demographic inversion
Interesting article on how the demographics of cities are changing.
http://tnr.com/politics/story.html?id=2 ... be122ac1a9
Certainly explains what is happening to Ballard.
http://tnr.com/politics/story.html?id=2 ... be122ac1a9
Certainly explains what is happening to Ballard.
Comments
That was a good read, I love this article
http://www.cnn.com/2008/TECH/06/16/subu ... newssearch
Mostly because I find this theory fascinating:
Apparently this is exactly what happened to the big gas-guzzling cars of the '70s. They used to be driven by the wealthy, but once gas became extremely expensive they became undesirable and were sold for cheap to poorer people that couldn't afford newer more fuel efficient cars. As a result the only people you see driving those once glamorous cars around are gang bangers in the inner city.
When I lived in Boston there was a ring around the metro area where the best schools are. In Seattle it is more concentrated into Bellevue and Mercer Island. Bellevue especially has become a major city in its own right, with better schools that the outer burbs that surround it.
I don't think that has been true of the bellevue school district for quite some time.
In most cases with cities of decent size the older the city and district are the lower their ranking goes as the population is more diverse and there is a longer financial legacy. Bellevue is a good school district, but I have never seen them ranked above Lake Washington or Issaquah which are the surrounding districts. MI is generally the top district in the state and is a pretty special case that really is "different".
http://www.schooldigger.com/go/WA/districtrank.aspx
We have been in an environment for 50-80 years where it was almost always cheaper and easier to push development out further out and create more suburbs and exurbs than it was to repair and renovate older areas as well as deal with the existing population. There are a number of forces converging both economic and psychological which are going to change this quite a bit going forward.
The question then is will Bellevue become more like Medina or more like Seattle. I think it is still close enough to the top that it will remain attractive to parents and its close proximity to jobs will keep it near the top.
What are the forces? I hear people talk about gas prices, but I thought the current gas prices were so high that technology would produce alternatives? The alternatives must by definition be cheaper otherwise we wouldn't produce them. So if we all end up with cheap electric cars in 10 years, won't we all decide that living further out is a better idea again?
it will always be cheaper to expand in areas with less density. Take Seattle for example. That Mercer Mess and fixing that to deal with the additional Paul Allen Biotech area will cost a lot more than expanding 405 or 520 at the Redmond end (which is planned BTW). Ultimately, if a business is coming in from out of town and doesn't have an existing presence and employment base in downtown Seattle to consider, they're less likely to choose Seattle than they are to choose Bellevue or Redmond or other similar areas.
That's assuming they come to the Seattle area at all and don't set up shop in Austin! We can only hope that house prices continue to come down, and the cranes in Bellevue keep building too much. In the next expansionary business cycle, that will set us up for getting a lot of companies coming here.
(consume with pinch of salt)
http://money.cnn.com/galleries/2008/fsb ... index.html
This David Stiff guy and his "Housing Bubbles Collapse Inward" article lays it out much better than I could:
http://www2.standardandpoors.com/spf/pd ... llapse.pdf
OK, that makes a lot of sense to me. The "drive until you qualify" really has an implication, though, and the implication is that you would - in the past - have bought a property in a location in which you wouldn't have considered living in if it weren't for the "certainty" of getting rich with appreciation.
This doesn't necessarily mean that suburbia is doomed, as a lot of people want to live there anyway. Suburbia was populated prior to the bubble after all. Issaquah, for example, has great schools, quiet neighborhoods, and so on. People didn't move out to Issaquah because they couldn't afford a place in Greenlake. Those people likely moved to Northgate, or West Seattle, or Burien, as they valued the "in city" locations more highly.
I think you have to look at each area and evaluate if it has any value separate to any potential capital gains on the house. Good schools? Quality of life/surroundings? Location close to job centers/amenities? If it's just a piece of dirt, then you're probably screwed right now.
The reason I focused on the energy part of the equation is that I'm getting fed up with people making long term statements with short term constants. For example, back before the nationwide bubble burst, the mantra was that prices would never go down because unemployment was low and prices never go down when unemployment is low. So, unemployment will never go up?
Same with gas prices. Gas prices are high, therefore everyone will move out of the suburbs and it will be a wasteland of empty McMansions. So gas prices will never go down? EVs, or plug-in hybrids won't get more popular? Honda won't come out with a hybrid version of their popular Fit next year? That's right, they will! All that's going to happen in the suburbs is a painful and short term readjustment of energy consumption and expectation of future energy price. When you have a 16MPG SUV (as I do) it's pretty darn easy to trade it in for something that uses half the gasoline, even with old technology. I could use 1/3 of the gasoline if I decided to go for a Prius. If I actually *used* my car much, I'd get rid of it in a heartbeat.
Not ranting at anyone in particular, just the general lack of long term thinking of the MSM and people talking their book (Belltown condo developers, I'm talking to you!).
Also, someone mentioned the old inefficient cars going to poor people. When I was a kid, they were called dinosaurs. However, these McMansions are not inefficient. The opposite is true. OTOH, I do consider them the 21st century equivalent of mobile homes. They certainly don't come with any actual real estate, hence the popularity of rechargeable electric lawn mowers.