First of all--welcome to my blog! I hope that this will be a great resource for you if you are looking for information about what is going on in the north King and south Snohomish counties, which are the primary areas that I work with as an agent with Windermere Real Estate in Mukilteo.

I'm a long time resident of the Puget Sound area (born and raised here), and as such I never cease to be amazed at the changes this area has undergone in my lifetime, which doesn't span THAT long a period of time (I'm in my 30s). One of the things that particularly gets my attention is our current real estate market which is, as anyone will tell you, a crazy one at times.

One topic that comes up with great regularity is whether or not the current trend in rising prices is just the market at work, or if it is a bubble that is about to pop. Anna, of the Rain City Guide, recently discussed this in her Seattle-based blog, saying that frankly, she doesn't find such talk to be all that interesting. She and I both tend to be in agreement with David of the City Comforts blog, that Seattle has space limitations that are largely behind our rising prices, and since those limitations are not going away, we are somewhat insulated against a popping bubble type of scenario. In other words, the rise in prices is simply the law of supply and demand at work. Other cities, such as Las Vegas, are also experiencing rising prices but pricing there is more affected by outside forces such as speculation that lead to rising prices but may not be supported by the market once those forces pull out.

That's a lot for a first entry, so I will close with this comment, which I initially posted over at Anna's site:

...Two thoughts. One is, to me a “bubble” signifies a rise in prices that is brought about by outside forces and which is not sustainable over a long period. The behavior of housing prices in places like Las Vegas is a good example, where you see a lot of outside investors coming in and driving up prices beyond what the area might normally be able to sustain. This is not the case here in Seattle because the forces driving up prices are inherent to our market. The little usable space and unhospitable topography combined with growth restrictions result in a lack of supply, and a relatively healthy employment base and low mortgage rates results in lots of demand, therefore, prices go up. Even when rates go up and we go through challenges with the local economy, the long term trend will still be upwards…barring any sort of economic or natural disaster.

As an aside, it cracks me up that folks are freaking out about bubbles when we are sitting right in the middle of one of the most seismologically active regions of the world, less than 100 miles from one of the worlds most dangerous volcanoes… It seems like if you want to worry about something, Mt. Rainier blowing up or a 7-9 richter-scale earthquake might be just as valid a concern.

The other is, the rise in prices is not limited just to within the Seattle city limits–we’re seeing it across the eastside and Snohomish county as well. I think one of the things we are going to see over time if Seattle can’t get this traffic situation figured out and as gas prices keep going up, is a real solidification of the neighborhoods and suburbs, with folks making more of an effort to keep their commute distances as short as possible. People will be trying to live and work in the same place. We’re already seeing this to some extent as what used to be bedroom communities (Bellevue, Redmond, Kirkland, etc.) have grown to become commercial centers, and as gas prices continue to rise people will be forced to make choices about where they are going to work and live. Which, frankly, is why I don’t particularly mind that gas prices are now topping $3 a gallon. The sooner we get to the point where people stop thinking it’s okay to drive their cars 100 miles a day roundtrip, the better for the environment and for people’s sanity too!