Those photos are mine. Well, they’re now the property of the WiFire Coffee Bar, the place where I’ll be part of an Economic Development Think Tank tonight. The setting is sweet (and artistically decorated, in my opinion.) The title is grand. It is all much simpler than it seems. A group of us have been inspired by the introduction of 10 Gig Internet service to think ahead about our community that is the south half of Whidbey Island. Others are more official, but sometimes unofficial conversations are more productive. 10 Gig is only one of the things inspiring me to ponder the future of Whidbey. I wrote about a few aspects recently, but more flow in. This will be an interesting shift that will be an exercise in adaptation instead of control; because, if you haven’t noticed, things seem to be getting out of control. Begin adapting, now.
One of my favorite gigs (not to be confused with Gig) is writing for Curbed Seattle. I’m a contributing writer for them, which means writing an article or two a day. Usually, the articles are a lighthearted perspective on houses for sale. The biggest and the smallest are typically the best stories. Sorry, suburbia. Occasionally though, I get to dive into unexpected trends, like the recent article about a possible shift in real estate from Vancouver to Seattle. I’ll leave the main story in the link above, which leads to an even deeper analysis in another article written by a local firm.
The short version is: Vancouver became unaffordable, possibly from too many foreign buyers; so, Vancouver began taxing foreign buyers; now, Chinese real estate agencies have cut back on Vancouver searches by ~80% while Seattle searches have risen over 140% in about a month. Because of immigration policies, there are citizenship advantages for foreign investments that exceed $500,000. Vancouver’s median real estate prices are 80% higher than Seattle’s. As much as we may think the Seattle area is unaffordable, we locals may find it is about to get an unexpected boost. Great if you’re a seller. Tough if you have to buy.
Seattle’s market has been extreme, and the impact has been spreading to surrounding counties. A few have seen over 20% increases over last year. Whidbey’s market is already speeding up. Rural areas by definition have fewer houses, which means lower supply. Increased demand, low supply, up go the prices. Zillow has been increasing my home value since the beginning of the year, up $17,000. (Professionals are allowed to groan at my use of Zestimate, but it is only tool I have available.). Of that $17,000, more than $6,000 has been in the last month. A $1,500 per week increase in assets helps swing fortunes. Do that for fifty weeks and see a $75,000 increase. While that may seem unrealistic, that would put my house’s value at $306,000, only $15,000 over what I paid in 2007 after the price had come down from $334,000 to $291,000. As a wealth creation model, that suggests a basic income that allows me to stay in the house is an enabler for passive wealth growth – as long as I’m willing to sell, at which point I probably couldn’t afford anything similar. Affordability drops. The outward migration will begin. The sustainability of the community diminishes even as its wealth increases, just like in Vancouver.
Set that aside for a while.
Thanks to one of the previous Think Tank meetings, I met a local entrepreneur, Ethan Worthington, who is working in the world of Virtual Reality (VR) and 3-D printing. (See his web site at ConsoleKiller.tech where he also creates gaming machines.) As I’ve said earlier, spending time using his VR rig gave me the same feel I had when AOL added a web portal to their previously closed environment. That prompted one of my best investments, which meant encountering months and years of jibes and scorn – until everyone else caught on. (Want details? Read my book, Dream. Invest. Live.) This time, I don’t have as much money to invest; so, I may invest my time. The ability to make something in virtual reality and make a 3-D print in the real world draws on a lot of experience I have from my aerospace engineering days. The ability to teach others about the experience is appealing, too.
The implications of Virtual Reality and 3-D printing was something I discussed in a previous post. Live near a bunch of big box stores and be able to buy almost anything you need, for a short drive, many lights, a long time parking, dealing with lines, all to buy something where the packaging costs more than the product. Live on an island and either add on the price of a ferry ride, a long drive, or buy online and possibly pay for shipping and then figure out how to get rid of styrofoam peanuts. Islands, therefore, are particularly appealing places to embrace 3-D printing. Skip the drive. Skip the wasteful packaging that would just have to be shipped off the island for disposal. Buy just what you need, and maybe get it customized, too.
Ethan is the expert, an artist, and far more talented than me in that realm. And yet, just like with the early Internet, the breadth of applications and opportunities grows as more people become involved. The ability to design, produce, and sell things for fellow islanders is appealing. The opportunity to sell the designs throughout the world is an marvelous market. I already have remote clients, and do most of my work online with off-island people. That may begin to happen in Virtual Reality as well taking screen sharing to a new level. While Ethan expands his business, I may find a new venue by using his gear, at least for now. With the addition of extra wearable sensors, I could even return to one-on-one personal training in karate. Much safer that way, too.
The two stories (as many other trends) will influence each other. Tech workers in Seattle may find it easier and cheaper to work from Whidbey thanks to the 10 Gig Internet service and the island’s lag in real estate prices. With more workers on the island, the local economy won’t be as reliant on retirees and tourists. With new business opportunities that support the community while also bringing more income to the island, the local economy and lifestyles become more sustainable.
Of the two, the real estate trend is less controllable because economic pressures are driven by wealth, and right now wealth is flowing as it seeks safe havens. (One measure of the confidence in the world economy is the flow of funds out of certain countries and conventional financial investments into things like real estate, which has just been proven to not be as stable as before.) Vancouver built a monetary dam that diverted instead of stopped the flow. The wealth is headed this way and has been thanks to Seattle’s healthy technology industry, and more wealth may flow along with it. As it does, people like me may have to find new ways to stay where we are, or sell and move. One way to minimize the moves is for people like myself to exert a bit more control over our own lives, and hopefully stay ahead of the trends.
The Think Tank meeting starts in under an hour. This post may not get the normal level of formatting as I rush to publish in time. Things are moving quickly. My adaptation has just begun.