Jun 10 2009
Seattle Area Housing Market Finding Its Valuation Balance
Although the housing sales pendulum is still swinging, we Seattle area residents are starting to feel a little less dizzy these days. Because the Northwest market has not fallen nearly as far as other areas – like California, Arizona, and Florida, for instance – our rebound has been a little quicker. That all has to do with the fact that the economic climate here was not quite as stormy as in much of the rest of the country. Knock on wood.
One buzz word that seems to be surfacing these days is “overvaluation” – that is, that with the big boom in tech and other industry in the past five to eight years, housing prices climbed much faster than anywhere else. So right now, given the bust in some of those industries, our market is trying to compensate for that meteoric boom with a stabilization factor. And what that means is that overall, housing prices may still need to drop a bit in order for us to come even with the rest of country. Not far, not a big drop, just a balance.
Although the Northwest housing market suffered less than others, Washington State saw some of the country’s highest rates of foreclosures and mortgage delinquencies. Once the lenders work out the mortgage lending kinks, and once the employment market shows a significant slowing – and indicators on both fronts are good – then we’ll see that pendulum settle. According to the Mortgage Bankers Association, the buyers have the advantage right now, especially with the federal government’s $8,000 first-time home-buyer’s tax credit.
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