Seattle proves the fundamentals eventually matter in a housing market

 Even a place like Seattle had a housing bubble, then subsequent bust.  They thought they were different too.

Seattle Zillow Home Value Index

Seattle Home Values - Interactive chart

A great quote on Seattle:

In the end, fundamentals are fundamentals. For a while after the downturn hit the bubblier cities, Seattle thought they were immune. After all, they have a good economy. They are living in a nice, west coast climate. They didn't have a significant number of ninja loans. They have a stable market underpinned by good equity, lending to professionals with good incomes.

And yet, the market started declining anyway. At first it caught itself pretty quickly, but by then sentiment had already turned against real estate and it was too late. So now the second dip is picking up steam, and it looks like it might go on for a while.

A downturn doesn't need irresponsible lending, doesn't need overbuilding, doesn't need non-recourse mortgages. All it needs is for fundamentals to be out of whack, and a change in consumer sentiment.

Seattle was one of the last ones to the US housing bubble party, kind of like Saskatoon was one of the last ones to the Canadian housing bubble party.  House pumpers can make any argument they like, but fundamentals eventually matter and if they are out of whack, the market always corrects. Always.

By every measure, the housing markets throughout Canada have strayed away from their fundamentals.  Saskatoon is of no exception.