Wednesday, February 15, 2006

One of the first items I'd like to address in our new blog is the sensational reporting on the real estate market that is published and broadcast by retail media outlets. The Seattle real Estate Blog is different from other media outlets. In this blog Braxtan Real Estate will publish the most accurate and current information about real estate in Seattle, regardless of how exciting or dull the news may be.

If you invest in real estate, or if you plan buy or sell your own home within the next year, the information provided by Braxtan Real Estate will be very valuable to you. This blog is your information resource for real property trends in Seattle, and it's your information resource for issues related to individual real estate transactions.

Most media outlets, from our local KOMO4 News and The Seattle Times to CNN and Forbes Magazine, are either exuberant about the real estate market or predict the popping of a "bubble". The reality of the real estate market is that it usually isn't very volatile. Historically, Seattle has seen few rapid corrections in the real estate market, these price fluctuations are rarely catastrophic and, with few exceptions, they don't last very long.

The prime factors that affect housing prices are regional unemployment, prevailing wages, population, housing supply, cost of construction and interest rates. If you own real estate and you want to see its value increase, you certainly want your region to enjoy low unemployment, high wages, a growing population, a moderate or low supply of housing, high construction costs and low interest rates. According to the Workforce Development Council (WDC) of Seattle-King County, we enjoy unemployment rates, prevailing wages and population changes that continue to push housing prices up. (Click here to read the WDC's report.) The cost of residential construction in Seattle is moderate, so it has a relatively neutral effect on housing prices. The one factor that has a slight downward press on housing prices is current interest rates.

The US Federal Reserve slightly increased interest rates throughout 2005. This has helped cool the housing market, and it has also made housing a little less affordable. Retail media outlets have myopically focused on this one factor, interest rates, and proclaimed the sky to be falling on homeowners and real estate investors throughout the US. However, interest rates remain historically low. According to Freddie Mac, "mortgage rates had fallen to their lowest level in more than a generation" by the end of 2002. (Read Freddie Mac's 2002 report) Currently, interest rates are increasing slow enough that Freddie Mac predicts "moderate home price gains" in 2006. (Read the 2005 report here.)

The frightening stories about Seattle's real estate prices are full of fiction and exaggerations, and they omit the facts we need to form an accurate picture of what's really happening. A bursting housing bubble? That's not what credible experts are predicting for Seattle. In fact, it's likely that housing prices will continue to grow in Seattle for the foreseeable future.

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At Thu Mar 16, 11:36:00 AM PST , Anonymous doc said...

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