So where are we at in the economy in June 2017? A handful of stories help tell the tale:
▪ Everyone’s favorite topic of conversation — topping weather, the Seahawks and traffic — got another spike of rocket fuel with the release of the latest home-sale-price numbers from the Northwest Multiple Listings Service.
Even for this region’s history, the numbers are eye-popping (and discouraging, if you’re on the buying side of the equation). The median price — half of the sales for the period were higher, half were lower — hit $300,000 in Pierce County in May, an 11 percent gallop from a year ago.
King and Snohomish counties were even more inflamed, with King at $560,000 and more than 15 percent ahead of a year ago, and Snohomish at $420,000, up more than 14 percent. Those numbers include single-family residences and condos.
People migrated to emphasizing median numbers instead of averages in the days when a few million-dollar showplace homes could skew the results for the rest of the market. The average price is still higher than the median (for Pierce County the average was more than $340,000), and you can still see listings and sales of homes with a whole bunch of zeroes to the left not just of the decimal point but the comma.
Median prices also tell us that half of buyers found something less than $300,000 ($309,000, if looking at median prices just for single-family homes) to buy, which in turn suggests something’s available if you’re not picky about location, size, appearance or features.
But the trend line suggests even the bottom half of the closed-sale cohort is going to get beyond the reach of many buyers, keeping them in rentals (which aren’t dropping in price) or pushing them further out from the three central Puget Sound region counties. Kitsap has a higher median than Pierce; Thurston County saw a 10 percent gain from a year ago.
There are lots of economic implications to higher housing prices taking bigger shares of household income, and a big one is job location. We keep predicting that eventually employers and employees will tire of high commercial and residential real estate prices and long commutes, and jobs will follow employees further out.
We keep predicting that – and it keeps not happening. True, decisions for relocating offices and operations take time to make. But it’s not as though the housing-price budgetary squeeze will get much better soon – or at all.
▪ One segment of the economy generating jobs is warehousing and distribution. The News Tribune reported in the last week that UPS plans 800 to 1,200 jobs at a Tacoma Tideflats facility now under construction, while Amazon plans to add a second fulfilment center in Sumner, adding hundreds more.
Those may not be the sort of glitzy jobs that a high-tech company might fill an office tower with, but they’re not to be dismissed either.
Distribution-facility jobs can be good entry-level, pay-your-way-through-school, learn-about-the-workplace employment. And not all the jobs will be in slinging packages. Supervisors, planners and mechanics for the robotic systems such warehouses increasingly employ will be required as well.
The warehouses are here and more are coming, so the region might as well put them to work, leveraging their presence into building a center of knowledge in logistics, supply chain management, distribution center operations and warehouse automation, complete with the companies (and their jobs) that specialize in those tasks. How convenient that we have another element for that cluster — a seaport — nearby.
▪ Speaking of which, the Northwest Seaport Alliance (made up of the ports of Tacoma and Seattle) authorized spending $52 million for four new cranes at the Husky Terminal in Tacoma. Another four are on order. The cranes are designed to handle the supersized, 18,000-TEU container ships that are expected to dominate major global shipping routes.
This is good news for Tacoma, in that it solidifies the local port’s position in the container business. Even better, the Port of Seattle is paying half the cost of the cranes.
Still ahead for the ports are decisions about what to do with the idled Terminal 5 in Seattle. In its current configuration, it can handle ships of up to 6,000 TEUs. A planned redevelopment project would give T-5 the ability to handle two 18,000-EU vessels simultaneously – what’s planned for Tacoma.
The city of Seattle has issued its master use permit decision on T-5, and design work continues. Does the alliance go ahead with the project? If so, does it take some other facility out of commission, in keeping with its stated objective of reducing redundancy? Or does it gamble that there will be enough traffic to require all the capacity it has to keep those distribution centers stocked?
That should provide you with enough conversational fuel for your next backyard barbecue – unless, of course, you’d prefer to stick with something less controversial. Like the weather. Or politics.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.