Weitz Law Firm - 520 Kirkland Way, Ste 103 - Kirkland, WA - (425) 889-9300

Friday, November 5, 2010

Seattle Real Estate Recovery?

CNN MONEY recently called Seattle the 2nd best market for a real estate recovey.

Here's the article:
Seattle has become a world-class city with a diverse, vibrant economy. As a home to manufacturers such as Boeing and software providers such as Microsoft, the job market has held up better than average, with a current unemployment rate of 8.8%.

Home prices had a softer landing as well, dropping just 15.2% over the past three years, about half the national average. However, prices do tend to be volatile, according to Mark Fleming, chief economist for First American CoreLogic. The lack of available land for development is one reason for that volatility, as are political restrictions on growth.

After another modest price decline of 2.3% in the next eight months, the market should begin to turn up. Between June 2010 and June 2011, the city should see a gain of 6.2%. Averaged out, that means a 3.8% gain over the next two years*.

And while that may not sound all that robust for those jaded by the annual double-digit returns recorded during the boom, that performance will be one of the best of any large city during that period.

Weitz - If you'll notice, this article has no statistics whatsoever to back up their their claim. In the hopes of being a realist (rather than a pessimist), I will simply point out that Foreclosures continue to rise dramatically, the number of sales is very close to post WWII lows with closed sales in October (down 25% from last year), and bankrtupcies still continue to rise (up 18% from last year)....not exactly the fundamentals of a solid recevery. In my opinion, this is a poorly thought out, poorly researched article. Be careful putting to much faith in the prediction of CNN-Money.

1 comment:

  1. Hahaha!!! I usually recommend doing exactly the opposite of what reporters and analysts at CNN Money, Fidelity and even the I-Banks say.

    On this specific issue, the Puget sound area has another larger issue that this article seems to paint over. Boeing is essentially moving out and the union level workers with salaries in the 85-180K (with overtime) are now without jobs or soon will be. Management has also been steadily emigrating.

    Microsoft's hiring growth has significantly slowed down as well. In other words, the virbant industry of the area is undergoing somewhat of a chill. Other tech firms are moving in but they are largely satellite offices. Biotech is a glimmer (like DNDN) but those are generally small niche firms (at least so far).