Seattle Bubble

In a story eerily similar to SmartMoney’s “best shape for a rebound” article Forbes once again places Seattle #1 on their own list of Real Estate Markets Most Likely To Rebound.

The best cities in which to invest are those that are considered gateways to international investment, have vital downtowns where people can forgo cars, and don’t have a glut of condos or office space.

These traits landed Seattle the No. 1 spot on the list. No city scored above a 6.15 on a scale of one to nine (one being an abysmal place to invest and nine being excellent).

Seattle is “a diversified market, has a good base of business and is becoming a 24-hour city,” says Stephen Blank, senior resident fellow, finance, of the Urban Land Institute. “It’s going to be in a good position to come back.”

Although the city is suffering from the loss of Washington Mutual and the downsizing of Starbucks, Boeing and Microsoft are still relatively strong. Apartment vacancies are low and there aren’t too many new buildings going up, meaning the market won’t be oversupplied. The same is true in the retail space.

I’m really curious what their definition of “too many new buildings” is, because as a recent Seattle Times article pointed out:

More than 2,300 condo units are under construction in the two city centers, according to figures compiled by principal Dean Jones of the condo-marketing firm Realogics. Almost all are scheduled for delivery within the next year.

And that’s just in downtown Seattle and Bellevue. The Forbes article clearly is referring to the greater Seattle area, since they mention Boeing and Microsoft, which have very little presence in the actual Seattle city limits. How many condos, apartments, and housing developments are coming online without buyers when you consider the entire metro area?

(Dorothy Pomerantz, Forbes, 10.29.2008)