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Saturday, March 18, 2006

The Increasing Expense Of Living In Seattle

It's getting more and more expensive—twice as fast as the national average—to live around the Puget Sound:

Consumer prices in the Puget Sound area increased 1.3 percent over January and February – almost double the rate of inflation nationally.

Housing prices, up 2.4 percent, led the increases in the Tacoma-Bremerton-Seattle area, the Labor Department reported Thursday. Grocery prices were up 1 percent in the two-month period, while alcoholic beverages poured a 3 percent increase.
If only our wages were going up twice as fast as the national average, too. Heck, I think we'd be in okay shape if our wages were going up at all.

(News Tribune Staff, Tacoma News Tribune, 03.17.2006)

10 comments:

Dr. Potts said...

hey Tim - did you make or are you making ?? Hit me back

Anonymous said...

Anyone else notice the land shortage has somehow changed course?

It's been a while since I checked on zip 98072 (woodinville).

Currently there are dozens of multi-acre parcels ranging from 1-30 acres available for sale. None of this was on the market just 2 months ago.

God must have made more!

TJ said...

Seattle is way over extended. It was a very comfortable place to live.
But everything changes. The monorail broke down - and they can't figure out how to build a commuter version. now they want to ruin the viaduct by replacing the viaduct with one that does not have the spectacualr view. Looks like the all the good things about the place are being ruined and overcrowded to boot.
Won't be surprised to see a decline - will the last person leaving Seattle please turn out the lights

S Crow said...

Speaking of Condo's and living expenses......

Just got back from San Diego. Seattle is in a very normal market right now in comparison.

Inventory in SD has skyrocketed. You should see the Sunday paper ads down there regarding condo's and new construction homes at "$25,000 off this weekend only" etc... If we had that here in Seattle, sheesh.

Today I bumped into a very nice couple from Orange County, Calif. (Buena Park area). They were house shopping in Snohomish. They felt like kids in a candy store. Big difference in what money buys up here. I asked about the market and inventory levels in OC. They really were not aware of market stress as they were long time homeowners. I asked them if they put their home on the market yet. Said no.

meshugy said...

I don't believe we're going to have a huge drop in prices anytime soon. Seattle's job growth is 4 times the national average...and these are high paying jobs in the tech industry (Google is moving an office to Fremont).

Things will probably level off and maybe go down slightly. But a huge drop isn't going to happen unless Microsoft tanks, Boeing gets beat out by airbus, and people stop using Adobe acrobat reader.

Anonymous said...

Housing prices must keep pace with the mean (~3%/year), it has since records were kept back in 1890... Seattle home prices are overvalued and WILL return to this mean (currently around 26% overvalued)... very simple economics people. No amount of job growth numbers or limited land arguement's going to explain away the low-interest rate Greenspan inspired asset inflation we've seen...

Good luck to the recent homeowner, you're going to need it

seattle price drop said...

Wow, some of these price drops are really starting to excelerate! Check this out:

4706 35th Ave NE (nice 4/2 craftsman, 3000sf)
Original Asking Price: 750,000
after 21 DOM: 715,000
after 24 DOM: 699,000

51K off in 24 days- not bad!

Keep waiting folks, this is just the beginning.

Anonymous said...

Of course it sold for $435,000 in 2004

seattle price drop said...

Anon-

Yes. that's the most intriguing thing about this whole thing is just how FAR these prices are going to have to drop to get back in line with reality.

Buyers: Do you really want to risk your own financial future just to line the pockets of someone who did nothing more than "sleep in their house for a couple yerars?" I think not!

I've said it before and it's worth repeating: Go to the county website and check previous selling price BEFORE you even consider making an offer on a home.

Somebody who paid 435K in '04 has nothing to lose by selling for 475K in '06. If they HELOC'ed themselves into debt and therefore "need" the higher selling price, THAT IS NOT YOUR PROBLEM.

On the other hand, if you buy that place now for 700, 600, or 500K, watch out. You may very well be holding a depreciating asset for many years to come.

The US economy is weakening. It does not matter what you want to believe about the Seattle area economy because here's a news flash folks: We are part of the USA!

Even if you believe all the pie in the sky rhetoric about how great the Puget Sound economy is, we are still a part of the larger boat.

And for those of you who believe that the "recovery" of the past several years has been a complete sham, further evidence that we are about to embark once again on a good, old fashioned wealth=wealth and debt=debt economy (as oppposed to this debt=wealth cycle that we've been in):

This statement by the new Fed Chief, Ben Bernanke:

"Savings will increase over the next couple of years, along with a moderation in housing prices".

For a discussion see Tim's link to "The Housing Bubble Blog", Tuesday, March 21.

When the guys who run the ship start talking about saving, it is not the time to be a holder of huge debt. And about the ONLY way Americans can even BEGIN to start saving again is for the price of housing to plummet and get back in line with wage reality.

seattle price drop said...

The "sold" prices for end of Jan '06 February '06 are finally showing up on the county website and they are pretty darn encouraging. Of 57 properties, 40 sold below asking price.

Most of these homes are located in the Ravenna,Laurelhurst areas with a few up near Lake City.

I'm not going to type out the addresses- don't have the time- but the numbers speak for themselves.

Total properties that sold for their asking price: 8

Tattered Remants of the bidding wars:
Asking Price Sold
869,500..............877,500
850..................870
600..................620
474,950..............482
419..................425
399..................420
350..................363
259,950..............265,250

Signs of things to come:
Asking Price Sold
1,795,000............1,600,000
1,560,000............1,465,000
1,375,000............1,275,000
1,350,000............1,200,000
1,100,000............1,049,000
889,950..............880
869..................850
865..................850
749,950..............725
725..................650
750..................680
699..................679
699..................695
695..................668
649..................610
649..................598
630..................600
599,950..............597
574..................545
559,500..............546
529..................506
527..................524
499..................470
499..................459
475..................453
469,950..............450
459..................447
459..................449
449,950..............432
449,900..............415
439,900..............433
435..................430
439..................420
415..................385
415..................405
412,500..............385
369..................357
369..................335

Looks like the heady bidding war days are really wrapping it up. Not sure if those recorded here even live up to the name. Does 6K-20K qualify in the "war" category?

The price reductions are bigger money amounts than the price increases.

Oh Happy Day. It's really starting.