In 1991, Boeing slowed down and the King County market flattened overall. But some neighborhoods took hard falls from their peaks. For example, prices on Capitol Hill and in Montlake, after rising 79 percent in two years, fell 13 percent in 1991 and didn't fully recover until 1996. So some buyers who bought at the peak had to wait six years to break even. Blake Nordstrom got caught in a similar bind.
Experts believe that buyers caught up in bidding wars are at the greatest risk.
Prices on Capitol Hill and in the Montlake neighborhood have risen 65 percent in the past four years. There's been similar appreciation in Seattle's Central Area, Green Lake, Madison Park, Mount Baker, Queen Anne, Rainier Valley and Ravenna neighborhoods and on Mercer Island and Newport Shores in Bellevue. Agents say that even poorly tended fixer-uppers in these neighborhoods are getting caught up in bidding wars. The amount of wealth created is hard to comprehend. But the effect of this wealth spreads far beyond the million-dollar homes, economists say.