia were priced between $970,000 and $1.9 million in March.

What perfect timing, right next door both Cosmo and 2200 have over 25% of their units back on the market, with most priced well under a million bucks.

Prices driving single women from downtown condo market

Love that quote about “demand outstripping supply”. That’s why there are twice as many on the market this year as there were last year…

http://seattletimes.nwsource.com/html/businesstechnology/2003709453_webcondo16.html

a) credit for marginal buyers had already began tightening by this time, making it impossible for “owners” to temporarily overextend themselves to get into a mortgage

b) simply a euphemism for people shrugging their shoulders, and waiting for price deflation.

A. above I think is basically impossible – credit has hardly begun to tighten yet. Maybe this explains a little of the decline in Snohomish regional (and condos) that S. Crow posted about recently — however, any hypothetical subprime tightening wouldn’t have been visible in the time period for this study. It might not even be visible in the next release of the data. Still a *LOT* of loose $$ flying around out there – Believe it.

B) I think is a little more likely. I know of several anecdotal cases (including my own) where high-income, financially savvy individuals who could in some cases easily afford 50% down or more, are deciding to stash money elsewhere. Unless you have >2 kids, it’s a no-brainer.

“Opportunities” indeed. Opportunities to line a broker’s pocket with fees, and an agent’s pocket with commissions? No thanks — I’ll take my no-load funds and monthly rent at 45% of equivalent mortgage PITI.

Trends, regardless of magnitude or historical context, are far more important than objective facts.

Um, why would I want to be a homeowner right now? I am absolutely stealing money from my landlord.