Looking at the latest numbers there is a lot of evidence that the picture for real estate in general continues to improve. Some of this evidence includes the continual monthly decline in foreclosures, prices being back to 1990-2000 levels when looking at price-rent ratios, bank REO down 18%, and the continued speculation that the bottom is in. There has even been a lot of evidence that commercial real estate is crawling back.
Despite the improvement, I think that this is going to continue to be somewhat slow, there is a lot of new real estate projects that are going to get completed in the next year or two adding apartments, commercial space, and little to no condos. These are where all the people with big pools of capital are putting there money (or at least have been in the last three years - e.g. at the bottom). This will obviously put some pressure on the rents and start to even out the balance which means housing affordability in general will balance out. So long as that is combined with the continued slow job stabilization/growth the housing should get on a flattish/upward trend which is good for homeowners and real estate investors
In Seattle specifically there seems to be a lot of these projects and a lot of housing price increases. I have talked about my recent focus on real estate investments and plan to continue this trend over the next few years while the growth remains slow. The cost to borrow money certainly is a major factor as well as the upcoming changes to taxes that may make it more important to have property to depreciate and off-set any other gains in my portfolio. That said, finding great deals in the Seattle area can be tough and I'm still not sure I am ready to go invest in some other market that I just don't know as well.