Wednesday, January 10, 2007

Northwest Not Bubble Burst Whipping Boy

With the outpouring of data from the 2006 real estate market, more and more experts are predicting trends similar to our future telling here on the SeattleHouses blog.

One of these experts is noted real estate economist Matthew Gardner. In a recent Seattle Times article, Gardner pointed out that the doom and gloom outcome of the housing burst didn’t affect the Northwest in the same way it did nationwide.

Overall sales and pricing didn’t bottom out in Seattle and surrounding areas the way it might have in other parts of the country. Instead, the market simply slowed to a more manageable rate. In fact, last year, housing prices were up 11% in the tri-county area according to the NWMLS – far from the prediction that prices were going to drop well below the 2005 boom levels. And many like Gardner think the softer price increases will continue into 2007.

This can be a good – no, a very good – thing for the market. A less frenzied environment allows buyers and sellers the opportunity to take their time and make the right decision. The same is true for investors – a slower price increases makes buying and selling a much less hectic operation, not to mention lowered risk.

As always, prices and inventory depend greatly on the specific location of the property. Areas closer to downtown Seattle or Bellevue will see greater appreciation because of the convenience factor. Other factors that can affect appreciation and inventory levels include economic inflation and, of course, mortgage rates. Many experts predicted the mortgage rates would increase dramatically in 2006. When that didn’t happen, further appreciation of prices was the benefit.

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10:57 PM  

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