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Who can afford it?

houseAn important column by Danny Westneat of the Seattle Times today, on the wildly increasing prices of houses in the Seattle area. If the column’s implications were only about Seattle, it would be of somewhat less importance; but you could substitute “Portland” or many other communities around the region and across the country and come to the same thing. He asked many of the important questions, but we’re addressing this here because he left one out.

His point is that housing in Seattle has become super-expensive. He recounts how, barely a decade ago, he bought his first home, a “fixer” but a decently-sized place, for $93,000, toward the upper limit of what he could then afford as a reporter for the Seattle Times (which pays pretty well, for the newspaper industry; its reporters are solidly paid professionals). He notes that buying something even remotely similar now would run at least $200,000, more likely at least $250,000. A decently modern and spacious house in the Seattle area – not just city limits, but for quite a few miles around – starts at upwards of $300,000. The average home sale now is closer to $400,000.

Westneat’s immediate point is that the Seattle area is rapidly pricing its working class out of home ownership – even out of residency. No doubt he’s right. And that has many implications.

The puzzler we wonder about on top of that, however, is: Where are all these people coming from who can afford $400,000 homes? Wages haven’t risen anywhere near those levels in recent years; the number of wealthy in our society is hardly so great that a city the size of Seattle can populate itself entirely with the rich. From where is all this money coming from? Or – ominously – can these people really afford it at all? And if they can’t, what will that mean a few years down the line?

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