Forbes' "Smartest" Cities—Where's Seattle?
I'm sure that those of you who have been reading Seattle Bubble since at least April recall the AP study that heralded Seattle as the "most educated" city in the USA (or "smartest," depending on whether the article author made the false assumption that more education == smarter). According to the April study:
Forty-seven percent of Seattle's adults hold bachelor's degrees, the strongest proportion of college-educated residents in any big city.However, a new study by Forbes lists America's ten most educated cities (again mis-titled as the "smartest cities"), and Seattle is nowhere to be found. Here's the complete list:
#1 Boulder, COThe methodologies of the two studies sound fairly similar, so I'm left wondering how Seattle went from #1 to below #10.
#2 Bethesda, MD
#3 Ann Arbor, MI
#4 Cambridge, MA
#5 San Francisco, CA
#6 Durham, NC
#7 Fort Collins-Loveland, CO
#8 Washington, DC
#9 Bridgeport, Stamford, and Norwalk, CT
#10 San Jose, Sunnyvale, and Santa Clara, CA
Using data from Sperling’s BestPlaces, we looked at data from the 200 biggest metropolitan areas in the U.S. and ranked them based on the percentage of the population age 25 and over with at least a bachelor’s degree.Whatever our percentage of degreed adults truly is, I don't think that an "educated" populace is some kind of magic bullet that will keep housing prices rising. I only really bothered mentioning this because some people made such a big deal about Seattle's #1 position in the April study.
Personally, I don't put much stock in Forbes, but I know a lot of people do, so being left off of their list probably comes as a bit of a blow to the collective ego of our city. Oh well. At least we were the reigning champions for eight months.
(Elisabeth Eaves, Forbes, 12.15.2006)
21 comments:
Hee hee hee. Are you saying that an expert's interpretation of statistics can't be trusted? Whatever does that mean for our society?
Here's a news tidbit: among the last gasps of the exiting do-nothing congress is another Hamiltonian gambit, a tax deduction for PMI.
Obviously, someone thought there wasn't enough loose money out there. We can probably thank NAR PAC.
Perhaps Forbes saw the kind of homes people are taking 50-year mortgages to buy in Seattle, and changed their editorial position on our collective intelligence....
Are you saying that an expert's interpretation of statistics can't be trusted?
I think he's saying he rather trust his interpretation.
I first came to Seattle for a tech job (read: DOTCOM) and lived at First and University. But, talk about living in city blight. Had to get out as soon as possible. Luckily, the bubble burst, I lost my job, and found another that allowed me to move out os Seattle. Honestly, how do people live in a place like that? I now live in the woods outside of Gig Harbor, doing what I did in Seattle, but breathing fresh air, living with less stress, and my neighbors are more real, personable, and there are no deadbeats asking me for money when I leave for work in the morning.
Where are all the Microsoft Genius's? As of January 2005, they are in India, where MS has opened a Research and Development Office. Is more of that coming? Will Microsoft be the next Boeing? Rumors are floating. I, personally, don't think that will happen, but one of my investor friends is starting to get worried and is thinking of putting all of his units up for sale. I told him MS is hiring for here and it doesn't seem that it would be smart to bring a bunch of people in and then move out of state/country. the brain pool is definately elsewere though.
Folks, you seem to have a lot of data on the housing prospects in 2007 and forward. I would like to request your advice for/against considering buying a new home (new construction) in the redmond area.
Over the past year I have seen prices climb to astronomical levels in properties being built on 116th St on Redmond (education hill area). In your expert opinion are those prices going to "stay" the same in the years to come?
I see that the real estate marked is 'slowing'. Prices for 30 year old homes are now showing signs of reduced price. But in my opinion even after price reduction, some these homes are so over priced. Whats your take here?
Last but not least what would you price a new construction of 2500 sqft in the education hill area at today?
I'm seeing reports that inflation in November was 2%. That means a 24% annual inflation rate. Maybe housing prices won't drop. Instead the value of the dollar will adjust so that the current prices are reasonable. All those people who have been saddling themselves with cheap debt suddenly are suddently starting to look really smart (or lucky).
Instead the value of the dollar will adjust so that the current prices are reasonable.
Alan, maybe, but wages aren't budging, and affordability is the key to this argument. This isn't the 70's when wages were rising with the cost of living. Offshoring has made stagnant wages a reality for everyone, from factory workers to IT workers to salesmen.
That's not to say that offshore workers are a better buy. They frequently aren't as experienced, well-educated, and usually lack the work-culture American businesses require. However, the threat of offshoring is a great club to beat labor costs down.
If wages don't rise, affordability remains the driving factor for the housing collapse, and an new international labor pool doesn't bode well for wages.
At a 24% annualized inflation rate, wages would have to rise (although perhaps not at a real rate).
I think the 2% being reported is an annualized rate anyway so my whole point is moot.
Now if you will excuse me, I am going to go back and hang out with my good friend Chicken Little.
I found this very interesting article by the PMI Corporation that perdicts the riskiness of major markets. Currently the riskiest market is Boston with a 55.3% chance of price declines in the next 2 years.
http://money.cnn.com/2005/08/03/
real_estate/buying_selling/pmi_
riskiest-markets/
Low on the list is Seattle with a 6.4% chance of price declines in the next 2 years. Thats the lowest for any city in the West.
So the Seattle market has is predicted to be strong for at least a few more years! If you compare housing prices to other large growing cities Seattle's prices are much lower compared to other markets.
For all you true BEARS, there is now a FUTURES MARKET (where you can bet wheither prices will increase or decline) for Real Estate. Put your money where your mouth is and Short the Seattle RE Market! As for myself I bought a condo right behind the convention center this summer and BULLISH on the Seattle market.
FinanceGuru,
I covered the latest PMI report back in September. Summary: Seattle's PMI Risk Index is indeed low, but has increased 139% since the summer of 2005. Not exactly something to get excited about.
As far as the futures market goes, it's not yet possible to take your advice to "Put your money where your mouth is and Short the Seattle RE Market!" There are currently only ten individual cities that are included in the futures market, and Seattle is not one of them.
That article is a year and half old financeguru. That was back when 'soft landing' was the snazzy phrase of the day.
As we all know, none of that 'soft landing' BS happened. Price drops in Boston are getting ugly now. I hope for your sake the condo market stays strong, becuase when I look around, all I see is new inventory going up on all sides of you.
Nothing worse than competing with a distressed builder when it comes time to sell.
Ok, sorry about the date on the article, yet from Tim's assessment of the market PMI, Seattles risk of decline would be approximately (6.4% X 139% = 8.9% risk of price declines).
I mainly bought a condo to get in the RE market and it is extremely close to downtown...as I walk to work. At least save money on parking at $10 bucks a day. Also bought for the long run, so a potential few year decline would not impact me greatly.
FinanceGuru,
You bought this summer, at the height of the condo craze in Seattle. Have you noticed how many new condo buildings will be flooding the market in 2007, 2008 and 2009? I know that in my condo complex there are at least 6 units for sale, two of which have been on the market for over 100 days.
I walk to work as well (even though my parking is paid for) and I too enjoy living downtown. However, I am renting a condo as of now, waiting to see what happens with prices while saving all my cash for a down payment.
If you've read the FATREPORT lately, you'll see that the condo market has been softening a lot lately. It's probably going to get a lot worse.
"I'm seeing reports that inflation in November was 2%. That means a 24% annual inflation rate."
Only if you ignore the inflation data from January through October.
PPI is currently up about 1% on the year.
IF YOU CAN, BUY REPOSSESSED HOMES
There's a RE magazine out in King County called the Investor's Edge [a realitor told me about it], the subscription is a bit pricey, but its always a big book of repossessions to grab up. Here's the 11/2006 Wall Street Journal report on reposessions in America in general [why let the attorneys get 'em all?]:
http://homes.wsj.com/buysell/markettrends/20061130-hagerty.html
Now, I could go on and on about not buying that perfect house, but who cares when ya get 'em for 50 cents and less on the dollar [cash only].
Save your money and grab up future and present bargains, just like savy realitors do. Buy gold [perhaps]?
Dr Roubini is reknown for filling in where Bernanke won't go. You might want to cash in your stock too before 2007?
http://www.rgemonitor.com/blog/roubini/162056/
Can any of you share your opinion on Redfin.com agents when you have narrowed down the house you want to buy (new construction) and found it urself?
Can you guys share some advice with me regarding asking the buyers agent to represent the seller as well? In case when we have found the house entirely by ourselves, will this open doors to 'asking' for a percentage of the comminsion be given back to us? Thanks!
Don't do it.
This is like having the prosecuting attorney also acting as your defense attorney. If things go sideways, you want an agent that ONLY has your interests in mind.
From CNNMoney
America's smartest city
Seattle, WA
Key stat: 52.7 percent have an undergraduate degree
http://money.cnn.com/popups/2006/real_estate/best_worst/3.html
They used US Census info for that story... So who knows?
asking the buyers agent to represent the seller as well
In this region, you can't ask a buyer's agent to represent the seller as well. Normally, the seller only puts a house on the market when he has an agent under contract. At that point, it's actually impossible for anyone else to represent the seller in a transaction for the property, until the listing expires. If it's a good deal, you won't have that much time.
It is possible to make an offer on a house without an agent. If you really want to do so, talk to a good mortgage professional, preferably one who is certified for financial planning. Get yourself a loan and a letter of credit. Then find an inspector willing to make appointments on short notice.
Can any of you share your opinion on Redfin.com agents when you have narrowed down the house you want to buy (new construction) and found it urself?
If you are ready to learn this on your own, why bother with someone who just checks over paperwork? When it comes to the investment value of a home, Redfin practices plausible deniability. It seems you want a good deal, so you might do better by learning about neighborhood apreciation and financing than by fishing for a kickback in the most complicated way possible. You can as well negotiate for cash at closing on your own, especially if you learn the above lessons.
In case it wasn't obvious at this point, I'm a real estate professional.
Post a Comment