Housing affordability in Seattle

wetdawgs
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Seattle Times today reports that affordability is back to 1998 levels. What do you think of their numbers? Here's a link. (Interesting they don't cite the Seattle Company Zillow in their article).

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November 11 2011 - Seattle

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John Stewart, "nwhome.us"
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The Washington Center for Real Estate Research at Washington State University has been at it a little longer than Zillow and brings a more credibility to their numbers as there is more research involved in arriving at conclusions.
Let's just get the job market moving and especially for the vets coming back from the middle east.

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November 12 2011

Dan, "the_country_hick"
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What does the article really say?

"The median price for the third quarter this year was $350,000, the center's latest score card says, down 10.3 percent from the same quarter last year.

Interest rates also hit new lows, said Glenn Crellin, the center's director

Interest rates are the big driver in improving affordability, said Tim Ellis, who writes the real-estate blog

Prices have slipped to 2004 or 2005 levels, he said, but higher interest rates back then meant buyers were paying more each month on conventional mortgages.

Homeownership is dropping and will continue to do so, Brian Fritz, a vice president with apartment developer Avalon Bay Communities, said at a real-estate industry breakfast this week.

the Center for Real Estate Research calculates an index for first-time buyers. That one assumes a lower down payment, slightly higher interest rate, lower income and less-expensive house. King County's third-quarter score was 67.5, suggesting affording a starter home remains a challenge for many.

Still, it's probably less challenging than in the third quarter of 2006, when that index hit an all-time low of 38.6."

It says home ownership is dropping and so are prices. The ONLY reasons housing is more affordable is because interest rates are to low.
That is not real affordability. It is only a sign of borrowing cheap. Once interest rates rise house prices will be forced down even more.

Seaswiss put it well in the comments on November 11, 2011 at 8:33 PM

"House are just like bonds. When interest rates go up prices come down. This is necessary to allow the typical buyer to qualify in light of higher interest driving up the monthly payment.

Now consider the Fed and the banks are pumping up the housing market with lower interest rates, yet house prices are stagnant to down. What would be happening if rates were not being pumped down?

Are people willing to accept 0.25% return on their savings account indefinably into the future and are future mortgage interest rates more likely to increase or decrease?

Folks basic homes are just not going for 1/4 to 1/2 million dollars in most of the country (ignore California insanity). Buying on affordability propped up by artificially low rates is risking buying and locking in the highest home price."

Houses are not really affordable and a safe investment yet.

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November 12 2011

SteadyState
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"Let's just get the job market moving and especially for the vets coming back from the middle east."

Translation - yippee - buyers who get low/zero down payment loans and ultra low interest rates are the best buyers REAs ask for.
Of course I may be wrong and you truly care and respect the veterans? NOT!