WCRER: Affordability Drops Again

The Washington Center for Real Estate Research posted their latest “Market Snapshot” data (pdf) this week.

Here’s an article on the data from the Times: Home sales still sliding in state, Puget Sound region

WCRER director Glenn Crellin continues to blame the media and buyer fear for the floundering market:

“Buyers see and hear stories about the collapse of the national housing market everywhere, and that makes them afraid to move forward with a purchase,” said Glenn Crellin, center director.

According to the WCRER, King County home prices rose from the first quarter to the second, but are still around 5% below their 3rd Quarter 2007 peak.

WCRER King County Affordability
Click to enlarge

The WCRER’s affordability index dropped from 76.6 in Q1 to 74.3 in Q2. The low point for affordability was Q2 2007 at 66.1.

When they post the more detailed data from their Q2 report, it can be found here.

There isn’t really a lot to say about this data, since it’s nothing new to anyone who has been regularly following the monthly data from the NWMLS. Prices had a slight spring bounce, but not enough to put them in the positive YOY. Affordability is still in the gutter.

0.00 avg. rating (0% score) - 0 votes

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
    SeattleMoose says:

    As Jagger/Richards sang…..”Time Is On My Side”.

    Limbo lower now….how low can you go????

  2. 2
    david losh says:

    Look at the affordability index at $270K and the first time index at $150K. That price range only provides a housing unit that has become a town home or condo as a base. I believe there is a market for those units and a price point to correspond.
    Those types of housing units are going to be the ones most likely to stay stagnant in appreciation. More can always be built for those prices. They are housing units with four walls and a toilet.
    This is the problem with the Affordability Index. It is viable data, but will never address the pricing issues. The pricing issues with housing, now commodities, as the stock market before that, are far removed from any day to day reality.
    The bubble in housing unit pricing is global. We just returned from Peru where the same massive building schemes are going on with banks being the biggest promoters. The difference in Peru, from Spain, is that fewer people could afford or were given loans for these town home, condo projects, so they in turn sit vacant hoping for renters.
    The bigger credit schemes in Peru are for every day items, like toasters, hot plates, and washing machines. Four years ago everything was cash.
    There are more machines, tools, and cars, usually used for some types of business, like taxis. Durable goods bought on these credit schemes help generate more economy. So, credit can be a good thing.
    Coming back to the United States these housing units are making more sense. Where I see the problem is that people began paying Real Estate prices for Housing Units. People began paying $500K for four walls and some toilets. People paid $350K for a $250K housing unit in Fremont, of all places.
    I can pay $400K for a little house that sits on a big lot or buy four walls and some toilets that sit on the foot print it sits on. It’s lumber and about 500 sq ft of dirt.
    In Peru, when the comparison was made more people bought little houses, for cash, or traded up, or remodelled. Now you can see row after row of buildings sitting vacant.
    It’s the banks that make the money. It was much clearer in Peru that the housing units were secondary to the amount of money those units pumped into the economy. Companies bought tools, and trucks, that are still in the system. Employees were hired and paid. Banks make loans based on income from jobs they created, then churn durable goods. The worst case is that they rent out housing units, but it’s still the banks money, investment, that they are getting a return on.
    It’s all money that keeps sloshing around. So yes you can own a housing unit for $250K. You just need to wait a bit and it will be so. The less tangible purchase will be that picket fenced yard you grew up with. The dream of real property may be more elusive. As builders tear more stuff down to build crappy housing units your dream homes becomes more scarce.

  3. 3
    Marc says:

    Businessweek.com has an interesting article about the best rental markets – spoiler alert – Tacoma is in the top 10:


    “In Tacoma, Wash., where there is an overflow of military personnel from nearby bases looking for apartments, rents increased 7.8%—the biggest increase in the nation.”

    “In Tacoma, which continues to experience job growth, many people are renting because—with increasingly restricting lending standards—it’s tough to qualify to buy, said Dick Beeson, broker/owner of Windermere/Commencement Associates. Tacoma is attractive to renters because it is an affordable alternative for people who work in Seattle, just over 30 miles away. Beeson said he expects rents to begin stabilizing next year as more investors lease out homes they couldn’t sell. ”

    I knew Tacoma sales were tanking but I didn’t see this coming.

  4. 4
    Robroy says:

    Dave, Any relation to Brian? I used to work at Ewing and Clark when they were on Dexter and later on 5th.

    You and I seem to have the same love of condos. ;)

  5. 5
    Groundhogday says:

    Crellin is a professor at a land grant university with an obligation to generate unbiased knowledge and to serve the people of this state. What an embarrassment. Can’t the guy read his OWN affordability numbers???

    Glen, get a clue! People are buying because houses are not affordable! THe days of getting a loan that you cannot afford are over, so it is back to reality in WA just like everywhere else.

  6. 6
    ThomasB. says:

    The Times article stated:
    “Declining prices don’t necessarily help many buyers, said Jan Ellingson, of Burlington, Skagit County, who is president of Washington Realtors.
    “Much of the savings in prices was consumed by higher interest rates, leaving buyers frustrated that they are not benefiting from price declines as they expected,” she said.”


  7. 7
    softwarengineer says:


    I’d add; eliminate the top 10% of Seattle’s household incomes….they already bought and most are not in the market.

    We all know the bottom 90% of household incomes are at best marching in place since 1999….with food/gas, they’re conservatively reducing approx 10% a year, inflation adjusted.

    Welcome to Seattle’s uncontrolled population wage deterioration.

    Oh that’s right, gas, food and housing aren’t in the COLA calculation….lol

  8. 8
    victorchai says:

    Just a quick Q, any1 got the July’s usual Monthly home sale maps in PDF? Thanks alot!

  9. 9
    TJ_98370 says:

    ……”Buyers see and hear stories about the collapse of the national housing market everywhere, and that makes them afraid to move forward with a purchase,” said Glenn Crellin, center director……

    Mr. Crellin does have a firm grasp of the obvious. You have to give him credit for that.

  10. 10
    TJ_98370 says:

    Mr. David Losh –
    I read your stuff occasionaly, and you make some very good observations at times, but I find most of your posts difficult to understand. I am hardly the one to legitimately criticize other’s posts, but you are a bit on the rambling side IMO.
    Mr. Losh. here is a challenge – if you had to consolidate your previous post into one sentence, what that one sentence be?

  11. 11
    98115renter says:

    david losh said: “Look at the affordability index at $270K and the first time index at $150K. ”

    I think your are misreading the graph. The $ price on the right axis is only for the median retail price while the numbers on the left axis are an index are for the affordability index. The affordability and first-time affordability are not given in dollar terms.

    Can anyone explain the index numbers? I guess lower numbers indicate less affordable.

  12. 12
    david losh says:

    Town house and condo units in Seattle have a value of between $150K to $250K.

  13. 13

    Ok David Losh, help me out here: When you say that town house and condo units in Seattle have a value of between 150-250K, do you mean that you ultimately believe that prices for such units will fall to those prices, or is this just a personal bias against townhomes and condos.
    Personally, they aren’t my style, and they are often built with the shoddiest workmanship and cheapest materials and I could never see myself living in one, but I just want to make sure i understand what you’re saying.

  14. 14
    david losh says:

    The idea of worker housing units has always been around. Todays units are no exception, it’s global, with a place in the Real Estate industry.
    When first proposed to the City Council for fast track permitting the design was for the expressed purpose to create these worker housing units in proximity to the down town core. It was a part of the Growth Mangement Act, and Urban Village concept.
    They were meant to be sold for cheap. They were built to be sold for cheap. By over building these units it should have lowered the price of housing units by increasing supply. That was the idea.
    That’s what I know from sitting in meetings. My concerns were increased traffic and decreased street parking. My goal was to have developers pay for improving infrastructure the same as they would have to for a sububan development project. I objected to and still do to our tax dollars being spent for mass transit projects that are ultimately benefitting large developers and they contribute nothing.
    Promises were made in terms of pricing. The problem is that these units are now being sold for the same price as stand alone Real Estate.

  15. 15
    TJ_98370 says:

    Mr.Losh –

    Whoah! You are covering alot of ground with your last post. I’m a bit tired right now after being on the road for 15 hrs the last two days, so I hope I make sense with my comments.

    I think what you are saying is that condo’s and town-homes should be affordable to those who are just starting out, or not a DINK. I do not believe you will find anyone disageeing with you on that point who visits this blog on a regular basis. As a minor aside, your use of such terms as “worker housing units” has all sorts of unfavorable politicly associated baggage associated with it. Nobody that I know wants to think of their condo or town-home as a “worker housing unit”.
    This is an internet blog, and maybe you should not share too much personal info, but I am curious. What is your background? You mention international travel alot.
    FWIW, you do provide a unique perspective. I have to work at what you are saying, but maybe that’s my problem. :-)

  16. 16
    mikal says:

    TJ, How condescending could you be. What minimum wage job do you work?

  17. 17
    david losh says:

    Worker housing unit is a fair term. The 1940s two bedroom one bath homes with no eaves were built for the war effort.
    There are row after row of housing units built with cinder block in Shoreline and Mount Lake Terrace.
    These new construction town house and stick built condo units are the same thing.
    The idea is to throw the units up to create supply quickly.

  18. 18

    …and this is why there are a fair number of vacant and for sale ” worker housing units”, because workers can’t afford them?

  19. 19
    deejayoh says:

    Look at the affordability index at $270K and the first time index at $150K. That price range only provides a housing unit that has become a town home or condo as a base. I believe there is a market for those units and a price point to correspond.

    um. Dave, you are looking at the wrong axis. The blue and red lines refer to the left axis (affordability index). The right axis (price) refers only the green line…

  20. 20
    TJ_98370 says:

    Mikal –
    Minimum wage is not a living wage in the Seattle metropolitan area. Has it ever been? It is extremely over-optimistic to think that minimum wage earners should be able to buy a home in the Seattle area with conventional financing. If my tacit acknowledgement of this economic reality makes me condescending or elitist, then I am guilty as charged.
    Minimum wage in Washington State is $8.07 per hour right now. The median household income in Seattle is three to four times this amount and even these households are having a difficult time affording a median priced “worker housing unit”.
    What is your point again, Mikal?

  21. 21
    TJ_98370 says:

    It’s just semantics, but the term “worker housing unit” makes me envision a stark run-down apartment building in some communist country, where underpaid factory workers would live. The term has a negative connotation IMO.

  22. 22
    mikal says:

    My point is, If you you can’t afford it, move. When I moved here I couldn’t afford it. Did I whine about it? Nope. I took on another job. I don’t give a rats @@@ if people can afford it.

  23. 23
    Cheapseats says:

    Mikal @ 22,

    I don’t disagree with you, in that it is not your responsibility to worry about whether joe shmo can afford a starter home. Nor do I begin to follow Dave Losh. But as a prospective buyer in Seattle, I am concerned about affordability for first time buyers in that that sector heavily influences all housing sectors. It has nothing to do with my ability to buy, it is a factor in purchasing motivation.

    If all people who cant afford to buy do move, then I would likely find more motivation to delay purchasing a home. A healthy first time buyer customer base would seem to be more indicative of a healthy housing market. I dont think I am whining, I just have indicators that would make me feel better about my purchase decision.

  24. 24
    david losh says:

    um. Dave, you are looking at the wrong axis. The blue and red lines refer to the left axis (affordability index). The right axis (price) refers only the green line…


Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.