The median housing price, we’re told, “has fallen four months in a row,” is “back where it was the previous November,” and “last month fetched nearly 10 percent less than the typical sale in July.” Wow. That sounds like the nationwide housing collapse has finally hit Seattle, except, you know, “it’s typical for monthly house prices to fluctuate,” some of the median price decline is surely from “the influence of condominiums, which have been making up more of home sales and generally cost less,” and of course the well known fact that “home sales are highly seasonal.”
To further complicate the reader’s job this morning, both articles liberally intermix data for detached homes and all housing, as well as trends from Seattle, King County and the surrounding areas. Ironically, the result of all this muddle is probably a fairly accurate picture: the regional housing market is soft — certainly softer than it’s been in years — but exactly how soft, how widespread, and how entrenched, well… we really don’t know. Gone for the moment are the bidding wars and double-digit annual appreciation to which we’ve all grown accustomed, but at least for us Seattle homeowners (and buyers) what we’re witnessing looks more like a return toward normalcy than an actual slump.
Which of course raises a question that seems to be missing from all the typically breathless local coverage of the region’s housing market: is a flattening or modest decline in prices actually a bad thing?
Self-appointed guardians of Seattle’s quality of life have long decried the loss of our city’s middle class heritage, but arguably the number one culprit in this trend has been the dramatic rise in housing prices that created such enormous wealth for those lucky enough to get into the market early. It was a struggle to buy my house for $187,000 back in 1997, but at a likely price of about half a million dollars today, it would be impossible. Average wages have not doubled and tripled over the past decade, but Seattle’s housing values have, pricing many families out of the market.
The equity in my house is my only substantial asset, so I have great empathy for homeowners watching their property value decline… or at the very least, not appreciate nearly as quickly as anticipated. But as someone with the experience of buying in the bidding war era — I joked at the time that I spent more time picking out a head of lettuce than I did deciding to make an offer on my house — I welcome a more rational housing market. And while the Ye Olde Seattle establishment bemoans the threat “vertical density” poses to our neighborhoods, the only realistic and palatable path toward “affordable housing” is to build more condos, townhouses and apartments… that is, short of a regional economic collapse.
So which is it? Do declining housing prices represent a crisis or an opportunity? I look forward to next month’s coverage to learn the answer.