{"id":395,"date":"2006-10-03T10:54:00","date_gmt":"2006-10-03T17:54:00","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=395"},"modified":"2010-12-20T11:27:38","modified_gmt":"2010-12-20T19:27:38","slug":"prices-plateau-as-incomes-catch-back-up","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2006\/10\/03\/prices-plateau-as-incomes-catch-back-up\/","title":{"rendered":""Prices plateau as incomes catch back up""},"content":{"rendered":"

Here’s some real hard-hitting reporting from the P-I. It turns out that mortgages are rising a lot faster than paychecks<\/a>. Who knew?<\/p>\n

The percentage of Seattle residents who … own their homes increased over the past five years — even though home values and mortgage payments rose much faster than incomes, data the U.S. Census Bureau released today shows.<\/p>\n

According to Census numbers, the trend in Seattle also was true in the county, state and nation, although the chasm between income and home values widened more in the city.<\/p>\n

Local economists said low interest rates were the biggest reason more people were able to buy their own homes between 2000 and 2005. They also worried about what the trend might mean for coming years.<\/p>\n

During that period, “we got home ownership levels nationwide really at record highs, to a point where I’m not sure it’s sustainable,” said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University.
\n…
\nCrellin expects nationwide homeownership rates to stagnate or even drift downward in the next several years.<\/p>\n

“Obviously, we can’t sustain the disparity between incomes and housing prices that we have at the present time,” he said. “What I am expecting is prices are going to remain pretty much on a plateau for a period of time as incomes catch back up.”<\/p><\/blockquote>\n

Ah yes, don’t anybody worry about the historically unprecedented run-up that home prices have experienced in the last 3-5 years. The much-lauded soft landing<\/a> will save the day. Depending on what Mr. Crellin means by “pretty much on a plateau,” and how quickly incomes actually increase, his scenario would mean stagnant home prices for anywhere between six (totally flat home prices, incomes increase by 5% per year) and twenty-five<\/b> years (1.5% per year home price increases, incomes increase by 3% per year).<\/p>\n

It would seem to me that if home prices stay stagnant for even three or four years, there will be repercussions that will put downward pressure on prices. People can’t refinance out of suicidal financing when they don’t have any magical equity. And who wants to buy an asset that isn’t appreciating at all? The soft landing just doesn’t seem to add up.<\/p>\n

(Aubrey Cohen, Seattle P-I<\/a>, 10.03.2006<\/em>)<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s some real hard-hitting reporting from the P-I. It turns out that mortgages are rising a lot faster than paychecks. Who knew? The percentage of Seattle residents who … own their homes increased over the past five years — even though home values and mortgage payments rose much faster than incomes, data the U.S. Census…<\/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":[1],"tags":[1113],"coauthors":[],"class_list":["post-395","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-uncategorized"],"yoast_head":"\n"Prices plateau as incomes catch back up" \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\/2006\/10\/03\/prices-plateau-as-incomes-catch-back-up\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\""Prices plateau as incomes catch back up" \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"Here’s some real hard-hitting reporting from the P-I. 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