Official King Co. Economic Forecast Cites Seattle Bubble

Apparently Tom Goodwin, King County’s Chief Economist and head of the Office of Economic and Financial Analysis is a Seattle Bubble reader, citing my chart of the decline from peak in Seattle’s Case-Shiller tiers in a recent presentation to the Regional Policy Committee (be patient, the video takes a little while to load):

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You can watch the entire presentation here, if you’re into that sort of thing. Tom’s got quite a few charts of forecasts that bottom out in 2012 and then ramp up over the next few years. Personally, I think he might be a bit too optimistic about the rate of recovery, but I do agree with him that the worst is most likely behind us.

Hat tip to my coworker Lisa Taylor, who spotted this on King County TV last night. Thanks Lisa!

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.


  1. 1
    Alex Z. says:

    Can’t watch silverlight video on mobile devices. Do you have a YouTube link? Thanks.

  2. 2
    The Tim says:

    RE: Alex Z. @ 1 – Nope, sorry. The King County website uses this format for their videos, and as far as I can tell there isn’t a way to download the video so I could upload it somewhere else.

  3. 3
    Scotsman says:

    Love it- sounds like Scotsman. Looks Scottish too. Even takes digs at “south of I-90.” Obviously a Bubble reader.

    Poor Newport Hills- so close, but still south. And Issaquah too- always a bride’s maid, never a bride.

  4. 4
    The Tim says:

    RE: Scotsman @ 3 – Yeah I loved the “south of I-90” bit.

  5. 5
  6. 6

    RE: Scotsman @ 3
    Poor Mercer Island too. Most of it is south of I-90.

  7. 7
    Pegasus says:

    RE: Ira Sacharoff @ 6 – Mercer Island is neither north nor south of I-90. It has always been the center of the universe and all prices reflect this. It and its inhabitants are in a world of their own and no one else is better although there are some pretenders.

  8. 8
    Scotsman says:

    RE: Pegasus @ 7

    Even their ponies were pinker than average. . .

  9. 9
    Jonness says:

    Blah, blah, blah. All of the supposed experts have predicted a bottom now for 5 years straight. What’s new? It’s safe to go along with the consensus. Too bad the consensus is never right.

    1) Price:rent ratio is at the historical average but price:income is still 23% too high.
    2) Large decline in inventory is due to nobody having enough equity in their home to sell.
    3) Obama’s underwater homeowner program to the rescue? Too bad foreclosures are ramping back up as we speak.

    On a brighter note, we’ve been getting some very good unemployment numbers. Unfortunately, the percent of the employed population remains unchanged. It’s a good idea to keep an eye on this indicator, as it says a lot about where we are headed.

    Oh boy! Obama wants to borrow another $1.3 trillion this year, and we each get an extra $40 month out of the deal. And it doesn’t cost us a dime because we are robbing it from our kid’s social security trust fund. Yep, the U.S. economy is in terrific shape all right. What a recovery! (sarc)

    Like I said before, the cronies can’t do a darned thing right now except for fake out the experts and get them to believe we are on the verge of a V-shaped recovery. And that’s why you should have been in stocks taking this wild ride on Apple’s coat tails. Forget making money on houses, I’ve been killing aapl, and all I had to do was jump on the bandwagon with Ben Bernanke. Meanwhile, you house buyers are losing your rear ends on a highly leveraged investment. Seriously, appl has returned 35% into my pocket a mere 7 months after picking up my last batch.

    It’s all about market timing and knowing when to shift out of one asset class and pile into another. Those of you waiting around for yesterday’s easy housing money are getting slaughtered. So forget about it. It was a one-trick pony. Housing will have its day in the sun again, but not for a very long time.

    There is tons of money in this world that needs to go somewhere. It just can’t sit around and depreciate against inflation. Otherwise, people could never retire. So learn how to invest wisely. Rule #1: Seattle-area housing is a really, really poor investment right now. Keep your eye on the big picture. If all you look at is the local picture, you are going to lose your shorts.

  10. 10
    Scotsman says:

    RE: Jonness @ 9

    AAPL to $1,000!! Or not. I’d take a breather.

    An apple inspired the concept of gravity once before. Will history repeat?

  11. 11
    WannaBuy2012 says:

    It would be nice to see an updated comparison of US city index prices against the Japan post-bubble burst. How similar is the trend? From your post 3 years ago

    IIRC, Japan home prices (big city markets) started to decline again in 2009 after a brief 2007 increase. I am beginning to think the inevitable post-modern slow growth capitalism equates to 20 years (or more) of flat to downward home price trends. US will have some differences of course. But so far nothing convinces me to expect a big upward trend before my kids grow up. i.e, I will not be able to use home equity to help pay for their college costs?

    One nice thing to look forward to is that Japan home buyers have enjoyed 1.9% mortgage interest rates for over about a decade now. And while home values have declined slowly, the low interest rates can still make buying more enjoyable than renting for many people. Of course it takes something like 24,000 years to earn $1,000 interest on a $10,000 Japanese savings account!

  12. 12
    Jonness says:

    RE: Scotsman @ 10 – I’d definitely recommend against anybody buying in at this price point. Not that it can’t go up. It’s just that one has to pick better entry points. And you are 100% correct. Anybody can figure out how to buy a stock, but learning how and when to sell is what separates the men from the boys.

    Don’t get me wrong, I’m a working class 99%er coming straight up from the bottom. But with a whole lot of hard work and study, I’m slowly but surely learning a few things here. :)

  13. 13
    Jonness says:

    RE: WannaBuy2012 @ 11 – Interesting you would bring that up. I suspect the chart continues to mimic Japan up to now.

    Most people point out Japan has a demographics problem much more severe than the U.S.; thus, U.S. population growth should keep us from going down the exact same path. But the caveat of that argument, as far as I can tell is, we continue to borrow money after having blown through the 90% debt:GDP threshold (I.E. we are robbing growth from the future at an alarming rate). Meanwhile, we are undergoing massive wage arbitrage. I’d like to get’s Scotsman’s input on this, as he understands it far better than I do.

    As bad as things are, just imagine what it would be like if we didn’t borrow an additional $1.3 trillion and flood the economy with cash every year. I have to admit, this is scary. I wouldn’t be half as concerned if the borrowed money was intelligently targeted toward future growth. Unfortunately, it’s being used for nothing more than a sugar high along with protecting the interests of the status quo. Scary!

  14. 14
    whatsmyname says:

    “There is tons of money in this world that needs to go somewhere. It just can’t sit around and depreciate against inflation. Otherwise, people could never retire. So learn how to invest wisely.”

    Yes, Put your money into Wall Street, That makes it easier for the manipulators to steal.

  15. 15
    WannaBuy2012 says:

    Jonness, I am well aware of Japan’s shrinking population etc. But the rural folks are moving to the big cities for jobs. So big city population is flat or probably going up.

    Those Japan home price index charts are for the top 6 city markets which actually have an increase in population and quite a bit of new construction homes up for sale each year. (I lived there and bough and sold new construction in early 2000’s to 2009). So those specific markets are pretty similar to US markets. Note, the total Japan homes sales line on some of those charts never even revealed a bubble because the rural areas never went up much during the city housing bubble. Probably due to the already decreasing population in rural areas.

    Agreed on the national debt comments. One difference between Japanese and Americans… Japanese continued to hold a huge amount of savings through it all. Much more than Americans who tended to be in the red for debt. So that is part of the reason interest rates have hovered below 2% in Japan.

    I’m not worried about $1.3 trillion per year. We just need to mind our own business and avoid other people’s wars for a few years. We will make up the difference quickly!

  16. 16
    robotslave says:

    By whatsmyname @ 14:

    Yes, Put your money into Wall Street, That makes it easier for the manipulators to steal.

    Alternately, keep your money in your mattress, and let inflation steal it.

    Or go buy gold! Buy it now, or be priced out forever!

  17. 17
    Blurtman says:

    Is a beard a prerequisite to be taken seriously as an economist? And is it possible to be taken seriously as an economist?

  18. 18
    The Tim says:

    By WannaBuy2012 @ 11:

    It would be nice to see an updated comparison of US city index prices against the Japan post-bubble burst. How similar is the trend? From your post 3 years ago.

    I posted an update to that chart just a few months ago that’s linked as the last comment to the one you found: Housing Bubbles: US vs. Japan Twelve Years In

  19. 19

    According to BLS Data

    We’ve lost 33K jobs since the peak 2008 timeframe in the Seattle/Bellevue/Everett area.

    Its chronic with no getwell too.

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