Real Estate Market "Magic"
This article in the Mercer Island Reporter cracked me up, if only because of the headline: Island real estate market still magic.
Fewer homes have been on the market on the Island over the past six months and slightly fewer homes sold as compared to last year. Prices for those that did sell were up 15 percent over last year.Home prices continuing to appreciate at a "good steady" rate while wages continue to stagnate would indeed be magic.
"The market in the first half of this year has remained strong," said John Deely, broker of the Mercer Island Coldwell Banker Bain office. "Again, this year we have seen an increase in both the average and median prices for active, pending and sold properties, however the rate of increase has slowed from previous years."
Island sellers have waited longer this year. The average time on the market for sold properties was 86 days as compared to 59 days in 2005 — nearly four weeks longer.
June, however, has been a good month. Sixty Island homes sold — more than double the number last June. And some properties have had a lot of action.
...
While interest rates have been rising as of late, [Mercer Island John L. Scott broker D'Ann] Jackson believes home prices will continue to appreciate in King County, although not necessarily at the present pace.
"We live in a vibrant area that continues to attract new residents, thanks to the region's improving economy, Jackson said.
"I think we'll see good steady growth (in home prices) in the months ahead," she said.
(Reporter Staff, Mercer Island Reporter, 07.13.2006)
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35 comments:
Home prices continuing to appreciate at a "good steady" rate while wages continue to stagnate would indeed be magic.
While I don't agree that pricing will appreciate in the near future, I disagree with your oft-repeated assertion that wages and housing prices are that tightly coupled. It's not a given that home prices must only appreciate at the same rate as wages. I'm sure you've heard of the elasticity of demand? Certainly NY, SF and LA have a long history (much longer than the current "bubble") of appreciation at rates greater than median wages. Some of this is driven by wealthy people, but some by higher than expected demand from average-wage earners. In many cases, the middle class have been driven out of these cities, but that hasn't caused housing to crater there, it's just led to more stratification (which is another issue) and increased demand for any property that's below median price (no matter how small/shabby).
There are also goods that depreciate faster than wages (electronics) or that remain relatively constant (cars) with respect to inflation. My point is that wages are not the only driver of prices. Simple economics.
I'm not arguing that prices will rise indefinitely at any rate for housing - as no one will be able to afford them (I can do the simple math). But the housing market is more price inelastic than you keep claiming, so I do not believe the wage market stagnation support your assertion price appreciation will not continue, or more directly, that we're in a bubble and prices are far away from any level of support. IMHO, this doesn't mean we're not in a bubble, just that wage stagnation isn't evidence of that.
I like the news.
More crazy people jump into this crazy market with crazy ARM, more likely we will see a sharp decline.
jcricket,
It is certainly true that there are many other factors at work than simply wages vs. home prices. However, I would argue that even in markets like SF or NYC, the historical increase in home prices has been at least somewhat tied to wages. Though it may have been increasing at a greater rate, it is still true that when wages increase more rapidly, home prices increase more rapidly, and vice versa.
What I believe is unique about the last few years is that an extreme disconnect between wages and home prices has emerged. It's not that home prices are going up a bit faster than wages/inflation, it's that home prices are going up, while wages go down. That's simply not sustainable.
But hey, I'm no economist. Maybe Seattle's new slogan will be something like "Seattle: All the stratification and class tension of the big cities, none of the rich culture or night life!"
I would argue that even in markets like SF or NYC, the historical increase in home prices has been at least somewhat tied to wages
The Tim speaks truth. One thing that us Seattle-ites are loathe to admit... SF and NYC'ers make much much more money than we do per-capita, the jobs are much better paying ergo the higher wages and more expensive real-estate
It's not that home prices are going up a bit faster than wages/inflation, it's that home prices are going up, while wages go down. That's simply not sustainable.
Tim, median wages have, in fact, been going down for 30 years when you factor in inflation, and yet housing prices across the nation are up over the same time period (not even counting the recent run-up).
Also, I know the NY and SF markets (housing and jobs) and people working there pretty well. I've even worked in Seattle, NY and SF at points in my career. People in NY and SF (and LA) make more than we do, but not enough to account for the difference in home prices. It's easily twice to three times as expensive to live in those places, and yet average wages are not two to three times what people make in Seattle. Even an upper-end wage earner like myself might only earn 50% more in NY, not 100 or 200%.
It's simply that housing demand is more price inelastic in those areas because they're so "desirable". Housing there (and maybe here?) behaves the same as any product that's become "desirable enough" to be that price insensitive.
Again, none of this says we're not in a bubble here or that NY isn't a bubble or whatever. I just don't believe wages are a useful barometer when looking at housing prices. Even given the massive run-up in prices for the last 5 years. Other factors will lead to the bubble bursting (if there is one). Like another war. A major recession (which will also hit the stock market for those of you who have your money there instead of real estate). Etc.
Maybe Seattle's new slogan will be something like "Seattle: All the stratification and class tension of the big cities, none of the rich culture or night life!"
On this I totally agree :-) It's one reason I wouldn't buy a high-end condo downtown. I'm glad to see them being built and maybe when I'm ready to retire downtown Seattle will be a lot more vibrant. But right now it's still pretty lame. Less lame than 10 years ago, but still lame for an east-coaster like me.
The recent middle east turmoil is going to throw a major wrench into the works of people who are living on the edge due to biting off more mortgage than they can chew.
Bring the pain
P.S. Go look at the DJUSHB indices. 50% drop in a year?
That is going to be the lead variable of the coming price decline in housing.
jcricket,
Obviously we can agree to disagree on whether or not wages are one of the useful barometers for measuring the housing market. However, I do have to take issue with your statement that "median wages have, in fact, been going down for 30 years when you factor in inflation..."
Here are two sources that demonstrate just the opposite: increasing wages after factoring in inflation. The Census website shows an inflation-adjusted increase of 27% for median incomes in the "West" from 1975 to 2003. The Washington State Office of Financial Management shows a 31% increase in average wages from 1990 to 2004.
Any way you look at it, wages have definitely not been going down for 30 years.
Have you ever smelled fear?
The situation Washington looks pretty good:
NAHB REPORTS WIDE STATE-BY-STATE VARIANCES IN LATEST HOUSING FORECASTS
Nationally, housing prices increased by 13.2 percent in 2005, with the strongest gains primarily in states along the East and West coasts. Much slower price increases are forecast nationally in both 2006 and 2007. While housing starts are expected to decline nationally, Idaho, North Carolina, Oklahoma, Washington and Wyoming are all expected to see their total starts increase in 2006.
Have you ever smelled fear?
Oh yeah! I like how they've lumped Washington in with Idaho and Wyoming... sheesh, whatever. I lived in Wyoming for 3 years and if we're statistically on par with that state as far as builidng growth? We're doomed. Wyoming was losing 2000 people a year and economically its a federaly welfare state...
Lies, lies and damned statistics.
I wish a few of our local builders would stop reducing their asking prices and offering commission incentives. We are not supposed to mimic other markets in the country.
Just giving you a hard time MESHUGY!
Regards,
S-Crow
your absurdly naïve and simplistic way of reasoning.
I don't think it's naive to point out that we'll be seing more home starts this year.
Any way you look at it, wages have definitely not been going down for 30 years.
Just a nitpick. The two data sources you cited don't quite prove that.
The Washington state data does not cover the period of the 1970s when inflation was very high. Remember, the metric was "wages adjusted for inflation".
The Census data is on household income. That's not the same thing as wages. However, I think income is actually a better measure of what you're after.
(If wages go down but people work more, they can still buy a more expensive house because their household income is higher.)
The Bureau of Labor Statistics tracks an "average weekly wage" in a quarterly census dating to 1975:
http://www.bls.gov/cew/
Remember, the metric was "wages adjusted for inflation"
Thanks for reminding Tim of that :-)
Here are some links that I believe support my argument that there has been 30 years of wage stagnation with respect to inflation. Here's some more detailed commentary on wage and income trends over the last 30 years. And some even more recent data about hourly wages actually being down this year with respect to inflation (despite "rising" 3.9%).
The Census data is on household income. That's not the same thing as wages. However, I think income is actually a better measure of what you're after.
This is a also a very important point. Household income has been going up a lot over the last 30 years. This is not, however, a result in the rise in wages. This is mainly a result of more women working, and more women working more hours (Women's hourly wages have been virtually stagnant too, their income increased because they work more hours, on average).
Of course the previous poster is right that a family's purchasing power absolutely increases as their household income goes up. This increased power does have some costs, of course (e.g. day care, gas + auto costs, etc.)
But hey, I'm no economist. Maybe Seattle's new slogan will be something like "Seattle: All the stratification and class tension of the big cities, none of the rich culture or night life!"
I love this!
I hear this housing bulls all the time: "And Seattle housing is WAY less expensive than NY or SF. It will keep going up!"
To which I reply, "Well yeah, because this is NOT New York or SF".
Seattle is a nice place. Good views, it's clean, and you can make a living - a nice little puritan-nanny-city by water.
In no way is it NY, SF, or Chicago. Now THOSE are "cities".
If you are talking about Seattle than this is remains to be seen, we still have another half year to go.
I suggest you go back and read my original post before you start calling me names.
In no way is it NY, SF, or Chicago. Now THOSE are "cities".
Oh right, with the murder rates, endemic poverty, and true ghettoes. Yeah we should aspire to that ;-)
This Seattle Bubble site is frustrating - RE Market Magic my ass. I think I'll take 6 - 10 months off from checking it - no offence to the host. I moved from Seattle to California in 2003 due to reduced job prospects following the 2001 economic implosions. How quickly people forget that things do not always go as planned/wished - and that economic fundamentals will prevail. The Fed inflated this housing bubble - a false economy to put off the inevitable - and the inevitable will now be even more painful - Yes, even in freaking Seattle!
The bubble is popping in real time in other places - places that were ahead of the curve vs. Seattle. But on this blog I still sense the belief that Seattle is "special." Yeah, well there are plenty of other special places in the country. Reading this blog is like going back in time 12 months on the national housing blogs.
When I relocated to California from Seattle in 2003 I breathlessly described the panicked-fortune-chasing-unprecedented-real-estate-mania I observed upon arriving. Friends in Seattle couldn't relate - the market was still slow and tame there at the time.
Well, I've in recent months I've been to Phoenix/Scottsdale, San Diego, Miami, various oh-so-"special" LA close-in and distant neighborhoods. This thing is happening folks and it is coming soon to a neighborhood near you.
Actually Anon,The bubble's already bursting here. You'd just would not know that for sure from reading this blog.
It's frustrating.
actually, it really isnt here yet.
Though the numbers are slowly trending that way in terms of listings and sales, there's still barely over a 2 month supply of houses on the market. You're just not going to get a crash with those kind of numbers. There were months on end in the early part of this decade when the supply was over 3 months, even as high as 5 months on occasion.
I wouldn't be surprised if the ball shows that it's starting to roll a little faster on the next few mls month end reports, but to say that Seattle is going down a one way street right now is premature. Obviously many of us believe this to be true based on a myriad of other factors, but the numbers just don't support it yet.
-Jesse
Obviously many of us believe this to be true based on a myriad of other factors, but the numbers just don't support it yet.
Yes, we are nowhere near a crash yet. Inventory is way too tight, hence the huge MOM/YOY price appreciation we've seen over the last few months.
I think we'll see a more stable market next year. More inventory and a return to 3-6% appreciation (instead of the 10-20% we're seeing now.) But prices will still be higher...
Personally I need another Wife to send off to work..
since the 60s we have been sending our wifes of to work to make up the difference, problem is we only have 1 wife!! if we could have 2 or 3 wifes per household we could maybe make up the difference.
hell I would easily pay todays housing prices with a couple of 6 figure wifes helping to foot the bill. Lets change Washington into a mormon state... heck maybe the United States for that matter~!!
meshugy are you single? have a sister?
Isnt this how things in country been getting tackled by not 1 wage earner but 2... Problem is there isn't no one else to send off to cover the tab? Kids? good luck with that one.
My friends dog did get a credit card sent to him.. interesting I could get my dog a very large credit line, heck who would they chase "Fluffy The Dog?... how about a mortgage in Fluffy's name?
How about Fluffy the Housing Flipper.. Kind of Rhymes,,, heck we could sell get rich Dog Courses.. How your dog can be a flipper to~!!! my infomercial would follow Carlton Sheets late night infomercial... With Fluffy, Patchs and Boomer all barking on instant riches in credit card fraud and housing flipping all the while bragging about the fact they have judicial/prison system in place to handle there sorts.
Maybe a photo of my house up here in whoreline with dollar signs painted on the roof if I lose, that Tim can post here.
ha ha...I'll hold you to that!
since the 60s we have been sending our wifes of to work to make up the difference, problem is we only have 1 wife!! if we could have 2 or 3 wifes per household we could maybe make up the difference.
I nominate this for post of the day. Made me laugh out loud.
The wage statistics point out that wages (per hour) have largely been stagnant (or slightly declining) since the 70s. However, with a wife working 2 or 3x as much you'd think that would more than make up the difference. This would be true if inflation were a true measure of what it "takes" to have a comfortable living. Unfortunately, there are too many "costs" that are kept out of the inflation figures, especially recently, where the current CPI keeps out energy and housing costs!
This was Gregory Wharton's prime argument regarding inflation - that the true inflation rate is much higher than publicly stated. This is what accounts for the fact that most middle-class dual-income families have less purchasing power today than they did 30 years ago.
Which, to get back to the topic, is one of the supporting arguments that we're in a housing bubble (nationally). The argument being there has to be a point (doesn't there?) where people's debt loads would be so high that they just stop buying houses - even with exotic (risky, usurious) financing.
My only point is that may or may not happen in the near future. Banks have shown a remarkable willingness to create new loan types to keep their profits up, the Republican congress is not interested in reigning in the "free market" and the public has been stomaching it for 30 years. Plus there's always the housing stratification issue, which keeps prices afloat even in places where they long-since left affordability land...
My head hurts :-)
Yes, we are nowhere near a crash yet. Inventory is way too tight, hence the huge MOM/YOY price appreciation we've seen over the last few months.
Maybe... like I said the numbers are trending badly, but slowly. If that trend excellerates over the next couple months which seems possible especially if there's another rate hike on the 8th, then 0 MOM appreciation could definitely start in the first half of 07. February actually looked worse than July numbers wise.. but seasonally that's not abnormal in Seattle.
I think the Aug-Sep-Oct MLS numbers are going to tell us a lot about the future.
How about Inventing New Types of Rental Agreements, Creative Financing needs further creativity to support our idea of lower rents.
We could come out with 100% Interest rental agreements.. with low teaser rate interest rates for the first 1-2 years of the rental agreement.. Neg Amortization rental agreements...
I would stick in a SPIDER ESCAPE CLAUSE..
Any Spider that scares me within the stated period of the rental time will give me the right to Terminate The Rental Agreement.
Problem is I will find that spider even If I have to go to the pet store to buy it~!! after my low teaser rental period ends. After all im phobic to spiders over 1/4 inch bid.
meshugy-- Have you any spiders in Ballard... Before I introduce you to my Mormon Church, I want to make sure you get rid of all those spiders.
See in our marriage contract "I will also need to stick in a spider Clause.. Part of your obligation will be that you will be in charge of killing the spiders and servicing the mortgage. Also if your house doesnt continue increasing in value at minimum 8% a year "I will have a exit clause.
if this interests you get back to me. We will starting drawing up the paperwork, of course theres a few more requirements, Just minor things.
Getting Off Spider Clauses...
Problem with these Real Estate Bubble Blogs~!
To much energy is focused on the problems and outcomes~!!
Not, "Very much energy is focused on how to profit? there is always money to be made in any market.. .. Not saying whats being said is not true, Im totally with "WE HAVE NEVER BEEN HERE BEFORE.. I think we have great deal of risk ahead and very possibly experiencing some very troubling times ahead.
Still doesnt mean there isnt another way of doing thing? in fact most you guys all think that real estate money is all made in Actual Ownership.. there is ways of making money in real estate without even owning it.. simply contracts that control it for a specific amount of time with, litterly 000 risk of downside.
I have been reading these blogs for about 1 1/2 years, just because it really does give you an idea of where things are going. Also there is at the same time some tremendous people here that great insight. I have learned quite a bit from the people on Bens Blog, Another f@cked borrowere etc.
Its just so many complain and very little action seems to take place. I think the answer lies somewhere in-between...
Investors in many deals that purchased in about 2002 when interest rates were super-low are actually in many cases positive cash flow properties.
I would agree since about 2003 Positive Cash flow is hard to get.. Example Friend bought 2 properties in bellevue in 2002 each for about 240,000 dollars.. because interest rates were so low his payments are around 1,400 dollars. He rents both out at just over 1,500. a month..
Now those houses both on paper are worth over 500,000. dollars.. personally I would sell 1 of them, however what he is doing in not wrong.. Hes Milking the Cow..
another guy I know has over 15 houses he purchased well over 20+ years ago. Apparently they are all paid off and each every month he collects on average 15-1600. dollars from each one. His position is not one of really not caring about the market overall, he in for cash flow.
I agree the frenzy is at a point it doesnt make any sense anymore.. There are to many novice wanna-be-investors litterlying the field. Many have no business being in the game. Also many so-called home mortgage renters also have no business pretending to able to afford what they are doing.
The Term HOME OWNER ~! for people holding a Mortgage??
isn't the whole term "home owner..kind of a lie??
What does that make the Bank that holds the deed?
Since when does 000 down owing 200,000+ hypothetically make you actually the OWNER??
Doesnt someone renting for lets say 1 year contract? actually minus some contract restrictions have basically the same benefits as the Person That calls himself the Owner (Time Constaints and improving demolishing to name a couple) .. then again its called a contract and anything if agreed apon can be added..
Heck you could add Sublease with 10 year agreement at stated rents for that fixed period if agreed apon and signed. Just about Anything could be put into a contract..
SO WHEN A HOME OWNER SIGNS A CONTRACT FOR HOME OWNERSHIP..
Can they Demolish the House put in a Nuclear Dump????? HECK NOT..
Wouldnt the bank have a real problem if there house was just ripped down/demolished in many cases. After-all arent they the REAL OWNERS~!! Isnt in most cases Owners Simply and Abused Term that makes people feel Real Important like they have accomplished something.. Kind of A Stigma.. OWNERSHIP.. IM SO PROUD, "I'VE ARRIVED..
Personally I See the Term OWNERSHIP As part of the Sales Pitch...
There are several homeowners on this blog. I'm one. And, homeownership has it's drawbacks: maintenance, mortgage, etc.
On the other hand, I think homeownership has some pretty good benefits too. It's a place for a family to grow up in for one. Establish roots, per se.
If people choose to rent, that's ok too. You can establish community roots in a neighborhood that you rent in.
I grew up in the inner city and really enjoy being out in the burbs. Had Deer through the yard eating fruit just the other day and I watch air-balloon and skydivers across the horizon in the evening. A neighbor rents his lower basement out so the tennants enjoy our surroundings too, by renting.
Housing starts are a very bad measure of a bubble, really. Builders will actually ramp up starts as things crash, attempting to squeeze the last value they can out of deals they already have in the works.
Jcricket,
Sorry for disappearing from our discussion. The weekend got busy.
This is a also a very important point. Household income has been going up a lot over the last 30 years. This is not, however, a result in the rise in wages. This is mainly a result of more women working, and more women working more hours (Women's hourly wages have been virtually stagnant too, their income increased because they work more hours, on average).
I think you've hit on the root of our misunderstanding. I've been using "wages" as shorthand for "median household income." My bad. I would agree that wages are not an especially useful barometer for the housing market. I do however believe that median household income is useful. I'm making an argument about whether people can afford homes or not based on how much money they actually take home. Quality of life and required number of hours or spousal employment is a separate issue, in my opinion. That being said, I'm really putting myself at a disadvantage in the whole housing affordability issue, because my wife and I have decided to live off of only my income. She works, but we're not willing to put ourselves into a situation where we depend on her salary to meet our monthly expenses. Fortunately I make more than the "median household income" all by myself, but unfortunately, we still can't "afford" to buy a home.
My only point is that may or may not happen in the near future. Banks have shown a remarkable willingness to create new loan types to keep their profits up, the Republican congress is not interested in reigning in the "free market" and the public has been stomaching it for 30 years. Plus there's always the housing stratification issue, which keeps prices afloat even in places where they long-since left affordability land...
My head hurts :-)
Mine too. :^)
Hey Tim -
I don't disagree that household income is a fair barometer of housing affordability. I will say that stagnant wages, even with rising household incomes has a net negative effect on one's perceived purchasing power, especially because so many household expenses are not considered in inflation figures.
What I was/am mainly disagreeing with is the notion that "affordability" is the metric to which the entire housing market must adhere or else prices will automatically drop. My argument centered on the fact that that there are quite a few places where housing affordability has plummeted over the last 30 years, but housing prices have kept rising, discounting the recent run-up. The primary result is that wealthy people continue to live very close-in to those metro areas, and everyone else keeps moving farther out. What has not happened, however, is prices plummeting because the "average joe" can't afford houses in those "unafforable" areas. This stratification is either good, neutral or bad, depending on your point of view. I'm simply concluding that there is long-term, multi-area precedent for rising unaffordability not being a harbinger of a bubble.
This says nothing of any other signs we're in a bubble.
I will agree with that you can't continue the trend "forever", or extend it to every area in a metro-region. However, and I keep harping on this - there is no one real estate market, so analyzing county or country-wide trends will only help you so much.
She works, but we're not willing to put ourselves into a situation where we depend on her salary to meet our monthly expenses. Fortunately I make more than the "median household income" all by myself, but unfortunately, we still can't "afford" to buy a home.
This is a very conservative way of living, and one that will probably keep you more financially fit than 90% of the population. Good for you!
My wife and I can afford our home on just my salary, but our ability to "fully enjoy" our current lifestyle and save enough to have a retirement cushion (above the minimum recommended) is dependent on her income. We could make cut-backs, probably significantly, on "luxuries" if we needed to live for an extended period of time on just my income. I guess, we've chosen to live in a hybrid of "for today" and "for tomorrow". We save enough for retirement that we'll be fine (if down-sized) in all but the worst-case scenarios. However, we haven't dramatically sacrificed our standard of living now so that we're assured of an even better standard of living in retirement.
I will accept, however, that I'm not in a normal position. Combined we probably make 3x the median income, plus I got lucky in the dot-com boom (not retirement lucky, but enough).
And none of this makes me conclude that real estate is some kind of magic investment. I own one home, and I live in it, and it works for me. I'm not out there telling others to buy houses, or placing any bets (bullish or bearish) on the housing sector, real estate in America, real estate in foreign countries, etc. My head hurts too much as it is trying to understand what the economy's going to do in the next year to go all crazy like that.
What I was/am mainly disagreeing with is the notion that "affordability" is the metric to which the entire housing market must adhere or else prices will automatically drop. My argument centered on the fact that that there are quite a few places where housing affordability has plummeted over the last 30 years, but housing prices have kept rising, discounting the recent run-up. The primary result is that wealthy people continue to live very close-in to those metro areas, and everyone else keeps moving farther out.
While I definitely make a big deal about affordability, I wouldn't call it "the metric to which the entire housing market must adhere." I think it's a piece of a much larger, extremely complicated puzzle. That said, your point is well taken. There are definitely multiple areas around the country/world that have stratified in the way you describe.
I guess the real question is whether Seattle's price appreciation is an indication that we're on the road to permanent NYC/San Fran. style stratification, or whether it's due to a bubble. Are high home prices all we need to become a "world class city"? As I alluded to in a previous comment, Seattle seems to be lacking the deep culture and other amenities that cities with such stratification usually offer. Crazy-high home prices aren't necessarily indicative of a bubble, but they could be, right?
Crazy-high home prices aren't necessarily indicative of a bubble, but they could be, right?
Absolutely. Combined with the rate and breadth of appreciation there are definitely signs the housing market is bubblicious. I merely point out that it's not as slam-dunk of a case as some more bearish commentators make it out to be. There are many scenarios (NY/SF being one) that we might see played out in the next 5-10 years, depending on where you live in King County.
Are high home prices all we need to become a "world class city"? As I alluded to in a previous comment, Seattle seems to be lacking the deep culture and other amenities that cities with such stratification usually offer.
No, we need more than high home prices, and I would never say otherwise. I do think Seattle's a lot more vibrant than it was compared to 10 years ago, and that weathering the dot-com bust has given people the feeling that Seattle is "here to stay" (vs. what happened when Boeing had a big bust back in the early 80s). That's my pop-psychology take on the situation, anyway.
All this may be because I like vibrant downtowns, high-end amenities (theater, sports, etc). I think the condo building boom,
increased density and population growth is a good thing, especially in the long-run. To me more people = more restaurants, more nightlife options, more kids in schools, a larger tax base, more university enrollment, increased jobs, etc. I wouldn't want to live in a stagnant or declining area in terms of population, economic/job growth, etc. - no matter how bucolic it might otherwise be.
Personally, I think Seattle's on the cusp of either becoming one of the top "second-tier" cities, or just an overly-expensive, overly-gray boom/bust town. I hope it's the former, but fear it's the latter.
A lot of my thinking about Seattle's future is based on arguments in the book "The Rise of the Creative Class". I think the future of America in general is increased growth in that second-tier of cities (esp as a "metro area") and away from small rural towns, except as retirement possibilities.
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