Seattle Real Estate Stable Amidst Mortgage Angst

By Richard Barrington
Local Lender Columnist
Sep 28, 2007
Amid concerns about rising interest rates and mortgage foreclosures, some areas of the country are seeing steep drops in the values of homes. In contrast, Seattle-area home prices are holding up quite well.

While no one would mistake the Seattle market with the real estate boom of a few years ago, stability and sanity might be the best possible type of market.

Seattle Area Holding Up as Some Areas Slide

Through the end of the second quarter of 2007, Seattle home prices had risen 6.4% from a year earlier. This contrasts with a 2.8% decline in average home prices nationally over the same period. The hardest hit areas? Mostly where the housing boom was once at its most frenzied: California and Florida.

Mortgage concerns have triggered the end of the boom. For one thing, mortgage rates have risen, making new mortgages more expensive and raising monthly payments on existing adjustable rate mortgages. The bigger culprit, however, seems to be borrowers who overextended themselves to get in on the boom. Rising foreclosure rates indicate that many of these people have been unable to keep up with the debt they took on.

Between Boom and Bust: A Happy Medium

Seattle's single-digit gain ranked 32nd in the nation, making it neither the hottest real estate market nor the most troubled. That middle ground may be the best place to be. It's not the stuff of instant fortunes, but stability represents the fairest deal for buyers and sellers. It helps both parties plan based on reasonable of expectations, and doesn't represent the type of sudden change that can shatter those expectations.

If Seattle can continue to eke out single-digit gains in housing prices while the market in other parts of the country falls apart, then area homeowners should count themselves very fortunate.

Source
Seattle Post-Intelligencer

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.