What do Seattle, Portland, and Charlotte, N.C. have in common?  These three cities are the bright stars of 2007 real estate.  Each city posted gains in real estate appreciation, although modest, this year.  The news we hear is not the best for real estate, but the major problems are happening elsewhere in the country.

 Has the market softened in Seattle and on the Eastside this year? Yes, there’s no doubt about it.  According to the Case-Shiller Index,  reported by Aubrey Cohen in the Seattle PI, our market appreciation from last October has been 3.3%, the lowest since 1996.   

I’ve been reporting on the decline in market performance each month on this blog.  However, some of this year’s decline is subprime related, some of it is cyclical, and some of this is media/fear driven. 

Seattle is known for its cycles in the real estate market.  Usually at the end of one decade and the beginning of the next, we see a major slowdown.  This decade has been a bit different.  We saw the big spike up in appreciation in 2005, whereas we normally see the peak of appreciation around the 7th or 8th year of the decade.  With this spike, usually comes a fall or softening in the prices.  The spike is earlier this decade and so is the softening in prices. I am not categorizing what is happening in the Seattle/Eastside marketplace as a fall, but merely a softening.  Normally, the softening of the market would be in the 9th or 10th year of the decade, but  we are there now at the end of 2007.

Are homes selling?  Very much so.  But less homes are selling each month, competition is fierce, and clearly it’s a buyers’ market.  But this, too, shall pass as all markets do.  We’ve had a terrific run as a sellers’ market and now we are in a buyers’ market.  We have seen this before, and, I imagine, will again.

 When the December statistics are available for the Eastside market, sometime in the middle of January, I will do a “State of The Market” report, summarizing the 2007 Eastside real estate activity.

We are fortunate to have such a strong economy to support our real estate market.  I think 2008 will prove to be a very active real estate market.  Stay tuned, take a deep breath, and have a Happy New Year.  Here’s to 2008!