Goldman-Sachs predicts Seattle area home prices to fall by 22% over next 2 years

No Cheer For Housing Bulls From Goldman Which Goes Negative On House Prices | zero hedge.

22% seems like an awfully big number. And note that predictions in say 2007 were, ahem, a bit wrong. More here.

Another Spokane economy historical document

Throughout the 70’s and 80’s, there was a growing hope that high technology industries could add markedly to the Spokane metro area. Some challenged the feasibility of this goal without a research university saying that Spokane could not hope to compete in the newly emerging world of high technology or biotechnology without this vital asset.

Although Spokane has four 4-year universities and a thriving community college system, Spokane has been bereft of a technology transfer, research university. All of the universities have post baccalaureate programs, but prior to 1988, there was little if any collaboration between programs, faculties, or students of any of these institutions.

To answer the challenge, the Washington State Legislature, with local guidance, created the Spokane Riverpoint Higher Education Park and created the Joint Center for Higher Education JCHE. The JCHE mandate was to catalyze a high tech sector, begin the effort to provide high tech worker education programs, and to be the administrative agent for the newly created Spokane Intercollegiate Research and Technology Institute SIRTI. The JCHE was to spur university collaboration in teaching of computer science, biotechnology, and other technology classes; collaboration in research projects especially with industry partners; and foster high-tech worker education and training programs. SIRTI was to be operated as a research and technology-facilitating institute that would provide grants, independent research laboratory space, project management help, infrastructure, and the capability of scientists from all local colleges and universities to collaborate. See Spokane Higher Education Park at Riverpoint, Master Plan and Design Guidelines.

via Terabyte Triangle | America’s Leading Digital Downtown, Spokane, WA.

Interesting. There are far fewer post baccalaureate programs in science and technology (engineering) than there were ten years ago. We seem to have gone in the wrong direction.

It appears the Joint Center for Higher Education did not work out- and was shut down by the legislature. SIRTI was re-constituted in 1998 with a 17 member board. The Board has 9 public members and 7 members representing WSU, EWU, GU, Whitworth, CCS, UW and CWU. No mention is made of who is the 17th Board member? The current Board roster is here.

SIRTI is to focus on “research that benefits the intermediate and long-term economic vitality of eastern Washington” – but they now support start ups statewide as there is a clause that allows that.  In the past, they also supported businesses in North Idaho, which is a bit of stretch for a Washington state government agency.

Update to this post:

I crossed out the two sentences above to clarify. In this link (which is above but not obvious), the Board is described as having 17 members. I missed one reference in the article – the SIRTI Board is to have 9 members of the public, 7 academic representatives and 1 representative from the WTC.

When the error was brought to my attention, I did more looking into the SIRTI Board structure based on the listing on their web site. Read more of this post

Offshoring creates a jobless recovery

As I have documented, perhaps 70% of the large job losses seen in Spokane are due to offshoring. Spokane is apparently a microcosm of what is going on in the U.S. – and this is not good:

The Economic Policy Institute, a Washington think tank, says U.S. companies have created 1.4 million jobs overseas this year, compared with fewer than 1 million here. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9 percent, says Robert Scott, the institute’s senior international economist.”There’s a huge difference between what is good for American companies versus what is good for the American economy,” Scott said.American jobs have been moving overseas for more than two decades. Those jobs, however, have become more sophisticated — semiconductors and software, not toys and clothes.

via Nation & World | Where are the jobs? For many companies, overseas | Seattle Times Newspaper.

Spokane Commercial Real Estate Vacancy Rates

Updated as of Dec 26, 2010. Source:

As always, each firm’s estimate of vacancies is calculated in their own way and estimates vary between real estate firms.


“Cities, Brains, and Brawn”

Some cities, like Huntsville or Houston, rely predominately on analytical skills. Most cities that draw highly on analytical skills also rely on social intelligence skills, like San Jose, Boston, Washington, Durham and Boulder. The cities that rely the most on physical skills are places like Dalton, GA, known for its carpet manufacturing, Toledo, OH, a center of glass manufacturing, and agricultural and food processing centers like Bakersfield, CA.

Employment in city regions is shifting away from physical skills and towards analytical and social intelligence skills. Regions that successfully increase their share of jobs relying on analytical and social intelligence skills are more likely to prosper than regions that rely on the physical skillset associated with manufacturing.

via Creative Class » Blog Archive » Cities, Brains, and Brawn – Creative Class.

Where do you think Spokane lies on the analytical/social/physical skills scale as of today?

Where do you think Spokane needs to be in 5 or 10 or 20 years from today?

“Where all the smart people are going”

Talented, highly-skilled and highly educated people are clustering in and around America’s major cities to an extent few would have thought possible a couple decades ago, when suburbs and sprawl were the locations of choice and cities were for the musicians, artistic creatives, and the poor.

Creative Class » Blog Archive » Where All the Smart People Are Going – Creative Class.


Despite its many upsides, this urban revival both reflects and reinforces the great economic and social divide which is splitting America by geography as well as by class. Beside the small number of resurgent central cities stand many other once-great cities, including the Rustbelt cities that literally drove American economic might during the early to mid 20th century, that continue to languish and even decline, while the Sunbelt cities of sand have been hit heavily by the housing crash.

Left to its own devices, America’s economic landscape will only get spikier and more uneven, and its political landscape, already being reshaped by the rise of rightwing populism and of the Tea Party movement, ever more polarized. Restoring sustainable economic growth and a more socially and politically cohesive society will require nothing less than new policies and institutions which can channel growth in ways that enable the many benefits of economic clustering while ensuring improving wages and living standards for the broader populace.

Update: Spokane historical home price trends

One week ago I presented a chart showing historical home prices since 1996 for Spokane.  This chart is shown again, below, for comparison.

For comparison, here is a chart showing historical national home prices, from the Federal Reserve Bank of Dallas. The charts show different periods on the horizontal access but are still useful.

And from the Dallas Fed:

With nearly half of total bank assets backed by real estate, both homeowners on the cusp of negative equity and the banking system as a whole remain concerned amid the resumption of home price declines.[8] This unease highlights the housing market’s fragility and suggests there may be no pain-free path to the eventual righting of the market. No perfect solution to the housing crisis exists. The latest price declines will undoubtedly cause more economic dislocation. As the crisis enters its fifth year, uncertainty is as prevalent as ever and continues to hinder a more robust economic recovery. Given that time has not proven beneficial in rendering pricing clarity, allowing the market to clear may be the path of least distress.