Next Housing Market to Crash? Seattle

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C'mon, at least give us the comments of someone who has impact and presence in the Seattle marketplace.
Step right up! Get your meaningless meanderings here!
EVERYBODY's got an opinion and a prediction and so far, the doomsayers haven't made one thats proved true.
I've been selling real estate in Seattle since 1976 and there has not been one year in the past 32, that a buyer hasn't told me; "I'm waiting till the prices go down "next week/month/year-after the (?), etc.etc.etc." Sure, they did drop in 1990, primarily in the outlying areas, but by 1993 they had surpassed even the 1989 peak. Will they drop more? Its entirely possible, but PLEASE recognize that most of the talk is what used to be called "gum flapping".
It would seem that if outside economic issues manage to influence the local population in even greater proportions, there will be a market correction. HOWEVER, the local employment and growth stats seem to contradict that eventuality. Meanwhile, its a pretty good time to buy and depending on when you live, not a bad time to sell, either.

30yearsinthebiz of WA 7:38PM May 31, 2008

Just wait till the high gas prices work through the economy a bit further. It does not take much imagination to see that the airlines are feeling the pain...just look at the increase in 1 bag checked as well as other ways to increase fees. Now add to this the 4-5 small airlines that have filed for bankruptcy coupled with 4 major airlines that are trying to merge.
Too many empty seats + not enough home equity loan money to fill them = tough times ahead for airlines. By extension this will spell trouble for the Boeing Company. Yeah, I know they are sitting on a record backlog of orders, but those will get slowly erased as airlines cut back on capital equipment purchases. This in turn is going to whack the employees who populate the whole Sound area.
Now comes the reality. These developments are going to lead to layoffs and by extension home loan defaults and foreclosures. The insulation that the Seattle area has enjoyed is about to be stripped to the bare wires. As the other poster stated give it about 18 months and lets see what has developed.
P.S. if you have not sold already, you might want to consider it before you lose an additional 20-30%.

steve of WA 11:11PM May 30, 2008

MLS stats in S.W. King County, has prices down 8% for the month of April year over year. Where are the justification for these prices even in Burien and West Seattle. In 2002/2003 the medium prices were 150k/200k in above areas, then loose lending took over. Prices have doubled, yet income personnal growth hasn't even come close. People claim that it's a buyers market and there waiting for prices to come down. Truth be had, generally people can not afford pie in the sky prices (minus loose lending standards). Real Estate agents were in denial in other bubble areas that have popped. Just as the one above is now, in the next 18 months I see a 100k price drop.

Mark of WA 10:30PM May 30, 2008

I have been a Real Estate Broker in Seattle for 30 years. Yes, the market is tough out there. But if one is going to make predictions for a particular area, one needs to look at data and trends. I work mostly the South End so I haven't tracked months of inventory in other areas. In West Seattle and Burien, the data isn't all that bad. Near the peak of the market in West Seattle, weeks, not months of inventory was 10-12. That was in Spring of 2007. Burien and Des Moines was about 15. By October, 2007, those numbers moved up to 27 and 32 respectively. Now, about 1 year after the peak, those numbers are 26 and 35. 26 weeks is just over 5 months of inventory. In the past 30 years, the range has been from about 8 to over 100 weeks or 2 to 24 months!!! The difference this time is that we have experienced about a 6-10% decrease in prices, not 4%! Months of inventory is holding up, so I see no reason for a continued substantial decrease in the core Seattle area.
The outlying areas however, saw higher appreciation and are now seeing more depreciation along with more months of inventory. We have seen an additional 1-2 months of inventory added in the past 7 months, so those areas aren't close to a bottom yet.
There are numerous people writing all kinds of articles. People need to KNOW what is going on from professionals who have looked at the raw data and know how to interpret it.
Where's the data for the supply/demand curve being out of whack? What's so bad about 6-10 months of inventory? That's the supply and demand ratio. The determinant about where the market is going is the trend of that months of inventory number. It's not rocket science. In addition, because of the amount of depreciation that has gone on, same house to house, or developments must be tracked for price changes to determine actual depreciation. Medians aren't accurate as more lower or upper priced houses selling can skew the median.
So what do I think is going to happen? 0-5% more depreciation in the core Seattle area and 5-10% more in those areas that enjoyed more appreciation during the bubble.
Talk and write after you do your research.

Rick Rose of WA 8:41PM May 30, 2008