Real estate bubbles are hard to see from the inside. Seattle's market has definitely been booming, which is especially apparent if you are a buyer or a seller. Most sellers are also buyers, so the upside on the sales price enables upscaling in housing, ratcheting up thanks to lending, and possibly repeating if you don't mind moving soon. All of that money has to come from somewhere, whether from sales, raises, or out-of-town buyers (hello, Palo Alto and China). Seattle's economy is strong, so the real estate market is strong. In economics, though, nothing grows forever. Is Seattle rising to a new tier as a global city, or is the recent rise unsustainable and about to go pop? As the article in Seattle Bubble points out: interest rates are rising, venture capital is slowing, China is slowing, commodities are falling, and some local businesses are pulling back. At the same time, housing supply is at record lows, housing demand is high, and enough businesses are doing well that growth and the influx continues. Even as interest rates rise, they are rising from such a low level that mortgages are still affordable. If you were here for the previous bubble (or any of the bubbles before that), ask yourself, "Does this feel different, or the same?" In any case, history never repeats exactly and we'll probably experience something completely new, again.
· State of the Seattle Housing Market: 2016 [SB]