A rebound in Seattle real estate?  Yes, but not just yet, and it will probably be a small rebound, IMHO. Both Yahoo, via the Plugged in Finance blog and Businessweek had articles projecting a faster return to a more positive real estate market  for Seattle than for many other parts of the country.  Seattle ended up on the top 10 real estate rebound lists on both Yahoo and  Businessweek.

Why a rebound in Seattle? Seattle’s chances are among the best in the country and for the same reasons the Seattle/Eastside area was so strong for most of the last two decades.  It’s our economy and our geography.

First, the geography. (Bear with me for this brief geography lesson. This brings me back to my roots as a social studies teacher who loves geography.) If you click on the “view larger version” of the map below, you’ll notice a lot of empty space east of Monroe down to Fall City.  This is where the foothills of the Cascade Mountain range begins.  It looks like there”s lots of  open space out there, and there is, but it gets pretty steep!

Couple this with strict land use regulations, protecting salmon streams as an example, and even less land is available for development.  It’s double-edged sword.  We need to maintain a healthy balance between people and nature, to maintain our wildlife, our trees, and our quality of life.   But the natural elements of the Seattle area, Puget Sound, Lake Washington, and  the Cascade Mountains do provide a challenge to our growth.   Less land to develop=higher prices , but it  won’t happen for a few years and increases should still be modest.

View Larger Map

The economy in the Seattle area is hurting like the rest of the country.  But there”s a strong economic base that will re-emerge as things start to turn around.  The old stand-bys, Microsoft, Starbucks, and Boeing are struggling now, but should bounce back.

Another thing to watch is the number of homes for sale, the housing inventory.  We’re still at higher numbers, but things are starting to balance out. If you look at the maps, you’ll see the Seattle real estate market of 2009 is far more balanced than the Seattle real estate market of 2008. (A balance market is when the number of homes for sale in an area is less than a 6 months supply.  Yellow on the attached maps indicates a balanced market in the area.

Builders are NOT buying land right now. Over the years, builders would have huge amounts of land tied up for future building.  This is no longer the case.  It can take a couple of years to develop a site and to start building homes. With less land available for building and less land owned by builders and ready to be built out, existing homes will be more in demand in the future.

On yesterday’s “Morning Edition” on NPR Station, KPLU, John Maynard interviewed Richard Hagar about another issue, the influx of new people moving to Washington State, the majority of whom are moving to King County. Some of these people rent and some buy condos and homes.  The in-migration of people will only help our real estate and economy over time.

The year 2012 seems like a long way off, but we’re halfway through 2009.  It’s around a really long corner and but it’s not going to be an easy “walk” to get there.