How’s that for a catchy headline? Well, if you’re a follower of Oprah, you might have caught the reference. In a recent show, which aired 10/18/07, Suze dresses down a California couple whose lavish lifestyle has driven them off a financial cliff. As she outlines her prescription for their recovery (a process she refers to as financial detox), Suze’s suggestions take an unexpected turn toward Seattle.
“Suze’s final step is the most drastic. Suze tells Felice and Phil they must sell their California home and move to Seattle, Washington. With a booming housing market and high-tech industry, Suze says Seattle is particularly well suited to both Felice and Phil’s strengths—Phil is a computer contractor and Felice was once a mortgage broker.”
Now, if you live in Seattle, you probably aren’t surprised to hear about yet another Californian preparing to migrate to our fair city. But this isn’t just another LA escapee; this is Seattle as a recipe for financial survival. And if you’re in the market for a Seattle home, you’re probably wondering why Seattle would specifically be mentioned by any responsible financial consultant – and particularly one of Suze’s national stature. Given the “Subprime Meltdown”, the “Mortgage Morass”, and the “Foreclosure Debacle” that continue to headline the national news, one could be forgiven for thinking we should all be running for cover. But if you like numbers, and aren’t afraid of digging a little deeper than the standard sound-bite headlines that pass for news these days, then you may be interested to know what kind of role our state has actually been playing in the national slide so many people like to talk about around the water cooler:
According to the MBA (Mortgage Brokers Association), which tracks data on 85% of all mortgages in the US (approximately 44 million), the current foreclosure rate for Washington State as of June 2007 is .49 percent, vs. the national rate of 1.40 percent, which means Washington is doing 65% better than the national rate. In fact, if you look at the 10 year trend line, Washington State is currently in slightly better shape foreclosure-wise than it was ten years ago. In the 2nd quarter of 1997, Washington foreclosures were at .50 percent which was 54 percent better than the national rate of 1.08 percent n 1997. Compare that with our 2002 numbers, in the wake of 9/11 and the ensuing recession, when national foreclosures were at 1.51 percent, and locally Washington’s foreclosures were just 17 points behind at 1.24 percent. While the national average has increased in recent years, those numbers are being driven by only a handful of states according to Doug Duncan, MBA’s Chief Economist and Senior VP of Research and Business Development.*
The quick summary says that 4 states – specifically, CA, AZ, FL & NV- bear the brunt of responsibility for the current “mortgage crisis”. The truth is, we are experiencing a crisis, but it’s one of collateral damage rather than actual involvement. We didn’t create the problem, and we aren’t part of the problem, but we have to accept the reality that the problem exists. Our part of the solution is to continue being the diverse, dynamic region that continues to capture the imagination.
* Excerpted from the Washington Realtor News, Nov/Dec. 2007