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So here are a couple of recent articles regarding the seattle/bellevue housing market:
http://www.kristv.com/Global/story.asp?S=7164834
http://blog.seattlepi.nwsource.com/r...ves/125867.asp
Not really sure what to make of it. Right now renting is cheaper than getting a 30yr 400k 6% mortgage, but its getting closer.
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But it's also possible that some are joining the ranks of international cities like London, Paris, San Francisco and New York, where costs are less tied to incomes, he said. "Now I'm beginning to think: Miami, Seattle, are they becoming superstar markets?"
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That's a scary quote from the Realtor's new economist. They fired the old one after they no longer liked being assoicated with his predictions. I'd take anything the NAR says with a grain of salt. They have one over-riding agenda, get people to buy, not rent. Their new economist knows what he has to say to keep his job.
And what does a $500k home rent for? According to Fortune the Seattle ratio is 38-1, so it should rent for about $1100 per month, or $13k per year. A $400k loan costs $24k, $100k down payment costs you at least $4k per year, and that's before property taxes, maintenance, and insurance (and tax benefits). Of course that rent sounds way low. But my guess is that owning a $500k house costs at least $25k-$30k per year, so unless it rents for $2k per month or more it's not very close.