Personally, I think we are in another bubble. Thankfully my market isn't really phased by the good or the bad too much. We don't get the crazy swings in value (good or bad).

If I were in a market where prices were approaching 2007 levels, I'd be looking REAL hard at why the prices are what they are. Cheap money has led to another building/investing craze.

Just a quick search shows that the median household income is around $65,000 in Seattle. So do you think a median single family home price of $430,000 is sustainable? Do you think there is much room for values to keep climbing in the near future? I don't.

ETA: Sales volume in Seattle is currently below 2009 levels. I'd say the adjustment is about to happen sooner rather than later in that market.

This post was edited on 7/21/14 at 6:49 am

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Posted by ItNeverRains

37069

Member since Oct 2007

25948 posts

Posted on 7/21/14 at 8:27 am to I Love Bama

quote:
Personally, I think we are in another bubble. Thankfully my market isn't really phased by the good or the bad too much. We don't get the crazy swings in value (good or bad).

Pretty insulated here in middle TN as well, but we are seeing a slow down in the high end market here (500k and up). Under 500k is still snooze and lose.

The older agents say that this is more in line with traditional markets from 10 years ago, where the spring market meant something because June-August always had lulls.

To the OP, lending is much tighter than before the crash. There is a lot of cheap money, but it is much tougher to get.

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Posted by C

Houston

Member since Dec 2007

27845 posts

Posted on 7/22/14 at 7:04 am to I Love Bama

quote:
Just a quick search shows that the median household income is around $65,000 in Seattle. So do you think a median single family home price of $430,000 is sustainable?

That statistic is a bit misleading. The people making less than $65k are less likely to buy any home than those making more.

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Posted by Hawkeye95

Member since Dec 2013

20293 posts

Posted on 7/22/14 at 1:39 pm to I Love Bama

quote:
Personally, I think we are in another bubble.

Its totally possible we are in another bubble. Cheap interest rates make homes more affordable, especially with rents going crazy in a few spots.

I live in Denver, and about 18 months ago, it became cheaper to buy than to rent (my calculation). And rents are continuing to go up. We were renting and our landlord jacked ours up three times in less than 18 months. When we started looking outside, we discovered we actually had a great deal on our rental, we should have been paying $2000/month (ours was $1575). So we bought.

The thing is the housing market isn't booming everywhere, and the markets that I know are doing well either bottomed (orlando), have always been strong (san fran) or didn't go completely crazy (denver, seattle).

I am definitely nervous we are in a bubble, but with the growth denver and seattle have seen maybe its justified.

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