Just how secure is Seattle’s economy? (Starbuck: for sale, real estate)

[CrazyDonkey]

Just how secure is Seattle

At the end of the day, observers of Puget Sound’s economy are left with a paradox. On the one hand, the experience of the past few years suggests that we may be living in a truly extraordinary period, when conventional economic rules are, if not suspended, at least partly rewritten. But on the other, one needn’t go back too many years to see how easy it is to mistake the exception for the rule.

[homesinseattle]

These jobs are real, the companies doing well aren't just fantasies like the dotcom busts of a number of years ago. They have vital products and services. The economy here is a lot more diverse than it used to be. For every Amazon and Starbucks, there are a number of very solid companies here in Seattle that people don't talk about as much.

[Ira500]

Well, in 2007 we were also diversified, and a long way away from the dot com bust, and everybody and their brother, especially in the real estate industry, were blathering on about how in Seattle we are insulated from economic downturns. Shortly after that, some parts of the Seattle area saw home price drops in the fifty percent range over a few years. Sure, everything looks rosy locally right now, and it's hard to see what can go wrong. But things happen. We are affected by what goes on elsewhere in the world. I don't see anything that will cause seattle's economy to contract in the near future. But at some point, it will happen. And, at that point, folks in the real estate will be blathering on about the historic buying opportunities.

[homesinseattle]

Ira, it doesn't take a genius to realize that no place is immune to true economic downturns. It is objectively true though that we have a more diverse economy than we used to. I appreciate your feisty contraction schtick though

[flyingsaucermom]

What had made me nervous is that three of my neighborhood's top real estate agents have put their own homes for sale in the last 4 months. Four if you count the last 9 months.

[GatsbyGatz]

Originally Posted by flyingsaucermom

What had made me nervous is that three of my neighborhood's top real estate agents have put their own homes for sale in the last 4 months. Four if you count the last 9 months.

Aren't a lot of homebuyers in Seattle paying in cash? (Ergo, no need to worry about mortgage lenders giving out loans to people who shouldn't be given loans). I think the main concern isn't fluctuations with mortgage lenders but rather how long employment trends continue on. I would think it be more likely Seattle would slowly and gradually slow down in growth and hiring rather than a dramatic downturn in some sector of the market.

[flyingsaucermom]

Originally Posted by GatsbyGatz

Aren't a lot of homebuyers in Seattle paying in cash? (Ergo, no need to worry about mortgage lenders giving out loans to people who shouldn't be given loans). I think the main concern isn't fluctuations with mortgage lenders but rather how long employment trends continue on. I would think it be more likely Seattle would slowly and gradually slow down in growth and hiring rather than a dramatic downturn in some sector of the market.

I have no idea what it means or if it means anything. My only thought was that perhaps as real estate agents they are in a better position to predict changing trends... maybe they sense something that the rest of us aren't catching on to yet and they are positioning themselves. Or.... it's house selling season and they collectively decided to upgrade into some nicer homes coming on the market that nobody else knows about yet. I actually hadn't realized the latter until now.. that probably explains it honestly...

[homesinseattle]

Yeah, probably the latter, coupled with taking advantage of low interest rates.

[leastprime]

The REagents could be starving because of the lack of inventory which means the lack of any sales. No sales means no bread. IMO

[CrazyDonkey]

Originally Posted by homesinseattle

These jobs are real, the companies doing well aren't just fantasies like the dotcom busts of a number of years ago. They have vital products and services. The economy here is a lot more diverse than it used to be. For every Amazon and Starbucks, there are a number of very solid companies here in Seattle that people don't talk about as much.

Amazon has virtually no profits and those jobs have to be balanced against all the brick-and-mortar retail jobs they are destroying. Boeing is already in a downturn, reducing their workforce. Microsoft is plowing tons of money into the Cloud to stay competitive with Amazon, while their Office "franchise" is becoming increasingly frayed (use OpenOffice for free!). No one is claiming these companies will go bankrupt, but when a downturn comes, they'll be cinching their belts several notches.

The higher you buy on the bubble, the further underwater you'll be if the market goes south. Real estate prices can only outrun income so long.