"Home Prices To Climb Substantially"

Here's another gem from Ms. Rhodes of the Times:

Q: We bought our house in 1996 for the same price as the sellers who bought it in 1990. We'd like to buy another house, but are hesitating for fear we're about to enter another zero-appreciation cycle. Are conditions right for that to happen?

A: Let's take a historical look at those conditions.

The year 1990 was the high point of a brutally hot housing market that began two years earlier. In 1990, 50-plus King County neighborhoods recorded appreciation of 30 percent or more, according to a Seattle Times analysis based on price per square foot of single-family homes sold that year.

Fueling this, recalled veteran property appraiser Alan Pope, was a strong economic base that was adding thousands of new jobs, attracting both investors and new residents from other states.

In 1991, runaway appreciation stopped. Home prices rose only modestly for the next few years. Why? Again it was the economy, said Pope, owner of Alan Pope & Associates in Redmond. Boeing restructured and thousands of jobs were lost through 1994. The Japanese economy took a nosedive. Pacific Rim investment money shriveled.

Now we're at war, and negative economic indicators are on the horizon, most notably spiking fuel prices and a slow but steady rise in mortgage interest rates.

Are those negatives enough to offset an otherwise robust local economy and cool our home market? Only time will tell.

However, after weighing all factors, Pope anticipates Puget Sound-area home prices to climb substantially this year and next, mostly because the region's major employers, including Boeing, are doing very well.

I have a hard time believing that housing prices have room to "climb substantially" for two more years. Unless all these Boeing and Microsoft jobs are $100,000 gigs, which I kinda doubt.

(Elizabeth Rhodes, Seattle Times, 04.30.2006)