Fact: As of 2005, Seattle area per capita income is the 15th highest in the nation (source).
Fantasy: “That pretty much says it all.” i.e. – Incomes in the Seattle area are so high, that it doesn’t matter how slowly they are growing. High incomes alone will keep home prices from falling.
Reality: Of the six metro areas with higher per capita incomes than Seattle in 2005 that are included in the S&P/Case-Shiller Home Price Index, all six have experienced YOY home price declines in the past year (source). Three of the six have experienced a smaller total increase in home prices since 2000 than Seattle.
The table below shows Seattle and the six other metro areas with larger per capita incomes that are also covered by the S&P/Case-Shiller Home Price Index. “S&P HPI” values are normalized to 100 in January 2000, so the present value (January 2007) indicates how much home prices have risen since then.
| Rank | Metro Area | S&P HPI | YOY Chg |
| 2 | San Francisco, CA | 211.77 | -1.4% |
| 4 | Washington, DC | 238.05 | -3.9% |
| 5 | Boston, MA | 168.28 | -5.6% |
| 8 | New York, NY | 211.50 | -0.9% |
| 13 | Denver, CO | 135.86 | -1.1% |
| 14 | Minneapolis-St. Paul, MN | 167.98 | -0.9% |
| 15 | Seattle, WA | 183.92 | +11.0% |
Seattle definitely sticks out as an apparent winner, for now. Honestly, I don’t know the reason that prices are continuing to rise here, but I do know some things that are not the reason, and “high incomes” is one of those things.