Seattle Sadhappy Talk

Lucky Seattle: “You were late to the party, you didn’t get as drunk and you’re less hung over.” That according to Portland economist Joe Cortright, as quoted in a recent PI piece with the headline “Area faces bleak real estate forecast.”

Even luckier still: according to both Smart Money and Forbes, Seattle is going to get over that hangover faster than any other city in the U.S.

And the word on the street was similar at the Urban Land Institute’s Fall meeting in Miami: Seattle and San Francisco are the two best real estate markets in the country, but even though they’re on top, on a scale of one to ten they still only rank about a six.

Meanwhile the mood is understandably righteous over at Seattle Bubble.

OK. Few haven’t noticed that “Seattle’s getting their butt kicked, too,” as Williams Marketing President Leslie Williams quipped. So now the question is: how low will it go? My, but isn’t it exhilarating, as you’re slipping over the edge of the precipice, to look down and wonder where the ground is?

My take is that Seattle still has some relatively strong fundamentals. But what the hell do I know? Like all of us, I’ve never been over a cliff quite like this one before. Oh, and did you hear that Citi is laying off 52,000 people? I’ve got one of their credit cards in my pocket. So it goes.

7 Responses to “Seattle Sadhappy Talk”

  1. dave

    Looks like we’re going to be neighbors for a long while :P

  2. Ben

    “relatively” is the key word when describing the fundamentals of the area.

    Here is a fun game. Look around where you live at homes for sale. Divide the house prices by 3, and then think about how many people you know earn that much money.

    Historically, banks were wary of lending more than 3 times income for a house. The market recently re-learned that this is probably about as much risk as is healthy. So houses won’t move until people drop prices to 1/3 of buyer incomes, or buyers start to make a whole lot more money. Which of these two things is more likely in a recession?

  3. Dan Staley

    Ben, decent point overall but it neglects in-migration, which is a big driver in the Puget Sound area.

  4. joshuadf

    The counter example I hear is that it’s been more like 5-6 times income in some areas like LA for almost 30 years. (During the bubble loans for over 10 times stated yearly income were handed out in LA!)

  5. Spencer Noland

    Dan,

    I think this speaks volumes about us all, “I’ve got one of their credit cards in my pocket.” I don’t have a Citi Bank but I am guilty of carrying one not issued by a local bank.

    I feel the economic down turn we are facing has a lot to do with how we have spread ourselves and our money out beyond our local boundaries. And, by local boundaries, I also mean those bounds that our paychecks create too.

  6. flotown

    Yeah, I don’t think the whole “deflation” concept has fully got around. A tough time ahead for those of us in the biz of designing, building, financing new “stuff” when people won’t, in aggregate, need much more “stuff” for while. I think the rehab/renovation play is the place to be in this context, especially for energy and space efficiency. There’s a great paper and/or presentation circulating from the Pacific Coast Homebuilders conference regarding the trendiness of scarcity…

  7. dan cortland

    Embarrassed Seattle townhouse moves to Saratoga Springs, hides behind screened porch:
    link

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