Hot on the heels of an unusually balanced report on the latest NWMLS home sales data, Aubrey Cohen comes back with another piece on the local market, this one full of non-sensical rationalizations for continued price gains.
Ken Kam, of Honolulu, scoped out second-home possibilities during a Seattle visit last month.
“It seems like it’s an up-and-coming and popular place,” he said while looking through a Queen Anne town-house development in which units start above $800,000. “The prices are still lower than in Hawaii.”
Two doors down, Tim Hug and David Hofmann were washing a BMW outside the town house they moved into in June after relocating from San Francisco.
San Francisco’s still more expensive, but Seattle’s catching up, Hug said.
People such as those help explain new Census Bureau data, which show Seattle’s home values rising considerably faster than incomes in recent years.
The 2006 numbers, released Tuesday, show the value of a typical Seattle home is 7.7 times the median household income in 2006 — a 39 percent jump from the ratio in 2000.
Seattle’s ratio of home value to income is higher than the county, state and nation, although that gap has narrowed in recent years.
But Seattle still is far more affordable than cities such as San Francisco, where houses cost 12.3 times the median income, and Honolulu, where they cost 10.7 times the median income. This ratio increased by more than 50 percent since 2000 in Honolulu and more than 60 percent in San Francisco.
That disparity is one reason King County regional labor economist Cristina Gonzalez does not expect much fallout from Seattle’s rising prices on the wider economy.
“Compared to other West Coast cities, they’re not unthinkable yet,” she said.
So, the take-home message is that prices in Seattle are bound to keep rising, because all of the homes will be bought by wealthy people moving here from places where homes are even more ridiculously expensive. I actually buy the ‘rich out-of-stater’ theory to a degree, but I think the effect is fairly limited. Also, doesn’t the theory that wealthy people from more expensive housing markets are propping up our own market directly contradict the claim that Seattle is insulated from the housing bust going on across the nation? When prices drop in San Francisco and Honolulu, wouldn’t the situation reverse itself?
The article does include some balance, but only because it’s really just an Associated Press report with the local cheerleading tacked on. The AP portions are decidely less optimistic:
“We had an artificial economy,” said Brad Geisen, founder of Foreclosure.com, a Web site that lists foreclosure properties. “There was all this wealth created in real estate, and it wasn’t really created.”
Mark Zandi, chief economist at Moody’s Economy.com, likened the current housing market to the dot-com boom and bust a few years ago, when stock prices for many tech companies soared — before some of them ever turned a profit — and then crashed.
“The parallels are quite similar,” Zandi said.
Anybody remember how that dot-com bust turned out for Seattle?
(Aubrey Cohen, Seattle P-I, 09.11.2007)
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57 responses so far ↓
1
Onlooker
// Sep 13, 2007 at 2:53 pm
It’s all so clear to me now:
As long as there are more expensive areas, Seattle has room to grow.
I hear downtown London flats can fetch $8,000 sq/ft. We’re positively CHEAP!
2
Greg
// Sep 13, 2007 at 3:07 pm
I’m from a place more expensive (Boston).
My next-door neighbor is too (San Fran).
His neighbor is too (Hong Kong).
So, yes, at least in my neck, this is an important effect.
Cost is very relative.
3
Old Ballard
// Sep 13, 2007 at 3:28 pm
Yes, cost is very relative, but very few people get up and go, leaving behind family and friends, a good job, and the place they’ve grown to love, just to save a few K on a house or condo. Ninety percent want to buy closer to mom and dad not two thousand miles away. Sometimes people do get jobs offers and have to move thousand of miles, but that’s the exception not the rule. Most people would change careers but leaving home.
4
Old Ballard
// Sep 13, 2007 at 3:30 pm
Yes, cost is very relative, but very few people get up and go, leaving behind family and friends, a good job, and the place they’ve grown to love, just to save a few K on a house or condo. Ninety percent want to buy closer to mom and dad not two thousand miles away. Sometimes people do get jobs offers and have to move thousand of miles, but that’s the exception not the rule. Most people would change careers but leaving home. You add children to the equation and the disire for family is even stronger.
5
BubbleBuyer
// Sep 13, 2007 at 5:37 pm
I think the inflow of out of state residents from expensive states to Seattle is a factor in increasing demand. I am an example of this. Economics dictate that people will continue to migrate from high cost areas to low cost areas that offer similar life-styles and career opportunities, until cost of living equalize. However, I seriously doubt that this effect is significant enough, in the short to intermediate term, to prop up prices if indeed the RE market in Seattle is fundamentally over priced as most of you claim.
I don’t think anyone can forecast the future but the next year or two will certainly be interesting.
6
Sen
// Sep 13, 2007 at 5:40 pm
“Ninety percent want to buy closer to mom and dad not two thousand miles away.”
Actually this is an extremely mobile country, especially among urbanites. I certainly know a lot more people in Seattle from elsewhere than from here. It’s true that Seattle has had more people moving in than SF, LA or San Diego which all had negative migration in the last several years. But people from Seattle are moving to cheaper places, too. Does anyone have the statistics?
7
MisterBubble
// Sep 13, 2007 at 5:52 pm
This town is so weird. Only locals would get excited about being named the national urban Consolation Prize….
Seattle: the Discount City.
8
Sandy
// Sep 13, 2007 at 5:52 pm
The fact that sales prices are going up means nothing to the person who wants to buy or sell a house today–it is only meaningful to the person who bought one about 30 days ago (which is about the normal amount of lag time between making an offer and closing). Listing prices have been dropping for the last 2 - 3 months in my area and that is, to me, a better measure of what is happening in the market right now than closed sales, which continue to go up.
Closed sale prices will probably take a while to catch up because of 1) the lag, 2) people list stuff at a price that is too high and will never sell (this is about 20 to 30% of our inventory in a “balanced market, which is not what we are experiencing in my neck of the woods at the moment…it is a buyer’s market), 3) the properties that sell are the ones that are priced best as compared to the competition and usually those will be right at the top of the price range and 4) sellers who saw their neighbor sell their house for $XXX will resist selling their house for $XXX minus 5% unless it becomes clear to them that there is no way to avoid it.
In a buyer’s market (which is what we’re experiencing where I live), if a listing is not the best in its price range the day it is listed, then it will sit on the market and price will have to drop until it is. If the person listed in June or July before the you-know-what really started to hit the fan, the price may yet have a ways to come down to meet the demand that is out there now. There are a lot of those sellers out there right now, and only when they receive an offer and it closes at $XXX minus 5% will we really be able to see the price reductions reflected in closed sales.
Closed sale prices reflect closed sales (I know–brilliant observation huh?), which represents the end of the “listing lifecycle.” It’s the last thing to happen, so it’s last to show up in the numbers.
Watch active listings if you want to see what’s actually happening right now.
Oh, one other thing…2006 numbers have no relevance to anything at all, but that is what those Census numbers are. Totally different market affected by totally different factors.
Oh, one other thing…median price doesn’t mean much if the only stuff that is selling is stuff in the higher end. You have to also look at volume. Volume is down.
9
MisterBubble
// Sep 13, 2007 at 5:54 pm
Actually on second thought, I have a better analogy:
Seattle: the Zune City.
10
deejayoh
// Sep 13, 2007 at 6:12 pm
Since you asked.. WSDOL publishes migration data based on drivers licenses surrendered and has in/outflow estimates by state. It’s the most accurate data I have seen on this issue.
Immigration from Cali looks like it has been dropping like a stone for about the past year, off about 15% on an annualized basis from it’s peak in Sept 2006.
11
Old Ballard
// Sep 13, 2007 at 6:28 pm
To new comers it does appear that everyone is from somewhere else. I lived in NYC in the 80’s and took me about two years to realize that most of the people living in NYC were born there. It was like that when I first moved here eighteen years ago. But now the majority of people I know were born inside the Seattle City Limits, the greater Puget Sound area, or have live here at least as long as I have. I’m in my mid-forties. It seems to me that the largest demographic for new emigrants would be people in their twenties, and unless their all trust fund babies I question their ability to buy a 450k home. It’s still hard for me to believe that dollars values mean more than family for most people.
12
David McManus
// Sep 13, 2007 at 7:09 pm
“It seems to me that the largest demographic for new emigrants would be people in their twenties, and unless their all trust fund babies I question their ability to buy a 450k home.”
What are you talking about? We buy by overextending ourselves, listening to the realtors, and purchasing things we can’t afford because it’s our God-given right. I mean, housing is only going up, right? Heck, I stopped contributing to my 401k and it’s all going towards making my mortgage payment.
13
John
// Sep 13, 2007 at 10:00 pm
This all may be explained by the hourglass economy, not just immigrants who are used to seeing $800/sq.ft..
The number of millionaire households is growing every day. A $1 million house is nothing to these families. The county median home price gets jacked up by the type of people who can party even if things aren’t looking so good for the peasants.
I agree with other posts that suggest desirable close-in neighborhoods may not be seeing that much of a decline. Areas that are further from the job centers? That’s a different story.
14
Kyle Nelson
// Sep 13, 2007 at 10:11 pm
The stock market is going up, despite the doom and gloom crowd. Contrarian thinking wins the profits right now. Guess what all the big players are betting on? The US economy is entering a new stage of international economics and world growth, which is the start of the new roaring financial century. Trade with China and SE Asia, and the breakdown of world trading barriers is making US corporations rich and securing the US position in the world.
15
Bitterrenter
// Sep 13, 2007 at 11:41 pm
Things getting VERY ugly down here in Portland. Don’t think the NW is going to be spared after all. But really, did you honestly believe your 1 BR 1BA condo was worth 400k? Oh, you did? So much for Seattle being the most intelligent city in the country.
16
B&W Nikes
// Sep 13, 2007 at 11:47 pm
“When prices drop in San Francisco and Honolulu…” Please let everyone know when they cease to become less in demand places for people with a few hundred thousand dollars to kick around. Those of us “in the know” will swarm in like vultures where the weaker willed fear to tread to get in on the deal once their money has disappeared in the vacuum. Certainly our dollars will be worth more since we held on to them during the dark times… right? Why don’t we rather talk about the income disparity that drives this 20 year old question of unaffordability? Poor attention spans and lack of public servants forever in fear of being lableled as socialists not acting as advocates. Not to really "dog" hard, but come on, you will ALWAYS be able to sell a house in Honolulu or San Francisco and buy two or three in Seattle. Unless we get a nice sandy beach with that Viaduct replacement.
17
B&W Nikes
// Sep 13, 2007 at 11:59 pm
Sorry, that was a rambling blemish, but except for media driven provincial anecdotalism to prop our self-importance (which I too think is higher than anyone will ever realize) who in the heck thinks to themselves “I was going to live in (fillintheblank) but Seattle was such a bargain and better investment I’ll move there? And it’s so nice all year!” Answer: fools, romantics, and some highly specialized and very disciplined types = not too bad a situation, but no horse race. For most peoples needs, it’s retarded expensive and fairly uncomfortable in this Klondike outpost. Ups to those who like it enough to stay long term.
18
what goes up comes down
// Sep 14, 2007 at 4:21 am
item 1. I recommend as an experiment people go on craigslist and in the re section type reduced and just look at the results, I have done this for the last four months and low an behold the list is now considerably larger
items 2. the idea of people relocating to seattle for re reasons is a joke, re is going down everywhere this is not a local problem but countrywide — no pun intended.
19
what goes up comes down
// Sep 14, 2007 at 6:58 am
Kyle — the US may just be entering what is called a recession.
20
Buceri
// Sep 14, 2007 at 8:07 am
Kyle;
The US cannot compete. Trickle down economics, my a.s.s. 30 years ago? Sure. Today? Give a corporation at tax break, and it will create new jobs…..in China!!! And to sell the crap they make, Wal-Mart will open new stores to hire Americans at $6.50/hr without benefits. We are loosing the middle class and becoming very slowly (emphasis on very slowly) more like a developing country (a few on top and most everyone else on the bottom). The rich get richer and…we know the rest. Seattle and most coastal cities do not represent what’s going on in the nation. The median household income is stuck at $48K; and I doubt anyone writing in this forum is below that figure.
21
Matthew
// Sep 14, 2007 at 8:29 am
Kyle Nelson,
You have been listening to that assclown Kudlow far too much. The “global economy” is nothing more than the US trading away its manufacturing base to countries with slave labor. We have become a nation of consumers, that produce very little. Our trade deficit is at record highs, our personal savings at record lows. Oil is at record highs along with the price of wheat. Meanwhile the dollar is falling to new lows across the board against all foreign currencies.
We have been in a bubble economy for over a decade, and morons like the people on CNBC have been touting a “global economy” as the reason why the stock market has been so high. The current credit crunch and incoming recession are going to come to a surprise to people like you, Kyle Nelson, but to those with a clearer picture of what is really going on, it won’t.
22
uptown
// Sep 14, 2007 at 8:30 am
Well you got to admit, it’s always easier to sell over priced shacks to naive out of towners.
23
greater context
// Sep 14, 2007 at 8:46 am
talk about bargain cities. in my industry (electric utility), we can’t find enough people willing to move here because they can afford a mansion in the midwest for the same price. they come out, like the job, but take one look at the housing prices and don’t call back.
compare us to America’s B-list cities and the economics are quite the reverse from the A-list mentoned in the article
so, the question is: do we have more in common with Philedelphia and Nashville or New York and Los Angelos?
I see us as more of a Denver, but they boomed early and are already busting
24
Nolaguy
// Sep 14, 2007 at 8:54 am
Kyle,
If what you say is true about the new paradigm of the US economy on a global scale, why is the US dollar at a record low vs the Euro?
In addition, why are jobless claims up and why is the price of gold going up significantly?
When Bernanke lowers rates (which he shouldn’t do, but I fear he will), we are going to see huge devalue of the US$. Sure, it might keep the inflated housing market up, but everything else is going to cost twice as much as our dollar sinks significantly.
Sorry. Back on topic:
When Seattle costs as much as San Diego, Santa Barbara, New York and London, I will just move to one of those places. Seattle is a pretty little town with some beautiful scenery in some not-so-good weather. It’s not worth $500/sq.foot to live here though.
25
jess
// Sep 14, 2007 at 9:17 am
To back up Kyle’s point above, I just spent an hour on the phone with the Bon, er, Macys, trying to figure out why they didn’t report our zero balance last week, and I talked with a tele-agent and three supervisors before they transferred me to a US office. The US supervisor took care of the problem in about two minutes. I’m glad she has a good American job. Very real example of how US jobs are being imported.
26
Ken
// Sep 14, 2007 at 9:32 am
“What are you talking about? We buy by overextending ourselves, listening to the realtors, and purchasing things we can’t afford because it’s our God-given right. I mean, housing is only going up, right? Heck, I stopped contributing to my 401k and it’s all going towards making my mortgage payment.”
I see that as a problem. I know quite a few people my age, 24, that are doing this. Just so they can buy a house that they cant afford. Its going to have a double whammy. Buying something thats over priced and will take many years before they can get what they pay and not saying for retirement when it really has time to compound.
27
David McManus
// Sep 14, 2007 at 9:53 am
Just for the record, I was being sarcastic; however, I’ll back up Ken’s comments. I know so many people like this. People that have six figure incomes are live paycheck to paycheck. So sad!
28
TJ_98370
// Sep 14, 2007 at 11:12 am
My take on the article is that Aubrey is putting the most positive spin that he can get away with on an evolving negative situation. The implication is that because other markets are even less affordable than Seattle, that Seattle will have a continuing immigration of equity locusts to prop up prices. I don’t think so, but we shall see…..
I’m no unquestioning, dedicated fan of Glenn Crellin, but I do totally agree with his statements in this article –
….Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said prices could not continue to rise so much faster than incomes indefinitely, although people are becoming accustomed to spending more of their money on housing.
Seattle and the surrounding area have so far managed to avoid the price declines showing up in markets that saw much more appreciation in recent years. Whether they can continue to do so will depend largely on the effect of tightening lending standards, rates on jumbo loans (those above the $417,000 cap for mortgage giants Fannie Mae and Freddie Mac) and how many people have to sell or lose their homes to foreclosure when adjustable-rate loans reset from low introductory rates, Crellin said.
Analysts of the national real estate situation, meanwhile, say the disparity between increases in home values and incomes underscore how low interest rates and risky mortgages fueled the market…
IMHO, it will be extremely interesting to note how tightened lending standards effect the local market during the next several months.
29
Jeff
// Sep 14, 2007 at 11:59 am
Frequently I hear people say that local high house prices (in any locale, not just Washington) is caused by people moving in from California. I always ask them “who’s buying the houses that they sold in California?”….they never have an answer and (usually) see the folly immediately.
30
patient
// Sep 14, 2007 at 12:28 pm
Well if Kirkland is an area where rich immigrants are buying it’s not looking good. I run almost daily through areas of Kirkland and to me it looks like for about a month or so nothing, zilch, nada is selling.
31
bigdollordog
// Sep 14, 2007 at 12:38 pm
deejayoh said,
Immigration from Cali looks like it has been dropping like a stone for about the past year, off about 15% on an annualized basis from it’s peak in Sept 2006.
***************
Those statistics are deceptive, I’ll give you a simple explanation: Immigrants to the US use to go to Cali, get a Cali drivers license then move to Washington and turn it in for a Washington drivers license, Now they just by-pass Cali and come strait up to Washington from Mexico, thus never turning in the Cali license and never clicking A DMV immigration stat.,, , they quit going through Cali back in the 90’s, and come strait to Washington and Oregon, may of them dont even know people in cali any more.
32
Dr Evil
// Sep 14, 2007 at 12:56 pm
patient,
I agree that even the idyllic community of Kirkland is slowing down. Price cuts are becomming common, even with new construction. Check out this one where the builder is even subisidizing a 2nd DOT:
http://redfin.com/stingray/do/printable-listing?listing-id=571095
33
UrbanArtist
// Sep 14, 2007 at 12:57 pm
I posted this link in the last post but it didn’t show up right. I think Kyle may like to read it. I’m not a gloom and doom type person, but I also don’t live in fantasy economics land either.
http://www.marketoracle.co.uk/Article2098.html
34
TJ_98370
// Sep 14, 2007 at 1:35 pm
UrbanArtist;
Wow! Totally scary article.
Link to article about related subject:
Northern Rock Bank Run
35
kaleetan
// Sep 14, 2007 at 1:50 pm
Heres a good picture of what the Tim will look like in a few years….
http://www.msnbc.msn.com/id/20776771/
36
softwarengineer
// Sep 14, 2007 at 1:52 pm
IF YOU WERE A BANKER TODAY
Would you approve a 5% down fixed rate loan, let alone a 0% one?
Would you approve an offer to supply a loan from a buffoon buyer at 9% or even 4% above last year’s price?
The answer is no way today. I wonder if the only homes selling today are minimum 20% down and most 30-50% down….most Americans don’t have 10% that much cash for a home purchase.
I know, we’ll lower the interest rates. If you were a banker, would that option sound good?
Hades no!!!
37
Matthew
// Sep 14, 2007 at 1:54 pm
Macys is a US company, how are they “importing” jobs?
38
deejayoh
// Sep 14, 2007 at 2:03 pm
right….
I’m assuming you clicked the link? maybe even found the spreadsheet? If you had - you might have noticed that immigration from outside the US (including Mexico) was less than 6,000 people, and basically unchanged over the last year - versus California, from which immigration has dropped from 38,000 to 32,000.
I doubt most illegals even get a license, so I’m not even sure how the point is pertinent, but it surely isn’t consistent with the data.
39
jess
// Sep 14, 2007 at 2:06 pm
Re: Macys
I spent 55 minutes arguing with “customer service” supervisors in India, and 5 minutes getting the issue resolved by someone based in the US.
40
Andrew
// Sep 14, 2007 at 2:40 pm
I live in San Diego and love the city of Seattle. But the real estate situation there is going to get as dire as it is down here, its just going to happen a little later. All the same factors are there, we just peaked before you did and are crashing now.
Seriously, how does a household making $70K or even $100K afford a $500K house? Same thing happened down here.
41
CCG
// Sep 14, 2007 at 3:09 pm
“The stock market is going up, despite the doom and gloom crowd blah blah blah”
You guys got suckered into wrestling a troll again.
42
wreckingbull
// Sep 14, 2007 at 3:25 pm
SOME HOUSING BUST WE ARE IN…DOPES! IPODS ARE SELLING LIKE CRAZY….DOPES! STOCK MARKET UP .01% today…..DOPES!!!!!
Sorry, just had to quote my favorite troll from Housing Panic. I almost miss the little guy now.
43
KurtS
// Sep 14, 2007 at 3:42 pm
“But Seattle still is far more affordable than cities such as San Francisco”
Seriously, that’s not saying much. Even with price erosion already underway in SF and outlying towns, the market is basically stagnant. If SF can stagnate, so can Seattle.
Growing up near Seattle during the 70s-80s, we know full well about economic fallout up there. At this point, the boosterism of these articles is absurd. That article fails to mention the weakened market in Hawaii.
44
TJ_98370
// Sep 14, 2007 at 4:23 pm
Seriously, how does a household making $70K or even $100K afford a $500K house?….
Precisely the concept that appears beyond comprehension for housing bulls……
45
Angie
// Sep 15, 2007 at 9:31 am
Hey, did you guys see the article in the Times today putting the foreclosure stuff in perspective?
URL is http://seattletimes.nwsource.com/html/realestate/2003884856_harney16.html
The meat of it is these paragraphs:
But from a national perspective, how bad is the situation? Not as bad as it may sound. Drill down into the latest delinquency and foreclosure numbers and you’ll find that for the overwhelming majority of homeowners across the country, delinquency and foreclosure are not issues — at least not yet.
To begin with, remember that mortgage-delinquency problems affect only people with outstanding loans, and more than one out of three homeowners own their properties debt-free. Of the remaining two-thirds of all owners with active mortgage accounts — the latest survey examined 44 million of them — prime loans that are 30 days past due or more constitute just 2.6 percent of all loans nationwide.
In other words, among mortgages made to borrowers with good credit at application, 97.4 percent are continuing to be paid on time.
In some states, delinquencies among prime borrowers are far lower — just 1.35 percent in Oregon, 1.39 percent in Washington, 1.89 percent in Virginia and 1.9 percent in California. Prime-credit borrowers who took out fixed-rate loans in most states are performing even better than prime borrowers as a whole — just over 2 percent on average nationally and barely over 1 percent in California, Oregon, Hawaii and Washington are paying late.
The numbers get more sobering when you look at how borrowers with subprime mortgages are performing: 14.5 percent of them nationwide are now behind on their payments by at least 30 days. That’s more than five times the rate of delinquency among prime borrowers. On the other hand, 85.5 percent of subprime borrowers are still paying on time every month, according to the survey.
46
Affluent Bitter Renter
// Sep 15, 2007 at 10:31 am
“Drill down into the latest delinquency and foreclosure numbers and you’ll find that for the overwhelming majority of homeowners across the country, delinquency and foreclosure are not issues — at least not yet.”
Of course - the problem is that prices are set by the marginal sale, so it doesn’t take a lot of foreclosures to start affecting prices downward. Only a small faction of houses have been foreclosed upon in Sacramento, but there is now one new foreclosure for every two houses put on the market - that is going to have a big effect.
Notice the Northern Rock bank run in England? The international banking system continues to be on the verge of seizing up, which is going to further reduce the availability of credit, which is going to reduce the buyer pool, and reduce the amount of money potential buyers can borrow.
47
The Clizz
// Sep 15, 2007 at 10:03 pm
I find very polarized views on this site:
Kyle Nelson said,
on September 13th, 2007 at 10:11 pm
The stock market is going up, despite the doom and gloom crowd. Contrarian thinking wins the profits right now. Guess what all the big players are betting on? The US economy is entering a new stage of international economics and world growth, which is the start of the new roaring financial century. Trade with China and SE Asia, and the breakdown of world trading barriers is making US corporations rich and securing the US position in the world.
what goes up comes down said,
on September 14th, 2007 at 6:58 am
Kyle — the US may just be entering what is called a recession.
Kyle: I agree with you but you sound too optimistic…we have a major deficit with too much FEDERAL spending.
I think that one way we can all make sure that our properties maintain and increase in value is to teach the next generation that if you choose a job that has potential to be outsourced…you’ll be out of a job and a career..and loose your house. They need to know that we now live in a world where yoy need to be flexible with employment and to train in a service sector job.
As for people moving from out of state - KEEP COMING
These people are more likely to be be of low-middle class immigrants who are the base of our housing market. Those who cant afford homes create the poor working class that is needed to maintain our way of living. I love capitalism - the only downfall is that there will always be a poor and low-middle class to maintain capitalism. From what I see most poor immigrants are happier being poor and struggleing in america that being in their poor, oppressing countries.
I know I am rambling…but has anyone been to Vegas lately…not about the housing there but about the large amount of wealthy spanish decent mexicans who spend money like it’s nothing and wear designer everything??
48
Bitterrenter
// Sep 16, 2007 at 12:05 am
The smartest guys in the room denied that the US would have the great Depression.
49
Shawn
// Sep 16, 2007 at 12:46 am
I am just a statistic, but I am someone who considered moving to Seattle and have chosen another city instead, Minneapolis. I am flying in the first week of Oct. for a senior software engineer pos. Wish me luck, I really want to buy a home in a nice town where prices are “normal”.
50
Puget Sounder
// Sep 16, 2007 at 8:58 am
Shawn,
Enjoy Minneapolis! I am a Wisconsin native and miss the midwest. If I was to relocate, the Twin Cities, Austin, or Denver are my top choices.
You should be able to swing something in the $300-$350k range that is really nice. Check out some of the nicer neighborhoods in St. Paul (if your commute won’t be too bad).
51
dashpoint
// Sep 16, 2007 at 9:28 am
The stock market is going up, despite the doom and gloom crowd.
Yeah…stocks for home builders, mortgage companies, and the home-improvement retail sector look like a great opportunity*. I’m buying at the bottom, because come spring, it will only go up, up, up! Don’t let the doomsayers fool you…what can possibly go wrong? How about market news?…it looks good!.
*obviously, not investment advice!
52
Lionel
// Sep 16, 2007 at 3:45 pm
Shawn, I’ve read a number of threads on Ben Jones’ Housingbubbleblog discussing how overpriced homes are currently in Minnesota. They might seem like a bargain relative to Seattle, but I wouldn’t dive right in. It would be similar to coming from LA (me) and buying in Seattle because it’s such a “bargain.”
53
AndyMiami
// Sep 16, 2007 at 5:17 pm
down at the bottom so many may not read this..but even GREENSPAN predicts DOOM…SEATTLE GOOD LUCK…
http://www.ft.com/cms/s/0/31207860-647f-11dc-90ea-0000779fd2ac.html
54
anon
// Sep 16, 2007 at 11:03 pm
I just moved here from New York City. For those of you who think the price difference is “just a few thousand” off or even close, try craigslisting New York real estate or rentals- the difference is night and day. What costs $1500 rent/month here would be $3500 there. Same in buying- what you could buy for $400,000 here (which is not so out of range for a couple with jobs and some equity) would easily be over a million in my old Brooklyn neighborhood. My lifestyle went from crappy to amazing overnight by moving here. FYI, I sold my condo there, but I’m choosing to rent here for now.
55
Denny Retrograde
// Sep 17, 2007 at 8:14 am
Welcome, Anon–sounds like New York kicked you and your dear lifestyle but good! Seattle is a pretty good retreat, much smaller pond and all. But our prop values will bite, so please don’t think about buying anything! Keep renting and relaxing…
56
WestSideBilly
// Sep 17, 2007 at 11:16 am
The Crizz said… “I think that one way we can all make sure that our properties maintain and increase in value is to teach the next generation that if you choose a job that has potential to be outsourced…you’ll be out of a job and a career..and loose your house. They need to know that we now live in a world where yoy need to be flexible with employment and to train in a service sector job.”
A valid point that misses the mark. Most of our “good” middle class jobs have been or can be outsourced. Manufacturing, engineering, software programming, and the like have all seen a steady stream towards southeast Asia. It’s only a matter of time before investment, banking, biotech, and the like head that way too. Americans must realize that they’re not just competing with John Smith down the street, they’re competing with Jayant Patel and Wei Chen; and that big American companies don’t care about your job.
As for training for a service sector job? That’s fine and dandy if you don’t want to make a decent living. The service sector is the bottom of the pay ladder. Retail and food service pay terrible. Nursing and education do not pay very well given the requirements.
If service sector jobs is the answer, the question must be “What should people who never want to get ahead do?”
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anon
// Sep 17, 2007 at 8:57 pm
thanks danny… i will keep renting until i have the cash to by a place i want to live in - clearly the rental market is a better value here right now anyway. that said, i wish i did have a few extra hundred thousand to plop down on a place. NYC was an exhausting place to live and I love it here for many reasons other than housing prices (although that’s what tipped the balance between here and going back to CA). For now I’m enjoying my 2-bdrm, 1000ft apartment (palatial by my standards) and the new thrill of a washer dryer, elevator, balcony, parking, fireplace, and a view… for several hundred less/month than i paid in brooklyn. I understand why people here are whining about the prices- it isn’t cheap compared to rural areas or midwest cities- but it is truly relative and here is not bad compared to other coastal USA locales.
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