I just have two links for you this. The first is this article which has been passed around pretty extensively amongst the local real estate folks. Everybody likes rose-colored glasses, and this article is tinted pink like a Tiffany window. Most of the quotes from Matthew Gardner demonstrate a finely crafted ability to look at selected pieces of the big picture and take comfort. If you like that comfort, stop there.
If you’d prefer a broader take, you might want to click through to The Seattle Bubble’s response to the article. Tim isn’t willing to say that we’re in a bubble, and he’s more qualified on economics and stats than me, but I’m pretty comfortable coming down on the side of saying yes Seattle is definitely in a bubble. We’re still at the beginning of it, but looking at our market numbers compared to the national trends, we’re outstripping national averages by more than can be justified by local economic forces. Unemployment is down and inventory is low everywhere, but Seattle is having a unique response, and I don’t think it’s a sustainable one.
What that means for people looking at buying or selling in the local market will depend on the individual, but broadly speaking, if you want to buy in the next 1-3 years, now is probably better than waiting, and if you want to sell, now’s good. Next year will be too. The year after that is probably good, but I’m not comfy with predicting continued growth beyond there at this point in time. Recognizing a bubble and behaving accordingly is savvy. Forgetting that bubbles burst isn’t.
There’s a statewide report about the market for the second quarter out from the UW center for real estate research. Most of it is what you’d expect; low inventory, rising prices, and King County standing out for both. I’m paying particular attention to the details at the end about building permits. In a market so desperate for an increase in inventory, seeing new permits down 8% is a bummer.
The Case-Shiller numbers for May-June are out, and there aren’t any huge surprises there, either. We’re still in the fuzzy are-we-aren’t-we territory around whether the market is starting to bubble, but it’s looking more and more like we did embark into bubble lands in the spring.
It might be interesting to take a look at the effects of flood insurance programs on housing. We’re not seeing much flooding in Seattle, despite setting records both for rainfall, and stretches of time without rainfall, this year. Still, good food for thought.
Redfin, the owners of WalkScore, has released its list of the 10 most walkable cities, and Seattle ranks as number 8. Our current walk score is 73.1, up 0.2 points from last year. Walkability across the board is increasing, and the article goes into depth on trends and specific areas that have shifted.
The Count Us In report for 2017 has been released. This is a more scientific, thorough analysis that was implemented this year to replace the previous one night count conducted in previous years in January. The new report gives a much more comprehensive view of the homeless population in the city and its surrounding areas and has a wealth of good information for anybody interested in this and related issues.
Also out is Zumper’s spring map for median one-bedroom rental prices, broken down by neighborhood. Rental prices don’t perfectly match to sale prices, but this is a good reference for demographic breakdowns of the city and is particularly useful for anybody looking at investment property.
The are-we, aren’t-we question of a housing bubble question remains very present with the latest Case-Shiller numbers with the March data come out. As always, the Seattle Bubble has a great analysis for you to take a look at and continue to chew this question over. It’s definitely starting to look like we’re a bit bubbly, though I’d like to see the numbers in the last graph adjusted for inflation and get a line for what reasonable growth (a percentage based on population growth) would look like.
The sun has been making regular appearances and the mercury is rising, so check out this map of Washington State’s depressing place names and the stories behind them. My favorite is #4, Desolation Peak, but I do have a literary bias so it was cheating by getting Jack Kerouac involved.
Rent prices are continuing to do interesting things, by which I mean, they’re still going up, but not uniformly and not at the rates we’ve been seeing. (Rents showing a slight drop in Capitol Hill? I’m wondering if that’s a data blip, or a settling out now that the light rail has been open for a while.) We’re still ranking in the top 10 nationally across a variety of sources. Rent prices in the region are a very important metric to watch for assessing the state of the housing market as a whole. We have a lot of outside investors, but not enough to power the entire market, and rents are a good indicator for where the locals are going to stand when they assess their relationship to the market.
That’s important because this year may or may not be the year that kicks off a genuine housing bubble. The housing stats since November have been an ambivalent will-we-won’t-we mix, and that’s continuing. So far we’ve been leaning more toward the won’t-we side, but March showed signs of a shift. April doesn’t appear to have supported that. Inventory is still low, but the number of sales finally dropped, and there are some indications that prices are starting to plateau. Those are both really good signs that the market isn’t getting frothy and the growth we’ve seen in the last few years have been a natural correction in response to the recession. It’s not definitive, though, and we’ll have to keep watching the numbers as the year continues. If sales continue to fall and prices hit a definitive plateau, we’ll be in good shape. Give us a couple years for inventory to correct toward something reasonable, and we might even see a sane market again.