Next Housing Market to Crash? Seattle

What makes you think the Seattle housing market is going to crash? In Seattle, if you look at it right now, on a year-over-year basis, you will see that inventory levels [of unsold homes] are up between 45 and 50 percent. And then if you looked at prices—in the price report that just came out—it would say that prices are down in Seattle by 4 percent. This is exactly what we saw in the rest of the country six to nine months ago.

Luke Mullins of U.S. News & World Report posted an article on May 29th about the potential of Seattle finally falling victim to the housing bubble crisis. Below is a permalink to the article and selected exerpts:

Link: http://www.usnews.com/blogs/the-home-front/2008/5/29/next-housing-market-to-crash-seattle.html

Exerpts:

What makes you think the Seattle housing market is going to crash?
In Seattle, if you look at it right now, on a year-over-year basis, you will see that inventory levels [of unsold homes] are up between 45 and 50 percent. And then if you looked at prices—in the price report that just came out—it would say that prices are down in Seattle by 4 percent. This is exactly what we saw in the rest of the country six to nine months ago.

So you are expecting this scenario to play out in the relatively near future?
Yeah. You’ll start to see sellers [who] are unable to get their house sold that will be having to sell because of economic reasons or divorce or whatever the case may be. They will have to sell, so they will take their home price significantly lower to get it sold. Additionally, you will have more distressed housing because people [who] are in short sales or are having their loans reset are not going to be able to get out of their homes because nobody is willing to buy it because the price is too high.