Recessionary flight from the cities?
The house I'm living in right now (a rental with 4 units), now has 2 vacancies. One vacancy is not recession-related, but the other one is a family which is moving back to Montana.
The recession has caused people to start pinching pennies on their spending. When do we start to see people in cities look at the cost of living in cities and decide to move to somewhere more affordable? I remember from the last downturn that there was a trend of people who had moved to SF or Seattle to follow the high tech boom turning around and moving back out to more rural areas where life was cheaper. So far I haven't seen any news articles on this becoming a trend -- has anyone else seen it?
And we know that housing prices in more rural areas has been cratering -- with real estate agents trying to claim that housing in Seattle proper would hold steady for various different rationalizations. In my mind this seems to be more like an "arbitrage" situation, but in a market which is very slow to react because people need to physically move. So, when does the trend start of people deciding that the "average" $450k house near downtown Seattle looks like a really bad deal compared with moving somewhere they can buy a nice house for $150-200k?
I haven't seen this in any newspaper articles yet, am I anticipating the trend, or am I just not looking in the right places?
The recession has caused people to start pinching pennies on their spending. When do we start to see people in cities look at the cost of living in cities and decide to move to somewhere more affordable? I remember from the last downturn that there was a trend of people who had moved to SF or Seattle to follow the high tech boom turning around and moving back out to more rural areas where life was cheaper. So far I haven't seen any news articles on this becoming a trend -- has anyone else seen it?
And we know that housing prices in more rural areas has been cratering -- with real estate agents trying to claim that housing in Seattle proper would hold steady for various different rationalizations. In my mind this seems to be more like an "arbitrage" situation, but in a market which is very slow to react because people need to physically move. So, when does the trend start of people deciding that the "average" $450k house near downtown Seattle looks like a really bad deal compared with moving somewhere they can buy a nice house for $150-200k?
I haven't seen this in any newspaper articles yet, am I anticipating the trend, or am I just not looking in the right places?
Comments
I think you're right on, but $150k-$200k will be more of a Houston price for a nice house. Those truly fleeing the cities will find a much cheaper living situation.
Maybe...but in Detroit, your life is also only worth $180.
http://www.boston.com/bostonglobe/ideas ... ?page=full
Thankfully the price of oil has dropped and so we aren't sending quite so much money to countries fomenting violence. The economic problems of the Depression led to WW II, hopefully we can avoid that happening again.
If we do get a high level of unemployment here, the public works projects can be building huge solar power plants.
I lived in LA during the recession of early 1990's. During that time a LOT of Californians moved to other states both to find work and to lower their housing costs.
I lived in Seattle during the late 60's after the great Boeing layoff when the "Last One Out of Seattle Please Turn Off The Lights" billboard was up. A lot of my friends parents moved their families out of state.
During hard times it very common for "disaporas" to occur. This time will be no different. Seattle is one of the 5 most expensive cities in the U.S. This does not bode well as the recession deepens and people are forced to make tough decisions. If MS or Boeing have layoffs it will only expedite the trend.
I have seen different lists of the most expensive cities and have never seen Seattle in the top 5.
I don't think it's even in the top 20!
LA in the 90's, Seattle in the late 60's, and Detroit today are all examples of regions hemorrhaging jobs. That's why people move away, and home prices follow. Absent job loss, I would bet that people are much more likely to stay put during tough economic times than they are to pick up and move just to find cheaper housing.
Why would this trend suddenly uptick? Seattle has been significantly more expensive than about 95% of the country for at least the last 5 years.
http://housing-watch.com/home.aspx?d=30
Sorry to rain on that one, but according to "housing watch" - home prices in seattle also increased 7% in the last month!
http://housing-watch.com/regionview.aspx?city=Seattle
1 month +29,950 (7.30%) +2,688 (51.60%)
3 months +20,000 (4.76%) +2,352 (42.42%)
6 months +20,000 (4.76%) +2,449 (44.95%)
12 months +10,000 (2.33%) +3,512 (80.09%)
That site has long exhibited a complete lack of caring for the accuracy of the data reported. There are lots of issues with scraping data off the MLS and they never bother to fix them - it seems to exist only as a vessel for advertising
1) from Altos Research - SFR asking prices for the city of Seattle only
2) from housing watch - SFR asking prices for who knows what definition of seattle
(Note how the inventory jumped by a third in mid October)
which looks right to you?
Yeah, my recollection is that the "diaspora" in the 2001 recession mostly affected rental prices as people chasing the tech bubble moved out of the city.
There is a theory that as people sell or lose their houses and move into rentals that it'll push up rental property prices which will prop up housing fundamentals. I don't see that happening, though, because as people lose their jobs they'll move out of cities (at least fairly expensive cities like seattle) and into cheaper housing and cheaper cost of living elsewhere. And then there's simply going to be a glut of housing in general since we're so overbuilt.
And I'm pretty sure that Seattle makes it into Top 20 lists in terms of cost of living, particularly when adjusted for salaries -- I know friends who moved here from NYC who had more difficult times making ends meet here because they had their salary cut down to about a 1/3rd of what it was there.