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Sunday, November 08, 1981

Wednesday Open Thread

This is your open thread for today. Please post random links and off-topic discussions here.


Terry said...

There is a good Nov 7 post on Ben Jones' "The Housing Bubble Blog". ""We're Just Getting Started" In Washington" and associated comments make for some interesting reading.

wreckingbull said...

Especially those comments about Spokane. Spokane is getting VERY bubbly, especially in the South Hill area. I am quite sure that they will fall harder than us. I also think they are about 3-6 months behind us.

Now, if you have the guts to buy on the north end of town, you can still find a deal or two. Just make sure you can handle the smell of meth cooking in the morning.

Banjo Willy said...

I don't see this commented on very much, but I think part of the reason prices have held and inventory hasn't grown astronomically is the lack of upgraders. In a healthy market, people who have equity in their homes and growing families will upgrade to a bigger, nicer, more expensive home.

With all the price appreciation Seattle has experienced, many folks who would normally upgrade can't afford to. I think from this we should expect to see less inventory growth in the less expensive segments as people hold on to the homes they can afford, while the more expensive segments grow substantially.

I don't think we'll see dramatic price drops in the less expensive segments until people's ARMs reprice over the next several years, forcing people into foreclosure and growing market inventory. How widespread this might is hard to gauge.

The sad part about all of this free market affair is that people's housing costs as a percentage of their income have grown from 30 to 50%, mostly likely reducing their retirement savings in our largely privatized 401k system. Most people today have less than $50K in their 401k on retirement. By spending so much on their homes, most people are making a very substantial investment that may or may not have a good enough return in the long run.