{"id":1102,"date":"2007-09-13T16:30:28","date_gmt":"2007-09-13T23:30:28","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/2007\/09\/13\/prices-in-seattle-not-unthinkable-yet\/"},"modified":"2007-09-13T16:30:59","modified_gmt":"2007-09-13T23:30:59","slug":"prices-in-seattle-not-unthinkable-yet","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2007\/09\/13\/prices-in-seattle-not-unthinkable-yet\/","title":{"rendered":"Prices in Seattle “Not Unthinkable Yet”"},"content":{"rendered":"

Hot on the heels of an unusually balanced report on the latest NWMLS home sales data, Aubrey Cohen comes back with another piece on the local market, this one full of non-sensical rationalizations for continued price gains<\/a>.<\/p>\n

Ken Kam, of Honolulu, scoped out second-home possibilities during a Seattle visit last month.<\/p>\n

“It seems like it’s an up-and-coming and popular place,” he said while looking through a Queen Anne town-house development in which units start above $800,000. “The prices are still lower than in Hawaii.”<\/p>\n

Two doors down, Tim Hug and David Hofmann were washing a BMW outside the town house they moved into in June after relocating from San Francisco.<\/p>\n

San Francisco’s still more expensive, but Seattle’s catching up, Hug said.<\/p>\n

People such as those help explain new Census Bureau data, which show Seattle’s home values rising considerably faster than incomes in recent years.<\/p>\n

The 2006 numbers, released Tuesday, show the value of a typical Seattle home is 7.7 times the median household income in 2006 \u2014 a 39 percent jump from the ratio in 2000.<\/p>\n

Seattle’s ratio of home value to income is higher than the county, state and nation, although that gap has narrowed in recent years.<\/p>\n

But Seattle still is far more affordable than cities such as San Francisco, where houses cost 12.3 times the median income, and Honolulu, where they cost 10.7 times the median income. This ratio increased by more than 50 percent since 2000 in Honolulu and more than 60 percent in San Francisco.<\/p>\n

That disparity is one reason King County regional labor economist Cristina Gonzalez does not expect much fallout from Seattle’s rising prices on the wider economy.<\/p>\n

“Compared to other West Coast cities, they’re not unthinkable yet,” she said.<\/p><\/blockquote>\n

So, the take-home message is that prices in Seattle are bound to keep rising, because all of the homes will be bought by wealthy people moving here from places where homes are even more<\/em> ridiculously expensive. I actually buy the ‘rich out-of-stater’ theory to a degree, but I think the effect is fairly limited. Also, doesn’t the theory that wealthy people from more expensive housing markets are propping up our own market directly contradict the claim that Seattle is insulated from the housing bust going on across the nation? When prices drop in San Francisco and Honolulu, wouldn’t the situation reverse itself?<\/p>\n

The article does include some balance, but only because it’s really just an Associated Press report with the local cheerleading tacked on. The AP portions are decidely less optimistic:<\/p>\n

“We had an artificial economy,” said Brad Geisen, founder of Foreclosure.com, a Web site that lists foreclosure properties. “There was all this wealth created in real estate, and it wasn’t really created.”<\/p>\n

Mark Zandi, chief economist at Moody’s Economy.com, likened the current housing market to the dot-com boom and bust a few years ago, when stock prices for many tech companies soared \u2014 before some of them ever turned a profit \u2014 and then crashed.<\/p>\n

“The parallels are quite similar,” Zandi said.<\/p><\/blockquote>\n

Anybody remember how that dot-com bust turned out for Seattle?<\/p>\n

(Aubrey Cohen, Seattle P-I<\/a>, 09.11.2007<\/em>)<\/p>\n","protected":false},"excerpt":{"rendered":"

Hot on the heels of an unusually balanced report on the latest NWMLS home sales data, Aubrey Cohen comes back with another piece on the local market, this one full of non-sensical rationalizations for continued price gains. 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