Despite Seattle’s resilience so far, the deflating bubble elsewhere around the country continues to affect businesses based in the Seattle area. The latest victim—HouseValues—took a hit last week.
Last year’s booming housing market helped pump up 2005 profits at Kirkland-based HouseValues, but the company’s forecast for the current year led to a 28 percent stock-market pummeling Wednesday.
HouseValues said Tuesday, after the markets had closed, that slower growth in its business from real-estate agents and heavy investment in new businesses would keep its 2006 results well below Wall Street’s expectations.
Wall Street was quick to respond. HouseValues shares, already trading 33 percent below their July 2005 peak, dropped $3.79, or 28.1 percent, on Wednesday, closing at $9.71. That’s the stock’s lowest close since HouseValues went public in December 2004.
This could be our area’s first of many negative effects of the impending drop, or it could be all we see of the downturn. Since I seem to have misplaced my time machine, I’m not able to make that call. Of course that doesn’t mean I can’t wildly speculate anyway. My call? Well let’s just say that I’m glad I didn’t buy a house in the last year or two.
(Drew DeSilver, Seattle Times, 03.02.2006)