SUSTAINABILITY: Home Prices In 80% Of US Cities Grow Twice Faster Than Wages… And Then There’s Seattle.

A quick look at US housing shows that while wages may be growing at roughly 2.5%, according to the latest Case Shiller data, every single metro area in the US saw home prices grow at a higher rate, while 16 of 20 major U.S. cities experienced home price growth of 5% or higher: double the average wage growth, and something which even the NAR has been complaining about with its chief economist Larry Yun warning that as the disconnect between prices and wages become wider, homes become increasingly unaffordable.

And while this should not come as a surprise, one look at the chart below suggests that something strange is taking place in Seattle, which has either become “Vancouver South” when it comes to Chinese hot money laundering, or there is an unprecedented mini housing bubble in the hipster capital of the world.

The thing about bubbles is, they always pop — which is why many of us warned back in 2007-08 that it would be a mistake to pursue policies that would re-inflate housing prices.