Add to that the fact that people are very hesitant to sell for a lose and our strong local economy means that most can afford their payments and therefor will likely not be forced to.

Now high end condos might be heading that way as a ton are being build. Still I would not expect them to drop a whole lot but you will almost certainly see a transition toward building smaller and cheaper units, though probably not right downtown.

Price is a major factor, both at the top and the bottom.

the point here is that NAR types are grasping at straws for good news.

You can find a 500k bungalow in the Bay Area. Perhaps you mean San Francisco?

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Monthly Appreciation
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fnarf: buy anytime in the next three years and you'll be buying high. Seattle's only 8 months into this mess, there's a lot of blood left to be shed. Also, a few percentage points is misleading, though correct for 'year over year'. Prices are now down 10% since last July. "Buy low" also assumes we are at the bottom, with 10 year high inventory, and 10 year low sales, both trending worse and worse, we are nowhere near bottom.

King County Median SFH sale prices:

July 2007: 481k
February 2008: 429.9k

I'm not advocating timing the market, I'm advocating realising we're nowhere near a bottom. To be honest with you though, timing a housing market isn't as difficult as you want to believe it is. Macro housing trends move as slow as molasses and supply and demand is always available for anyone to see. Anyone with half a brain could see what is happening now coming back in 2005. Housing prices historically have always reverted back to their mean appreciation which barely beats inflation.

For any individual buyer, sure now may be a fine time to buy if they can afford a house that they want. But if that person has to move anytime in the next five years (job change, loss, kids) they'll likely end up owing more on their house then they can sell it for.

If you already own a house, the market usually is not as important as the interest rate cycle, however.

(caveat - I worked for Century 21 Real Estate Canada Ltd when I wrote software for the agents - so this is based on courses we taught there)

unlike the national market, which is weighted down by the speculatively bubbles of places like Miamis and California, the local market is pretty strong. It probably peaked around July 2007 when the usually strong summer season corresponded with the height of the credit bubble, but that does not mean dramatic declines are a given.

Seattle prices are up 2% from this time last year.

In-city condos and row houses are staying on the market longer. As are homes outside of the city. But a single family house in Ballard? Still on the market for less than 30 days and getting near asking price.

Don't forget that with an inflation rate approaching 5% now, staying flat is basically losing 5% in real terms.

@23 my point was that it is a risky transaction to buy a home right now because there are many thinks that can force a sale, job relocation, divorce, medical emergency and other increasingly unlikely situations... First time home owners on average only own their first home for five years. Buy now and you could be stuck there much longer than that unless you're willing to pony up the cash to the bank to make the difference.

@25 yes, Seattle proper median for an SFH is 2% higher than February, and down almost exactly 10% since August, (501k to 450k). And FYI inventory in Ballard is 104.87% higher than last February (MLS area #705). If you divide inventory (547) by pending sales (135) you get 4.05 months of supply in Ballard. Your view of the Seattle housing market is hovering somewhere over 2006.

Based just on my observations (not that reliable I grant), the units that I see staying on the market longer are condos and row houses. The single family ones tend to sell pretty fast.

On the other hand, I can use my own situation as an example of market collapse. I live in a single family unit on Phinney Ridge. It's zoned multi-unit and for the past several years I've gotten anywhere from two to five letters per month offering me cash for the place. I've gotten maybe two in the past four months. So it certainly seems the developers are pulling way back.

Now that I'm down in Columbia City, I'm seeing a lot of houses for sale, but they still seem to be moving.

Personally, I think the price adjustment is a good thing.

Condo inventory in Ballard is currently at 259, and was 150 last february, so a 72.67% increase.

If you want to check out the numbers yourself you can go here:
http://www.nwrealestate.com/nwrpub/common/news.cfm

Then click on the King County Breakouts link at the top right of the page which will take you to a PDF. The first page is condo & SFH combined, the second page SFH only (includes townhouses), the third condos only.