South King County: Affordable Slum
There may still be one part of King County that has affordable housing, but apparently only to the detriment of pretty much every other quality of living measurement:
South King County residents have more problems with obesity, feel less safe from neighborhood crime, and are more likely not to have health insurance than those who live elsewhere in King County, according to a report issued today.Unless wages start to see some serious increases, if the cost of homes keeps going up for much longer, and rents really do increase the way that some people seem to want, it's only a matter of time before the Seattle area population stagnates and begins to shrink. I mean, if people can't afford to live, they'll leave, right? What other choice is there?
The Seattle Foundation's report, "A Healthy Community," says South King County lags some or all of the county on nine quality-of-life indicators, while scoring best in one area: affordable housing.
...
"We have been the poorest part of the county for years," said Duclos, chief executive officer for a nonprofit agency that provides temporary and permanent low-income housing.
Families with low incomes are drawn to South King County for affordable housing, said Kathryn Horsley, of Public Health – Seattle & King County.
"They may be able to afford to live there but they can't afford health insurance," Horsley said.
...
But the cost of housing in South King County has now increased to the point that some are moving to Pierce County, Duclos said. That means driving farther to jobs and spending more on gas.
What people need are better-paying jobs and help saving money, Duclos said.
"When you don't have money to spend, it's real hard to learn how to save," Duclos said.
(Steve Maynard, Tacoma News Tribune, 06.27.2006)
12 comments:
Quick show of hands...
Do you own property in the Seattle area?
Some of the comments seem like logical arguments from people with financial sense. Other arguments seem like people stoking the bubble theory in hopes of getting a crash so they have a chance at buying something.
"...people stoking the bubble theory in hopes of getting a crash"
I doubt theories ever crashed a housing market. Buyers/inventory determine price, don't they?
Interesting article:
Carl Haefling is a portfolio manager in Bainbridge Island. He is a deep value player in small and micro cap stocks, biotech and medical devices; he and often takes a very long term view. Carl is often a contrarian -- recently, he has been accumulating shares of Jet Blue (JBLU).
He also has a sharp eye for the Macro-environment, and I often find his take on events intriguing. Following the recent data releases on Housing, he recently observed:
I believe the stock market is predictive -- not reactive -- except for relatively short periods of time.
Housing stocks topped out in Dec and are now down up to 50% in numerous cases from those highs. It will take a couple of years at least for this scenario to complete itself. A significant decline in the housing market over the next 2 to 6 years is being predicted by housing stocks.
It takes time for the housing market to fully unravel, we are in the early stages of stage 1. Stage 1 is where the market begins to recognize that prices have reached levels that reduce affordability and thus the number of possible buyers. Sellers, who have been holding back selling for fear of not selling at the top, begin posting signs advertising their home, usually at prices that reflect the highest paid for a similar home, and suddenly the inventory of homes foresale explodes. This has already happened in many parts of the country. This stage may take one to three years to fully unfold.
Stage 2 is price cuts by those who are becoming convinced that the market has softened if they want to sell their home they better cut prices. Once those "reduced" signs start appearing, buyers start reducing offers, even on properties that have been already reduced. Prices will drop far lower then anyone thinks possible in stage 2.
Stage 3 is the exhaustive phase. Buyers are afraid to buy, investors have no liquidity, mortgage requirements demand a high down payment and supporting cash flow, and the press is filled with articles claiming real estate is a terrible investment. (which happens to be true in the previous 5 years).
There are serious other problems that will contribute to this cycle, including a decline in the buying power of the middle class, tilting demographics which will reduce the number of possible buyers beginning about 2010 for real estate and possible shifts in values of owning vs. renting. There remain other problems that are related to real estate but not thought of as being directly connected. A decline in the value of the dollar may force foreign owners of commercial and residential real estate to try and liquefy. Higher interest rates because of inflation or stagflation also impact real estate prices.
And one of the unseen values will be the desire to downsize as the cost of insurance (in some high risk hurricane states you cannot get homeowners insurance except through the state at 3 times previous cost) explodes, the cost to heat and air-condition accelerates, and the cost of maintenance become detriments to ownership.
A house may go from being something that we take pride in, to becoming a burden.
You can read comments about this articale at this link:
http://bigpicture.typepad.com/comments/2006/06/haefling_on_hou.html
Based on my observation, we are at the end of stage 1 and early stage 2 in Seattle.
Based on my observation, we are at the end of stage 1 and early stage 2 in Seattle.
We're not even at stage one...inventory in Seattle hasn't exploded. We're only slightly up from last year, and way behind 2004 and 2003 levels.
Additionally, prices have been appreciating at a feverish pace. We still have a long way to go to even get to stage 1.
What’s wrong with you Mesh? You have no self esteem left?
Actually, I agree with meshugy that we are still in Stage 1 at least on the East Side. I just sold my place this week and I was amazed at how much I got after 1 week with no price reduction. I told everyone my agent had priced it at least 25k, but either he got it right or I got lucky.
You must be in the right Eastside neighborhod then. In the Lake Hills area I'm seeing for sale signs everywhere and they don't seem to be selling. A little farther north (Redmond) and they seem to go pretty quickly.
OK. I'll raise my hand.
I own (well, own part of - the bank owns a reasonable-sized, but not massive chunk of) a house on Mercer Island.
I bought this house last year, moving from the bay area.
I don't tend to think prices are going to move much in either direction. But I thought that when I bought the house, and prices in my neighborhood appear to have gone up about 15-20% since I bought it.
In general, when I researched my house, it had gone up by 8%/yr since its last sale in 1987. A bit on the high side, but it's in a nice location, so I guess I could believe it.
So I'm not expecting much, but not really expecting to lose my shirt, either....
Following up my own post, when I bought the house, I paid points and got the lowest fixed-rate mortgage I could find @ 5.5%
Shiiiiiiiiiiiiiit.........
I know people in Bellevue who, while not being overweight, don't have health insurance, or money to save for thier future or an emergency because they "have to live in Bellevue"
Staying up with the Jones's ain't what its cut out to be.
inventory in Seattle hasn't exploded. We're only slightly up from last year, and way behind 2004 and 2003 levels.
Just once, just god-damned once Meshugy, look at something OTHER THAN THE MLS!!!! Do yourse'f a favor. That's like looking at the a thermometer and saying "oh, its 55ยบ, it must be raining!". It none-sensical and pointless, you must look at other economic indicators, especially macro-economic indicators. You sound like a friggin' day-trader, in fact you have a day-trader mentality, but YOU'RE NOT DAY-TRADING!
Just looking at te amount of price reduced listings on Zip, I agree with the poster.
We're at the end of stage 1/ beginning of stage 2.
In - city anyway. Don't know about the East side.
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