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Wednesday, February 01, 2006

King County: Prices Up, Wages Down

Thanks to the reader that pointed out the story on CNN regarding the recently released statistics on wages.

Real wages are not exactly going through the roof.

For the 24-month period through the second quarter of 2005, the inflation-adjusted wages of an average American grew just 1 percent or so, according to statistics reported by the Bureau of Labor Statistics (BLS).

Despite overall sluggish wage growth, there are still areas of strength; the majority of the 316 largest counties in the United States — those with employee rolls of 75,000 or more — reported average wage increases that outpaced inflation for the 24 months ended June 30, 2005, the latest county data available from the BLS. Forty four of the counties had real wage growth of 3 percent or more during the period.
CountyState2003 Wages2005 WagesNominal ChangeReal Change
Yes that's right, of the 309 counties for which both 2003 and 2005 data is available, our very own King County ranked #308—second from last. In case you were wondering, the median price of a house in King County shot up 27% during that same period.

Update: I added the other counties from Washington state to the table above to give additional context. As you can see, none of the counties in the greater Puget Sound area have been performing particularly well in the wage growth department, although none have been performing nearly as dismally as King. Yay for us.

(Les Christie,, 01.30.2006)


Anonymous said...

In fact, the article clearly states that there are 2 counties in the US that experienced negative wage growth in '05.

One was in Georgia and the other was, you guessed it, King County, WA.

So much for our screaming economy that's going to help prop up RE prices while they fall everywhere else.

Lawrence Yun, shame on you.

Anonymous said...

It's a good thing the average Joe doesn't buy houses with wages.

S Crow said...

Seattle Metro area is bulletproof.

Smart folks, no debt, great employment base, people saving money.

Median prices never go down. People never sell at a loss. No one geting 100% loans. Everyone putting down 10-20%. Fixed rates are best option.

Anonymous said...

Admin - I was just overhearing a friends roommate on the phone confirming that she was going for 100% financing on a belltown condo... on her $32K year retail job... sorry bout that.

inseattle said...

Dear dear, looks like another FB has been added to the long list.

S Crow said...

Anonymous -

No need to be sorry. Obviously I was being heavily sarcastic. Yes, the insane advice borrowers are getting from some LO's and Realtors , such as your friends roomate getting a 100% loan continues....

If they close the purchase, keep tabs on it over time. Perhaps they will survive or perhaps they will go into default.

Anonymous said...

I apologize in advance for using this forum to ask a question that is pertinent to my personal situation. However, all of you who have posted seem to be well-informed about the housing market in WA and I believe that you are the ones who can give me the best response. I currently live in San Diego and would like to purchase in rural Northeastern WA sometime in spring - fall. What do you think the housing situation there is like right now? Any ideas on whether it will "deflate"; if so, any ideas on when? If no ideas, any info on where I might obtain more info on this area? Thanks in advance!

biliruben said...

Stevens, Pend Orielle and Ferry county have median home prices that are all up 17% or so. Okanagon is up 27% year over year as of the 3rd quarter.

That would worry me a bit.

I would consider renting for a year or two and see how things shake out.

Lots of good county-specific data here:

Soini said...

Ah, it warms my heart to live in the most overpriced city according to Forbes, two years in a row.

Go Seattle!

Anonymous said...

I see Pierce County actually went up in real wages, and is off only a -0.5% of real wage growth. Probably because of the influx of commutters moving down from King County.

Anonymous said...

It will be interesting to see what happens when the regulators start clamping down on stated income mortgages.

biliruben said...

What regulators?

All I've heard is bluster. There will be no serious clampdown. Maybe a high profile case or two just to make it look like the regulators are making some attempt, but nothing that actually influences loans.

What will stop the practice is when they can no longer profitably package and sell them off as mortgage backed securities. If the the lender has to actually hold that stinky, rotten mortgage with an almost guaranteed default written all over it, then they will stop writing them.

Anonymous said...

Just wait until the Fannie Maes and Freddie Macs get bailed out by your truly, the taxpayers. Don't worry, its coming 2008 at the latest....

biliruben said...

The taxpayer has no statuatory responsibility to bail out Fannie and Freddie, though everyone thinks so, and that implicit guarantee is built into the interest rates.

It could well take trillions to bail them out under some worst-case scenarios (who the heck knows what their books look like - they certainly don't know themselves), and not even the federal government can take that kind of hit.

It may be time to start making some not-so-subtle hints that if they fail, they fail.

Anonymous said...

It may be time to start making some not-so-subtle hints that if they fail, they fail.

Ah. How about 'they are too big to fail'. Shades of the S&L crisis? Implosion of that secretive hedge fund in the '90s? Asian banking crisis, mexican banking crisis...

Anonymous said...

Biliruben, thanks for the information on northeastern WA! Will look up the site and do more research.

Anonymous said...

I've been checking the Coldwell Banker site for N. Seattle properties since early Dec.

The amount of off the list/back on the list and jumping around with price deductions beginning last week of Jan. is enough to make you seasick just trying to keep track of it all.

I seriously doubt that prices are up unless by
"prices" they mean original asking price.

Big difference between asking price and selling price.