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how big were past Seattle bubbles?

snigletsniglet
edited May 2007 in Seattle Real Estate
Does anyone have any idea as to how large previous real-estate bubbles in the Puget Sound have been? Is the run-up we've seen in prices over the last few years truly unprecedented, or has our market experienced similar manic increases over short time-frames before?

If there has been other instances with quick appreciations without major crashes, then one could certainly argue that we might not experience a significant downturn. However, if our region has never experienced a similar massive appreciation of similar proportions, then we are in uncharted territory and past experience won't be a good guide as to how this unravels.

Comments

  • The_TimThe_Tim
    I don't have that data available to me as of yet, but Steve Tytler pointed me toward The Central Puget Sound Real Estate Research Report, which has been published twice a year since 1949.

    There are copies in one of the UW libraries, and I'm hoping to head down and check them out on an upcoming Saturday. With the data from these reports, we will have a much more complete picture of the historical performance of the Seattle area real estate market.

    Stay tuned...
  • bilirubenbiliruben
    I think the increase in late 89-90-91 was quite steep, though of much shorter duration than what has been going on lately.

    I consider this current bubble to have started blowing up around 1996, which only a brief breather around the tech bust. In that time I believe the appreciation has been about 170%.

    A $400K house in 1996 is now worth well over a million dollars a mere 10 years later.

    That is certainly unprecedented.
  • bilirubenbiliruben
    Just to put a picture to it:

    In 1996, this reasonably modest house on Capital Hill sold for $400K.

    High for the time, but perfectly affordable for a couple making a bit more than the median household income of that time - around 50K/yr I think.
    27089211_1_2.jpg

    It's currently listing for $1.25 Million. It is now out of reach for all but those carting giant bags of cash behind them, the CEO of a large company, or a Seattle City Light employee after a big windstorm.
  • bilirubenbiliruben
    As an aside, one thing I noticed searching for that example is that almost every house on Redfin for sale over a million dollars is a flip. Almost everyone had a previous sale within the last year or two. Wow.
  • deejayohdeejayoh
    The OFHEO index goes back to 1975. OFHEO is calculated similarly to Case Shiller (versus median price)

    It shows slight dips in early 80's and early 90's (after the big run up) - but no sustained downturns

    ofheoindexrg5-sm.jpg
  • mike2mike2
    This would be better if the scale was closer to the ofheo chart, but you can see there were significant periods of declining interest rates that coincided with flat prices.

    30 year fixed mortgage rates: 04.1971-08.2006

    Hmmm... the img tag appears to want an image file type. Regardless here's the link.
  • georgegeorge
    The question of how big drops have been depends on how you draw the lines on the map. OFHEO leaves Tacoma out of that chart - why?
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