Case-Shiller: Seattle Home Prices Surpass 2007 Peak

Let’s have a look at the latest data from the Case-Shiller Home Price Index. According to March data that was released today, Seattle-area home prices were:

Up 2.4 percent February to March
Up 10.8 percent YOY.
Up 0.4 percent from the July 2007 peak

Over the same period last year prices were up 2.3 percent month-over-month and year-over-year prices were up 7.5 percent.

The Seattle area’s Case-Shiller home price index hit a new all-time high in March.

Here’s a Tableau Public interactive graph of the year-over-year change for all twenty Case-Shiller-tracked cities. Check and un-check the boxes on the right to modify which cities are showing:

Seattle’s rank for month-over-month changes increased from #2 in February to #1 in March.

Case-Shiller HPI: Month-to-Month

Hit the jump for the rest of our monthly Case-Shiller charts, including the interactive chart of raw index data for all 20 metro areas.

In March, just one of the twenty Case-Shiller-tracked metro areas gained more year-over-year than Seattle (the same as February):

  • Portland at +12.3%

Washington and Oregon obviously still have an economy that is literally the envy of other states.

Seattle and Charlotte joined San Francisco, Denver, Portland, and Dallas in the club for metro areas that hit new all-time highs in March.

Eighteen metro areas gained less than Seattle as of March: Denver, San Francisco, Dallas, Tampa, Atlanta, Los Angeles, Miami, Detroit, San Diego, Las Vegas, Phoenix, Boston, Charlotte, Minneapolis, Cleveland, New York, Chicago, and Washington.

Here’s the interactive chart of the raw HPI for all twenty metro areas through March.

Here’s an update to the peak-decline graph, inspired by a graph created by reader CrystalBall. This chart takes the twelve metro areas whose peak index was greater than 175, and tracks how far they have fallen so far from their peak. The horizontal axis shows the total number of months since each individual city peaked.

Case-Shiller HPI: Decline From Peak

In the 104 months since the price peak in Seattle prices are up 0.4 percent.

Lastly, let’s see what month in the past Seattle’s current prices most compare to. As of March 2016, Seattle prices are just above where they were at the peak in July 2007. Note that this does not adjust for inflation.

Case-Shiller: Seattle Home Price Index

Check back tomorrow for our monthly look at Case-Shiller data for Seattle’s price tiers.

(Home Price Indices, Standard & Poor’s, 2016-05-31)

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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.

64 comments:

  1. 1
    Carl says:

    So it took almost 11 years to get back above water. That’s a long time to be struggling underwater, but I suppose if you are patient enough, you got your money back, if you disregard transaction costs.

  2. 2
    Sam Hunter says:

    Being at 2007 levels is not a bad thing at all. How much was a bottle of coke 10 years ago? How much was a honda accord? How much was bread?

    Ouch! All those consumer products got more expensive. Wait housing cost the same?! Wow what a deal!!

    One of the fastest growing cities with limited land has houses for sale at 2007 prices! WHAT A STEAL!

    :)

  3. 3
    SFraz says:

    “At the top, with annual price increases of 10% to over 12%, we find the usual west coast (and thus closest to China) suspects for the second month: Portland and Seattle, followed close behind by Denver and tech mecca San Francisco. On the other end once again are Washington, Chicago and New York. We wonder if Case Shiller used the UMich “random” telephone directory to calculate that NYC home prices rose almost exactly at the rate of core inflation in the past 12 months while ignoring the dramatic moves in the ultra luxury high end segment.” http://www.zerohedge.com/news/2016-05-31/these-are-best-and-worst-us-cities-own-house

  4. 4
  5. 5

    By Carl @ 1:

    So it took almost 11 years to get back above water. That’s a long time to be struggling underwater, but I suppose if you are patient enough, you got your money back, if you disregard transaction costs.

    The peak was 2007, so almost 9 years (ignoring the fact that many areas recovered well over a year ago, and that some outlying areas still haven’t).

    Also you’re assuming a financed transaction. Some paid cash, but there are probably some very popular areas that never dropped 20% if you don’t used distressed properties as comps.

  6. 6
    Screenname345 says:

    Areas close in to metro Seattle are way above 2007. My house is probably 25- 30% above that level. Let’s see where we are at in 3 years from now since the market is awakening and these moves last more than just a year. Better hope that inventory explodes or prices here are going to be insane in the membrane shortly.

  7. 7
    Justme says:

    RE: Kary L. Krismer @ 5

    >>but there are probably some very popular areas that never dropped 20% if you don’t used distressed properties as comps.

    I say distressed sales are valid comps, just as distressed buys, which happen all the time, are deemed valid comps without anyone questioning them.

    Distressed buys: Panic buys, buys that involve high leverage and remarkably low down payments, buys that involve buyers trying to move money from a stressful situation in another country. Other similar categories undoubtedly exist.

  8. 8
    pfft says:

    By ronp @ 4:

    Good post. http://www.calculatedriskblog.com/2016/05/real-prices-and-price-to-rent-ratio-in.html has an inflation adjusted national chart.

    hey posting CR links is my job:)

  9. 9

    By Justme @ 6:

    RE: Kary L. Krismer @ 5 – >>but there are probably some very popular areas that never dropped 20% if you don’t used distressed properties as comps.

    I say distressed sales are valid comps, just as distressed buys, which happen all the time, are deemed valid comps without anyone questioning them.

    Well I tell you what. If you ever have a property to sell, price it as the price of distressed properties in your area. And if you have other things you want to sell at a significant discount for no reason whatsoever, go ahead and post them here too! ;-)

    The only time distressed properties are comps are when the totally dominate the market in the area, and even then it would be questionable. But there they would affect values.

  10. 10
    Justme says:

    RE: Kary L. Krismer @ 8

    You completely avoided the point there, Kary. The point was, why are so many people treating distressed buying as producing valid comps, but distressed selling as not producing valid comps?

    I think I know the answer: Rampant self-interest and inflationary cheerleading, rather than fair and symmetrical treatment of both cases.

  11. 11
    boater says:

    By Justme @ 9:

    RE: Kary L. Krismer @ 8

    You completely avoided the point there, Kary. The point was, why are so many people treating distressed buying as producing valid comps, but distressed selling as not producing valid comps?

    I think I know the answer: Rampant self-interest and inflationary cheerleading, rather than fair and symmetrical treatment of both cases.

    WTH is a distressed buyer? Is someone threatening them with eviction, bankruptcy, imprisonment or similar if they don’t buy this house? It’s a fallacy someone tells themself that they MUST buy a house NOW.

    Selling on the other hand can be distressed. If you don’t have the time to get the maximum price. If the upkeep becomes beyond your means or ability that can force a sale. Etc

    Since home ownership is a want not a need I can’t see how you can get into a distressed buying state other than self delusion.

  12. 12

    By Justme @ 9:

    RE: Kary L. Krismer @ 8 – You completely avoided the point there, Kary. The point was, why are so many people treating distressed buying as producing valid comps, but distressed selling as not producing valid comps?.

    There’s clearly panic buying right now. If a house sells for well over what it appears to be worth then it would be best to not use that as a comp. But to some extent that has always been true–there are comps that are just out of the normal range. Distressed properties though are easier to spot. And not all distressed properties sell at a discount.

    But when I was suggesting not using distressed properties as comps, I simply meant not to include them when determining average values in an area. Perhaps comps wasn’t the best term because comps suggests a more specific house you’re trying to value.

  13. 13
    Justme says:

    RE: Kary L. Krismer @ 12 – I think you are now closer to my stated position, but not quite there. I’ll leave it at that :-)

  14. 14

    RE: Justme @ 13 – Well it really depends on what you’re doing, but if you’re selling I wouldn’t rely on either a distressed sale or panic buy to price a listing (unless you’re a distressed property owner). Pricing at a distressed sale would be too low, and generate way too many offers in this market, and probably not as high an offer as if you priced higher. Pricing at a panic buy price could leave you with no offers.

  15. 15
    greg says:

    While there are a number of differences between today and 2007, at least in 2007 it was just bad debt/ poor lending. Today it is much harder for me to figure out what is going on and out how this will play out.

    Currently I don’t have a single friend in WA who is buying for investment or even talking about buying as an investment. plenty are talking about the prices, but mostly with disbelief and astonishment .
    Perhaps it is just my circle friends, maybe there are still plenty of investors buying SFHs , but at least in my small circles I no longer see it. The last one was earlier in the year, an acquaintance buying a couple of condos near Bothell, since then not one person has purchased an investment property , and the last friend who purchased a new home actually sold his existing one!
    perhaps I am just hanging around with risk adverse folk who don’t “get it”.

    Are any posters here actually in the market to purchase RE as an investment ?
    (Not looking to judge anyone, we all have different investment horizons and risk tolerance.)

  16. 16
    Doug says:

    RE: greg @ 15 – I’m sure they’re out there, but Seattle doesn’t, or at least shouldn’t, make a ton of sense to an investor. Unless I’m way off about expected rents I don’t see how anyone could make the math work; cap rate, DCR, NOI, cash on cash return, etc…

  17. 17
    Jason Chu says:

    I just bought an investment rental in Kennydale and paid well over asking. Anyone want to rent a newer construction in upper kennydale?

  18. 18
    Green-Horn Investor says:

    RE: greg @ 15

    “Are any posters here actually in the market to purchase RE as an investment?”

    Just two months ago I closed on a second residential property that is located in the same North Beacon Hill neighborhood as my other property. I don’t know if my say-so is worthy investment advice, but this time I did put my money where my mouth is. After the dot-com crash, while interest rates were so low and at the time, bonds and other fixed income securities were yielding nothing. Furthermore even though it was obvious to me that real estate prices were in bubble territory, so investment in dirt, walls and rooves made little sense to me. As a junior student of finance, I was dreaming that it would be great to get in on the reverse side of some of those adjustable rate mortgages. I expected that as rates increase, which they inevitably would, homeowners would pay those mortgage payments no matter what because they surely wouldn’t want to become homeless… Lacking any actual capital, experience or access while being overseas for the entirety of the prior decade, I did not make that trade. It should be obvious to all of us, that my assumptions were off and I’m lucky I missed that opportunity to flush any savings down that hole.

    Now we are in a different era. Economic cycles are inevitable, but expecting them to repeat in the same way as the most recent experience that scarred so many is also inevitably a mistake. For the past two generations, the powers that be have been telling us not only that real estate is a can’t miss investment, but also that the stock market is the only way to get a decent return in order to save for retirement. Of course another crash is possible… in either market… wall street or home street… But what I fear more is that the “promises” that have been made in terms of wall street delivering the kind of historic return that investors from the prior century have enjoyed will not be fulfilled. Despite any repeated heroic efforts by central banks and no matter how spineless and short-sighted our democratically elected representatives respond, the expectation that investing in stocks likely will not be fulfilled. Some claim that the glut of capital accumulated through the miracle of interest compounded over generations of relatively stable peacetime prosperity, especially by those at the apex of the economy chasing a return on savings, is depressing returns for us small time savers. Others claim perhaps “secular stagnation” caused by decreasing growth and progress as well as demographic decline in increasingly sclerotic developed economics means that it just doesn’t pay like it used to in order to invest in real productive physical capital… The end result could be returns to savings decline even further disappointing savers

    http://www.bloomberg.com/news/articles/2016-04-27/be-afraid-be-very-afraid-if-you-re-investing-for-the-long-run

    So if wall street ain’t gonna deliver my retirement, then I’m hoping the suckers who can’t help but want to live in a close in neighborhood with a convenient short commute to well-paying jobs in a local booming economy will. Of course I’m leveraged, but the rental income should more than cover the payments and the cash flow would make a nice return that exceeds any dividends from paid by any companies with any hope of growth and capital appreciation. Even if the appreciation in the Seattle real estate should slow or fluctuate, I’m confident that the volatility would be less than on the ballyhooed wall street. I had been contemplating this move for the past year, but the 10% swoon on wall street in the first quarter really focused my attention.

    Finally, the question isn’t whether it makes sense to invest in real estate or properties in Seattle in particular. If you have savings or any kind of capital, the question is on which horse do you bet. Cash? Because you expect a crash and hope to move in like a buzzard when the blood is in the streets? Our recent experience with extreme low inflation has lulled us into complacency about price stability. Perhaps the last crisis was an asset price crash that temporarily destroyed a lot of wealth. There is no reason to believe that the next one will be just like it. It could very well be an unexpected acceleration of inflation that destroys the cash savings of many. But when inflation has done this before, it’s always a one way street. The value of your money will never recover. It could do it again. So if paper money becomes worth less, what assets can provide a real future stream of value whatever the price level?… whether as “housing services” or as business revenues? Holders of cash will be left with a stable bank balance, but rent and any other living costs will have increased such to make them worth much less. So where are you all parking your savings if you think real estate is a bubble?

    Put your money where your mouth is! If you’re convinced that it’s a bubble, you should sell and let the investor rent to you at a loss while you park the proceeds of your sale someplace else while you wait for the dumb investor to get desperate enough to sell at a juicy loss.

    If you are like me, you think that the regional real estate market has room to run, and that with the reversion to the mean after the bubble and crash years, there is still quite a bit of headroom until the values catch up to trend. Perhaps our dear host and his friends at tableau can crunch the numbers and depict the data in a different way… but looking at a number homes that sold in 2001-2002 and then again in 2015-2016, I discovered that they appreciated a modest 4 – 6% per year. Is this the kind of thing you call an unsustainable bubble? Furthermore there is the supply question…. How much fresh land is left for development and how much additional density is possible with redevelopment? Tear down an an old dump to make a four-pack of tiny townhomes? How much supply is this adding? The demography question… With housing becoming so expensive, will it choke off affordable family formation that is the basic driver of single family homes? Will Seattle become a parody of bourgeois bohemian child-free (but pet-worshipping) yuppies? Eventually real estate might become fully valued when potential home-owners just don’t earn enough to make the payments. Then the market would be fully valued. But for this wage increases and inflation might provide more fuel. Even if home owners don’t make any real inflation adjusted returns from appreciation, at least their savings and equity are protected from that effect from inflation. Unemployment in our region is already low and tightening labor markets should yield pressure on wages.

    I love the data and commentary that the tim and the pink pony bring us. A lot of the comments are pretty great too. I’d be interested in seeing the numbers broken down a little bit more finely by neighborhoods or mls districts or whatever they call them. Numbers for King County are useful, but it might be interesting to observe local trends that may differ from places like Fremont, Sammamish or Skyway, etc. Furthermore, even though I’m paying attention to the business pages to see what employers are doing, I’m sure I’m missing things. What developments among employers can you note in Tacoma, Everett, Bremerton… I read about plenty of employers moving closer to the center of the regional economy… Russell Investments from Tacoma to Seattle… Weyerhauser from Federal Way to Downtown Seattle… Expedia from Bellevue to Queen Anne…. REI from Kent to Bellevue. Any more examples to consider? Do you think that the dynamic Seattle economy could “infect” the rest of the region in Pierce, Snohomish, and Kitsap counties so that employers put more well paid jobs in those peripheral cities?… Could Tacoma get sexy or is it Seattle will be the winner that takes all?

  19. 19
    Erik says:

    RE: Jason Chu @ 17
    Yah, maybe after I rent mine out and you cut me a deal. I don’t like Renton, but for the right price I do.

  20. 20
    AJT says:

    Is there a lot of house flipping occurring right now? I don’t see a lot of homes off then back on the market in Issy or Sammamish but maybe closer in?
    http://finance.yahoo.com/news/house-flipping-heats-creating-home-132611206.html

  21. 21

    RE: Screenname345 @ 6
    My Assessed Value of My SE King County Home

    Peaked at $165-175K in 2007…..its property tax assessment was about $150K then….its $116K [$96K the year before, went as low as $84K] now….all Seattle area houses are not alike. Mine is still way under water and yes I still see foreclosures even in my neighborhood too…

  22. 22
    Blurtman says:

    By softwarengineer @ 21:

    RE: Screenname345 @ 6
    My Assessed Value of My SE King County Home

    Peaked at $165-175K in 2007…..its property tax assessment was about $150K then….its $116K [$96K the year before, went as low as $84K] now….all Seattle area houses are not alike. Mine is still way under water and yes I still see foreclosures even in my neighborhood too…

    That’s because you bought down in the bayou.

    Civilization is creeping eastward, however.

  23. 23
    huskydown says:

    Let’s be clear here. That’s 11 years to match the price peak of what was a housing asset bubble so hyper-inflated by Wall Street, major bank, mortgage lender, ratings agency and -frankly Realtor – FRAUD, that it took the entire world economy down with it requiring Federal monetary and fiscal intervention on a scale unseen since the New Deal – and would likely have created a new Great Depression absent the various economic safety mechanisms that the Federal government has built over the last 70 years. FRAUD so rampant and vile that if somebody had burned the entirely of Wall Street down a la the closing scene of Fight Club, the rest of the country would have erupted in resounding cheers.

    So, yes, that’s a rather long time to match the peak of an insane, fraudulent housing bubble.

    What would be far more useful would be a data analysis estimating a trendline for housing prices that disaggregates out the key years of the housing bubble and then seeing where we are at. I would expect that current prices are materially higher than what that peak would have been.

  24. 24
    Justme says:

    RE: huskydown @ 23

    >>What would be far more useful would be a data analysis estimating a trendline for housing prices that disaggregates out the key years of the housing bubble and then seeing where we are at. I would expect that current prices are materially higher than what that peak would have been.

    Applause!! And, yes that means is backing out all the panic buying from the “comps” or indices or whatever,

    Distressed buys: Panic buys, buys that involve high leverage and remarkably low down payments, buys that involve buyers trying to move money from a stressful situation in another country, ETC ETC ETC.

  25. 25
    ronp says:

    Here is a crazy over priced house that just sold near me — http://u.zillow.com/p3IN48/ . Hopefully whoever bought it paid a lot less than asking (apparently not). Contractor bought it for $475k three years ago, did an extremely slow and marginal quality remodel. Prices have to moderate soon.

  26. 26
    Justanotherguy says:

    Is it just me or others on this blog also feel that the prices have become ridiculously high? Me and the wife both work in IT industry, make decent money, but still cannot afford a decent house in a good school district (>2500 sq feet home built after 2000 with modern Kitchen and bathrooms in Issaquah school district). My colleagues think that I am crazy to put an offer of 600K for a house in Renton. Since we just moved here a year ago, I wanted to see if others who have lived here for a while also feel the same.

  27. 27
    Ross says:

    By Green-Horn Investor @ 18:

    RE: greg @ 15

    […]

    Perhaps our dear host and his friends at tableau can crunch the numbers and depict the data in a different way… but looking at a number homes that sold in 2001-2002 and then again in 2015-2016, I discovered that they appreciated a modest 4 – 6% per year. Is this the kind of thing you call an unsustainable bubble?

    […]

    Though 4-6%, sustained annual return doesn’t seem like all that much. Actually, it is for housing, at least when wage inflation is sustained at 1-3%. Suppose Wage inflation is 2% sustained for the next 100 years, and home appreciation is 5%, sustained, for the next 100 years. Let’s assume a median home cost $500K today, and median household wages are $100K. [So multiplier of 5.]

    Then, after 100 years, we’d have:
    median household wage in 100 years with 2% wage inflation: $100K * (1.02^100) = $725K (approx)
    median home cost in 100 years with 5% property appreciation: $65.75M (approx).

    So the income to home price multiplier would increase from 5 to 90. That’s not sustainable.

    Actually, wage inflation is the forcing function for home prices in the long run.

  28. 28
    Justme says:

    RE: ronp @ 25 – 475k in 2014 and 1145k (list/pending) now for that 1750(?) ft2 house is crazy. That remodel would have to involve a lot of gold plating.

  29. 29
    Justme says:

    test

  30. 30
    Justme says:

    Tim, I no longer get edit or the time-limited delete option when I post something. Am I the only one or is this a systemic problem?

  31. 31
    Eile says:

    It looks like condo price is slowly down. My friend wanted to sell his condo for 500k, in the market for a month. No sell. He has to lower the price to 480k, still waiting for buyer.

  32. 32

    RE: Eile @ 30 – Probably more likely means the condo was just not worth what he was asking.

    http://blog.seattlepi.com/realestate/2007/12/30/when-basket-weaving-is-too-difficult/

  33. 33
    Eile says:

    RE: Kary L. Krismer @ 31

    It could be, he bought it for 450k. He is not making any money after the commission. He will money if you count the interest and hoa.

  34. 34
    ARDELL says:

    RE: Justanotherguy @ 26

    What do your friends tell you to do if not that?

  35. 35
    Erik says:

    RE: Justanotherguy @ 26
    Easy solution. Lower your standards. If you wait to buy, prices will go higher. We talk about inventory being low because prices will keep going up until inventory goes up to atleast $6k in King county. You are a poor and I’m sorry about your situation. Atleast you aren’t homeless. Not sure if you applied for food stamps yet, but that’s an option.

    Another idea is to move to a ghetto and commute to the eastside.

  36. 36

    RE: Blurtman @ 22
    Most Sellers Say Their Neighborhood is Somehow Different if its Underwater

    What proof?

    I at least have my King County property assessment history IN WRITING.

  37. 37
    Erik says:

    RE: Kary L. Krismer @ 32
    I will bet you $100 that real estate prices in Seattle go up over 10% next year. We can meet at Starbucks and settle the bet in June 2017.

    Plus I would get to meet Kary the pit bull krismer in person.

  38. 38

    By Eile @ 33:

    RE: Kary L. Krismer @ 31

    It could be, he bought it for 450k. He is not making any money after the commission.

    Which would be something in common with the situation in the story. They seemingly tried to price to cover their initial investment rather than pricing based on the market. Very common that a seller tries to price based on this need or that need, but buyers don’t really care about the seller’s needs.

  39. 39

    By softwarengineer @ 36:

    I at least have my King County property assessment history IN WRITING.

    That’s not very good evidence of market value. If you came into court with only that and the other side had evidence of almost any comps, you would probably lose. You might as well have a record of your Zestimates!

  40. 40
    greg says:

    By Justanotherguy @ 26:

    Is it just me or others on this blog also feel that the prices have become ridiculously high? Me and the wife both work in IT industry, make decent money, but still cannot afford a decent house in a good school district (>2500 sq feet home built after 2000 with modern Kitchen and bathrooms in Issaquah school district). My colleagues think that I am crazy to put an offer of 600K for a house in Renton. Since we just moved here a year ago, I wanted to see if others who have lived here for a while also feel the same.

    Ref buying a home in Renton, if you do remember to focus on buying a home that would be easy to sell in a flat to down market. Buyer are MUCH more critical of the product when they have choice. So don’t buy an “issue” home unless the home is very heavily discounted, you need a safety net.

    We purchased our first home in a lower tier neighborhood with excellent transit . We were middle class pioneers for the area and it ended up being an excellent choice financially .

    Having said that , my partner and I have decided NOT to invest anymore money in this area as long as the status quo is maintained. The risk reward is just not good enough in my view.

  41. 41
    ARDELL says:

    RE: greg @ 40

    I think the question is, is it better to buy a remodeled somewhat, 60’s split level or newer townhome in Bellevue School Distuct or Lake Washington School District or a newer house in Renton. Then you have Renton but Issaquah School District or Renton with Renton School District.

    That’s usually how the choices break down. Not inferior house, but more the opposite. Trading down in area to get a better and newer house for the same money.

    If the choice is old fixer in Ballard or newer house in Renton, the choice is a bit easier. But then there’s newer townhome in Ballard- Green Lake that may trump both.

  42. 42
    jon says:

    We could be getting close to the end of the line for the Chinese money.

    http://www.nytimes.com/2016/06/05/opinion/sunday/how-china-fell-off-the-miracle-path.html

    “Chinese moved a record $675 billion out of the country in 2015, some of it for purchases of foreign real estate.”

    An end or reversal of that flow will have a big impact in the locations that those buyers prefer. The bidding wars we see now will end once buyers no longer feel comfortable that they can easily sell whatever they buy.

  43. 43
    David B. says:

    By Erik @ 35:

    RE: Justanotherguy @ 26
    Easy solution. Lower your standards.

    For once I totally agree with something you posted. Lots of couples not only live in themselves but successfully raise families in homes half the size of a “>2500 sq feet home built after 2000 with modern Kitchen and bathrooms.” That’s not a need, that’s a want. One is hardly “poor” just because one cannot easily afford anything and everything one wants.

    If you wait to buy, prices will go higher.

    For a while at least, but the present situation will end eventually. Up markets never last forever. I’ve lived through three of them in the Seattle area.

  44. 44
    Mikal says:

    RE: David B. @ 43RE: David B. @ 43 – But do people end up buying a 4 bedroom craftsman Capitol Hill for less than $100,000 on the downturn like some of these numb nuts think will happen? For better or worse, Seattle is becoming San Francisco. I miss the old town, and especially Floyd’s, but Seattle is no longer going to operate like it once did. Even if it takes a hit on a probable downturn, it won’t be that much.

  45. 45
    Cap''n says:

    RE: Mikal @ 44

    I agree to a large extent. Seattle will drop again cyclically, but like global warming, the trend up will be relentless. Strip away everything else and the cost of housing is simply how much folks are willing to pay to call somewhere home. That is a deeply personal and intangible thing. It ends up with a price, of course. A location is a part of who you are and a reflection where and how you want to experience life. When many share a view of what a good life is….then welcome to Seattle. You might need a roommate.

  46. 46
    Doug says:

    It just occurred to me that The Tim has yet to post May’s inventory data — or did I miss it?

  47. 47
    Erik says:

    RE: David B. @ 43
    I’m going to press my luck and aim to sell in 6 years. This bubble could pop sooner, but I doubt it based on how low inventory is and how low I think it will continue to be. If inventory is still low in 6 years, i’ll keep waiting.

  48. 48
    Blurtman says:

    The Jungle represents a ground floor opportunity. Get in while you can, now!

  49. 49
    Weasel says:

    By greg @ 40:

    By Justanotherguy @ 26:

    Is it just me or others on this blog also feel that the prices have become ridiculously high? Me and the wife both work in IT industry, make decent money, but still cannot afford a decent house in a good school district (>2500 sq feet home built after 2000 with modern Kitchen and bathrooms in Issaquah school district). My colleagues think that I am crazy to put an offer of 600K for a house in Renton. Since we just moved here a year ago, I wanted to see if others who have lived here for a while also feel the same.

    Ref buying a home in Renton, if you do remember to focus on buying a home that would be easy to sell in a flat to down market. Buyer are MUCH more critical of the product when they have choice. So don’t buy an “issue” home unless the home is very heavily discounted, you need a safety net.

    We purchased our first home in a lower tier neighborhood with excellent transit . We were middle class pioneers for the area and it ended up being an excellent choice financially .

    Having said that , my partner and I have decided NOT to invest anymore money in this area as long as the status quo is maintained. The risk reward is just not good enough in my view.

    I’d offer much the same advice, get further away from Seattle. We used to rent in Rainier Beach at a crazy $1800/mo. Renton were we’d shop etc didnt really tickle us much either.

    I’d suggest looking for places further south near the Sounder south line stations, before everyone else figures that out. Which is happening because ridership is up 17% over last year. ST is about to build a maintenance base at Lakewood to service and store more train sets, later this year they are adding a mid-day service, and next year two more trains for the peak commute.

    We’re a one income family of 3, bought an 1980 home in Puyallup between downtown and South Hill, I commute into/out of Seattle each day on the train, car stays at home. Walmart, Lowe’s, Target, the mall etc is all walkable (<20 mins) from where we live, 7-Eleven just around the corner, Hospital down the street, good freeway access west and north to get places during non-commute times.

    But I guess if you have to be in the right neighborhood to send your kids to a swanky school and impress your friends then you pay for that eh ;-)

  50. 50
    ess says:

    RE: Weasel @ 49

    Speaking of figuring out transportation opportunities, light rail will be in South Snohomish County in about seven years. There are still some pretty reasonable places to buy in that area that are close to both the freeways, as well as the future light rail stations in that area. When light rail arrives in South Snohomish County, it will be faster to get from Lynnwood or Mountlake Terrace to downtown Seattle than it is from a variety of Seattle locations to downtown Seattle.

  51. 51
    Weasel says:

    RE: ess @ 50

    I used Link light rail from Rainier Beach, it was 11 stops and 35 minutes because it’s at grade along MLK, limited to 35mph. Hopefully the north and east expansions of Link don’t have this limitation?

    At 35 minutes on Sounder you’re just shy of Sumner and its stop number 4. More roomy too, enough to comfortably use a laptop – I get a good 30 minutes of work done during my morning commute and trade that to get home earlier.

  52. 52
    redmondjp says:

    By ess @ 50:

    RE: Weasel @ 49

    Speaking of figuring out transportation opportunities, light rail will be in South Snohomish County in about seven years. There are still some pretty reasonable places to buy in that area that are close to both the freeways, as well as the future light rail stations in that area. When light rail arrives in South Snohomish County, it will be faster to get from Lynnwood or Mountlake Terrace to downtown Seattle than it is from a variety of Seattle locations to downtown Seattle.

    Careful there! Any time you see a predicted completion date from Sound Transit, you need to add an asterisk, for the “forward-looking statement” footnote typically seen in investment brochures.

  53. 53
    redmondjp says:

    Ruh Roh! People camping out overnight to buy a condo in a building that hasn’t even been built yet?

    Say it isn’t so!

    http://komonews.com/news/local/seattle-for-sale-condo-buyers-camp-out-line-up-for-project-three-years-out

  54. 54
    ess says:

    By Weasel @ 51:

    RE: ess @ 50

    I used Link light rail from Rainier Beach, it was 11 stops and 35 minutes because it’s at grade along MLK, limited to 35mph. Hopefully the north and east expansions of Link don’t have this limitation?

    At 35 minutes on Sounder you’re just shy of Sumner and its stop number 4. More roomy too, enough to comfortably use a laptop – I get a good 30 minutes of work done during my morning commute and trade that to get home earlier.

    The good news is that light rail north won’t be fighting autos as it is going to be built along Interstate 5. Estimates I have read place the trip from Mountlake Terrace to downtown Seattle in something like 20 minutes.

  55. 55
    Bob says:

    Why was Washington Mutual the first big bank to go belly up last time around?

  56. 56
    ess says:

    RE: redmondjp @ 52

    True – this is why I used the words “in about” seven years. With Sound Transit, “in about” automatically includes a great deal of leeway.
    I would suspect that Sound Transit will behaving themselves over the next few years especially after they lose the upcoming election for 50 billion dollars and come back with hat in hand to the voters with promises of on time and within budget. Thus I am hoping that “in about” seven years is actually that.

  57. 57

    RE: Bob @ 55

    Because they acquired the largest or one of the largest subprime companies, Long Beach Mortgage. Basically everything Long Beach was all very “The Big Short”. They felt they were missing out by only doing A-Paper and others were making big money on sub-prime lending. They didn’t want to grow their own subprime business, so they swooped up a big pile of dog poop instead to expand into that market quickly.

    http://www.prnewswire.com/news-releases/washington-mutual-and-long-beach-financial-announce-definitive-agreement-74586692.html

    My opinion of course. Others may have different and equally valid answers.

  58. 58

    RE: redmondjp @ 53

    We had that in Kirkland in 2005 or 2006. Kirkland Central. You had a month to get a number to stand in the line and you had to stand in line in that order and you had 5 minutes to pick your unit or “NEXT!” Kind of like your number at the lunch meat counter. People were selling their numbers for a lot of money. I heard the first number resold for $100,000. Could be urban legend…could have been number 2 or number 3 and not number 1.

    Back in the mid to late 80’s a good friend of mine had a line around the block for a new housing project. They came out and announced they were raising the prices by $50,000 (back then that was more money than today) to try to decrease the line as there were more people than they had houses they could build on that land, and no one budged.

    This stuff happens fairly often. Not sure it ever happened here before 2005-2006, but it’s happened elsewhere over the years. Fairly common in NYC commute route NJ.

  59. 59
    kenmorem says:

    it sure would’ve been nice if sound transit had selected heavy rail instead of light rail, instead of puttering along the tukwila corner or all the surface streets at speeds barely above biking speeds, that train could’ve actually moved people, fast.

    i will never understand the reasoning. didn’t they go and tour the world and visit various forms of rail transit? how could they have possibly selected light rail? i know the existing short stretch of tracks in the downtown bus tunnel were already light rail width, but man that’s shortsighted.

  60. 60
    redmondjp says:

    By kenmorem @ 59:

    i will never understand the reasoning. didn’t they go and tour the world and visit various forms of rail transit? how could they have possibly selected light rail? i know the existing short stretch of tracks in the downtown bus tunnel were already light rail width, but man that’s shortsighted.

    Color me cynical, but providing transit is somewhere around reason #7 for Sound Transit’s existence. It’s primarily a funds redistribution machine, a jobs program, and it also makes well-connected developers along its corridor obscene amounts of money (like Wright Runstad is poised to make in the Overlake corridor). Once you understand and accept these things, it all starts to make sense. Not that it makes it any better.

    I’m not against mass-transit; I’m just against wasteful spending. And when lighting a $100 bill on fire and watching it burn gives you more bang for your buck than what Sound Transit does with it, I’m dead-set against giving them any additional funding. Personally I think we should have two-track monorail running down the medians of all of our major roads, and on all of the former rail corridors that are now trails (which could still exist underneath). But that will never happen.

    And I wish I could share the above commenter’s optimism about ST3 not passing, but I think that Seattle voters will once again vote to increase their taxes this fall. I first moved to Redmond in 1995, and I’ve been hearing about light rail coming to Redmond for almost the entire time. I’m not sure I’ll be alive when it finally does get here (especially if we are talking about all the way to downtown – I’ll probably live to see it get to Overlake 1.5 miles south of my house, so I will still have that ‘last mile’ problem).

    Now if you’ll excuse me, I’ve got to pack up my tent and extra power pack for the phone; there are un-built condos out there somewhere that I need to camp out in line for!

  61. 61
    Erik says:

    RE: redmondjp @ 60
    As someone that is employed in the transportation industry, I can confirm that mission statement #7 is to supply transportation. #1 is safety. #2 is jobs. #3 has to do with election stuff, but I can’t go into it. #7 is to supply transportation.

    To figure out what’s going on next, think more tunnels. We are wanting to merge light rail and the underground Bertha tunnel idea together. Slow moving trains underground is the future of Seattle.

  62. 62

    By Bob @ 56:

    Why was Washington Mutual the first big bank to go belly up last time around?

    Because an incredibly stupid NY Senator (yes that’s unnecessarily verbose since stupidity and being a senator tend to be correlated) started a bank run. They probably would have tipped anyway, but you asked about timing.

  63. 63
    Doug says:

    RE: Bob @ 56 – Bear Stearns was actually the first big bank to go down about 6 months before WaMu.

    As Kary mentioned, it was ultimately due to a bank run caused by subprime losses.

  64. 64
    David B. says:

    By Mikal @ 44:

    For better or worse, Seattle is becoming San Francisco.

    No, it is not, and the fact that people are once more repeating this trope endlessly is but one more sign that we are in fact in a bubble.

    The SF Bay Area has a more popular climate, far tighter restrictions on adding housing supply, and greater economic opportunity than Seattle. Absent a very major natural disaster, it will remain significantly more expensive than Seattle.

    Seattle prices are today basically what they were when I first moved to this region in the late 1980s: significantly more expensive than prices in more inland areas, yet significantly less expensive than prices in coastal California.

    Seattle did not “become the next San Francisco” in the 1990s and it will not do so in the 2010’s either.

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