Old Seattle Real Estate…is gone.
Experts have been calling a bottom for the housing market ever since the bubble began to collapse in 2006. They’ve been uniformly wrong. Are we finally there? David Stiff, chief economist of Fiserv, the financial-services technology company that produces the widely followed Case-Shiller indexes, says yes. The old Seattle Real Estate market is gone.
The evidences of a new emerging Seattle real estate market are everywhere. House prices nationally are expected to stabilize by the end of summer and start to rise by an annualized rate of 3.9 percent over the next five years. For the Seattle-Bellevue-Everett metro area, prices are seen rising at a 5 percent annualized rate. But that won’t come before an additional 3.3 percent price decline through the rest of this year. The Seattle area was late to the party, with prices reaching their peak in the second-quarter of 2007 compared with a national peak in the first quarter of 2006.
“There’s always a danger of being premature,” Stiff told me last week. “But a number of favorable factors are going to put a floor under prices.” Among them: better employment numbers, fewer markets dominated by foreclosure sales and bank-owned properties, and affordability at record levels. The changes are already taking place. Slowly but surely, the truth is emerging.
When the bottom hits, there’s only one way to go.
“Seattle is a very unique market,” Stiff said. Thanks to aerospace, software, life sciences and other economic assets, it has a deep, specialized labor pool making good money. He expects Seattle to stabilize sooner. Other data back this up. According to the Runstad Center for Real Estate Studies at the University of Washington, sales of existing houses in King County rose more than 12 percent in the first quarter compared with the same period in 2011, even as median prices fell 6.6 percent. Indeed, anecdotal evidence points to bidding wars for houses in the best locations, especially in Seattle proper.
The evidence that a new real estate market in Seattle continues to stack. House resales rose 10.9 percent in Pierce County and 18.5 percent in Snohomish County. Building permits for single-family houses are very slowly recovering, and apartment construction is booming in central Seattle.
Samuel Anderson, executive officer of the Master Builders Association of King and Snohomish Counties, said recently at Town Hall Seattle that he’s “feeling optimistic for the future of housing and the housing industry, even if the glass may still seem half empty to many of our members in the wake of the recession.”
One vote of confidence he cited is the quiet entry into the region of major builders, such as Toll Brothers, Henley Homes, Newland Communities, Lennar, Richmond American and Pulte. At the same time, he warned that tighter lending, loss of subcontractors and workers, limitations on developable land and lack of government officials to process permits risk holding back a recovery.
“What local elected officials found out in this recession and housing collapse is that the residential housing industry has been their ATM machine. My new best friends are mayors and city council” members, he said. Anderson also made the point that the region needs to embrace greater density inside existing urban-growth footprints and resist the NIMBYs. “The problem in many urban areas is that the community hates sprawl but doesn’t want increased density in their neighborhoods.”
New Seattle Real Estate is here to stay.
So, a bottom — at last? I’m prepared to buy in.
The New Normal won’t feel normal, even if for now, and for many, Seattle is an island of prosperity. If you’re considering home buying, don’t wait for the bubble to pop and miss out on this once in a lifetime opportunity to get in on the market while is at the bottom. When the new Seattle Real Estate market emerges it will never be the same.