Friday Flashback: Not a Recipe For Disaster

Here’s something I’m thankful for: That nonsense like this drivel written seven years ago by former Seattle Times real estate “reporter” Elizabeth Rhodes turned out to be totally false.

Priced out: Home appreciation report

Stanley DuobinisThis past year’s broad-based price increase is one of the largest the U.S. has seen since at least 1970, economist Stanley Duobinis told a recent gathering of John L. Scott Real Estate agents and local homebuilders.

Is that a signal that home values are at risk?

“It really depends on where you live,” said Duobinis, president of Maryland-based Crystal Ball Economics. “Not since after World War II have house prices declined nationally, although I can give you instances of local downturns.”

Those declines usually were caused by local job loss or overbuilding, two factors that aren’t present here.

Rather, the Seattle area has several indicators that housing demand will continue strong, Duobinis said.

One is the lack of buildable land within the urban growth boundary.

Another is the strong job market, which attracts newcomers. Every 1.7 new jobs creates the need for another place to live, he said.

“Seattle is one area where you can start talking about restrictive growth — not just because of policy, but also because of geography,” Duobinis said. “You can’t create more land, and you’re having increasing numbers of people coming in.

“Is this a recipe for disaster? No. But you are going to get some pretty strong price increases in the future.”

There’s nothing like telling home salespeople what they want to hear in order to make a quick buck in speaking fees. The sad thing is that this guy appears to still be at it. Who would take someone like this seriously after they completely missed the biggest housing crash in history?

The purpose of our Friday Flashback series is to remind people why it’s never a good idea to base your home purchase decisions on the word of someone with a vested financial interest in selling as many homes as possible for as much as possible, no matter what. If you’ve got a good example of local home salespeople or other industry shills on record making fools of themselves in the years before the bubble burst, shoot me an email.
  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

2 comments:

  1. 1
    Ben Koshkin says:

    Well written Tim. You are absolutely right. Nowadays home values are at risk. I enjoyed this post very much. Thanks for sharing.

    Ben Koshkin
    Land development

    Rate this comment: Thumb up 0

  2. 2
    David Losh says:

    “Duobinis, president of Maryland-based Crystal Ball Economics.”

    Seriously? How do you get past Crystal Ball Economics?

    Rate this comment: Thumb up 0

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