Forbes: Seattle “Continues its Ascent”

These “top real estate market” lists by Matt Woolsey in Forbes are really starting to seem pointless and repetitive, but I suppose I should at least mention the latest one, since it will probably be proudly touted in local real estate marketing material for the next few months. The latest fill-in-the-blanks list from star reporter Matt Woolsey is titled Best And Worst U.S. Housing Markets, and Seattle comes in at #8 on the “best” list.

Scaled-back lending practices, risky loans, oversupply and low demand continue to plague the nation’s housing markets, driving down prices and stalling sales. But it’s not so in Salt Lake City, Charlotte, N.C., and San Jose, Calif., where prices have continued to climb without so much as a hiccup.

The Emerald City housing market continues its ascent on the back of a strong local economy and the prudent construction rates of the past five years. Although prices are reaching record highs, the city remains a cheap alternative for Northern California residents and businesses looking for better value.

Funny he should say “continues its ascent,” right at the time when the ascent finally seems to be leveling off and changing into a descent. Of course, if we stay behind the curve like we seem to have been the last five years or so, we could still qualify as one of the “best” housing markets next year on the way down, with a -5% change in prices, compared to -10% or more elsewhere.

(Matt Woolsey, Forbes, 11.21.2007)

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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
    redmondjp says:

    This is my favorite line:

    . . . the city remains a cheap alternative for Northern California residents and businesses looking for better value.

    So, Seattle is still cheap compared to San Francisco, thus ensuring a continuing stream of CA equity locusts to devour our affordable housing crops. Great. Woo hoo!

    Now, wait a minute, why did he specifically mention Northern CA, with no mention of any of the rest of the state? Could it be becase the RE markets in most of the rest of the state are in a significant decline right now? Talk about cherry-picking the data!

  2. 2
    MacAttack says:

    Well, Seattle is MORE expensive than almost all of California – the exception being the coastal areas near major cities.

    If CARS suddenly doubled in price – but you could RENT one for 1/3 the price of buying one – what do you think would happen to car sales?

  3. 3
    Affluent Bitter Renter says:

    RE prices just south of San Jose have started to decline (as well as over the hill in Santa Cruz).

    “So, Seattle is still cheap compared to San Francisco”

    Of course, this has always been true (among other things, the predicted high temp in San Jose today is 64, San Francisco 62, and Seattle 43… hmmm). One thing that doesn’t seem to get asked by the RE boosters is precisely why Seattle is getting nicer vis a vis Northern California – more gridlock on I-5?

  4. 4
    B&W Nikes says:

    In Forbes speak Seattle is viewed as a cheap alternative, rather than a primary destination. Funnny.

  5. 5
    patient says:

    He forgot the little detail that with best and worst he means for current sellers and owners. The situation is likely reversed for potential buyers.

  6. 6
  7. 7
    deejayoh says:

    Gosh, maybe it was their lender discussed in this article…

    Housing crunch hits local lender First Financial Northwest
    The housing crunch hit Renton-based First Financial Northwest Wednesday, as the lender said it would set aside $4.5 million because one of its large borrowers, a residential developer, may have trouble repaying $37.3 million in loans

  8. 8
    Bellevue Ave says:

    lets look at this way; if forbes is reporting it, then it is most likely already at its peak. i remember in 2k5 when there was all the hubub about housing and coincidentally once the MSM became aware of the fact that was the high point.

  9. 9
    Buceri says:


  10. 10
    Buceri says:


    Forbes is a monthly magazine. News from two month ago in a magazine dated for January 2009.

  11. 11
    Joel says:

    Funny that Salt Lake City is on the top of the list. My sister just made two trips out there to look at houses and it’s blindingly obvious that they’re in panic mode. She said that realtors would pull them aside and tell them to make any offer they wanted because the sellers are desperate. She observed several situations where the family had already relocated to a new area, minus the wife who stayed behind to try to sell the house because they had such a hard time finding a buyer.

    The word is that buyers can’t get financing (duh), and a lot of buyers can only buy contingent on selling a home in an even slower market. Since my sister and her husband have perfect credit, greater than 20% down payment and are renters, the realtors are clamoring to get an offer out of them. One even said “We have another buyer that’s putting an offer on this home . . . but I’m sure their financing will fall through so just make whatever offer you want.”

  12. 12
    deejayoh says:

    So, Seattle is still cheap compared to San Francisco, thus ensuring a continuing stream of CA equity locusts to devour our affordable housing crops. Great. Woo hoo!

    I love the quality of Forbes’ “research”. Perhaps they looked at the population trends, as reported by the Washington Office of Financial Management?

    The economy of such a populous neighbor as
    California has considerable effect on Washington’s
    growth. Drivers’ license data indicate that California
    contributes the largest share, from 40 to 50 percent,
    of the net movement into Washington from other
    states. The current 12-month license total of
    individuals moving from California is 34,000. This
    compares to 38,000 in 2006 and a peak of about
    40,000 licenses from California in the early 1990s.

    Movement from Oregon, the second largest
    contributor of migrants into Washington, has also

  13. 13
    patient says:

    Perhaps, just perhaps all californinan’s do not own their properties out right and perhaps even some are now caught up-side down? There could even be one or two filthy renters that decide to move to Washington, or are there immigrations laws prohibiting them from entering the state?

  14. 14

    So if Seattle declines 5% next year, and is better than the rest of the country, at what point do we hit bottom?
    My own guess is that 2008 sees a greater than 5% decline locally, and then stays flat in 09/2010 for a while before going back up.
    Do people here see the local market continuing to decline in 09?

  15. 15
    Buceri says:

    My take is that only a recession will make prices go lower at a faster rate. Otherwise, Ira, you have it right. Slow down and flat until salaries catch up. Interest rates are the wild card. But I think it will be more than 2010 for things to catch. By the way, Florida, 10% less foreclosures compare to last month, BUT 160% MORE than last October. Ouch!

  16. 16
    Buceri says:

    One more thing. The euphoria that feeds the increment in pricing (DON’T WANT TO LEFT OUT!!!!); rapidly converts in the opposite. When Price Reduction shows up everywhere, the “wait, it will go lower” attitude takes over and feeds on itself.

  17. 17
    goin' for it says:

    So how long would it take at the current rate of salary increases for income to reach a level that would make things affordable again? And by affordable I mean that the median house price is only 2-3x the yearly gross income of the median family. From everything I’ve seen that is gonna take a lot lot longer than 1-2 years. More like, lets see……..NEVER.

  18. 18
    patient says:

    “Do people here see the local market continuing to decline in 09?”

    Well, from the c/s data we can see that many markets are now well into the 2nd year of YoY depreciation. From that I would say it’s likely that the decline continues into 09. A question mark is the continously deteriorating economy that as Buceri mentions can speed things up with a quicker and steeper correction.

  19. 19
    Chris says:

    If we’re taking a poll… (Poll, Tim?)

    -upwards of ten % area wide average in 2008
    -flat or slightly negative 2009
    -first marginally positive year is 2010

    towards a 20% adjustment in real terms

  20. 20


    They had another joke article on the ten “turkey cars” for 2008 and made about as much sense as mud.

    If you went to MSN Autos and got the expert/user ratings with Consumer Reports backups on their top ten turkey automobiles, you basically found out the following:

    1. The users thought their alleged turkeys were high quality cars.
    2. Even the expert ratings on their alleged turkeys were comparable to Honda and Toyota, for $10K less.
    3. I commented on their unscientific alleged turkey list as complete hogwash and Forbes made sure to eliminate the comments page the next day.


  21. 21
    NotaBull says:

    “Forbes is a monthly magazine. News from two month ago in a magazine dated for January 2009.”

    Actually, it’s news regarding the twelve months *prior* to two months ago. YOY stats are great when the market is steadily increasing or steadily decreasing, but they completely miss turning points. Month over month, prices have been going down for several months now but the MSM won’t “see” it until the YOY stats show it to be true.

    The only way to really see what’s going on with prices is to watch properties sell, and watch what they sell for. That’s what I’ve been doing for months now, and the prices are coming down (in the areas I’m watching).

  22. 22

    Hi IRA

    If you’ve read my past blogs, you know I’m a Dr. Roubini hard landing believer. We’ve only seen the very tip of the mortgage “bloodbath” to quote Roubini. Japan’s bubble went on and on [its still going on since about 1990]….so will ours.

    Oh, Roubini made it totally clear recently, he’s against bail out of Countrywide and Citi, etc….he calls is phony welfare/socialism to the rich who claim to be conservative free traders in total error. I’m with him.

  23. 23
    Matthew says:

    Forbes is total and absolute garbage. Keep in mind Steve Forbes argued that there was not a nationwide housing bubble and that we would not see a decline in housing prices nationally.

    The fact that people pay attention to this publication is mind boggling. Everyone should do themselves a favor and read the Economist and ignore this mindless drivel.

  24. 24
    Plymster says:

    My own guess is that 2008 sees a greater than 5% decline locally, and then stays flat in 09/2010 for a while before going back up.
    Do people here see the local market continuing to decline in 09?

    If prices decline by 5% next year and stay flat through 2010, doesn’t that mean that anyone who bought this year would be underwater next year assuming they put down 2-5%? If they had an ARM (typically pegged to LIBOR, which has been spiking lately), wouldn’t they be incented to simply walk away, rather than pay a mortgage that is 30-50% higher? This means foreclosures, which will drag prices down even further.

    What about the homes that are currently readjusting? People may have some equity (assuming they’re not HELOC’ed to the gills).

    What about the banks, like Citibank, that are potentially facing insolvency. Does anyone believe that the largest bank in the US having to be saved by foreign investors willing to lend them money at 11% interest will be positive for the mortgage market in 2009 or 2010?

    Personally, I’d bet that next year will be a 5-10% bloodletting IF the mortgage market can hold that long (doubtful), followed by a bloodbath in 2009.

  25. 25
    TJ_98370 says:

    For those that might be interested, the Seattle Times & PI, Tacoma Tribune, and the Columbian are referenced in Ben Jones’ HBB today along with news about Montana, Oregon and Idaho.

    It’s Just a Waiting Game

  26. 26
    on topic says:

    how do we come out of this with an economy intact? if prices decline 5%/yoy for 2 yrs because nobody wants to risk giving loans against assets with declining values, won’t that just make the values further decline, leading to further restrictive lending practices?

    what defines the bottom?

    as for how we get to the bottom, is a crash better or worse than a 20yr recession? and what would it take to set off a crash? Japan has shown us what the mechanics of a 20yr recession looks like.

    i’m tempted to think that a nationwide housing-led crash is unlikely, because houses are not liquid, because they have intrinsic value as long as there are jobs or the expectation of future jobs nearby, and because the housing market is influenced by far too many people who are not primarily financially motivated. (if my family and i owned and liked where we lived and could make the payments, we would probably stay there, even if we were significantly underwater and would be financially better of leaving)

    instead, i think a drawn out recession, complicated by the baby-boomers retiring, excessive debt at all levels, underfunded social security, etc is in store

  27. 27
    Jonny says:

    “Do people here see the local market continuing to decline in 09?”

    Since we’re taking a survey, my guess is 2015. I have a built-in assumption of a whopping recession and possible large-scale financial meltdown. In the highly unlikely event that doesn’t happen, my guess is 2011.

  28. 28
    george says:


    I hope you are right and that we see a relatively small correction since that would mean a major national recession won’t occur, and the forecasts for economic growth in the PNW are accurate.

    I’m a lot less confident that you’re right about that than I was a year ago.

    Already we’ve got the first national housing declines since the great depression dragging the economy. Not to mention a costly war for the taxpayers to keep funding.

    Nobody knows where this is all headed, but from where I sit it ain’t looking very good.

  29. 29
    Bellevue Ave says:

    here’s what I think is missing in regards to the discussion of psychology of the housing bubble

    “houses are a great investment, look at the YoY return, it’s better than the stock market and easy to get in to with other people’s money” to
    “housing will make a comeback as a great investment in the near future”
    to “houses are value holders, look at the YoY value, you can live in it to boot”

    the idea that housing can be the best purely financial investment you make in the future is a crock. a past housing boom is no indication that “once the ship is righted” there will be a housing boom again. who really thinks that lenders are going to return to the lending practices of 2003 in 2011 that created this bubble? who thinks that average growth of 10% spread over 4 years is a good investment? even if housing prices grew at 2.5% a year, you could do better investing in something else.

  30. 30
    Dave0 says:

    “[Seattle] remains a cheap alternative for Northern California residents”

    And Fargo, ND remains a cheap alternative for Seattle residents. That doesn’t mean that I’m going to move to Fargo.

  31. 31

    Following that logic, residents of every place will find somewhere else to move to that’s less expensive, and after the folks vacate Fargo and move to Malvern, Arkansas, what’s left? Mongolia?

  32. 32
    TJ_98370 says:

    Inspired by Ira’s comment, I posted the following link. I think I’ll check the place out and maybe I’ll see Billy Bob Thornton! It looks like it may be a place I can afford after I retire. Thanks for the tip Ira! :)
    Brick Capital of the World

  33. 33
    NostraDamnUs says:

    I love it when software engineers espouse their beliefs into all kinds of things…

    Anyway, if you’re to beleive this article:


    “To be sure, there are several major differences between Japan in the 1980’s and the United States today. One is the fact that property prices rose much faster and more steeply in Japan, partly because speculators used paper profits from a booming stock market to invest in property, insupportably leveraging the prices of both higher and higher.

    Another difference is that the biggest speculators in Japan’s frenzy were deep-pocketed corporations, and they pumped up the commercial property market at the same time that home prices were inflating.”

    So, Softie, go ahead man, spend the night trying to prove Dr Houdini (Roubini, pardon), right.

    I hate comparing the U.S.’ to Japan’s economy, but then again, that might be just me. They may be experts at (over)engineering ricerockets, but they gotta a lot more to learn about value creation, economics, people, human psychology, etc.

  34. 34
    NostraDamnUs says:

    Dr Houdini, pardon, Dr Roubini:

    (search for Roubini – only one points to a nice article, many other ones on the site too)

  35. 35
    NostraDamnUs says:

    Japan bubble (vs US) –

    Japan has yet to master the art of value creation, economics and human psychology the way the U.S. does it.

    Softie, Mr Google’s waiting for your doomsday queries

  36. 36
    NostraDamnUs says:

    more for excited, keyboard happy, lonely software engineers who think just cause they can program a recursive function successfully, they also know economics:

    Someone in this article, if you believe his truth, elaborates on the differences between our burst bubble vs Japan’s… I see the Japanese are back in the stone age today…

  37. 37
    NostraDamnUs says:

    Ira – stay away from technical people with an ability to predict the future by raping Mr Google to death.

  38. 38
    NostraDamnUs says:

    Help on the way for troubled homeowners? –

  39. 39
    TJ_98370 says:

    Hey Nostra-

    That Japan article is two years old – most of us have seen it already. Did you note the similarities ?

    …Most of all, economists say, Japan’s experience teaches the need to be skeptical of that fundamental myth behind all asset bubbles: that prices will keep rising forever. Like their United States counterparts today, too many Japanese homebuyers overextended their debt, buying property that cost more than they could rationally afford because they assumed that values would only rise. When prices dropped, many buyers were financially battered or even wiped out….

  40. 40
    CliveL says:

    Why does everyone who thinks the current bubble will pop have to be a “curry loving” lonely guy. He/she could be your regular Joe who does not want to commit financial suicide by buying at the peak or for that matter buy within his/her means ?

  41. 41
    NostraDamnUs says:

    I noted the discrepancies too.

  42. 42
    NostraDamnUs says:

    they can be rice lovers too. it’s ok. I didnt have a preference but being that I love curry myself, I used that as an example.

  43. 43

    NostraDamnUs said,

    “on November 29th, 2007 at 6:34 pm

    Ira – stay away from technical people with an ability to predict the future by raping Mr Google to death.”

    Did I miss something or am I just brain dead?
    Nostra- what are you talking about?

  44. 44
    Matthew says:


    You didn’t miss anything. Most of his posts are incoherent and consists of posting articles that are 2+ years old.

  45. 45
    just_checking says:

    New Realtor tactics ?

    Off late I am seeing that the realtors are increasing the asking prices after sitting in the market for some time (30-60 days). Anyone care to share the insight here ?

    For example – MLS 27198457
    The list price was “$549,950” and changed to “$564,950”

  46. 46
    b says:

    just_checking –
    A lot of people are quite stupid, many realtors and homesellers included.

  47. 47
    just_checking says:

    I would like to give them a little more credit though.

    My thinking is that they are trying to make it look like a “great deal” to the potential buyers when they accept a offer for 5-10% off the inflated listing price, akin to the 75% off jewelry sale.

  48. 48
    AndySeattle says:

    I like how Nostra posts six posts in a row in attempts to prove a point. I’m guessing that the obvious truth of the situation is stinging just a bit. Pathetic.

  49. 49
    rose-colored-ghoulaid says:

    I can also prove a point.


  50. 50
    rose-colored-coolaid says:


  51. 51
    rose-colored-coolaid says:


  52. 52
    rose-colored-coolaid says:


  53. 53
    rose-colored-coolaid says:


  54. 54
    Bitterrenter says:

    You know what I think? I think many of you WANT things to crash and burn. You don’t appreciate the society we live in, are even hostile to it and want to see it pushed close to ruin if not to collapse. The economic system makes you angry. Good news doesn’t please you.

    Not that there’s anything wrong with that.

  55. 55
    rose-colored-coolaid says:


    NostraDamnUs is nucking futz!

  56. 56
    Jackson Wallace says:

    All the undesireable areas of puget sound, including undesireable areas of seattle, are showing a dirty dumpload of inventory. The only areas that are still expensive are
    the best areas of inner Seattle, and maybe the eastside, which i could not care less about. There is no doubt that the weather in this city sucks. Always has, always will. Every time you get one summer you think is decent, you get five more that are terminal. Now, I dont really want all that much heat, but the damp goes on a bit long and marathon-style. Of course, California is now paradise lost in many places, but there is still lots of verve there if you can afford it. So, a 300k condo on Mission Beach where I can stare at bikinis every day, or 300k condo in downtown seattle, with heffalina angry shopping lady all day? Decisions, decisions.

  57. 57
    Jackson Wallace says:

    oh yeah, this is infantile…Seattle continues its ass-scent

  58. 58
    what goes up comes down says:

    I always wonder if Seattle is so perfect — why is anyone selling a house??? That number up in the left corner shouldn’t be over 10,000 it should be closer to 5,000 (some people are forced to relocate and there is building going on) if Seattle is paradise.

  59. 59
    NostraDamnUs says:

    Andy – you know the truth ™? You can’t handle the truth :).

  60. 60
    WestSideBilly says:

    You know what I think? I think many of you WANT things to crash and burn. You don’t appreciate the society we live in, are even hostile to it and want to see it pushed close to ruin if not to collapse. The economic system makes you angry. Good news doesn’t please you.

    Not that there’s anything wrong with that.

    That’s a bit extreme. Most people here, I suspect, realize that a massive collapse in housing markets would probably lead to the Great Depression, take 2. And while 90% reductions in housing prices would be great, since there’d be 30% unemployment it wouldn’t matter much.

  61. 61

    […] a bit confused. Just two weeks ago, Matt Woolsey’s latest real estate list in Forbes placed Seattle as the 8th best real estate market in the country. Now this week, Forbes writer Joshua Lipton pens an article titled Selling Your Home In A Down […]

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