Slow Down of the Big Boom is Not a Bust

In an article written by Mary Umberger for the Chicago Tribune and published in the Seattle Times, she addresses why the slowing down of todays market is not a bust. PMI, a mortgage insurance company in California has taken a look at the 3 biggest real estate market busts in the last 25 years and compared them to our current situation. The difference? Employment. All 3 of these boom to bust markets as she calls them were created by an influx of jobs and then a sudden drying up of that job market. This led to a frenzy of buying and then was followed by price drops and declines in home values. It took people in these situations between 10 and 15 years to recoup the values in their homes. Is this market in that same spot? No. According to PMI, we are not there yet. Why? PMI says it is because employment has not plummeted. They estimate that in the worst parts of the country it will take less then 5 years to recover. But in Seattle where job growth is not only not plummeting but is growing, the outlook is good for home values.