Seattle Economy is a Sign Things Aren't Getting Better in Obama's America

Remember the interview I highlighted with the former Sun Microsystems CEO that says the technology sector known as Silicon Valley in America has moved to Asia? Well let's further reinforce that today with this story about Seattle, Washington, who also has played a role in the technology boom. Remember Microsoft is a Washington based company, and Seattle has been a vital part in the technology sector with companies like Boeing. Seattle was once thought immune from these tough times.

The housing market in Seattle is getting worse. Even after the hundreds of billions in stimulus that were spent to stop the bleeding--a claim Obama continues to make saying we were on the brink of total collapse. I think the collapse was put in slow motion. Consider the news out of Seattle:

New York Times SEATTLE — Few believed the housing market here would ever collapse. Now they wonder if it will ever stop slumping.

The rolling real estate crash that ravaged Florida and the Southwest is delivering a new wave of distress to communities once thought to be immune — economically diversified cities where the boom was relatively restrained.

In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.

Seattle is down about 31 percent from its mid-2007 peak and, according to Zillow’s calculations, still has as much as 10 percent to fall. Mr. Humphries [chief economist for Zillow] estimates the rest of the country will drop a further 5 and 7 percent as last year’s tax credits for home buyers continue to wear off.

CoreLogic, a data firm, said last week that American home prices fell 5.5 percent in 2010, back to the recession low of March 2009. New home sales are scraping along the bottom. Mortgage applications are near a 15-year low, boding ill for the rest of the winter.

“I don’t expect the market to get better,” said Ms. Dortch, 31, a customer service consultant.

Neither does Gene Burrus, another frustrated seller who became a landlord. “Rent is so cheap it doesn’t make sense to buy now,” he said. He might reconsider if 10 or 15 percent more comes out of the market.

Whenever the market finally does pick up, all those accidental landlords will want to unload, putting another burden on the market. “So many sellers are waiting in the shadows,” said Redfin’s chief executive, Glenn Kelman. “The inventory is going to expand and expand and expand. I don’t see any basis for significant price increases.”

“We’re at a period near the bottom but with more volatility than we normally see at this point,” said David Stiff, Fiserv’s chief economist. “This sort of double dip is unprecedented for housing.”