{"id":1272,"date":"2007-11-08T13:20:31","date_gmt":"2007-11-08T20:20:31","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/2007\/11\/08\/welcome-to-seattle-bubble-2\/"},"modified":"2013-12-14T12:52:05","modified_gmt":"2013-12-14T20:52:05","slug":"welcome-to-seattle-bubble-2","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2007\/11\/08\/welcome-to-seattle-bubble-2\/","title":{"rendered":"Welcome to Seattle Bubble"},"content":{"rendered":"<p>Since I was on KING 5 News last night and KOMO 1000 radio this morning*, I thought it would be good to write up a slightly more detailed post aimed at answering the question: &#8220;What is Seattle Bubble about?&#8221;  So, here&#8217;s a summary of the important points.<\/p>\n<p><u>The Bottom Line<\/u>: <strong>Now is not a good time to buy a home in Seattle.<\/strong><\/p>\n<p>Here&#8217;s why:<\/p>\n<ul>\n<li>Irresponsible, loose lending drove prices to artificial highs, pricing out responsible individuals and families that just want to make a decent down payment and get a traditional loan on a reasonably priced house.<\/li>\n<li>We are presently seeing a return to responsible lending standards, as the banks experience the consequences of writing loans to people who did not have the ability to pay them off.  As lending standards continue to tighten, further downward pressure will be placed on home prices.<\/li>\n<li>Macro-economic factors drove home prices up, and will in turn bring prices back down (yes, even in Seattle).<\/li>\n<li>Home prices in Seattle did not rise as fast or as far as other places in the US, and likely will not fall <em>as far<\/em>. <strong>However<\/strong>, they <em>will<\/em> most likely fall.<\/li>\n<li>Why will prices fall?  Because the current level of local home prices is not supported by <em>any<\/em> of the fundamentals that drive a healthy housing market:\n<ul>\n<li>Incomes (<a href=\"http:\/\/seattlebubble.com\/blog\/2007\/08\/06\/gangbuster-job-growth-lackluster-incomes\/\" title=\"Gangbuster Job Growth, Lackluster Incomes\">1<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/11\/05\/washington-real-estate-40-overvalued\/\" title=\"Washington Real Estate: 40% overvalued?\">2<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/02\/01\/pop-quiz-time-fundamentals-or-speculation\/\" title=\"Pop Quiz Time: Fundamentals or Speculation?\">3<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/03\/29\/spot-the-fundamentals-addendum\/\" title=\"Spot the Fundamentals, Addendum\">4<\/a>)<\/li>\n<li>Employment (<a href=\"http:\/\/seattlebubble.com\/blog\/2007\/01\/18\/does-job-growth-home-buying-demand\/\" title=\"Does Job Growth = Home Buying Demand?\">1<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/03\/28\/spot-the-fundamentals\/\" title=\"Spot the Fundamentals\">2<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/08\/06\/gangbuster-job-growth-lackluster-incomes\/\" title=\"Gangbuster Job Growth, Lackluster Incomes\">3<\/a>)<\/li>\n<li>Population (<a href=\"http:\/\/seattlebubble.com\/blog\/2006\/10\/25\/big-picture-supply-vs-demand\/\" title=\"Big Picture: Supply vs. Demand\">1<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/09\/21\/king-county-not-running-out-of-land\/\" title=\"King County NOT Running Out of Land\">2<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/02\/13\/what-cities-does-seattle-compare-to\/\" title=\"What Cities Does Seattle Compare To?\">3<\/a>)<\/li>\n<li>Rents (<a href=\"http:\/\/seattlebubble.com\/blog\/2007\/09\/12\/homebuying-platitudes-vs-reality\/\" title=\"Homebuying Platitudes vs. Reality\">1<\/a>, <a href=\"http:\/\/seattlebubble.com\/blog\/2007\/07\/16\/rent-increases-likely-to-taper-off-soon\/\" title=\"Rent Increases Likely to Taper Off Soon\">2<\/a>)<\/li>\n<\/ul>\n<p>All of these factors are indeed positive for the Seattle area, but prices began to rise out of control while Seattle was still recovering from being hit particularly hard by the dot-com recession.  Thanks to the aforementioned easy lending, home prices during and since Seattle&#8217;s economic recovery have risen much faster and higher than these positive fundamentals support.<\/li>\n<\/ul>\n<p>There are lots of people (like myself) who have little to no debt, great credit, and a good down payment, but are not willing to buy into an inflated housing market.  <strong>We are not against home ownership.<\/strong>  We <em>are<\/em> against taking out massive, dangerous loans to finance an otherwise unaffordable and overpriced asset.  We are perfectly content to wait out the declining market, and will not be suckered by real estate salespeople who perpetually repeat claims that &#8220;now is a great time to buy.&#8221;  They said that about the national housing market, and they were wrong.  Once the home price drops were irrefutable, they began declaring that &#8220;the market has hit bottom&#8221; <a href=\"http:\/\/davidlereahwatch.blogspot.com\/2007\/03\/lereah-housing-market-is-doing-lot-of.html\" title=\" Lereah Calls Bottom For At Least The Fourth Time\"><em>every three to four months<\/em><\/a>.<\/p>\n<p>Don&#8217;t take anyone&#8217;s word when it comes to what will likely be the largest financial decision of your life.  Do the research, and determine if the market is right for you.  That&#8217;s what Seattle Bubble is for: providing a resource where regular people can assess the local housing market on their own.<\/p>\n<p><span style=\"font-size: 85%\">P.S. (I&#8217;d like to improve \/ refine this post and make a copy to link at the top next to &#8220;Home&#8221; and &#8220;Forum&#8221; as an &#8220;About&#8221; page.  If anyone has any suggestions for improving this post with that end in mind, such as additional posts that should be linked or main points that I left out, please share your ideas in the comments.  Thanks!)<\/span><\/p>\n<p>* <span style=\"font-size: 85%\">I tried to record the interview through the online stream of KOMO 1000, but halfway through they cut into the feed with an ad for a casino that ran for the entire remainder of the call.  KOMO host Nancy Barrick is going to email me the audio tomorrow morning, and I will post it here sometime thereafter.)<\/span><\/p>\n<p><strong><em>Update:<\/em><\/strong> Here&#8217;s the audio from the interview on KOMO today:<br \/>\n<!--[if lt IE 9]><script>document.createElement('audio');<\/script><![endif]-->\n<audio class=\"wp-audio-shortcode\" id=\"audio-1272-1\" preload=\"none\" style=\"width: 100%;\" controls=\"controls\"><source type=\"audio\/mpeg\" src=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2007\/11\/SeattleBubbleOnKOMO1000_2007-11-08.mp3?_=1\" \/><a href=\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2007\/11\/SeattleBubbleOnKOMO1000_2007-11-08.mp3\">http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2007\/11\/SeattleBubbleOnKOMO1000_2007-11-08.mp3<\/a><\/audio><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since I was on KING 5 News last night and KOMO 1000 radio this morning*, I thought it would be good to write up a slightly more detailed post aimed at answering the question: &#8220;What is Seattle Bubble about?&#8221; So, here&#8217;s a summary of the important points. The Bottom Line: Now is not a good&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[264,206],"tags":[43,700,61,62,13,182,78,59],"coauthors":[],"class_list":["post-1272","post","type-post","status-publish","format-standard","hentry","category-media","category-features","tag-administrative","tag-audio-video","tag-fundamentals","tag-income","tag-job_growth","tag-komo","tag-population","tag-rent"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Welcome to Seattle Bubble \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2007\/11\/08\/welcome-to-seattle-bubble-2\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Welcome to Seattle Bubble \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"Since I was on KING 5 News last night and KOMO 1000 radio this morning*, I thought it would be good to write up a slightly more detailed post aimed at answering the question: &#8220;What is Seattle Bubble about?&#8221; So, here&#8217;s a summary of the important points. 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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. 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