Elua replied very calmly and thoughtfully to my criticism of her post on the imminent meltdown in Bainbridge real-estate prices. I give her points for not rising to my bait and attacking me as some kind of liberal nut-case. If even the conservatives on Bainbridge believe in polite discourse, it’s even closer to Paradise than I expected. She did elaborate on her thesis about the economics of development, arguing that “once SFHs and condos on BI consistently sell below replacement cost, building will stop”.
But, this really makes no sense to me. If $750K SFH’s and $400K condos can’t sell, then it seems to me that builders would just keep building, shifting to $400K SFH’s and $225K condos. Assuming Puget Sound as a whole keeps growing, the finite supply of buildable “slots” in the overall megalopolis within a 35 minute commute distance to downtown Seattle is simply destined to be developed. Part of the price haircut would come out of falling land prices, part from builders going for more plebian “fit and finish”. If as Elua points out new developments in S. King County can get done for 1/2 the price of Bainbridge, then Bainbridge at 1/2 price should still get fully developed. And, BI will be even more attractive to California refugees at “fire sale prices”. So, I don’t really see where she’s coming from.
The only way I can see to keep BI from becoming another Tiburon is regulatory measures that restrict how many slots there are, and/or how fast they can be developed. Stop blindly accepting that the “Growth Management Act” requires BI to accept some mythical “fair share” of future development, and lean on our limitations, such as the finite water supply of our aquifer.
