With the numbers we’ve been seeing for the last few months, it is clear that Seattle is not the red-hot market that it was a year ago. What is still not clear though is just where we are in the boom/bust cycle. Many theories have been suggested recently in the comments about how soon Seattle will turn, how extreme the turn will be, etc. I’m curious to know what kind of timeline you expect the Seattle area housing market to follow in the next 5-10 years. Here’s my (very) rough guess:
- In most parts of King County appreciation slows to a crawl through the end of the year. The closer to Seattle you get, the more stagnant the appreciation. Near the end of summer and into fall, inventory begins to build slightly. Realtors and newspapers proudly proclaim a "soft landing."
- Inventory stacks up at an increasing pace, prices are level in some areas, slightly declining in others. By the end of the year, prices in some areas are approaching 2004 levels. Realtors still in denial.
- Prices continue to decline at slightly less than the rate they appreciated in 2001-2005. By summer of 2010, prices are at or near 2002-2003 levels for most areas and holding steady.
Of course, what will really happen depends on so many factors (interest rates, strength of the dollar, foreign investors, lending practices, etc…) that it’s impossible to really predict with any certainty, but that doesn’t stop it from being fun. So what’s your predicted timeline?