Comments on: Seattle Sales Plummet While Prices Merely Decline

By: Michael P Lindekugel

Michael P Lindekugel — Fri, 26 Sep 2008 05:14:42 +0000

Don’t get your hopes up for Seattle prices becoming affordable any time in the near future for many reasons.

During the last Seattle recession, the real estate market was hot by Seattle standards.

Our economy is doing very well compared to the rest of the country.

The local guvment puts restrictions and owner land use which creates an artificial supply problem and upward price pressure. The Growth Management Act adds an estimated $200k to the price of a house.

The reason sales have fallen and prices have not fallen as much is the sticky price theory and pent up demand in a market with scarce housing. Our rental market has seen record high rents and record low vacancy despite the slow ownership market.

Despite the sky is falling with foreclosures according the media, WA isn’t that bad. Not nearly as bad as many parts of the country which experienced hyper capital asset growth or appreciation, zero down, no income verification loans.

By: KT

KT — Fri, 26 Sep 2008 01:13:59 +0000

We were transferred here from the east coast & I have to say home prices here are seriously absurd.
We are originally from the west coast and were totally jazzed about coming back “home”.
We will be even more jazzed when the reality check of reasonably priced houses hits the Seattle area.
Face it folks the 1,000 square foot of condo in West Seattle is NOT reasonably priced @ $480,000.

By: some guy

some guy — Thu, 25 Sep 2008 22:10:37 +0000

The faster prices get closer to what people can afford the better off we will all be, so I disagree that 11% drop is good news. It’s bad news.

By: Tom

Tom — Thu, 25 Sep 2008 20:13:59 +0000

I’ll guess that the volume of home sales will stay down until prices decline further. Median home prices in the area are still well beyond the median income of the average potential homebuyer. Renting is still much cheaper than buying in many neighborhoods.

By: Gene

Gene — Thu, 25 Sep 2008 19:58:21 +0000

You make a good point about the rainy season. If people couldn’t sell houses with the gorgeous (post “Junuary”) weather we had this summer – good luck on dark cloudy days.

Some people always have to move, but it looks like more are choosing to rent.

I’ll be really surprised if we don’t see 10+% year over year drops in 2008 too, especially given the economy (bailout package or no).