What’s Your Seattle Bubble Timeline?

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:

  • 2006
    • 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."
  • 2007
    • 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.
  • 2008-2010
    • 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?

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.


  1. 1
    Anonymous says:

    Overall, I agree pretty much with your scenario, which is a soft landing one. The biggest unknown factor are the interest and the dollar value. If the dollar plunges, the interest will shoot up sharply and the scenario will play out faster and uglier…

  2. 2
    The Tim says:

    I always thought that when realtors and others used the phrase “soft landing” they meant “appreciation slows back to 5%/year, or at the worst, flattens.” I doubt that any sort of depreciation would be considered a “soft landing” by most.

  3. 3
    meshugy says:

    Tim, I think your prediction is right on.

    I was looking at the MLS data for my neighborhood (705)Loyal Heights/Ballard. If you look back to March 2003 there were 544 active listings and 291 pending sales. March 2006 had only 316 active listings and 287 pending sales! Only 29 houses not sold…wow, that’s a tight market.

    Even the 2003 numbers are signs of a very competitive market, and we’re way, way beyond that right now. I think we have a long, long way to fall before we even have a “normal” market. And much, much longer to fall before there’s anything you could really call a “crash.”

    But, prices are so out of whack with incomes that it has to correct at some point.


  4. 4
    Mikhail says:

    I am more of the oppinion that housing prices will revert back to mid-90s prices before we see the bottom of the coming downturn. For one thing, I think that credit is going to virtually disappear for anyone who doesn’t have a stellar credit rating and LOADS of cash (don’t even think of buying with less than 20% down).

    The key for me is to see the simply PHENOMENAL number of exotic mortgages that have swept the entire nation. The vast majority of these dodgy loans are going to end up badly, and send shock-waves through the entire financial industry. The S&L crises of the early ’90s will look like child’s play. This credit bubble is a national phenomena, so EVERYWHERE will be hit, Seattle will not be immune.

    Sorry, but I think we have long sinced passed the point of no return on the soft-landing theory.

    Here is my prediction:
    – see rising listing inventories in Seattle in fall of 2006
    – Seattle sales volumes will start to really trail off in beginning of 2007, prices will remain flat
    – Distressed sales will start to occur in summer of 2007, as some home owners with exotic mortgages get trapped
    – foreclosures pick up susbstantiall at end of 2007
    – 2008 sees Seattle area prices fall 20% to 30% from 2005 peak.
    – 2009 sees Seattle area prices fall another 20% to 30% from 2008
    – prices stabilize at end of 2010, and stay in the doldrums through maybe 2012

  5. 5
    John Doe says:


    One of the first things that realtors and the Real Estate Industry will try to do is redefine the term “soft landing” while it has historically meant returning to historical levels of appreciation (real estate never goes down), many of them will be saying that decreases of less than 10% per year is still a “soft landing”.

    Of course, you could have called the NASDAQ 2002-2003 a “soft landing” then too, right? (overall, not within a year)

    Besides, real estate moves like a glacier. Once it gets moving, it keeps going until friction makes it stop. Record foreclosures are almost a certainty in every locale.

  6. 6
    Anonymous says:

    Market “tightness” in Ballard is not necessarily indicative of the market as a whole.

    Ballard is hyped as the “last starter neighborhood in Seattle.” It is also kind of trendy at the moment. Naive, first-time buyers flock there to purchase homes (nevermind that rent in the neighborhood is nowhere *near* what it takes to pay the mortgage on an equivalent property), and compete for the handful of turn-of-the-century, POS craftsman houses that are up for sale.

    This has two impacts: one, prices stay elevated in Ballard because it is considered a desirable, “low-cost” neighborhood. Two, supply doesn’t significantly increase there, because first-time buyers tend to hold on to their properties (after all, they’re mortgaged to the gills…)

    I live in Ballard (rent), and see dozens and dozens of yuppie couples who are about my age (early 30s), buying homes in the area, popping out 1.5 kids, and crusing Market with the sport-utility strollers. Aside from the disgusting blandness of it all, it’s indicative of the market forces that drive housing prices in the neighborhood….

  7. 7
    biliruben says:

    I think you’re pretty close, Tim.

    I think it will happen a bit faster, and I also think there will be a false-bottom that’s looked at as a buying opportunity in mid-2007, screwing the impatient and the last of the speculators.

  8. 8
    matt says:

    anon 10:12

    Most agreed, I rent a really decent place cut-rate in Ballard/Phinney. I’ve been seeing a lot shoddy remodels by folks that looked like they just stepped out of an IKEA catelogue. These old places are in need of some severe retrofitting, but instead I’m seeing new hap-hazard do-it-yourself shingling being put on sloping structurally unsound roofs. Some of thse old places here don’t going for the 400K’s don’t even have real cement foundations! Before you throw the granite countertops on and the preverbial stainless steel applainaces in the kitchen, lift-jack the place up and start pouring the concrete for cryin’ out loud!

    This is the sort of thing that happens in bidding wars where people insanely wave inspections.

  9. 9
    Anonymous says:

    well in 2007 a bit over 1 TRILLION (yes trillion) in AMR’s are set to re-adjust. I suppose that anytime from then until 2010 when even more ARM’s will be re-adjusting we will be seeing something major. \

    Why? Because the vast majority of those with these ARM’s couldn’t afford the house they got into in the first place. They will not be able to re-fi at a decent rate (fed will be hiking at least to 5.25 by the middle of this year alone) so they will flood the market.

  10. 10
    Eleua says:

    I was just looking at this last night (while watching my hockey team getting drilled). I posted this to a blog a few weeks ago.

    My wife and I have been asking this very question for a few months. Here is what we came up with:

    Q1-06: Denial of housing softening. Most will not sell. Weak hands are not yet nervous. Those interested in selling are looking to spring.

    Q2-06: Inventory starts to build. Prices inch up on declining sales. Not as many Californians marching up here with a pile of equity money as last year. No fear, yet.

    Q3-06: National economy starts to tank, and FEDGOV can’t hide it anymore. Iran involved in military conflict with Isreal/US. Congressional elections heat up. Reports of slow sales spring hit the wire. People pull houses off market to wait until next year. General uneasiness, but no fear.

    Q4-06: California has fear. BOS-NYC-WAS corridor has fear. Florida has fear. NV-AZ have fear. Seattle still in denial. “Investors” really upset they could not rent out their homes – blame war/Bush/GOP.

    Q1-07: Dollar in freefall. Economy tanking in Pacific NW. Notices of Default hit records in PNW.

    Q2-07: Massive inventory build. NO BUYERS! Sheriff sales start to grow. ARM money readjusts, and HELOCs can’t generate any more cash. Local news talks about people not being able to sell and losing money.

    Q3-07: Fear hits PNW. Prices are cut to stave off holding an overpriced property through the six month winter cycle. All 250+ Bainbridge Island RE agents take out a contract on the author of Clearcut Bainbridge website.

    Q4-07: With Sheriff sales at record highs, double digit interest rates, a sub-7000 DJIA, $1000/mo ferry commute costs, and absolutely no X-Cal equity money in sight, Bainbridge Island homeowners can’t give away thier homes.

    Q1-08: Clearcut Bainbridge website reposts 20 cents on the dollar by 2010. Mysterious fires all over the island take place during the rainiest part of the year, and in the most expensive homes, by the most overextended owners. X-Cal types watch Rose Bowl, see the 80F sunny day in Pasadena, look outside their BI “dream house” see nothing but moss, clouds, and rain. They try to sell their Mission style house and move back to the OC. CNBC taken off air. Cramer moves to Cayman Islands.

    Q2-08: FEAR! FORECLOSURES! DIVORCES! UNEMPLOYMENT! FERRY TOLLS! RE agents go weeks without a showing. Title companies fold. Mortgage brokers go bankrupt. Appraisers go to jail. RE agents watching their own properties go to foreclosure. Builders are bankrupt. US banking system teters on collapse. GWB wants to give corporate Amurikuh a tax cut. War with Iran is underway. Gas is $6 gallon. The Dallas Stars lose their 5th consecutive playoff series.

    Q3-08: Civil revolt is brewing. Vigilante justice is rampant on the border. Illegal aliens being scapegoated for unemployment in US. The wheels have come completely off the bus for PNW real estate. Homes are vacant, mildewing, and on the docket for foreclosure. A “reasonable” offer is now 1/3 of what it was at the Q2-06 peak. Buyers undergoing financial rectal exam when applying for a loan. No income or no documents = no loan. Lenders require 25-30% down payment. GWB makes first public appearance in 90 days.

    Q4-08: GOP swept out of power. Banks close. Gas at $7/gal. Tax hikes coming. Amnesty promised for criminal aliens. Crime skyrockets. Civil unrest. PNW homes become unmarketable. Unemployment reaches 25% (or 8% using government numbers). Interest rates are above 17%. “Ferry Jumping” (people jumping from the ferry to commit suicide) is now so commonplace, the Kitsap Sun reports it on page B8. 77,000,000 Mouseketeers finally realize they will never retire, their homes are worth a small fraction of their “value” and their stock portfolio is long gone.

    1Q-09: New president confiscates gold and silver again. Currency export controls established. Strict racial quotas enforced in all aspects of employment, education and contracts. US invades Venezuela.

  11. 11
    Eleua says:

    Seattle is going to be the last domino to fall. It will also fall into an environment where there will not be anything to catch it.

    One day, you will wake up and you simply will not be able to sell. You will wonder what happened.

    When California sneezes, Western Washington catches the flu.

  12. 12
    Nick says:

    “I live in Ballard (rent), and see dozens and dozens of yuppie couples who are about my age (early 30s), buying homes in the area, popping out 1.5 kids, and crusing Market with the sport-utility strollers. Aside from the disgusting blandness of it all, it’s indicative of the market forces that drive housing prices in the neighborhood….”

    Always with the disgusting generalizations. What you so condescendingly refer to as “blandness” is real people living real lives with real children. Screw you and your elitist attitude.

  13. 13
    meshugy says:

    Yes…Ballard is sort of trendy right now. I’m in the 30 something 1.5 kid demographic, so I fit in perfectly.

    However, other areas are showing the same sort of activity:

    Area 710: Ravenna/U District/Sandpoint

    March 2003: 335 listings/165 pending sales

    March 2006: 210 listings/156 pending sales

    Area 140: West Seattle

    March 2003: 507 listings/187 pending sales

    March 2006: 268 listings/240 pending sales

    Same sorts of trends that you seen in Ballard. People were saying there was a bubble back 2003 and that it would burst soon. Now we are so far beyond the #s of that era. Inventory down a third and sales are the same or more. So prices have skyrocketed and seem to be still creeping up. Even if we get back to those 2003 #s, we’ll still have a long way to go to crash. But I suppose under the right conditions it could happen very fast.


  14. 14
    Anonymous says:

    “What you so condescendingly refer to as ‘blandness’ is real people living real lives with real children. Screw you and your elitist attitude.”

    Yikes. Someone has an SUV stroller….

    For the record, Nick, “real” people live “real” lives with “real” children in communities all over the world with neither sport-utility strollers, nor polar-fleece banality.

    You don’t need to be bland to have kids. (You just need to have children in Seattle, apparently.)

  15. 15
    Anonymous says:

    I actually have something substantive to add to the discussion of timelines: Natural Disasters.

    It’s random, but all we need is one good shake-up, and housing prices will topple like the million-dollar shacks teetering on cliffs over Puget Sound.

    There are just too many seismically unsafe houses in the PNW….should a serious earthquake take place, a number of homes will be totalled. Market values will sink in response.

  16. 16
    Anonymous says:

    I understand all that about the greater Seattle area, even over to Braindead…Bainbridge Island. Any comments on the Central Kitsap area? It might prove to be the exception due to steady income and progressing population with the Navy’s presence.

  17. 17
    seattle price drop says:

    Think things might unwind a tad faster. There has been an increased awareness about the housing bubble just in the last week.

    I’ve been broaching the subject with strangers for several months now. And consistently got a “that’s nutty, housing is not going down” response.

    Until this past week. Three out of the 4 people I spoke with agreed with me! And one was a realtor! I asked her what was going on with the market and she said “It’s plateaued.”

    Another had a daughter in Financial Planning. Her daughter told her that the FP’s had a big meeting in Boston and they are all preparing for a recession and that housing is going to “tumble”.

    Another person was advised by a realtor friend in Seattle to sell her house now and wait to make a new purchase because housing is going down.

    Once enough people who have not been bubble watchers BECOME bubble watchers this could start unravelling quickly.

    I think inventory’s going to be building through the summer and by Fall it will be clear that the housing extravaganza is over.

    Where it goes from there is anybody’s guess.

    But I do think the gains of 04/05 will be wiped off the top pretty quickly. Like within a year.

  18. 18
    Eleua says:

    Anon 12:09

    Re: Central Kitsap

    I was born and raised on Navy money in Kitsap County.

    The myth that CK is “different” because we have steady Navy income is just that – a myth.

    Silverdale has a median income of $48K/household/year. Not bad, but certainly not the kind of thing that floats homes anywhere from 5x to 15x income. The newer developments are coming in at $350K+.

    You are assuming the Navy money is the driver of local real estate – and it is, to a limited degree.

    I was a USN officer for 10 years. I made more money that my submariner counterparts (I was an aviator). My squadron had 75+/- officers, all but 6 with flight pay (extra $700/mo), and only 3 of us owned a house – the Commanding Officer, the Ops O, and one of the very junior officers.

    I was the Admin Div O, and was the first person you would see in case you got into debt trouble. All but one was an enlisted member.

    Keep in mind, the only thing I was dealing with was child support and car loans. I never saw anyone get into a mortgage situation.

    Now, EVERY COMMISSIONED OFFICER and just about every enlisted member at E-5 and above, has a house at $250K or above. Everyone thinks they are going to retire here.

    I think you have a bubble in the Navy part of Kitsap, just like Braindead Island, and the rest of Metro Seattle. Rents are going out at a small fraction of ownership cost, and Squids use creative financing just as much, if not more, than the regular population.

    If interest rates climb, and ARMs readjust, the ability to pay will go down. This is where the Navy salaries kill you. Prices will come down, while the cost to own them go up, but the income stays the same. If the VHA (variable housing allowance) goes down, in response to plummeting prices, the problem compounds.

    The Navy has a MUCH higher divorce rate than the rest of the population, and one of the quickest ways for an officer to end his career, is to get into financial trouble.

    I see CK as a trap door, waiting to spring. Bummerton has the highest crime rate in the state, due to the Navy influenced drug culture. Poulsbo is no bargain either. It is becoming a poor-man’s Bainbridge, and the Seattle money will dry up very easily as the job market becomes tougher and the King County RE market tanks.

    There is no “special” place that is immune to the coming bubble. Interest rates will hit the entire population that uses US dollars, even those in Silverdale. The underlying math is universal.

    There is a pecking order for Navy towns. Submarine towns are the best, followed by aviation towns. Surface towns are just hell holes (Charleston, Bremerton, parts of San Diego, No-fuk, Bayonne, etc.)

    $400K in Silverdale has to make you ask, WTF?

  19. 19
    T.S. says:

    Not a lot coming on the market over the last several days, and definitely noticing bigger asking prices here in the Maple Leaf/Roosevelt area. Criminey.

    Highly recommend the new Harpers (May 2006 – not online), for the cover article: “The New Road to Serfdom: An Illustrated Guide to the Coming Real Estate Collapse.”

    Not for the weak of heart. One interesting statistic: mortgage debt in the U.S. is now about 90% of the GDP (this means “more people owe more money to banks than at any other time in history”) and is “on track to surpass the size of America’s entire gross domestic product by the end of the decade.”

  20. 20
    Nick says:

    “You don’t need to be bland to have kids.”

    But evidently you DO need to be a judgemental, condescending asshole in order to label an entire set of people as “bland”. Please please please fill us all in on how distinctive and noteworthy you and your children are. We’re all just dying to hear how we can join Seattle’s condescending, cultural elite.

  21. 21
    Nick says:

    “One interesting statistic: mortgage debt in the U.S. is now about 90% of the GDP”

    This is meaningless unless you provide us with a reference point. What was it in, say, 1986.

  22. 22
    T.S. says:

    This is meaningless unless you provide us with a reference point. What was it in, say, 1986.

    Judging from the graph, it looks like about 60%. Was about 30% in 1955.

  23. 23
    Eleua says:

    “We’re all just dying to hear how we can join Seattle’s condescending, cultural elite. “

    I couldn’t help but think of this.

    Seattle is, by far, the second “smuggiest” city in the USA.

  24. 24
    Nick says:

    Which is the first?

  25. 25
    Eleua says:

    San Francisco is to smugginess, what the Soviet Union was to ice hockey, or the USA was to the mens 4×100 freestyle relay (prior to 2000).

    San Francisco is, by far, the smuggiest place in the US. The South Park episode I refrenced, absolutely nailed it.

    I lived there for several years, and it was painful. I never believed so many could pat themselves on the back, so often, over so little.

    Bainbridge is humble by comparison (and Bainbridge is pretty darn smuggy).

  26. 26
    Eleua says:

    Boston gets the bronze.

  27. 27
    Anonymous says:

    Oh, Nick….

    You need to learn the difference between a generalization and an observation. Go back and read what I said: I mentioned some people that I saw (bland people, living bland lives, blandly), and said that they were bland. That’s an observation. Nothing to get worked up about, see?

    A generalization, Nick, would be (for example) saying that “Nick and his entire family are bland people, because they live in Seattle.” See? I’ve never met you, Nick. Nor have I met your family. And yet, I would be calling you bland, categorically. That’s how generalizations work.

    So, Nick, until I see you, ambling down the street with a double-wide stroller, polar fleece and venti vanilla lattes, perhaps you should assume that you’re not in the group that I’m talking about, and chill out, OK?

  28. 28
    Eric D. says:

    Nice nightmare scenario Eleua. However, I will go in a slightly different direction. I see the housing bubble continuing on it’s merry way with prices and bidding wars in Seattle increasing until about the time until the Iran war starts. The Iran war start should roughly coincide with the 2006 mid-term elections in November. This will be a real 9/11 style wake-up call to the economy. Wall Street will finally say “oh $hit we are totally screwed” as oil hits $100 a barrel. Wall Street will start bailing on Mortgage Products and foreign investors will all but stop buying mortgage-backed bonds in the U.S. The housing boom will be stopped dead in it’s tracks as buyers will no longer be able to get financing. The realtors may be right when they say “buy a house know or you won’t be able to ever”, because no one will be able to get financing at this point. By mid quarter 07 the war with Iran will be over but the oil fields will have been totally destroyed by the “outgoing” President of Iran. Meanwhile China, with it’s repressed population, will start to undergo a recession much worse than what the U.S. will be going through. The Chinese will again overthrow their government and become a closed off nation. Saudi Arabia will do the same as Islamic radicalists finally become too numerous for the Monarchy to handle. The new Saudi “government” keeps selling oil but a price so high that even Americans can’t afford it. From here it’s basically a Peak Oil scenario and the consequences are well-known, the loss of the American Suburbs, cheap air travel and the American way of life in general.

    I hope I’m wrong but too many things tell me this could be all too right…

  29. 29
    Mikhail says:

    s crow: Why do you think that HELOCs and mortgage stress are occurring right now? Is there any evidence of that in the Seattle market?

  30. 30
    S Crow says:

    Previous posts referred to Heloc & mortgage stress in the coming months.

    Oh Contrare.

    I assure you, it’s occuring right now.

    Your friendly escrow “front row seat” market watcher.

  31. 31
    Eleua says:

    eric d,
    your scenario is very much a possibility.

    When you build your entire economy on speculation, debt, and cheap oil, you are just begging for trouble.

    I agree that China is more screwed than we are, if this scenario comes to pass.

  32. 32
    Anonymous says:

    S Crow:

    Please, do tell. What are you seeing out there?

    Does anybody make 20% downpayments anymore?

  33. 33
    Dukes says:

    I have to agree with the multiple “anon” posts.

    Nick is waaaayyyy too hostile, probably the kind of kid who got his ass kicked all the way through high school and now feels he can be tough on a message board, it cracks me up to read his posts.

    I live in Queen Anne, yes, I rent. One thing I have noticed and agree with is that YES, people are VERY, VERY SMUG in Seattle. Disgusting actually. People are always patting themselves on the back here: “we are the most literate, we have the highest amount of college grads, we have a lot of parks, we, we, we”…it gets tiring being a normal person here.

  34. 34
    seattle price drop says:

    Not at all sure that China is a doomsday scenario.

    The Chinese higher-ups are pretty good about “changing direction and focus” when they feel it’s neccessary.

    They’re also good at “damage control” and planning for and anticipating the future, both near and far.

    And remember, a lot of the ruckus that we see here- like the peasant riots over gov’t. land takeover- most Chinese never even see that stuff.

    It’s kept off TV and out of the papers. The infrastructure there is medieval in most places. So communication from one rural area to the next is not great.

    In the meantime, so many Chinese are moving ahead economically from what they ever dreamed possible 10 years ago, that there’s a general “good times” buzz in many places.

    Hard to argue things are not getting better when your town finally has indoor plumbing, electricity and cell phones (after decades of one general use public phone for the whole town).

    Swift economic progress and an undeniable uplift of living standards from sub-par to basic, has a way of pacifying crowds.

    I will be very surprised if China explodes into civil unrest in the next 20 years.

    I think China’s on a pretty solid footing right now, both domestically and internationally and they will be a fierce economic competitor.

  35. 35
    Van Housing Blogger says:

    You guys think you have a smug problem? Ever been to Canada? To Vancouver? We are the smuggiest city in the smuggiest country in the world.

    Idiots here think don’t understand why the Taliban wants to blow us away too – I mean, didn’t they see the Canadian flags on our backpacks?

  36. 36
    Nick says:

    “You need to learn the difference between a generalization and an observation. Go back and read what I said: I mentioned some people that I saw (bland people, living bland lives, blandly), and said that they were bland. That’s an observation. Nothing to get worked up about, see?”

    Yeah, right. And the little snarky part about “popping out 1.5 kids” wasn’t a generalization, now was it? I mean, you literally saw multiple families with “1.5 kids”, right? That wasn’t intended AT ALL to generalize about certain swaths of the population, was it?

    And even if you weren’t generalizing (which you clearly were), your observation of people as “bland” purely upon sight is about as elitist as it comes. Because you stopped and had in depth conversations with all these people and found out all their individual hopes and dreams as humans, right?

    Give it up.

  37. 37
    Anonymous says:

    1Q-09: New president confiscates gold and silver again. Currency export controls established. Strict racial quotas enforced in all aspects of employment, education and contracts. US invades Venezuela.

    Tue Apr 25, 10:42:54 AM PDT


    Time for a check-up?

  38. 38
    matt says:

    sorry nick, I have to disagree… most people are bland.

    Find me a Vegan Seattle-ite who hits Yoga daily but is also a gun nut with an arsenal of vintage Colts, and I’ll show you exciting…

    Or find me somebody who brags about listening to KEXP but also has a KVI sticker in their back window…

    Or a computer programmer who drives a monster truck, but also enjoys hitting the neighborhood coffeehouse book club…

    polar fleece, SUV strolelr at the Starbucks? *yawn*

  39. 39
    Nick says:

    “polar fleece, SUV strolelr at the Starbucks? *yawn*”

    What the hell is an SUV stroller anyway?

    All I’m saying is that it’s real easy to find interesting stuff behind these facades.

  40. 40
    meshugy says:

    …ambling down the street with a double-wide stroller, polar fleece and venti vanilla lattes…

    yep, that’s me….it’s actually pretty nice being bland.

  41. 41
    Anonymous says:

    Van Housing-

    Aw c’mon, Canadians are T-riffic!

  42. 42
    Anonymous says:

    SUV stroller = strollers on steroids with big bicycle wheels, aircraft aluminum tube frames, and ballistic nylon pouch/slings for the yuppie larvae.

    Designed for running, but most often seen in front of people wearing polar fleece, sipping coffee at the local Starbucks.

  43. 43
    Anonymous says:

    Here we go:

    Isnt’ this just precious?

    (I’ve driven cars that didn’t cost that much.)

  44. 44
    Anonymous says:

    All of this attention over what kind of stroller, what brand of coffee, what your clothes look like–how depressing and small-minded. It’s like being back in high school. The world is a big, complicated place and does not care what kind of car you drive or which radio station sticker is stuck on the back window.

  45. 45
    Mikhail says:

    On a completely seperate topic: does anyone care to speculate as to why the Seattle area market still seems to be SO tight? I check ZipRealt.com regularly, and am just amazed at how few listings there are in my area (98008). In fact, the number of listings keeps DROPPING!

    Why is the Seattle area seeing such a resiliant real-estate market despite all the weakness growing across the country? Are we truly “special”?

  46. 46
    matt says:

    Yes, we are that special… to coin a ‘dot-com’ era phrase “We’ve achieved a new plateua, we are working under a completely new paradygm, prices will only go higher”

    Sound about right?

  47. 47
    meshugy says:

    Hi Mikhail,

    If you check the #s on the Housing Tracker site you’ll see that Seattle has a fraction of the inventory of comparable cities:

    As of 4/21/06

    Seattle: 3,382

    Portland: 4,534

    Boston: 6,763

    Raleigh-Druham: 8,765

    Minneapolis: 16,142

    Orlando: 19,481

    Phoenix: 22,096

    Chicago: 31,564

    Atlanta: 41,392

    San Francisco has us beat at: 1,873

    We have one of the tightest markets in the country…that’s for sure. But how long will it last?

  48. 48
    Mikhail says:

    Matt said: “Yes, we are that special… to coin a ‘dot-com’ era phrase “We’ve achieved a new plateua, we are working under a completely new paradygm, prices will only go higher””

    Well, if the Seattle area is NOT special, then what would explain the persistent tightness of our market even as many other regions are starting to hurt?

  49. 49
    Anonymous says:

    Hmmm…not sure where 98008 is but looks like it’s out of the city. So maybe you’re catching the tail end because homes are cheaper out where you are?

    Here’s the inventory for the in-city zips I check on seattle-realestate.com:

    Fremont:April 13- 54 properties
    April 23- 59 “

    Ballard:April 13- 121 properties
    April 23- 138″

    Inventory looks to be going up for the first time since last Fall. It was dropping thru the winter.

  50. 50
    Mikhail says:

    Anonymous said: “not sure where 98008 is but looks like it’s out of the city”

    I am in Bellevue.

  51. 51
    Eleua says:

    It is X-Cal equity refugees that are propping the market. Arid-zona and Nevada have had their run, and we are just finishing out ours. Once California inverts for real, it is good-night for the PNW.

    Anyone remember the tech bubble? Anyone? When the big names were all burning and crashing, Juniper Networks (JNPR) was soaring to new heights. In the depths of the descent for the tech sector, JNPR was bid up to $244/share. JNPR was “special” and did not have the “same metrics” as the rest of the techies. CNBC treated JNPR like they did GOOG when it was released. Believe me, it was a darling.

    Well, that story ended with JNPR going from $244 to under $5 in a very short time. It turns out that JNPR was not so special, and the “metrics” used to measure a company’s worth applied to JNPR just like everyone else.

    JNPR is under $20 today.

    Seattle is the last domino in the chain. We will fall into an environment that has NO support for real estate, unlike Boston, Florida, and San Diego. Those markets are being cushioned by a “hopeful” economy.

    Nope, when Seattle goes, it will go with a huge bang.

    Bubbles are bubbles. They are all the same. We are not special.

    BTW, it never fails…everywhere I go, everyone thinks they are special. I’ve heard it about Seattle, San Francisco, Coronado, Silverdale, Poulsbo, Bainbridge Island, Bellingham, etc.

    I’ve heard it about stocks (back up 6 years). The NAZ (5100 to 800), MSFT, JNPR, INTC, GOOG, YHOO, AMZN, LRCX, CDWC, AMAT, NTAP, CMGI, GLW, KKD, ENE, CSCO, GTW, DELL, RMBS, MU, etc. Every last one of those, at one time, or still does think that classical valuations do not apply to them. They were all mercilessly pimped by CNBC and the Wall Street Industrial Complex. They all lost significant value.

    It will happen. We are witnesses to it.

  52. 52
    Eleua says:

    Keep in mind that JNPR would NEVER trade less than $150. People just would not sell, or so I was told.

    $5 is quite a trim from $244.

  53. 53
    Mikhail says:

    Maybe Tim could start a new thread where we could discuss whether the Puget Sound area is “special” or not?

  54. 54
    The Tim says:

    You mean like this one?

  55. 55
    Anonymous says:

    Inventory always rises at this time of year because this is when people sell houses. Inventory always goes down in winter because that is when people take their houses off the market for the Thanksgiving to Super Bowl market stagnancy. Prices also typically fall in the last quarter and first quarter of the following year because all the properties that are left on the market are dogs or mispriced.

    This market is not being driven solely by California money although that is a large component. In-migration is a factor, with people coming from all over the country to Seattle for a host of reasons. Many of these people have degrees from top-tier schools and are coming to Seattle to take commensurate jobs. They drive a large portion of the market. Another part of the equity arbitrage are people taking their equity from outlying communities and moving to closer-in communities. Outlying communities have seen just as large of a run-up as other places in the wider Sound region and that translates into thousands of dollars of equity for down payments (for those smart enough to recognize it).

    It would be a mistake to underestimate the effects of Asian money in the Seattle market as well. Though there are few metrics to reference, it is a very real element in the market. Seattle is a pan-Asian city and that phenomenon will not abate so long as the US stays in the Bretton Woods II arrangement that we have with the Asian economies. An adjustment of the the renminbi or a banking crisis in Asia (as happens all too frequently) could stagger this to some degree but it would probably be a hiccup rather than a structural realignment. Many Asian families buy houses and condos for their children to live in while they go to school. The UW is roughly 30% Asian with similar numbers at other schools, I would assume. That makes for a healthy bit of activity.

    When a weakening happens, I believe it will start further out, where there are not land use controls (nor general appeal) as pronounced as in Seattle proper. There is a huge amount of value in being able to get downtown in 15 minutes for work. That’s why we bought in Ballard/Loyal Heights. (disclaimer: no SUV stroller, just a black lab and i’ll take drip coffee any day). Traffic functions as a geographical constraint in the same way that actual physical boundaries and water rights do.

    Anyhow, these are just a few comments. I have been watching this blog (and the housing bubble) since before I bought a house. We paid mid-$400s for a mid-century rambler with 1150 SF above and full basement below with 300 SF finished rec room, garage and covered patio. It’s less than five minutes to the beach at Golden Gardens and 15 minutes to almost any location in the city when it isn’t rush hour. I figured the dirt underneath the house was worth at least $300k, meaning the house only had to contribute $50/SF. I think that it probably does. The neighborhood is immaculate and friendly. We are on a fixed 30 year loan with 25% down. Our payments are about $500/month above what we would pay for a comparable rental. We can afford it. In a rental market run-up, $500/mo. can get wasted away pretty quickly. We didn’t come close to stretching ourselves financially. I think there are a lot of other people like us out there too. There are people in this town that make a lot of money and some that know what they are doing with it too. If there is a downturn, I plan on adjusting my basis in real estate by buying distressed properties to offset any loss we might take.

  56. 56
    Anonymous says:


    Some of those cities (e.g. Boston) are much bigger than Seattle. Others (e.g. Phoenix) have housing markets that have already begun to implode.

    Seattle is just battling its usual inferiority complex — we’re going to have a “world-class” housing bubble too (even if we have to start a bit later in the game).

  57. 57
    Anonymous says:

    No, there is nothing special about Seattle. Seattle is just late to the party and logically, it will be late to catch up with the (problematic) trend. A friend of mine left for Southern California around 8/04. His home me there had appreciated 60% in less than a year. At that time, he had a house in Duvall that he bought in 2001. His had trouble selling his house just to break even! Eventually, he had to rent out his house. Now, the house in this area had appreciated 30,40% since then. Lucky for him!

  58. 58
    Chipmunkbob says:


    Being a Coronado native, it IS a special place. Does that mean it justifies the ridiculous housing prices? No.

    OT, but were you with one of the S-3 or helo squadrons at NASNI?

  59. 59
    Eleua says:


    Yes, Coronado IS a very special place. It is one of the very few places I would actually live in California (San Luis Obispo, Diablo, Coronado, and Lake Tahoe).

    As I am sure you understand, when I say “special,” I am referring to how people think the laws of economics, mathematics, and bubble phenomenon do not apply to them.

    Coronado, as you are probably aware, sells for 13-17x median income. It’s a jewel, but an expensive one at that. I hope you are not overextended.

    Dude, if you call Coronado home, you are very, very blessed.


    BTW, I was a P-3 pilot, and spent a month in Coronado back in ’96. It was one of the best months of my life. Unfortunately, the wife spent the entire time chucking her guts, due to her pregnancy with our eldest.

  60. 60
    chipmunkbob says:

    Nope, I don’t live there. Haven’t since I moved out and to Denver in 1984. Can’t (and won’t) afford to go back. Nice to visit from time to time though. I just grew up there and consider it my “hometown”. Went to school there (except when we were deployed). Met my wife there in 1979 (her dad was a Doctor at the Amphib Base). My father was also a PPC (P-2/P-3) who bought in Coronado in ’59 and my Mom sold in ’85 (at the bottom). It’s INSANE how much my childhood home is selling for. Totally nuts.

    Nope, no overextension for us.

  61. 61
    Bennydtown says:

    Fun to check in on these prediction posts to test them against history.

    It seems that your predictions up until this point were about 6 months premature, particularly in the case of sales price drops which really only started happening in September or so. We’ve got a long way to go before approaching your 2004 valuations guess.

    The easiest prediction you made, that the realtors would still be pooping rainbows, has of course proven true.

    Interestingly, markets in higher end neighborhoods in Seattle proper seem to be among the slowest to reverse, which seems to be the opposite of your prediction, Tim.

    Here’s my guess at this point for Seattle:

    2008: -15% valuations
    2009: -5% valuations
    2010: 0 – +5% depending on how tight credit markets stay.

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