Written by Greg Perry
We've all heard the stories and worries about the "Real Estate Bubble". But will we experience that "Bubble" in the Puget Sound Region?
Let's look at what drives the Real Estate market:
1. Regional Emplyment.
2. Interest Rates.
3. Available land for building.
Our area's regional employment is exceptional....in fact one of the BEST in the nation. The thousands of new employees that are feeding Microsoft, bio tech and tech companies, the Port of Seatte and local hosptial exansions -- all of which are fueling commercial building and retail -- is the fuel that is driving the Region's economy.
Interest rates have remained historically low and actually dived in December. Most industry watchers conclude rates will remain low.
King County building restrictions and low land availability mean that large home plats can't be built. These large, new construction plats stabilize housing prices by keeping up with the demand of people moving into the region. Without the ability to build large quantities of homes, land values rise quickly. It is interesting to note that 70% of the US population lives within 50 miles of the east and west coasts. Because the US population is packing in to these areas, overall, the coastal regions should have softer market corrections when they occur and should be the quickest to recover.
Money magazine recently called the Puget Sound Region "Bubbleproof" at this time because all 3 market drivers remain very positive for our region.
Now, I don't believe we'll sustain the up to 20% yearly appreciation rates we've been enjoying, but I do bellieve the market will decelerate slightly. Inventory is building, but not to excess and price appreciaiton will slow. I believe we'll see prices appreciate this year in the 7%-10% area. Overall we will fare better than most coastal markets.
All real estate markets are LOCAL. Local demand and supply. Local employment. Local politics. Don't let articles you read about troubled markets in others areas of our country cloud your judgement here!
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