Best I can tell so far, the answer to that question is a resounding YES, Seattle IS bubble proof, at least in the $300,000 and under market.
I am totally bugeyed, having spent the last 10 hours slicing, dicing and dissecting every single stat in the $300,000 and under market, in $100,000 increments, for 2005 and 2006 year to date on a month by month basis.
While we are seeing a teensy weensy weakness in October vs. August and September prices, the run up from January of 2005 to present has been insane. 72% of families have been squeezed out of the first time buyer market during that time in the $300,000 or under range. So even if we see prices dropping back, we will not soon see the day when the increase will be declared a bubble that is about to burst. In fact a modest correction is well warranted, but I do not see single family homes dropping in price back to where they were in January of 2005 for many, many…if ever…years. So yes, in the single family home market, anything decent in the lowest of price ranges should still be grabbed up. By March of 2007 the opportunity to get any bargains in the entry level single family home markets, will likely be gone for good.
For my neck of the woods, which would be from Green Lake up through Shoreline and beyond, around Lake Washington and into Kirkland and the Eastside, if it’s a single family home priced under $400,000…buy with care…but don’t wait for any of them to ever dip under $300,000 again. I don’t see that happening.
Condo markets in the same price range…entirely different story. I’d stay far away from the one bedroom condo market. the run up there has been as insane as it has been in the single family home market, BUT the one bedrooms are fast converging on the price of a much large two bedroom. So don’t assume you have to buy a one bedroom condo if you are starting out.
So many have overlooked the two bedroom opportunities, that the price growth of the one bedrooms has far exceeded the price growth of the two bedrooms. As fewer people can afford single family homes, more and more are buying condos in the under $300,000 price range. Hold out for the two bedroom units whenever possible, and let the one bedroom condos back off in price a bit. Some one bedroom units are tryng to sell at 79% more than they did 16 months ago! Pass them by. Hold out for a two bedroom, unless the one bedroom is reasonably priced for what and where it is.
I’m too worn out to go further than $300,000 today, but what I’ve written is worth studying. I have every single number broken down by $100,000 increments and split between condo markets and single family markets. I didn’t post them all, but I will keep my sheets of pencil notes for awhile, just in case anyone has any questions.