Seattle just named one of the Top 3 "Hottest" Real Estate markets (rent, houses)

[The Global Citizen]

A house just sold in my neighborhood for $87k above asking price.

[pnwguy2]

It's crazy without a doubt. And I do wonder if the bubble may burst again.

Not to belabor the point, but I remember in the early 70's when a $50,000 home was considered upper middle class, and a $75,000 home was considered wealthy. Of course we can't go back, oh wait, we can. Those who bought and kept at that time are now millionaires.

[Scorpio2]

I might be a simple man but I cannot for the life of me see why rapidly rising house prices are good for most people. If you are a middle class dude with a family and you buy a house in Seattle in 1983 for 200,000 and it's now worth 2 million - great for you! But now, what are the chances that your kids can afford to live in the same community. Whereas if you're house appreciated at a reasonable rate of 2-3% for all those years and now it's worth $400,000. You still have some nice equity (paid down debt along with the appreciation) and your kids will have a shot at affording a house in your area. That is how it is where I live now. We get a steady 2 or 3% appreciation every year without fail. I bought my house (on a half acre) for $170,000 sixteen years ago and now it's worth $350,000. Nice houses go for $250k. Mansions with a big yard start at $500k. No one here stresses about crap like - Is this the right neighborhood?, Is this the right time to buy?, Is this the right time to sell? You just buy or sell a damn house when your requirements change and there's none of this timing nonsense. A house is a very simple proposition in so many places in the US, but not Seattle.

[The Global Citizen]

So says the article: not Denver, Portland, or Seattle in 2016. Unfortunately, your snapshot of America is gone and even worse, forever lost. The new snapshot of America is likely to be a picture of a middle class family that overpaid for a home by at least 30%. With this gamble, they are hoping that in 17 years, after a bubble (or two), they break even on their home purchase. Welcome to the New America.

[mhays25]

Past stability doesn't mean future stability. I'd put Seattle's short-term and mid-term future trends up with anyone's.

A 30% drop would probably take another collapse of the lending industry, and we're not seeing any obvious precursors of that. Or it would take an economic disaster like Microsoft and Boeing dropping 50,000 local jobs at the same time, which also doesn't seem likely.

Instead our economy seems pretty stable. Our focus on tech isn't terribly worrisome. Amazon is a business services and retail company, vs wondering if this internet sales thing can be profitable like in 2000. Boeing might leak jobs over time but they're investing billions in local production capacity for now. Microsoft isn't a star but they're stable. Other techs are expanding like crazy, with the limiting factor being how many people they can hire. We're a decent in-migration and immigration recipient, a huge wealth of talent that our economy lives on.

People increasingly move to places they like. That might slow in-migration at some point. But there's always desire keeping the pressure up. Any drop in prices just makes it easier for more people to move here unless they're under water somewhere else.

[Thom52]

Originally Posted by mhays25

Past stability doesn't mean future stability. I'd put Seattle's short-term and mid-term future trends up with anyone's.

A 30% drop would probably take another collapse of the lending industry, and we're not seeing any obvious precursors of that. Or it would take an economic disaster like Microsoft and Boeing dropping 50,000 local jobs at the same time, which also doesn't seem likely. .......

I still hear people talking like we are still a one company town in the Seattle, referring to the very real "last person leaving, turn the lights out" billboard of the 70's. Boeing really was the only game in town back then.

Since then, Seattle has diversified significantly. Boeing is a significant but not overwhelming part of the job scene. We have software and internet Big Companies like Google and Microsoft, and a very healthy medical/ bio-medical companies presence, to name a few. The area does not have economic variety and just plain massive number of companies as Silicone valley, so a major company like Microsoft folding would definitely be felt and would have repercussions, maybe resulting in an temporary slight drop in housing prices, but the likelyhood of a repeat of the Great Boeing Crash of yesteryear is highly unlikely. It would require a crash of the total USA economy to make a significant dent, and then you won't be able to afford the cheaper prices anyway.

i.e. if you are holding out to buy a house until prices drop to match the price of a house in Iowa, I would suggest not holding your breath.

[evilcart]

Originally Posted by Tac-Sea

I've wondered for a while why Seattle housing isn't more expensive. I make as much and in many cases more than Senior Engineers at LinkedIn, Yahoo, Twitter, even Google, yet here for 600K you can buy a nice house. In SF 1.2 million buys you a tear down.

OK, I will take the bait.


I will give you 600k for a nice house, I have the monies in place and can buy tomorrow, if you don't have one I will pay you a finders fee of 5%. Yes I will give you 30k to find that "nice" in Seattle for $600k.


NO tricks, no cons, if you have access to such houses I know we can both get rich very fast, so come on show me what you got.

[evilcart]

people grossly under estimating the confluence of factors driving this housing market beyond long term support. We will most likely NEVER see such an event again in our life times. strong jobs, insanely cheap money, easy access to that money. Institutional investment on a massive scale and for the first time in many decades unfettered access to our markets by foreign intuitional investment houses. add to that huge numbers of foreign based retail investors seeking shelter in US RE...

it reads like a made up story , but it is real and our federal government is 100% backing this asset growth. I am left wondering are they trying to find bag holders, for our debt or maybe just trying to get in the last of the fish before a big pullback. After all we did this a smaller version of this about 30 years ago ...

[CrazyDonkey]

Seattle has always been a boom-and-bust town. The higher the boom, the deeper the bust. Boeing and Microsoft are laying off thousands of workers - this boom is being driven primarily by one company, Amazon, which has only recently posted anemic profits, along with other companies, such as Google, hoping to strike it rich in the "cloud".

Busts are what have kept Seattle both growing and affordable in the past. Booms build up both commercial and housing real estate, while busts reverse population inflows to outflows, leaving behind real estate surpluses. One need only look at San Francisco to see what happens when you have a continuous boom, with no bust. I'd argue that a bust here is not only overdue, but needed.

[josie13]

Originally Posted by Scorpio2

I might be a simple man but I cannot for the life of me see why rapidly rising house prices are good for most people. If you are a middle class dude with a family and you buy a house in Seattle in 1983 for 200,000 and it's now worth 2 million - great for you! But now, what are the chances that your kids can afford to live in the same community. Whereas if you're house appreciated at a reasonable rate of 2-3% for all those years and now it's worth $400,000. You still have some nice equity (paid down debt along with the appreciation) and your kids will have a shot at affording a house in your area. That is how it is where I live now. We get a steady 2 or 3% appreciation every year without fail. I bought my house (on a half acre) for $170,000 sixteen years ago and now it's worth $350,000. Nice houses go for $250k. Mansions with a big yard start at $500k. No one here stresses about crap like - Is this the right neighborhood?, Is this the right time to buy?, Is this the right time to sell? You just buy or sell a damn house when your requirements change and there's none of this timing nonsense. A house is a very simple proposition in so many places in the US, but not Seattle.

Eventually the kids will inherit either the house or the proceeds from the sale. (Assuming the parents don't divorce, remarry, and leave their estates to their new spouses.} So, eventually, the kids of the real estate lottery winners will benefit from the appreciation in value.

But it's an ugly situation for everyone else.