However, the signals coming from extremely slow sales and still elevated inventories suggest that listing prices need to decline further. To be sure, most market participants are long over the denial stage, and have realized that prices have in fact declined. Looking ahead, while inventories in the area have finally begun to decline, the pace of home sales has remained extremely depressed-in part because of the sharp slide in the local economy, but also because listing prices have not yet adjusted down to market-clearing levels consistent with area incomes. Back then I thought it didn't make sense, and it certainly didn't pan out. That benign outlook was shared by many area home buyers-including real-estate investors who were exiting already topped-out markets in the West. In the latter part of 2007 a leading mortgage insurer put the Seattle metro area in its lowest risk category-meaning that it viewed the likelihood of a decline in Seattle home prices over the next two years as extremely small. The home price run-up seemed tame compared to other areas in the West. ![]() ![]() The area was not as dependent on subprime and alt-A loans as other areas in the West. While these trends were pretty clear by the latter part of 2007, many housing economists (especially those that do not track local sales and inventory trends) at the time felt that the prospects for home price declines in the area in the coming year or two were slim. Sales started sliding and inventories started increasing before home prices in the area peaked in the summer of 2007, and the sales slide accelerated and inventories kept on increasing through most of 2008. ![]() Well before the state's economy began tanking, there were signs that the Seattle area's housing market was weakening after the somewhat bubbly 2004-2006 period.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |