It is generally accepted that the more desirable an area is, the less affordable it is to live there, and specifically, to buy a home. For instance, homes in San Francisco have always been ridiculously expensive—even considering the higher median income there—because it's considered by many to be a highly desirable place to live.
For reference, here are the affordability indices (definition) for a few cities (using county-wide data from City-Data.com) around the country as of the year 2000.
|St. Louis, MO||181|
|Sioux Falls, SD||176|
|San Diego, CA||87|
|San Francisco, CA||58|
|New York, NY||20|
Allow me to lay out the point of this post in a very logical way.
Premise: More desirable = less affordable (and vice versa)
Fact: King County's affordability index dropped 26.7 points 2000—2005.
Fact: The affordability indices of many less-desirable locations were either stagnant or increased from 2000 to 2005.1
Query: How has King County become 29% more desirable since 2000?
This is a completely serious question. If affordability was dropping nation-wide, then I could buy the argument that massive home price gains are due to "fundamentals." However, that is simply not the case. Huge increases in home prices have been largely limited to cities on the coasts.
If someone would care to make an argument explaining how our area is 29% more desirable now than it was in 2000, I'm all ears. Otherwise, I'm inclined to believe that the 29% affordability drop has more to do with speculation than with "fundamentals."
1For instance, the affordability index for St. Louis, MO dropped just 4 points from 2000 to 2005 (source), while the index for Houston, TX actually increased 20 points (source).