Today's Seattle Times has a front-page article predicting that home prices nationwide are going to fall. They quote from PMI Mortgage Insurance calculations that show a 50% or greater likelihood of housing price drops for Boston, San Francisco, and San Jose, in contrast with Seattle where the risk of falling prices is only 11%.
But who cares about averages? What matters to you is how your own neighborhood is doing. The online edition of the paper offers a more detailed breakdown that shows
- Mercer Island is #28 (out of 108 neighborhoods) for 5-year price appreciation. We're 10.8% (vs. 15.7% for #1-ranked Medina).
- Median home price on Mercer Island is $825K, putting us #3 in the region, behind Madison Park ($869K) and Medina ($1.14M).
- Price per square food, we're #9 ($332), well behind Madison Park ($408), Medina ($394), Queen Anne ($359) and others in North Seattle.
- Appreciation in 2004-2005, we're ranked #27 (18.2% -- same as Medina), behind super-hot places like Southpark (27.2%), West Seattle (22%), or Green Lake (19.4%), all of which are much more affordable of course.
The bottom line is that long-term I still think Mercer Island is about as protected pricewise as you can get. It's an island, with its own (strong) school system, with a fixed number of homes and residents. People will always want to live here, making home prices about as secure as they can get.