Forbes: Seattle Has Already “Hit Bottom”

Sometimes you read something and it just makes you say “huh?!?” An article in Forbes last week titled Most Resilient U.S. Real Estate Markets gave me just such a moment. In it, Forbes writer Matt Woolsey attempts to predict the future, making some absolutely bizarre claims along the way:

When it comes to real estate, the questions on everyone’s lips are: How low is low, and when’s the perfect time to buy back in? That moment has passed in Seattle and Charlotte—both metros hit bottom in the first quarter of 2006 and have since posted price gains of 12.3% and 6.3%, respectively, according to National Association of Realtors (NAR) data.

Huh?!? What kind of “bottom” did the Seattle market hit in the first quarter of 2006? As far as I can tell, that was darn near the peak appreciation time.

Among the “Most Resilient” markets highlighted in the article (links go to S&P Case-Shiller Data): Phoenix, Las Vegas, San Diego, Miami, Boston, and… wait for it… Detroit (I kid you not).

I just want to say… Huh?!?

(Matt Woolsey, Forbes, 06.08.2007)

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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
    EconE says:

    funny how Forbes pumps the markets that are in danger of decline.

    They never claimed bottom in 2006 at all. In fact, quite the opposite. AOL had a link to Forbes in the beginning of 2006 stating that Seattle would be the best place for appreciation.

    Their estimate was 12%

  2. 2
    The Tim says:

    Ah yes. You’re probably referring to this article, where they get the data from the same source, Moody’s

    Always good for a laugh, that Forbes.

  3. 3
    Alex Econ says:

    It tracks the 40 biggest cities and of the ones not appreciating, Detroit ranks second to last. Your point makes no sense Tim.

    Also, Seattle’s market had its most significant decline from q4/05 to q1/06.

  4. 4
    CCG says:

    Forbes is well known for this kind of crap. Waste of time to even glance at them.

  5. 5


    Its in their best interest, when they spread untruths, it causes FEAR. When there is FEAR we buy even less.

    MSM, don’t ever mitigate the intelligence of Americans, we know when you’re just exagerating to push your agenda. Start offerring solutions, not exagerations.

    Have you ever heard the MSM tell us the real truth, that OVERPOPULATION in America reduces wages and hence, home prices?

    This isn’t politics, this is simply demography 101, ask any educated/intelligent American.

  6. 6
    pricedOutForNow says:

    In the cute picture show, they list most of the market troughs as being months to years in the future. That’s not reporting, it’s speculation! At least the hypothesized appreciation post-bottom for most markets are a believable 1-3%.

  7. 7
    Shawn says:

    the mistake is believing that the press is presenting news for the public’s benefit.

  8. 8
    The Tim says:

    It tracks the 40 biggest cities and of the ones not appreciating, Detroit ranks second to last. Your point makes no sense Tim.

    The Forbes article highlights 19 of what they call the “Most Resilient U.S. Real Estate Markets.” Detroit is listed as one.

    The relevant definition of “resilience” is:

    an ability to recover from or adjust easily to misfortune or change

    Considering that Detroit is currently in the midst of such “misfortune,” having declined over 9% since the December 2005 peak (according to the CS-S&P Index), I think it’s a bit ludicrous to proclaim their “resilience.”

    How does that not make sense?

  9. 9
    deejayoh says:

    Case Shiller since first quarter…
    04 2006 17.8%
    05 2006 17.4%
    06 2006 17.1%
    07 2006 16.8%
    08 2006 16.1%
    09 2006 15.2%
    10 2006 14.1%
    11 2006 13.0%
    12 2006 12.0%
    01 2007 11.1%
    02 2007 10.6%
    03 2007 10.0%
    Anyone getting a trend there? I’m getting a reminder why I cancelled my Forbes subscription

  10. 10
    EconE says:

    Actually…there wasn’t an article…just an AOL Real Estate link for “places that are going to appreciate”…pretty much for the sheeple. It went directly to a slideshow of the 10 cities that were going to appreciate for 2006. There *may have been an article but I didn’t see the link. I wouldn’t expect much more from AOL as they definitely contribute to the “dumbing down” of our society as far as I am concerned.

    Oh…full disclosure…I had AOL years ago and have always just kept my AOL email address…so I have to see the stupid “news stories” when I get my mail. So…of course I’m going to click on anything RE or Economy related to see what the sheeple are being fed. Lately, AOL nixed their “post” link next to any RE or Economy related story. Post all you want about the War, Bush, Brittney though.

    I have actually never read Forbes Magazine. I’m partial to The Economist.

    If anyone is interested in Economic journals, The American Economic Association has a few that are really quite interesting although when they get into the econometrics and mathematical equations it becomes a chore to read.

    Here’s the link for the journals.

  11. 11
    BanteringBear says:

    It’s always humorous when anybody calls a bottom while inventories continue to balloon. What kind of fools logic are they using? Furthermore, the idea that a bottom would come almost immediately following the greatest price run-up in history is delusional. What a bunch of nosensical garbage.

  12. 12
    Lake Hills Renter says:

    The article is front page at Yahoo now.

  13. 13
    Alan says:

    Chocolate rations are increasing this month too.

  14. 14
    george says:

    Lawrence Yun needs to try this roller coaster.

  15. 15
    seattlerenter says:

    The PI today:
    According to the [Washington Center for Real Estate Research at Washington State University], 7.8 percent of Seattle-area mortgages were for investors last year — good for 125th place among the 332 areas in the report.

    The report also broke out state percentages of loans where buyers only pay interest or can even pay less than their interest charge, meaning their balance increases. Washington had a 30 percent rate of interest-only loans — sixth among states and higher than the national rate of 22 percent — and a 12 percent rate for payment-option loans, fifth among states and more than the U.S. rate of 11 percent.


    The report says the number of households spending more than 30 percent of their income on housing rose by 2.3 million in one year, to 37 million in 2005. In the Seattle area, 33.3 percent of homeowners and 47 percent of renters spend more than 30 percent of their pretax income on housing. That’s 13th among the nation’s largest 50 metro areas for burdened homeowners and 38th for renters.

  16. 16
    Alan says:

    If you feel like being a vulture, this is a fun one:

    Purchased 6/2006 for $1.5M. Asking $1.75M.

    Here’s the kicker: It went into foreclosure last Friday.

    They only need $15k to bring the mortgage current. That tells me they are having serious cash flow issues. If they don’t sell by 9/7/2007 the house goes onto the auction block. Luckily for the bank, they only owe $340k on the place (unless there is a second mortgage). I bet the place sells for $900k, since they just don’t have any negotiating power.

  17. 17
    E says:

    Please email the author of this article with how poorly he checks data and trends. Wow.

    and tell his bosses too:

  18. 18
    Eleua says:

    I’m feeling it today…

    Anyone that still thinks the PNW market is “special” had better watch their back.

    California foreclosures are up 30% month/month and 350% year/year.

    The 10 year bond hit 5.25% today, which was a prediction that I made either here or on RCG last Thursday.

    Tighten that seatbelt. We are about to go offroading…

  19. 19
    Dade says:

    bet, $340K is the second.

  20. 20
    EconE says:

    California foreclosures are up 30% month/month and 350% year/year.

    if you really want to see a hurting area go to the Yahoo Real Estate Section and do a search in Salinas, CA.

    more than 2/3 of the homes for sale are forclosures

  21. 21
    Alan says:

    That foreclosure could also be a scam.

    Buy a house for $900k. Sell it for $1.5M. The buyer finances the whole thing and then leaves the country. Later he and the buy meet to split the $600k profit. Meanwhile the bank takes a loss. When it happens enough the government asks the taxpayers to foot the bill for the banks not being risk-averse.

    Those people own two other properties. I wonder if they are going into foreclosure too.

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