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Tuesday, August 30, 2005

Is Seattle's Economy A Bubble Buffer?

The Puget Sound has built a reputation as a high-tech industry destination, with top tech companies such as Microsoft and Amazon.com calling the area home. Thanks in large part to companies like these; we have a healthy, growing economy. But as those who lived through Boeing layoffs in the 1970's know well, nothing is permanent.

A new report says Seattle-area biotechnology companies could save up to $1.2 million in yearly operating costs -- that is, if they move.

Places such as Vancouver, B.C.; Raleigh-Durham, N.C.; Sioux Falls, S.D.; and Denver have lower yearly biotechnology costs compared with the Seattle area, which ranked as the 18th most expensive in the country.
Interestingly, this both directly affects and is directly affected by the real estate market in our area. One reason many people like to give that the Puget Sound is somehow magically safe from price corrections is our growing economy. If Seattle becomes too expensive a place to do business, businesses could find it tempting pack up and move out. And that can't be anything but bad for home values. Also, if our "growing economy" is helping real estate continue its crazy upward march, and expensive real estate means high rents for office space, doesn't one of those have to give eventually?

Having high-tech depart our area is definitely not a situation I would like to see happen, since I happen to work in the industry. But if our state, counties, and cities continue down the path we're on right now, I definitely see it as something that could happen.

(Brad Wong, Seattle P-I, 08.30.2005)

1 comment:

kirchemaus said...

I work for a company in the Boise, Idaho, area. This company used to be in Mountain View, California, but the people who worked for the company couldn't afford to live in the community it was in, and costs of doing business were getting quite high there. In 1984, this company moved to Idaho because the costs of doing business are much lower here. I moved here from King County. There, I made more than $50K per year but could not afford to buy any sort of house. Here I started in the 15% tax bracket, but bought a house within six months of moving here. And my mortgage payments are less than what I paid for rent for a 400 square foot cabin in Renton. I think the housing trends in King County are crazy, but now the same sort of thing is happening here. I'm glad I found a place to live before it started getting too crazy.