Housing Bust Slowing Population Growth

Aubrey Cohen reports on some interesting population growth data just released by the state Office of Financial Management.

…difficulty selling homes elsewhere has slowed population growth here over the past year, according to new estimates from the state Office of Financial Management.

Seattle and King County grew 1.1 percent and 1.2 percent, respectively, between April 1, 2007, and April 1, 2008, down from growth rates of 1.3 percent and 1.4 percent the previous year. Seattle is now home to 592,800 of King County’s 1.88 million residents.

The state grew 1.5 percent to nearly 6.59 million people as of April 1. The growth rate was down from 1.8 percent in the previous year.

Population gain from net migration — the number of people moving in minus those leaving — was 59,000 statewide over the past year, down from 70,000 in 2007 and 81,000 in 2006. King County’s net migration gain was just over 10,000, down from nearly 13,000 in 2007 and 15,500 in 2006.

The nationwide housing slowdown is starting to have a local impact, said Chandler Felt, demographer with the King County Office of Management and Budget.

“We’re not totally insulated from it, and I think we may be seeing more of it in the coming year,” he said.

Another fact not mentioned in the article is that as home prices drop more rapidly in sunny, desirable locations such as California and Florida than they do in Seattle, those places become even more desirable, which can only lead to some people leaving Seattle for more affordable, sunny locales.

(Aubrey Cohen, Seattle P-I, 07.03.2008)

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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.

38 comments:

  1. 1

    I think most people are going to move to where the jobs are, and pay less attention to home costs…But there are also going to be lots of retiring baby boomers who just won’t be able to continue living in places like Seattle, and will seek places where their housing dollar goes a lot farther.

  2. 2
    Sniglet says:

    I sometimes wonder just how valid these population stastics really are? During the boom years it seems as if almost EVERY region of the US was growing. Florida was growing, Las Vegas was growing, Calfornia was growing, Minnesota was growing, and Washington was growing. Now, it seems as if the population is contracting everywhere.

    Where has everyone gone? It’s not as if we hear of people running to Detroit, Cleveland or Chicago.

    I suppose that some of this population fluctation could result from foreign immigrants (legal or otherwise) returning to their home countries. But I wonder if there might be some flaw in the statistical gathering of population data? Maybe we over-estimate the number of people living in homes or something?

  3. 3

    “Where has everyone gone?”

    Soylent Green.

  4. 4
    vboring says:

    the company i work for has had a hard time recruiting senior people because of the high cost of owning a house here for years.

    folks from the midwest especially like the jobs and the higher pay, but just can’t imagine paying so much for a house.

  5. 5
    The Tim says:

    Sniglet, it should be noted that these latest figures for Washington State and the Seattle area still show population growth, just at a slowing rate.

  6. 6
    jon says:

    Commercial rents continued to go up in Q2 in Seattle as well: http://online.wsj.com/article/SB121505726814325883.html

  7. 7
    Slumlord says:

    Ira,

    It is true that the Soylent Green factory is having trouble retaining staff. What’s weird is that people clock in at the beginning of their shift but they never clock out or show up for their shift the next day.

  8. 8

    OUR KIDS CAN’T FIND JOBS

    US News & World Report, 7/14/08 Issue, “Occupying Idle Teen Hands” by Bret Schulte reports our kids can’t find jobs this summer. The reason is given, and the article states in part:

    “…The problem is partly due to the weakening of a federal summer summer jobs program but also to immigrants competing for low skilled jobs…”

    It also mentions our retirees going back to work too at these jobs, ’cause they can’t afford to live in America’s hyper inflation anymore.

    Overpopulation in America is real and its not a joke either, especially if you’re in today’s job market.

  9. 9
    vboring says:

    @ softwarengineer,

    it is an interesting situation, this increasing joblessness amongst teens thing, but i can’t see a way to explain it as an overpopulation issue.

    it seems to be more likely it is some combination of the following:
    1) old folks didn’t save enough to retire, instead relying on their house or social security, or just choosing to not think about it
    2) social security benefits are based on the CPI, which consistently underestimates the costs of things, so the real value of social security benefits decrease every year
    3) businesses don’t want old people as full time employees because they increase the cost of health insurance too much, so they encourage them to retire or don’t hire them
    4) many old people don’t have skill sets that are valued by the economy

    because of these reasons, old people have to compete with young for part time jobs. since most of these jobs are in the retail industry, i doubt that illegal immigrants are really having much impact.

  10. 10
    Scotsman says:

    More sun, lower expenses? Sounds like a winner to me! Not that I don’t love the prospect of another cloudy 4th of July.

  11. 11
    EconE says:

    Not only may people be moving to sunnier locales….some who may have considered moving here from those sunny states are deciding not to.

  12. 12
    Buceri says:

    Jobs, Jobs, jobs…a move to Seattle is always a promotion. I have never heard anyone say: “crap, I got transfered to Seattle”. And as jobs go, no matter the weather, so goes the population.

    And Seattle weather is not “senior friendly” (they wear jackets when temperatures drop to 78 here in Florida).

  13. 13
    jon says:

    If you like California taxes or Florida summers, go for it. Personally, I’ll take clouds over smoke anyday, except July 4!

  14. 14
    Civil Servant says:

    Buceri: a move to Seattle may always be a promotion, but I don’t think it’s considered the brass ring. In my grad program (back east), it was common for people to sew up job offers in Seattle or Portland and then keep looking for something in NYC, SF, LA, or even Chicago. I knew a few people who opted for Chicago, and they all cited the allure of a large city combined with a low cost of living as factors in their decisions. A friend of mine turned down Amazon — even at a fairly senior level they weren’t offering him enough to afford a mortgage and for his wife to stay home with the kids, priorities for them. Maybe a few years ago when stock options were more of a gravy train they could have bagged him, but no more.

  15. 15
    MisterBubble says:

    Civil Servant for the win…

    In both the biotech and software industries, Seattle is a second- or third-rate player. Unless you’re brand new, your career will benefit from moving to the bay area (for both software and biotech) or San Diego (for biotech). There’s simply no comparison.

    Once again, the delusional, “Seattle is special” locals overestimate their worth in the free market….

  16. 16

    I disagree with the fact that people choose to live in desireable locations such as California and Florida. I am a realtor in Miami, Florida, and people are shying away from here because of the extremely high property taxes. And I know that the taxes are just as high in California. So I would not say that prices are necessarily “more affordable” here.

  17. 17
    Buceri says:

    Civil; I agree. Compared with the cities you listed, Seattle is not matched if the “Northwest lifestyle” is not your cup of tea. And housing costs will always play a role.

    I worked with many Texans that sold their ranches and moved to Seattle to work in my former company (back in the 90s). They spent all their time bitching about not being able to afford anything in Seattle. Don’t worry; I was told that by the early 2000s, they were all back in Texas.

    In conclusion, a recession will affect Seattle’s population more than other cities. Most growth has been job related. 9 months without sun PLUS struggling to make the mortgage payment ….people will go back to where they came from.

  18. 18
    b says:

    The report itself is more interesting than the article (complete with graphs).

    Driver’s license data indicate that over time California contributes the largest share, from 40 percent to 50 percent, of the net movement into Washington from other states. The current 12-month license total of in-movers from California is 27,900 licenses. This compares to 38,000 in 2006 and a peak of about 40,000 licenses from California in the early 1990s.

    Considering the vast majority of population growth from within the US is from California, their cratering market and next few years of declines/stagnation will probably effect Seattle quite a bit. I am a silicon valley renter who is moving back to Seattle for a new job and the recruiter was incredibly relieved I did not own a home, she said they had a lot of people from the valley backing out of offers because they were unable to sell and move without losing a bundle.

  19. 19
    Civil Servant says:

    RS @ 16 — how are you measuring desirability if not by the fact that, uh, people have tended to desire to live in these places? US Census puts Miami population growth at 6.2% from 2000 to 2006. Those new residents seem to have rationalized your tax rates just fine. Either I am missing your point or your argument could use some heft.

  20. 20
    Yaoyao says:

    Seattle is special. But if Santa Barbara has jobs, or San francisco becomes more affordable, I’d move to either of them.

  21. 21
    deejayoh says:

    Slowing immigration from other states is not a new phenomenon. California and Oregon are the lions share for Washington, and that phenomenon peaked way back in mid-2006, and has been dropping ever since. I saw this when tried to tie migration patterns to home prices in a post last year.

  22. 22
    MacAttack says:

    Jobs, Jobs, jobs…a move to Seattle is always a promotion. I have never heard anyone say: “crap, I got transfered to Seattle”. And as jobs go, no matter the weather, so goes the population.

    Well, I am a Seattle native, as are my three sisters. I live in Portland and am the northernmost outpost of my family unit. They are all in the Bay Area, Laguna Beach, and San Diego, respectively, and none of them would consider a move to Seattle a promotion. They all would call it a move to hell. See, they like sunshine.

  23. 23
    Scotsman says:

    Ah, Mac, it’s not quite Hell, but you can see it from here, usually around the end of November. The sun comes out just often enough to allow the continued delusion that this is always paradise, when in reality that’s only true two or three weeks a year.

  24. 24
    mikal says:

    What a bunch of whiners. You would all find something to bitch about somewhere else. Moving doesn’t make one’s life any better.

  25. 25
    Buceri says:

    Mac – the Bay Area, Laguna Beach and San Diego?? Wow, sure a move back to Seattle would be a step back. And I agree that, home prices being the same, I can’t see the logic of leaving California for WA. But some 250 million Americans live in places that are sh..holes. I’ve been lucky and have traveled around the country. Most (NOT ALL) of those red states…yikes!!! A move to Baghdad would be an improvement.

    And I have not met anyone here in Florida that has visited Seattle that does not ask: “what ? you lived there? What the heck are you doing here???”

  26. 26
    Yaoyao says:

    Another thing. When I was single, raining all winter was ok, since most of the time i was indoors working my b**** off. But these days, I have to work all day and come home to hear my wife bitching about the wet playground and lack of cheap indoor play space. Now I start to miss Santa Barbara and Bay Area.

  27. 27
    B&W Nikes says:

    If my muddled brain remembers right, in the early 90s in LA the outflow of residents was increasing faster than the inflow. I think the sunnier beauty spots in America are just more volatile in general – most of them are boomtowns of one kind or another. Being a boomtown herself, Seattle is not an exception, but the swings are generally more shallow in recent memory.

  28. 28
    Bellingham REnter says:

    Bellingham is in a quagmire.

    “We don’t anticipate a collapse or the steep price declines that are being forecast for other areas of the country,” Johnson said. YEAH RIGHT

    http://www.bellinghamherald.com/business/story/458651.html

  29. 29
    Tim says:

    I too live in Bellingham and just drove down S. Garden st. and was struck by how many for sale signs I saw and the large number of them boasting a new price. We are looking for a place but I think we will not consider anything until next year. There really is no compelling reason to buy right now.

  30. 30
    david losh says:

    These statistics have always been suspect to me. Drivers license data should have a lag time to it. I hate the DMV. I hate waiting in line, holding a number, looking in the box, getting a crappy picture, so why would anyone else jump in to get that new license? It’s scketchy data.
    I would like to know why it seems that the contraction of population is so real. Sniglet has made another point that has me curious about what happened to all of those expanding market places we had just a couple of years ago.
    People were moving to Florida, Nevada, San Diego, Seattle, Dettroit, and Boston. Now, all of a sudden we have this huge glut of housing units, everywhere.

  31. 31
    Runs With Scissors says:

    Will the last person who leaves King County please turn off the lights?

  32. 32
    Jonny says:

    I did a search on the MLS and found 44 listings in King County Priced between $500k and $1,000K with the key word “short.” Of those 44, six were mentioning “subject to short plat recording.”

    Not very many short sales listed in comparison as to how everyone is talking on this site.

    Can another agent verify my findings?

  33. 33
    david losh says:

    Good Morning!
    There are 88 total for King County as Active, 79 as Pending and Sold.
    That is a lot. That also doesn’t take into account those that will be short that haven’t come to grips with thier situation. I have had three short sales in the past four months. I could have more but don’t want them.
    Many people are holding out for the market to turn around. It won’t. There are two new Foreclosure services associated with Windermere on the East side. They are doing a brisk business. All in all selling for less than what’s owed will continue to be a trend for the next two years.

  34. 34
    biliruben says:

    Thanks, Dave. Interesting.

    BTW, drove by your listing on the west side of QA. You gotta talk some sense into that seller.

  35. 35
    deejayoh says:

    Thanks, Dave. Interesting.

    BTW, drove by your listing on the west side of QA. You gotta talk some sense into that seller.

    Bili. I thought the same thing when I saw that listing and noticed it was Mr. Losh’s.

    For those wondering about the listing, here it is. Perhaps the added exposure will help turn up a buyer.

  36. 36
    Buceri says:

    David – I can testify that at the peak (2005) we were told that about 40,000 people a month were moving to Florida. By 2006, schools reported the number of new students, and the numbers were ridiculously low. Then it started to surface, that some people had their names on waiting lists in 10-20 condos under construction at the same time!!!! It was a pyramid scheme/flippers galore!!! Non of these states population grew as much as housing units did in those days.

  37. 37
    Jonny says:

    David Losh

    “There are 88 total for King County as Active, 79 as Pending and Sold.
    That is a lot. ”

    Out of over 30,000 listings in King County, that isn’t a lot…

    Less than 3 tenths of one percent.

  38. 38
    deejayoh says:

    Jonny –
    If there are 30,000 listings in King County, we have problems other than foreclosures! I think the number is about half that, but your point still holds. Half a percent is on the high end of the long run average for mortgages going bad, but nowhere near what other markets are seeing.

    That said, a year ago none of these would have made the MLS as distressed listings.

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