Take a breath. Things may be happening at troubling speeds in the rest of the world, but it takes a while for them to reach the island. Thanks to the internet, we know about them as soon as anyone else, but don’t be surprised to find that trends take a while to get here – or start here.
Business people know the rule of thumb. Note, this is a rule of thumb, not something with lots of supporting data. Live here long enough, though, and the trend in trends is obvious. If something is happening in Seattle, it may take one to three years to happen on Whidbey.
Watch the national news and notice that something is happening in Seattle. That’s happening a lot, lately. Seattle is launching initiatives, challenging conventions, and driving major parts of the economy. That environment is why Seattle’s housing is also making the news with stellar rises and seemingly ridiculous offers. Like most cities, Seattle helps define the region, especially for people on the outside looking in. But, something that starts in an urban area can take time to catch on in a suburban area, and can take time to affect a rural area, and can take even longer to jump a moat and touch an island. Ripples aren’t instantaneous. They take time to spread.
As economies rise and fall, it makes sense that the changes happen quickest in the center of cities. Seattle’s recent growth spurt is reaching into the surrounding regions, but only after saturating and revitalizing downtown. Growth in the big businesses is followed by growth in the small businesses and an increasing demand for services and housing. As the central supply is consumed, demand reaches farther to find new sources.
Typically, that means that upturns and downturns take a year or so to reach the island. The good news is that there’s more time to react, more time to take advantage of situations, and a bit of a buffer that softens any abrupt news. The bad news is that the economy can lag while waiting for mainlanders to realize the opportunities that exist on the islands.
Possibly the easiest trend to notice is housing. Six years ago, Seattle’s housing market finally began recovering from the Great Recession. In the previous four years, the median house price in Seattle fell from over $410,000 to under $340,000. Within a year and a half the prices caught back up, and have since risen to about $700,000, a doubling in the last six years. South Whidbey, the priciest part of the island, took almost two years longer to reach its bottom, falling from about $340,000 to under $250,000. About the time Seattle had recovered its losses, the south part of the island had finally stopped falling. Now, South Whidbey has risen to over $390,000; impressive, but not the 100% increase in Seattle.
Here’s where the debate begins among islanders who watch such things. Does Seattle’s trend continue, or has it gone far enough? Does Whibdey follow Seattle’s price curve putting the prices around $500,000 in about two more years? If people are priced out of Seattle, they may not be priced out of the suburbs, the countryside, or the islands. Even if Seattle’s prices slow, does the demand move here? Especially as remote work becomes more popular, why work in the expensive city when it’s much more affordable to live on an island?
Then there’s the larger issue. The national recovery is setting records, records that usually end with at least a mild recession. Is Seattle’s economy strong enough to continue growing even in a downturn? Some think so, which also means some think not. Will Whidbey’s economy continue to grow, too? It isn’t all tourism. The military is expanding, not contracting. Entrepreneurs are moving to the island thanks to high-speed (1G+) internet and parcel service. Entrepreneurs are also the source of new ideas. New ideas don’t necessarily require massive infrastructure, facilities, or populations. It’s possible that fresh ideas may flip the trend making Whidbey the center of the ripples.
People in and around Seattle are justifiably worrying about and working on affordability. A 100% increase in housing costs catches people’s attention. But, looking around the Pacific Rim (arguably more representative than looking at the rest of the continent), Seattle looks affordable compared to Silicon Valley, Vancouver, Tokyo, and Hong Kong. Maybe this is a new era for a redefined Seattle, in which case it’s possibly also a new era for places like Whidbey Island.
It is a great debate, but one of those that is moot. Talking about it makes us feel better, but the larger economic forces aren’t going to be steered by a few words. We’ll know the answer by looking back after we’ve lived through it. Using Seattle as a guide, there are reasons for encouragement for the island’s economy, reasons to consider possible housing price rises, and reasons not to overthink it too much. Just don’t be surprised that, whatever happens in Seattle may not immediately happen on the island, and the island may surprise Seattle with some new ideas from here in the middle of Puget Sound.