Goldman Sachs predicts Seattle home prices to
fall another 20% in next 2 years
If you're one of those homeowners who is always looking for shreds of optimistic news about the
Seattle market, well, you might want to avert your eyes.
Goldman Sachs is predicting that Seattle home prices will fall 20 percent in the next two years. That's twice as much as anywhere else except Portland. Apparently, the folks at Goldman Sachs think the Seattle market is still overpriced.
"For Seattle and Portland, the model projects back-loaded price declines as house prices currently look overvalued," the report says. The report points to "high home vacancy rates and steeply rising delinquencies" as the catalysts for the projected decline.
Tim Ellis at Seattle Bubble, a consistent voice of reason in the Seattle real estate community, has been projecting a significant drop, but even he was surprised by the Goldman Sachs report. He says he doesn't have a PhD in finance and he hasn't constructed a 6-variable model of home prices, but his estimates have been for only another 10-15% decline in Seattle area home prices.
Goldman Sachs is predicting that Seattle home prices will fall 20 percent in the next two years. That's twice as much as anywhere else except Portland. Apparently, the folks at Goldman Sachs think the Seattle market is still overpriced.
"For Seattle and Portland, the model projects back-loaded price declines as house prices currently look overvalued," the report says. The report points to "high home vacancy rates and steeply rising delinquencies" as the catalysts for the projected decline.
Tim Ellis at Seattle Bubble, a consistent voice of reason in the Seattle real estate community, has been projecting a significant drop, but even he was surprised by the Goldman Sachs report. He says he doesn't have a PhD in finance and he hasn't constructed a 6-variable model of home prices, but his estimates have been for only another 10-15% decline in Seattle area home prices.
My personal view is that some areas will feel more of this pinch than others. The residential areas north of downtown Seattle and
close-in areas such as Kenmore and Kirkland will have very little value reduction, but south of Seattle and further out in the
suburbs will likely experience more significant value reductions.