Seattle Bubble

Now that the real estate market in Seattle is finally showing undeniable signs of reversing direction (read: declining median prices), it’s interesting how the tone of some real estate professionals’ comments regarding this site (and others like it) are changing.

Seattle Bubble was started in August 2005, during a time when the “common knowledge” among those following Seattle-area real estate was that the Seattle market was hot (which it was), and that it would continue to be hot for a good long while, only possibly slowing down slightly sometime down the road. This blog began with a bias toward the notion that the market was in a bubble and a goal to collect as much information as possible to test that theory.

Throughout 2006 this and other housing bubble sites grew in popularity and the Seattle market (mostly) continued its hot streak. During this time, when local real estate agents commented or mentioned Seattle Bubble in their own blogs it was primarily with a tone of amusement. The general sentiment came across as something like: “Oh, that silly bubble blogger. He doesn’t know what he’s talking about. There is no real estate bubble in Seattle, and the market will only slow to 5-10% appreciation.”

These days though, the tone of the remarks is a little… different. Instead of “Seattle Bubble is wrong,” now it has turned to “Seattle Bubble is only right because they are like a stopped clock. If you keep saying the same thing all the time, eventually you’ll be right.” Here are a few recent examples:

With respect to the Seattle Bubble blog site my guess is that like a broken clock you can be right at least 2x a day.
- Reba

You have to chuckle though. Isn’t it like standing outside and saying it’s 42 degrees day in and day out for three years? One day you are bound to be more right than others. And for a few moments here and there you are bound to be spot on.
- Ardell

Keep in mind that Seattle Bubble (and most other bubble blogs out there) has only been in existence for a little over two years. Given the slow-moving nature of the real estate market, is it really that unreasonable that we should be making the same point–that the market is overheated and ripe for a correction–for two years?

Let’s also not misrepresent what Seattle Bubble and other bubble blogs have been saying during the past few years.

What we haven’t been saying:

The housing market is tanking right now! By the end of [insert current year here], prices will be down by 30 percent! Homeowners, get out now while you still can!

If we had been saying those sorts of things then yeah, the “broken clock” analogy would make some sense. However, that’s not what we’ve been saying at all.

What we have been saying:

The housing market is overheated. A slowdown is coming, and not just to 5% appreciation. Home prices will most likely drop, quite possibly by a significant amount. It might not happen tomorrow, but it will happen.

If we are right now, we were right two years ago. The only way broken clock type comments make any sense is if our perspective was unchanging and based on clichés and gut feelings. We’re not perma-bears here, we’re realists. When the market returns to sanity and healthy appreciation is on the horizon again, you’ll probably hear it here first. If anything is broken, it is the broken record of real estate agents that continue to claim the present market is not in trouble.