Seattle to Boston Comparison
From my standpoint, it is very interesting to watch the Seattle market right now. I lived in Boston until spring of 2006, and I'm beginning to see some similarities:
(Note: unless otherwise noted, this is based on my experience, not on numbers)
-Summer of 2005: China "unpegs" it's currency from the dollar, which seems to begin the questions of future economic uncertainty
-September of 2005: Hurricane Katrina unfolds and the world watches as New Orleans is flooded, abandoned and chaos breaks out, with the US government doing very little initially to help. Oil, gas and natural gas prices spiked across the country.
In Boston, the summer of 2005 had a high inventory of homes, with ridiculous prices. Then Katrina hit, and people stopped buying houses. The fall of 2005 was the beginning of the slowdown. Three months before, and houses were still going for over asking price. I know, because I was trying to sell my two-family home in the fall of 2005. There were a lot of lookers, but few people willing to buy. Most buyers I encountered were concerned with oil and natural gas prices, since it costs a lot to heat an old house through the winter.
The similarities that I see to Seattle is the high inventory increases this summer (like summer 2005 in Boston), and then the mortgage market really dried up in August (one would think this would have an even bigger impact on the real estate market than Katrina).
I am curious, as I know so many Seattle Bubble readers are, to see if/how much prices will decline in Seattle. Depending on the source, I think the median price decrease in the Boston area from the summer 2005 high to now is between 5-10%, but from my research (I can post this if anyone is interested), values on actual homes have decreased over 10%.
A couple of striking differences between Seattle and Boston is that (from what I've gleaned from this board) Seattle has a net increase in population, whereas Boston keeps on having net decreases. Manufacturing jobs are disappearing in Boston faster than one can say "China", and there have been some high-profile Boston companies that have been bought and moved elsewhere (Gillette is the one that come to mind), and Boston companies are moving jobs down south (Fidelity).
Personally, I'm not in the market to buy in Seattle right now, but possibly in 3 to 5 years. After owning a 100yr old house for a few years that needed quite a bit of work, I'm currently a happy renter.
Time will tell if Seattle will follow Boston's footsteps, or if the increase in population and jobs, and the "fact" that Seattle is special
, is enough to spare it from price decreases.
(Note: unless otherwise noted, this is based on my experience, not on numbers)
-Summer of 2005: China "unpegs" it's currency from the dollar, which seems to begin the questions of future economic uncertainty
-September of 2005: Hurricane Katrina unfolds and the world watches as New Orleans is flooded, abandoned and chaos breaks out, with the US government doing very little initially to help. Oil, gas and natural gas prices spiked across the country.
In Boston, the summer of 2005 had a high inventory of homes, with ridiculous prices. Then Katrina hit, and people stopped buying houses. The fall of 2005 was the beginning of the slowdown. Three months before, and houses were still going for over asking price. I know, because I was trying to sell my two-family home in the fall of 2005. There were a lot of lookers, but few people willing to buy. Most buyers I encountered were concerned with oil and natural gas prices, since it costs a lot to heat an old house through the winter.
The similarities that I see to Seattle is the high inventory increases this summer (like summer 2005 in Boston), and then the mortgage market really dried up in August (one would think this would have an even bigger impact on the real estate market than Katrina).
I am curious, as I know so many Seattle Bubble readers are, to see if/how much prices will decline in Seattle. Depending on the source, I think the median price decrease in the Boston area from the summer 2005 high to now is between 5-10%, but from my research (I can post this if anyone is interested), values on actual homes have decreased over 10%.
A couple of striking differences between Seattle and Boston is that (from what I've gleaned from this board) Seattle has a net increase in population, whereas Boston keeps on having net decreases. Manufacturing jobs are disappearing in Boston faster than one can say "China", and there have been some high-profile Boston companies that have been bought and moved elsewhere (Gillette is the one that come to mind), and Boston companies are moving jobs down south (Fidelity).
Personally, I'm not in the market to buy in Seattle right now, but possibly in 3 to 5 years. After owning a 100yr old house for a few years that needed quite a bit of work, I'm currently a happy renter.
Time will tell if Seattle will follow Boston's footsteps, or if the increase in population and jobs, and the "fact" that Seattle is special
, is enough to spare it from price decreases.