Home Prices on Mercer Island

Today's Seattle Times has a front-page article predicting that home prices nationwide are going to fall. They quote from PMI Mortgage Insurance calculations that show a 50% or greater likelihood of housing price drops for Boston, San Francisco, and San Jose, in contrast with Seattle where the risk of falling prices is only 11%.

Map of US metros showing the chance home prices fall, Seattle at 10.9 percent

But who cares about averages? What matters to you is how your own neighborhood is doing. The online edition of the paper offers a more detailed breakdown that shows

Mercer Island is #28 (out of 108 neighborhoods) for 5-year price appreciation. We're 10.8% (vs. 15.7% for #1-ranked Medina).
Median home price on Mercer Island is $825K, putting us #3 in the region, behind Madison Park ($869K) and Medina ($1.14M).
Price per square food, we're #9 ($332), well behind Madison Park ($408), Medina ($394), Queen Anne ($359) and others in North Seattle.
Appreciation in 2004-2005, we're ranked #27 (18.2% -- same as Medina), behind super-hot places like Southpark (27.2%), West Seattle (22%), or Green Lake (19.4%), all of which are much more affordable of course.

The bottom line is that long-term I still think Mercer Island is about as protected pricewise as you can get. It's an island, with its own (strong) school system, with a fixed number of homes and residents. People will always want to live here, making home prices about as secure as they can get.